Monthly digest on housing affordability and homelessness – July/Aug 2021Aug 31, 2021
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.
Changes to Tasmania’s reporting on government supported housing. The Tasmanian government recently announced changes to the way it reports its support for social and affordable housing. The new monthly format is a welcome advance on the previous quarterly reporting and expands the range of data provided. Included in the data are detailed supply and demand indicators, along with the key economic and other metrics. The new reporting covers the State’s efficiency of use of its social housing dwellings. In announcing the above changes, the government mentions its record recent investment of $615 million into social and affordable housing and homelessness initiatives, including its election commitment of $280 million to extend its building program of new social housing, claiming it as “the biggest in this State for decades”. Tasmania has committed to building a total of 3,5000 new social dwellings by 2027. see also Revamped Tasmanian Housing Dashboard – June 2021, and Reporting on housing outcomes in Tasmania
What is build-to-rent? Alasdair Duncan describes the nature of and participation in build-to-rent (BTR) residential development. He says BTR is long-established in Europe, comprising nearly a fifth of the entire market as of early 2020. Australia is a relative newcomer to BTR, but now has an estimated 10,000 BTR apartments in the pipeline from various residential developers, including Mirvac. Duncan says BTR developments offer a number of potential benefits to tenants, including more flexible lease arrangements than other types of rentals (including longer security of tenure), a variety of included amenities, and the potential for affordable housing. He observes, however, that there are several potential downsides to the BTR model, including that they can cost more on average than other rental properties, in part because they come with more amenities attached. It is hoped that BTR developers will, with appropriate government subsidies and other incentives, allocate a proportion of their units towards affordable housing. A Queensland Government supported BTR Pilot Project, for example, will see 2 projects include 240 apartments with “discounted rent”, designed to provide homes for people who need to live in Brisbane’s inner city but have been priced out of the rental market.
Taxing the family home the ultimate in pariah policies This edited extract is from “Who Dares Loses: Pariah Policies” by Wayne Errington and Peter van Onselen – part of Monash University Publishing’s ‘In the National Interest series’. Errington and van Onselen lament the political difficulties of major tax reform in Australia. However, they note (with support) the opportunity for state governments to take the bold step of embracing tax reform related to the family home, by replacing the productively inefficient and unpredictable stamp duty regime with an annual land tax. Errington and van Onselen say: “Moving from stamp duty on property transfers to a greater reliance on an annual tax on the unimproved value of land would swap one of the least-efficient government charges for one of the most efficient. Labour could be more mobile in search of better wages and conditions, and a shorter commute; capital could be more lightly taxed…Tax on land is transparent, difficult to evade, and easy to calibrate for equity purposes.” The NSW Government has already indicated its willingness to contemplate going down the route of replacing stamp duty with a broad-based land tax, as indicated in the 28 June 2021 instalment of this Monthly Digest.
‘Housing for hippies now for hipsters’: Alternative plan to boost affordability SMH journalist, Angus Thompson, reports that “Co-living, a trendy new wave of communal housing championed by millennials, will be automatically approved in all areas [of NSW] where apartments are allowed in order to flood NSW with affordable development. Seniors will also be housed in ‘vertical villages’ that could be in the middle of CBDs or on top of shopping centres under new planning changes to boost housing options amid an affordability crisis and shortages of supply.” The planning rule changes, being driven by NSW Planning Minister Rob Stokes, envisage a range of non-bedroom facilities such as workspaces, dining spaces, kitchens and storage spaces being able to be shared. Co-living is part of the evolution of the so-called ‘sharing economy’. The success of the latest planning changes will depend in part on whether the federal government introduces appropriate concessions under relevant federal tax rules, particularly relating to GST. See also Developer reps slam proposed boarding house and co-living changes for NSW
Return on investment for social housing in the ACT This research paper, commissioned by ACT Shelter and authored by AHURI’s Jim Davison, Dr Nicola Brackertz and Dr Tom Alves, quantifies the estimated savings to the ACT government from providing direct access to planned, sustainable, long-term housing options for the homeless, and those at risk of homelessness. The authors estimate that the cost-of-service use for those stably housed is around $15,300 per person per year lower than for those who are homeless, findings which they say are broadly consistent with other comparable studies in Australia. They acknowledge, however, that there is a wide disparity in the cost-of-service use amongst those experiencing persistent homelessness, showing that cost offsets are more apparent for some high needs’ clients. They calculate a benefit cost ratio ranging from 0.29 to 0.57, representing the proportion of the subsidy needed for new community housing that could be recouped through welfare cost offsets (in terms of health, justice and welfare support). This means that for every dollar the government spends on a new house, it would recoup between 29 and 57 cents through benefits in welfare offsets, depending on the quality of such housing. In short, the research findings support the case for investing in more social housing, an important form of social infrastructure that provides a safety net for those most in need (and improved health, safety, employment, wellbeing, and empowerment of its occupants), as well as productivity benefits for society more broadly. It is noted that there are currently around 2,500 persons on the social housing waiting list in the ACT, a figure projected to increase to 8,500 by 2036.
Housing equality – a better future for all Australians Mark Steinart, the recently retired managing director of Stockland, offers his thoughts on the role of the private sector in achieving housing equality. He notes that one of the main causes of house price inflation in recent years has been the rapid increase in land values, which have risen materially faster than construction costs. He attributes this rapid land price inflation to: an undersupply of suitably zoned and serviced land, which largely reflects strong demand growth; complex, inefficient planning policies, which mean rezoning can take up to 10 years; and lagging infrastructure provision. He also identifies the growth of government charges, and says HIA estimates that costs associated with the planning process represent 25% to 35% of the price of new housing. He regrets the NIMBY (“Not In My BackYard”) attitudes of some community residents, who object to increased density in their suburb or immediate surrounds, thereby contributing to a slowing of the necessary densification of middle-ring suburbs, which typically have good access to infrastructure (including public transport), services and job opportunities. At the same time, he lauds the new metropolitan rail infrastructure that we have seen in the last 5 years, particularly in Sydney, Melbourne and Brisbane, the first significant heavy rail development in these capital cities in 50 years. Combined with the master planning of near station land use, and the provision of a range of transport interchange services and facilities, this has in his view helped address affordability, inequality and economic growth. Steinert posits: “Density done well is the key to improving affordability and livability, enabling younger generations to buy or rent a home and older generations to downsize in suburbs where they live.” He calls for “a new approach from all stakeholders to put the needs of our whole community first, enabling the use of scalable master planning to develop better communities”. In short, more YIMBY and less NIMBY.
The invisible problem of death on our streets Pro Bono Australia journalist, Nikki Stefanoff reports that an estimated 424 people experiencing homelessness died on Australia’s streets over the past 12 months, though the true number may be much higher, as there is no consistent data collected or recorded on the deaths of people experiencing homelessness across Australia – hence the relative “invisibility” of this cause of death. These findings emerge from research conducted by the Australian Alliance to End Homelessness (AAEH) in collaboration with University of Western Australia’s Home2Health team, which identified 56 Perth residents who died last year while sleeping rough, or after a long-term experience of rough sleeping. David Pearson, CEO of AAEH, says a “by-name list” of rough sleepers (ie. A list of everyone who’s sleeping rough) can play an important role in getting more accurate data about deaths from homelessness. He calls for the Commonwealth government to take leadership on the issue, and to task the Australian Institute of Health and Welfare with creating a measurement framework, arguing “you can’t change what you don’t measure”.
Final report of Federal Parliamentary enquiry into homelessness The federal parliament has recently released the Final Report of the House of Representatives Standing Committee on Social Policy and Legal Affairs, relating to its “Inquiry into homelessness in Australia”, following its Interim Report in October 2020. The Final Report makes 35 recommendations, including the need for a national approach, even though state and territory governments are primarily responsible for housing and homelessness. The Committee recognises that “a national strategy would lead to more cohesive policies, better coordination and more accountability, particularly in relation to the use of Australian Government funding…. [and] also recognise and harness the important roles of local governments, community organisations and the private sector in preventing and addressing homelessness.” Three main reform principles were identified. First, prevention and early intervention represent the most effective and cost-efficient measures to address homelessness. Second, the principle of ‘Housing First” should guide all Australian governments’ responses to homelessness, along with flexible ‘wrap-around’ services to prevent homelessness and associated problems from becoming entrenched. Third, new approaches are needed to address the shortfall in social and affordable housing. The Committee supports the design of a new “needs-based funding model for future funding agreements between the Commonwealth and the states and territories as well as particular measures to assist groups such as victim-survivors of family, domestic and sexual violence, and Indigenous Australians.” The recommendations include measures to improve data collection and reporting, to better inform all levels of government, and a review of how homelessness is defined and homeless counted in the Census. See also Federal Government investment into homelessness “falls short” and Advocates hope homelessness report marks new era of Commonwealth engagement
Giving hope: Housing our essential workers This news item from the Centre for Social Impact (CSI) tells the story of an interesting and potentially exciting start-up social enterprise, HOPE Housing, which (with CSI’s design and impact measurement help) is seeking to address the increasing challenges faced by so-called “essential workers” in finding affordable housing within reasonable proximity to where they work. Essential workers typically include the likes of teachers, nurses, police officers and firefighters. The model being pursued by HOPE is a relatively simple idea deployed in other parts of the world, but apparently not so common in Australia: “HOPE will co-invest as a passive shared equity partner, buying 50% of a home, with a frontline worker purchasing the other 50% through a mortgage from HOPE Housing partner, Police Bank. The frontline worker will be under no obligation to buy out HOPE, but should they sell the property the fund receives a proportional share of the proceeds.” Tim Buskens, CEO of HOPE Housing, says the social enterprise is targeting a 10% commercial return from the venture, but at the same time forecasting a positive social impact of around 30 cents for every dollar invested. HOPE is working towards the roll out of their first affordable housing project.
Exiting prison with complex support needs: the role of housing of housing assistance This AHURI report, authored by a group of academics from University of NSW, University of Tasmania and RMIT, powerfully supports the case for providing public housing to ex-prisoners, particularly those with complex support needs. The case for doing so is made out not only due to the benefits to ex-prisoners as they seek to re-enter society (a worthy objective in itself), but also importantly because it generates significant savings to the public purse, and provides a better outcome for the community as a whole. The report concludes: “Ex-prisoners with complex support needs who receive public housing have better criminal justice outcomes than comparable ex-prisoners who receive private rental assistance only. Public housing ‘flattens the curve’ of average predicted police incidents (down 8.9% per year), time in custody (down 11.2% per year), justice system costs per person (down $4,996 initially, then a further $2,040 per year), and other measures. In dollar terms, housing an ex-prisoner in a public housing tenancy generates, after five years, a net benefit of between $5,200 and $35,000 relative to the cost of providing them with assistance in private rental and/or through homelessness services.” The lessons from this research are even more important at a time when imprisonment in Australia is growing, with associated increases in ex-prisoner housing need, and housing assistance capacity is declining. See also Experts say public housing the key element to stop ex-prisoners re-offending