As infrastructure investments are increasing rapidly, our focus should move beyond roads and rail to encompass affordable housing as well.
Reserve Bank Governor Phillip Lowe says that given the current economic cycle, it is now time to invest in the right infrastructure that will provide a positive long-term economic foundation for Australia’s future. This infrastructure is housing. Housing for all Australians, regardless of their financial stature.
The growing shortage of affordable, social and public housing is pushing Australian cities to a crisis point.
The growing shortage of affordable, social and public housing is pushing Australian cities to a crisis point. Housing affordability is an issue of national responsibility, extending beyond the government. It’s not just about building houses for people to live in; it’s about building communities.
In 2017–18, more than 800,000 Australians across the country were in social housing. While the vast majority were in public housing, some were situated in community housing. Social housing not only supports people on low incomes but also those experiencing homelessness, at risk of homelessness, or people with a disability.
In 2016, the National census recorded approximately 116,400 people affected by homelessness. The numbers are expected to have risen since then.
Australia currently has around 400,000 social housing dwellings and this figure has barely grown in the past 20 years. However, the general population has increased by 33%, according to a report released in April by the Grattan Institute.
The general population has increased by 33%, according to a report released in April by the Grattan Institute.
On top of this shortage of social housing, a report by the University of Sydney has found low income and vulnerable groups are now being forced into informal housing arrangements, such as share accommodation.
Co-author of the report Professor Nicole Gurran from the University of Sydney’s School of Architecture, Design and Planning said a chronic shortage of social and affordable housing meant some people were forced to live in shared accommodation. Sometimes this resulted in severely overcrowded situations violating building regulations.
“Sydney’s ongoing housing affordability crisis is hitting low income and vulnerable groups particularly hard, they are now having to find accommodation through informal and sometimes illegal housing,” Professor Gurran said.
Informal housing can include illegally constructed, converted or occupied dwellings, as well as informal rental arrangements not subject to standard residential tenancy agreements, including both share housing and room rentals.
By addressing the long-term economic impact of the housing crisis, Australia will experience flow-on benefits, such as a bigger number of jobs in the construction sector.
The government cannot solve or fund this problem alone. However, the private sector needs the appropriate financial settings and frameworks in place to achieve the required returns relative to the risk.
By addressing the long-term economic impact of the housing crisis, Australia will experience flow-on benefits, such as a bigger number of jobs in the construction sector. It will also stimulate uptake of innovative approaches like prefabrication which, in turn, creates jobs for the embattled manufacturing sector.
A number of studies have shown that a “housing-first” approach helps reduce homelessness and improve the lives of those constantly facing housing insecurity. What is more, the research has also shown it is the lowest cost to the economy and consequently taxpayers.
For every dollar spent on housing people, there are future gains. The reduction of homelessness results in reduced future costs for managing the consequential impacts, the lack of housing has as well as a positive gain in terms of workforce participation.
Analysis by SGS Economics indicates a cost-benefit ratio of 7:1 in respect to the economic benefit to the community of providing public, social and affordable housing in the right locations.
For every dollar spent on housing people, there are future gains.
For example, San Francisco introduced an Inclusionary Housing Program in 2002. Since inception, this program has generated 4,600 affordable units. The requirements state that new residential projects of 10 or more units must pay an Affordable Housing Fee. Alternatively, they can meet the inclusionary requirement by providing a percentage of the units as “below market rate” units. They should be available at a price affordable to low or middle-income households and may be situated either “on-site” within the project or “off-site” at another location in the City.
Back here in Australia, Everybody’s Home is campaigning for support to fix Australia’s housing system so that it is more inclusive.
The campaign focuses on:
- New tax incentives to encourage super funds to invest in social and affordable housing.
- Subsidies to close the gap between what it costs to provide housing and the lower rents that affordable housing tenants pay.
- More capital investment from the government and the private sector to fund and build new social, affordable and Aboriginal housing.
- Freeing up government-owned land to be used for housing.
- Requirements for new developments to include a certain number of affordable rental homes.