National Housing and Homelessness Agreement ‘ineffective’; Governments must address structural factors leading to housing unaffordability; and First Nations people face discrimination in the private rental market. Read on for the latest monthly digest of articles, research reports, policy announcements and other material about housing stress/affordability and homelessness.
Productivity Commission pronounces the National Housing and Homelessness Agreement as “in need of repair” and “ineffective” A recent 600-page, wide-ranging, report by Australia’s Productivity Commission, published on 30 September, is scathing in its criticism of the NHHA. Labelling the inter-governmental agreement “ineffective”, it says the NHHA does not foster collaboration between governments, does not hold governments to account and is a “funding contract, not a blueprint for reform”. The Commission exhorts Australian governments to use the next iteration of the NHHA (from 2024, when the current agreement will expire) as an opportunity to collaborate on a national reform agenda, with particular focus on improving the affordability of the private rental market and directing housing assistance to those most in need.
Amongst other reforms, the Commission calls for: changes to Commonwealth Rent Assistance (to improve its adequacy and targeting); the introduction of firm targets for new housing supply (facilitated by planning reforms and better coordination of infrastructure); a reduction in first-home-buyer (FHB) support (which can be counter-productive, particularly for those not directly benefited, and is not seen to represent good value for money) and redirection of such FHB funding to measures to prevent homelessness; and the introduction (on a trial basis) of some ‘portability’ into social housing support to help social housing tenants transition, where feasible, to other forms of assisted housing apart from public housing (including to the private rental market).
The Commission report also includes several recommendations regarding governance and accountability, including a new performance monitoring framework with annual reporting on outcomes and performance indicators. The Commission believes a future NHHA should embrace all forms of direct housing assistance by federal, state and territory governments (currently aggregating some $16 billion annually), rather than just the $1.6 billion per annum currently provided by the Federal government to states and territories under the NHHA. See also: How to fix Australia’s housing problem – a special Grattan Webinar event; Productivity Commission suggests redirecting support from first home buyers to people facing homelessness; Housing and homelessness agreement savaged in Productivity Commission report; and Productivity Commission exposes decades of housing policy failure
Housing policy experts give Productivity Commission report only qualified approval. Writing in The Conversation, several experts in housing policy, economics, and urban planning, from universities across Australia, offer an independent assessment of the recent Productivity Commission report on the National Housing and Homelessness Agreement (see previous item in this Housing Digest). The authors endorse several of the Commission’s findings and recommendations. For example, they agree that governments must address the structural factors that lead to housing unaffordability, that first-home-buyer and stamp duty grants are counter-productive and push up prices, and that it is right to pursue a “housing-first” approach to tackling homelessness (meaning the homeless should be housed unconditionally as the first priority before dealing with their other needs), and that certain “at risk” cohorts (eg. Those leaving hospitals, prisons, and out-of-home care) should be assisted with early-intervention programs. However, the authors are critical of other aspects of the Commission report. To begin with, they believe its terms of reference (set by the previous federal government, in 2021) have meant that “the Commission did not consider how easy credit, negative gearing and the capital gains tax discount drive real estate speculation, inflate prices and lead to inefficient use of housing and land”.
They go on to say: “Coupled with the Commission’s embedded faith in market forces, these omissions skew its recommendations, especially on social housing”. They note that the supply of social (public) housing – with rents capped at 25% of tenant income – has virtually halved in 30 years, and waiting lists have surged to 176,000 households, with many more estimated to be in need. They are particularly sceptical of the Commission’s view that it is realistic for Commonwealth Rent Assistance (CRA) to be raised and better targeted to the extent necessary to enable those in need of social housing to instead rely on the private rental market, with upgraded CRA support, in lieu of social housing itself. They argue that such a switch would require the level of CRA support to be raised “to a level equating to the implicit subsidy social housing tenants receive”, and that such a switch also neglects “the broader benefits of social housing investment that delivers good-quality, well-managed homes that low-income earners can afford”. They also raise doubt on the Commission’s underlying implication that the main cause of unaffordable housing is restricted new housing supply caused by outdated land-use planning rules. In short, they say planning reform is no panacea to improving housing affordability for those most in need, and they challenge “trickle down” theories which suggest that all private real estate development, regardless of cost, will eventually trickle through to those in need and make homes affordable for lower-income earners.
No Place to Call Home In this episode of Four Corners, investigative reporter Louise Milligan investigates the reasons behind Australia’s homelessness crisis, in the process meeting single working mums living in motels, cars and even tents. Her focus is on regional towns, where record high rental prices combined with a lack of available houses, means low-income workers have little hope of finding a home. This edition of Four Corners first went to air on 3 October but is accessible through ABC iview.
Private sector involvement in social and affordable housing A group of AHURI researchers, comprising experts from the University of Sydney and Curtain University, together with an industry specialist, report on the current extent of, and potential for, ‘private sector’ involvement to increase the supply of social and affordable housing in Australia, and draw parallels in other comparable jurisdictions, including the UK and US. For example, in the UK, private investment in social and affordable housing dwarfs government grant funding by a factor of three to one, and in the US, over one million affordable rental units have been financed by private investors incentivised by the ‘low-income housing tax credit’ scheme, that dates back to the Reagan years. The term “private sector”, for these purposes, embraces all non-government and non-public entities, including both for-profit and not-for-profit housing providers.
The report notes that social and affordable housing is increasingly financed, developed, and managed by a combination of government, community based and market providers, spurred on by increasing emphasis on ESG goals and demonstrable corporate social responsibility in business. The increasing “hybridity” of the housing system and cross-sector partnerships are regarded as essential, as no one sector (not even government) can address the enormous challenges that exist. Although the researchers acknowledge that involving the private sector is not necessarily a panacea, they say the private sector has a strong appetite for involvement and, when programs are carefully designed and risks mitigated, can make a significant and valuable contribution, including through skills and capacity building. Essential to the success of involving the private sector are that relevant government agencies develop and clearly communicate long-term strategies, short- and medium-term delivery targets by market segment, strong policy settings, efficient procurement processes and adequate and ongoing “gap” subsidy (to assist, where necessary, those most in need).
First Nations people face discrimination in the private rental market. Writing in The Conversation, Wendy Stone, Professor of Housing & Social Policy, at Swinburne University of Technology, and several Swinburne academic colleagues, discuss the findings of their recent research into the various forms of discrimination that Aboriginal and Torres Strait Islander peoples can experience, disproportionately to renters generally, when seeking, living in or leaving a rental property. Discrimination arises from multiple reasons, some of which are not unique to Aboriginal people (eg. Low-income, being a single parent, having pets, previous living in social housing), but Aboriginal people often face other pernicious forms of discrimination as well.
Although their research is based on experience in the Victorian private rental market, they say the discriminatory barriers they found in Victoria are Australia-wide. The discrimination these researchers found is, at least to a significant extent, considered to be systemic, and they say it “reflects a capitalist agenda of economic priorities, which treats housing as a financial investment” and is thereby “disconnected from the inherent cultural connections of Aboriginal peoples”. The researchers used indigenous research methodologies – including the use of ‘yarning’ with Aboriginal participants – to inform their research. These included Aboriginal storytelling and perspectives, using the structure of the “Renter’s Journey”. Barriers were found to arise at every stage of such journey, due to prejudice, discrimination, and structural disadvantage, particularly at the point of rental access. The researchers propose a few potential specific areas for reform, including greater transparency of processes for awarding/refusing tenancies, cultural training for the real estate industry, more mentoring and support for prospective and current renters and Aboriginal owned and managed private rental agencies.