ADRIAN PISARSKI. Tackling the Housing Crisis Properly Requires a National Housing Strategy

Mar 22, 2019

There is a plethora of well-intentioned research and opinion aimed at solving Australia’s growing housing crisis, including Labor’s proposed reforms to negative gearing and the capital gains tax discount. However, to be really effective, all of this must be considered in the context of a new national housing strategy. Only by taking that sort of holistic approach can we transform Australia’s housing system to be fit for the 21st Century.

The past 25 years have been characterized by underinvestment in social and affordable housing, shifting the balance of house purchase too far towards investors, creating an inter-generational chasm.

We have seen poor planning, increased homelessness, an acceleration of housing poverty on our urban fringe and an exclusion of low-income households from areas well serviced by infrastructure. States have neglected their housing responsibilities in part due to a blame culture perpetuated by successive federal governments.

Markets have failed to create sufficient supply and developers have failed to honour their promises to people with disabilities and our ageing populace around universal design standards for new housing.

New research by UNSW City Futures claims the challenge we face in social and affordable housing is a need to build 1 million properties by 2036 to repair the damage, of which some three quarters would be social housing and the rest affordable housing.

This builds on research by the Australian Housing Research Institute (AHURI, Lawson et al) who argue that the best way to go is via direct government investment in social housing either through the States or via Community Housing Providers (CHPs).

The Grattan Institute argues that the National Rental Affordability Scheme (NRAS) and the announcement by the ALP to use a similar approach to build affordable housing represents “pretty awful value”. NRAS was the only program in the past 10 years adding to the supply of affordable housing targeted at low to moderate income households.

National Shelter does not agree that NRAS was awful value. New programs such as NRAS often have teething issues, and sometimes higher costs, until they reach acceptance and are established. The real issue with NRAS was that the Abbott government shut it down prematurely, instead of trying to address any administrative issues it had.

Our view starts with looking at housing as infrastructure (ignored until recently, but see McLennanet al), and social and affordable housing as essential infrastructure, underpinning economic, social and cultural participation.

The above highlighted call for substantial new supply of social and affordable housing is applauded, but what is also needed is a national housing strategy to determine the different roles which could be played by all relevant stakeholders, including government (at all levels), markets, CHPs, regulators, NGOs, financiers, investors and, most importantly, those being housed.

A range of mechanisms are required to enable the layering of incentives from different sources. This includes direct government investment and subsidies (federal and state), land from NGOs or governments, institutional investment, and enhanced planning mechanisms like inclusionary zoning and value capture. These incentives also need to be considered alongside the adequacy of transport and other infrastructure.

We are convinced that CHPs are now better placed than State housing authorities to deliver expanded capacity in the social and affordable housing sector.

An often overlooked negative consequence of the past 25 years of housing policy has been to consign social and affordable housing to a welfare role, targeted only at those in greatest need with the lowest incomes. The stigma sometimes associated with our social housing ‘estate’ can on occasions (sadly) diminish support for it.

In fact, social housing has been doing a valiant job housing people whom the market essentially rejects or won’t house. Its proportion relative to total housing has decreased from nearly 6% in 1996 to less than 5% in 2016, and in some states (Vic and Qld) it is only around 3 to 4%.

The task ahead of us is to create a housing system which establishes a suite of incentives (direct funding, incentives, planning measures, institutional equity investment, CHP borrowing, specialist disability accommodation funding, low or no cost land) which are aggregated, packaged and tendered to CHPs, rather than being subject to slow central decision making.

Some progress has occurred. The National Housing Finance Investment Corporation (NHFIC) is about to issue its first bond which will refinance the borrowing of CHPs at lower rates. States are now required to have affordable housing strategies and the ALP has announced a new program of investment to build 250,000 properties over the next 15 years, if elected.

We need to go further than these welcome measures and announcements and develop a national housing strategy, one that eases pressure in rental markets and provides genuine choices for low to moderate income households.

We can rebalance our housing system by developing a comprehensive national housing strategy.

Adrian Pisarski is the Executive Officer of National Shelter. He has been at the forefront of advocacy for social, public, affordable housing and an effective end to structural homelessness for the past 20 years and has a 40 year involvement in social causes.

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