The following is the latest instalment of a monthly digest of interesting articles, research reports, policy announcements and other material relevant to housing stress/affordability and homelessness – with hypertext links to the relevant source.
Era of working from home
Investing in social housing, in the era of working from home [Probono Australia, 2 Feb]. This article by the Chief of Policy and Research at Infrastructure Australia, Peter Colacino, is the sixth of a 12-part series from the Robert Pradolin founded and directed initiative, Housing All Australians, exploring the role that housing can and should play within Australian society and why it is important to our economy that we house all Australians, rich and poor.
Colacino notes that the increasing incidence of home-working – one in three workers are still home-based, and 10% of the total workforce still intends to continue working remotely into the future – makes it all the more important for Australians to have a stable and secure place to live, with a good broadband internet connection.
As he points out:
“The home internet connection becomes the link to economic and social opportunity, the living room is the office as well as the place for family, and the costs of utilities have shifted from employer to employee”.
The article contains data, from both Australia and abroad, regarding the wide-ranging activities and (in some cases surprising) industry sectors that lend themselves to home working. Colacino focuses on the nub of the problems afflicting social housing, and how they impact on productivity and the economy:
“…social housing faces the dual challenges of ageing, inappropriate assets and long waiting lists… While this inequity is not new, the pandemic has thrust it into the spotlight. The acceleration of the move of the workplace online has also accelerated the move of social housing from social policy to a paramount economic issue that could directly impact our economic recovery…”.
Fleeing for the regions
Sydneysiders flee for the bush, led by students and workers [SMH, 2 Feb].
Sydney Morning Herald economics correspondents Shane Wright and Jennifer Duke report that Sydneysiders are fleeing for regional parts of NSW, Queensland and even Canberra, in the face of employment and economic pressures created by the Covid pandemic, creating significant house price rises in areas that have traditionally not featured significantly in the house price boom.
The silver lining is reduced pressure on rents in the Sydney and Melbourne rental markets. Those making the move to regional areas are no doubt also mindful of the pre-existing lack of housing affordability in our major cities.
According to the authors:
“Migration out of the nation’s two largest cities [Sydney and Melbourne] has almost doubled since the September quarter in 2019, before the advent of the pandemic.”
ANU demographer and social researcher, Dr Liz Allen, is quoted as saying that households have realised more could be done remotely beyond the limits of the nation’s capitals, including working from home. UNSW City Futures Research Centre director, Professor Bill Randolph, has said that the number of people leaving Sydney and Melbourne is not significant for cities with populations of about 5 million people, and that there are limitations on regional areas’ ability to cater to huge inflows of new residents.
Randolph points to the lack of capacity of such regional areas to soak up these new residents, in terms of jobs, housing and infrastructure. Both Randolph and Allen think any net significant move away from our big cities is likely to be short lived, particularly once the pandemic is brought under control and workers start returning to the office. See also Sydney exodus drives regional property prices up and locals out of the market [ABC News, 15 Feb]
Hardly an exodus
Has Covid really caused an exodus from our cities? In fact, moving to the regions is nothing new [The Conversation, 15 Feb]
University of WA Professor of Human Geography, Amanda Davies, notes that internal migration resulted in a net loss of 11,200 people from Australia’s capital cities in the September quarter of 2020, while some regional areas experienced growth in house prices as demand for properties increased. While this net loss is, in absolute terms, the largest on record, Davies observes that it is not a significant proportion of the population, representing only 0.06% of the total population living in such cities – a proportion comparable to recent years.
She also points to the fact that the net loss has resulted mainly from fewer people moving into our capital cities, rather than from a city exodus. Brisbane, Perth and Darwin in fact all had net population gains. The two capitals that experienced the largest net population losses were Sydney and, to a lesser extent, Melbourne, our two largest population centres.
Sydney has recorded a net loss of population through internal migration every quarter for the past two decades, and Melbourne recorded net losses until 2012 and then since 2017. Davies says the data reveals that “on average, regional Australia has been gaining population for many years – decades actually” and “Moving to regional Australia is not new.”
She believes the drastic Covid-related restrictions on international migration to Australia, particularly as they have impacted our capital cities, have previously masked the long-term trend of people relocating from our major cities. Despite all of this, she is confident that Australia’s capital cities have not lost their appeal, and that there is considerable variability in the types of moves people make within Australia, where they are going and why.
Build to rent
New BTR project to transform Kensington (Melbourne) with more affordable housing [Architecture&Design, news and editorial desk, 9 Feb] Build-to-rent (BTR) developer, Assemble, plans to build a new community featuring more than 400 affordable rental dwellings in Kensington, Melbourne.
Up to 20% of the apartments will be dedicated to social housing, delivered in partnership with a community housing provider. Assemble has already delivered more than 650 dwellings in the Kensington area alone, collectively valued at more than $500 million. The latest acquisition takes Assemble’s overall development pipeline past 5,000 dwellings nationally. Assemble has a significant $3 billion privately funded, mixed-income rental housing portfolio – the largest of its kind in Australia. It is pleasing to see that BTR can be made to work with a significant component of social and affordable housing.
Rough sleeping on the rise
States housed 40,000 people during COVID. How rough sleeper numbers are rising again [The Conversation, 11 Feb]
The good news is that in the first six months of the Covid-19 crisis, NSW, Victoria, Queensland and South Australia – the four Australian states that launched emergency housing (often hotel-based) programs in response to the pandemic – housed more than 40,000 rough sleepers and others, a figure well-surpassing the estimated 33,000 housed in England.
This is despite our population representing less than half that of England. The not-so-good news is that the proportion of Australians transferred from emergency accommodation to longer-term tenancies (less than 1/3) has been far less than the corresponding proportion in England (roughly 2/3), leading to homeless numbers increasing. Rough sleeper numbers again increased in Adelaide and Sydney after the middle of 2020.
Joint authors of this article, UNSW City Futures Professor Hal Pawson, and his Senior Research Fellow colleague Chris Martin, say Australia’s poor showing reflects, to a great extent, our growing shortage of social housing, as well as inadequate rent assistance and other social security benefits (at their standard rates, without the benefit of temporary, Covid-related supplements).
While the authors applaud the short-term Covid-related federally funded income protection measures, and eviction moratorium measures, they are critical of Canberra’s lack of direct support for a social housing stimulus program, noting that the Feds have continually resisted doing so on the basis that social housing is a state or territory responsibility. While this may be an accurate statement in relation to service delivery, the authors say this ignores the Commonwealth’s control of the vital levers of tax and social security, meaning that the feds must in reality share responsibility for housing outcomes, and play more of a leadership role across Australia.
Lack of social housing costly
Economist survey finds most believe Australia’s lack of social housing is costly [The Guardian, 15 Feb]
Guardian journalist Amy Remeikis reports that Australia’s leading economists agree that governments don’t spend enough time on housing policy in Australia and it is costing us money as well as widening the inequality gap. Such economists are overwhelmingly of the view that governments have paid too little attention to how housing outcomes also affect productivity and growth, and to how status quo economic policies are exacerbating income and wealth inequality.
These findings are amongst a wide range of interesting insights to emerge from a report of a recent survey of 47 top economists and 40 senior experts from across government, industry and academia, conducted by UNSW’s City Futures Research Centre and led by Professor Bill Randolph.
Other important consensus views are that rising mortgage debt poses an economic stability risk to Australia, with an over-reliance on historically low mortgage rates (ie. cheap money). Almost 70% of respondents agreed that stimulating housing was best achieved through social and affordable housing, rather than the private market. S
ome States (particularly Victoria) have shown a strong inclination to invest heavily in social and affordable housing, though the Federal government’s Covid-related housing stimulus efforts have been focused on private housing. The great majority of survey respondents believe that existing inequality will be compounded by the Covid-19 induced economic downturn, and that the Morrison government erred in excluding social housing from its post-pandemic budget response.
Hands-off approach unhelpful
Australian government criticised for “hands off” approach to pandemic policymaking [Probono Australia, 15 Feb]
Citing a recent report by UNSW’s City Future Research Centre for the ACOSS-UNSW Poverty and Inequality Partnership, journalist Luke Michael notes that the report concludes that there has been a “fundamental absence of national coordination and leadership” during Australia’s pandemic-triggered housing and homelessness policy response. The report found that efforts to combat homelessness were hindered by Australia’s social housing shortage, representing a key reason why only a minority of those given temporary hotel accommodation during the crisis were then transitioned into longer-term affordable housing.
The report also points to the lack of involvement by the federal government in the housing and homelessness response, with the States and Territories being left to provide emergency (mainly hotel) accommodation. Lead author of the report, UNSW Professor Hal Pawson, endorses the Federal government’s boost to income support during the pandemic, but believes the Morrison government could and should have taken a more central coordinating and leadership role (not to mention provide additional funding) – working with the State and Territory governments – in Australia’s emergency housing and homelessness response to the pandemic, as happened to beneficial effect in NZ and the UK, and to a lesser extent in Canada and the US.
Pawson notes that the UK has a relatively larger stock of social housing and a more generous housing allowance than we have. See also Fears for renters and the homeless as pandemic aid reduced [ABC RN, 11 Feb], which includes an interview by the ABC’s Fran Kelly with Professor Hal Pawson, in relation to the above report.
3D printed homes
Wow!: 3D-printed homes build hope for US affordable housing [Sight Magazine, 17 Feb]
Carey Biron of Thomson Reuters Foundation reports that after years of living homeless, Austin, Texas resident Tim Shea has recently moved into his brand new 3D-printed home in Austin. “It’s just phenomenally beautiful…it just wraps around and gives me a feeling of life security”, says Shea.
The home was constructed by Austin-based developer Icon, a relative newcomer to the US house construction market, which believes 3D printing of houses may provide an economical alternative for building affordable housing. Although the global market for 3D-printed construction currently remains very small, it is projected to grow significantly in the coming years.
The author of this article notes:
“ICON constructed the first 3D printed building in the United States in 2018 and is one of the few 3D construction firms focusing specifically on affordable housing.”
It built its first 3D-printed homes in Austin in 2020, on a site called the Community First! Village, and has also in recent times completed the largest 3D-printed structure in North America – a military barracks in Texas, designed to house 76 military personnel. A spokesman for the US “Defence Innovation Unit” claims the 3D building process is 5 times faster than traditional approaches and has “significant” cost and labour savings. See also Eco-sustainable 3D printed homes created in just days [Architecture & Design, 23 Feb]
Build to rent planning controls
New build-to-rent (BTR) planning controls for NSW [Corrs Chambers Westgarth, 15 Feb]
This legal update by environment and planning experts from well-known law firm Corrs Chambers Westgarth describes long-awaited new planning controls for build-to-rent (BTR) housing developments in NSW. The controls will not only establish a definition for BTR, for the first time in NSW, but will also mandate minimum lifespans for BTR developments, allow them to be assessed as “State significant development” in certain circumstances, relax the stringent requirements of NSW’s Apartment Design Guide and establish BTR specific planning controls and design standards.
NSW Treasurer, Dominic Perrottet, has also announced new guidelines under which BTR developments can achieve significant land tax concessions. The Treasurer’s guidelines provide that a BTR development must offer minimum three-year tenancies and they also offer certain concessions for BTR dwellings that are made available for use as affordable housing or social housing for a continuous period of 15 years.
The growth of a BTR market is seen as potentially very good news for the increasing proportion of Australians who are forced to rent long-term, often due to the lack of home purchase affordability, and who would benefit from the increased security of tenure offered by BTR. It may also have flow-on benefits in terms of rental affordability, partly as a result of increased supply of rental product. The authors of this article say “BTR is likely to be a rapidly evolving product” and that “the BTR reforms will facilitate the growth of this type of development in NSW”.
Oliver Frankel is a former corporate finance and M&A lawyer, who has spent the second half of his career in finance, investment and management. Most recently, he has taken a strong interest in how to address the affordable housing crisis.
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