This article is from the Australian Property Journal archive
AT least 25,000 new social housing dwellings are needed as part of Treasurer Josh Frydenberg’s budget ahead of the 2022 election and a co-ordinated federal response required to improve the social and affordable housing system, with current underinvestment set to cost $1.286 billion each year in foregone public and private sector costs and offsets.
The Budget Position Paper from national campaign to end homelessness, Everybody’s Home, shows that the current cost of underinvestment is $676.5 million per annum and is set to nearly double by 2036. These costs take the form of added costs addressing homelessness, mental health, domestic violence, alcohol and substance abuse, and reduced household spending and lower community wellbeing.
Constructing 25,000 social homes per year would generate an annual economic output of $12.9 billion, and create 15,700 jobs, according to the paper.
Just to maintain the current share of social housing as a proportion of Australia’s housing stock will require the construction of 15,000 new properties a year, but the current rate of new social housing construction is about 3,000 dwellings.
Labor has proposed to put $10 billion into its Housing Australia Future Fund, which would deliver 20,000 social housing dwellings and 10,000 affordable housing dwellings in the first five years. Everybody’s Home said this is a “welcome proposal but will not meet the social housing shortfall. A ‘one-off’ payment of this kind will not replicate the impact of an ongoing annual investment”.
It calls upon the federal government lead development and work with the states on a national housing strategy, overseen by a Cabinet-level minister, with work conducted in a central agency, such as Treasury, or through the establishment of a dedicated statutory agency.
Within this there would a national homelessness strategy that addresses the key drivers of homelessness, including access to affordable housing, adequacy of incomes, domestic and family violence, and poor access to mental health and other services, with a linked Indigenous housing strategy, the paper said. An independent body such as the National Housing Supply Council – established in 2008 and abolished six years later – would provide data and modelling to quantify existing and projected housing supply.
Affordability concerns right across the housing market have been felt widely throughout the COVID period as prices skyrocketed. In the 12 months to January, the asking rent on a three-bedroom home increased by 13.5%, according to SQM Research. CoreLogic data shows house prices have lifted by 22.4% in that time, and are at record levels in all capitals except for Perth and Darwin.
The regions have also felt the impact, where rents surged 12.1% over 2021.
Wage growth, meanwhile, sat at a sluggish 2.2%.
Federal funding for social and Indigenous housing has also been lagging. In 2013/14 it was over $2 billion, but is only budgeted at $1.6 billion in 2023/24. Indexed for inflation, Everbody Home says, it should be $2.7 billion.
It also noted that in 1994, social housing made up 6% of all housing – a figure that has receded to just 4%.
“As our leaders put the final touches on the budget, they need to be aware of the full benefit of social housing as well as the deep human cost of not providing people with a home,” said Kate Colvin, national spokesperson for Everybody’s Home.
“The surging rental and property markets are swallowing up ever larger chunks of household budgets. Some regions of Australia, such as Tasmania, or the NSW and Queensland coasts have seen rents surge more than 20%. This is not just breaking family budgets, it’s pushing families into homelessness.”
The paper also suggested increasing the maximum rate of Commonwealth Rent Assistance by at least 50% and broadening eligibility for payment, and making renting fairer by enshrining tenants’ rights, making minor and reversible modifications, and getting rid of no cause evictions.
