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.
Global solutions to a global crisis: International housing policy lessons from the pandemic
This AHURI Brief is the first in a new five-part series outlining the learnings from an International Housing Policy Exchange led by AHURI and the US Department of Housing and Urban Development (HUD), in late 2020. The Policy Exchange provides a means for various countries (including in North America, Europe and the Asia Pacific region) to share their housing policy experiences and responses in the face of the Covid pandemic. Policy responses ranged across how to minimise street homelessness, how to avoid forced evictions and what income support measures to put in place. Some policies have been focused on public health intervention (ie. Mainly infection control) and others directed towards simply keeping people housed in the face of the economic turmoil caused by Covid. Amongst the learnings from the Policy Exchange is that “the pandemic has made the importance of having a place to call home undeniable”, and that “the provision of affordable rental accommodation at scale is … an important part of the solution”.
Insecure housing and overcrowding risk children’s health. But we’ve found a way to help
Two academics from Flinders University lay bare the impact that homelessness has on children, noting that more than 19,000 Australian children were recorded as homeless on census night in 2016, accounting for about one in six of the nation’s homeless. In a large proportion of cases, family breakdown and domestic violence are the triggers. The form of homelessness varies, but insecure or severely overcrowded accommodation (rather than street sleeping) accounts for a major part, as it does for the homeless in general. The authors list a range of adverse consequences for children suffering from homelessness, including poorer academic and health outcomes, in the latter case including both physical and mental health. On a more optimistic note, they describe a relatively cost-effective initiative they’ve implemented to address relevant service gaps: a “nurse practitioner-led model of care”, as part of a metropolitan homelessness service, which they say allows quicker access to health care for children impacted by insufficient shelter.
First dedicated Aboriginal housing strategy for South Australia
The South Australian government has committed $4m for a 40-unit housing development in an Adelaide suburb, to accommodate Aboriginal Elders. It is part of the SA Aboriginal Housing Strategy 2021-31, which also allocates $28.4m for a remote housing replacement program over 6 years, $34m for remote housing maintenance over 5 years and $17m for new social and affordable housing over 6 years. Housing solutions will be co-designed by communities “to increase the cultural awareness capacity of the housing sector”. This new strategy is SA’s first stand-alone housing strategy which addresses the specific housing needs of South Australia’s Aboriginal population.
Homelessness strategy “unlikely to end homelessness”
The NSW Auditor-General, Margaret Crawford, has recently delivered her Performance Audit report, assessing the efficacy of the NSW Homelessness Strategy 2018-23. The report incorporates some scathing findings, including that “The strategy will have a limited short-term impact on homelessness across NSW”, and that the actions delivered as part of the strategy have a “narrow” reach in terms of both individuals and locations targeted for assistance. Ms Crawford found that once fully implemented most of the government’s actions will be available to only a quarter of the state’s local government areas and will support less than a quarter of the state’s 38,000 homeless people. The report notes that an estimated three-quarters of those who received temporary government-funded accommodation during Covid may be back out on the streets. The number of people experiencing homelessness in NSW increased by 37% between 2011 and 2016 (and an even more sobering 75% in the case of women). Aboriginal people make up almost 8% of NSW’s homeless population. NSW Department of Communities and Justice Secretary, Michael Coutts-Trotter, said the Department had accepted all recommendations in the report and has presented an action plan.
This annual one-night mid-Winter fund and awareness-raising event took place recently, generating $7.3m towards funding temporary, emergency and crisis accommodation, and support in paying electricity bills for those less fortunate. Hundreds of CEOs, business owners and government and community leaders slept outdoors to support the many Australians who are experiencing homelessness and those who are at risk. See also: One cold night isn’t a lot but it can make a whole lot of difference; CEOs sleeping rough on Thursday night at National Arboretum; 2021 Vinnies CEO Sleepout: Sleeping out to help others sleep in.
What could the neighbourhood of 2040 look like?
The Australian Centre for Social Innovation (TACSI) has recently published a free book, The Future of Home, which illustrates what our future housing system could look like, showcasing some of the innovations that are already beginning to take shape. TACSI’s vision includes policy and markets which incentivise homes as an outcome; financing that makes homeownership more affordable for more people; health, care and other services which wrap around the home; and resources and structures that incubate and accelerate change across the system. Pre-requisites for making their vision work include a focus on the long-term social and economic benefit of good homes over short-term profit; providing a greater diversity of options when it comes to buildings, finance and ownership (which make it easy to move between those options); and flexibility to adapt to a local context, and even influence institutional settings like aged care and custody.
Land tax plan to cut housing prices
AFR economics editor, John Kehoe, and his colleague, Finbar O’Mallon, outline the NSW Government’s proposal to give future purchasers of real estate the right to opt into paying an annual land tax in lieu of paying stamp duty on their purchase. Any such opt-in would bind future owners of that land.
Such land tax would be levied on the unimproved land value of the property. Owner-occupiers buying a typical (median value) property would pay a $1,780 annual land tax, whereas an investor buying the same property would pay almost 3.5 times more. Investors owning multiple properties with a combined land value of more than $1.5m would pay a land tax surcharge.
The idea of transitioning from stamp duty to an annual land tax has been talked about for some time and has the strong backing of NSW Treasurer Dominic Perrottet. The latest iteration of the proposal is contained in a recently released NSW Government Progress Paper. The Paper forecasts that the result of the implementation of the proposal could see housing become 4% cheaper, and homeownership rise by 6%, in the latter case against a significant downward trend in recent years, particularly amongst the young.
It is also forecast that the NSW economy would be substantially better off from land tax replacing stamp duty, which has long been seen as counter-productive in terms of housing mobility and right-sizing. The government’s ultimate objective is to phase out stamp duty entirely. The proposed reform is seen as the largest tax reform since the introduction of GST in 2000 and may increase pressure on other states to follow. The proposed NSW reform would almost certainly require Federal government funding support, at least during the transition stage, to account for the substantial dent in NSW’s cash flows that would accompany such transition.
Australia Talks: Majority says young Australians have been locked out of the housing market
The recent ‘Australia Talks’ survey has found that some three-quarters of Australians think the country is doing poorly when it comes to providing affordable housing, with a majority believing young people will be financially worse off than their parents.
Soaring house prices: an economic threat eating away the future
SMH senior economics correspondent, Shane Wright, discusses the findings of a recently released research report – Housing: Taming the Elephant in the Economy – into the adverse economic implications of Australia’s current housing policy settings. The research, which was presented to the Housing and Productivity Research Consortium, has been led by Professor Duncan Maclennan from the University of Glasgow, Professors Hal Pawson and Bill Randolph from UNSW’s City Futures Research Centre, and Professor Chris Leishman from the University of South Australia.
The authors believe that Australia’s housing system raises costs for all Australians, creates economic instability and lowers productivity. Contributing to national economic instability, Australia’s level of household debt is the highest per capita in the developed world. The research is based in part on a survey of Australia’s leading economists and housing policy experts. It finds that since the mid-1990s house prices have outstripped income growth, contributing to a 4% drop in homeownership, mainly to the detriment of young people, where levels of homeownership among under-35s have halved since 1995.
The report includes a number of recommendations, including a federal Royal Commission into Australia’s housing future, a permanent Housing Committee within National Cabinet, development by the Commonwealth government of a national housing strategy, establishment of a national housing agency under Commonwealth Treasury (with analytical capacity analogous to Australia’s former National Housing Supply Council), and creation within the federal government of a specific ministry responsible for housing policy and outcomes.
The report authors also support the expansion of the Reserve Bank’s mandate to include “maintaining a more price stable and well-functioning housing market”, similar to what New Zealand has recently implemented. See also: Experts warn housing prices are a “time bomb” and Housing royal commission needed to rebuild the Australian dream: Report
The immediate context for this article is the recently announced $250m NSW Budget boost for Aboriginal housing, and how that will be spent, though the underlying themes have broader application.
The authors make a simple but important point about what governments at all levels need to do when designing housing for Aboriginal communities – namely, consult with and be responsive to the specific Aboriginal community in question about what they consider culturally appropriate – reflecting amongst other things Aboriginal cultural connections to country and kinship. It goes without saying that such housing should also avoid overcrowding, be well constructed in compliance with the Building Code of Australia, and adequately maintained.
The principles underlying culturally responsive housing design are grouped under three headings: building and block orientation; how the house is laid out internally; and durability and ease of maintenance. The authors say that Aboriginal housing should be resilient, sustainable and provide flexible and adaptable spaces for extended families and community activities. They also note that a much higher proportion of Aboriginal and Torres Strait Islander people live in overcrowded and public housing and only 42% own their home, compared with 65% in the case of non-Indigenous households.
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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