Social and affordable housing is key to the future of national housing policy

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As seen in Parity Magazine

As the Commonwealth negotiates bilateral housing and homelessness agreements with each state and territory, there is an opportunity for not only more accountability, but for genuine progress towards real and lasting change. Reducing homelessness will require efforts by all levels of government, businesses and the community sector - and now is the time to get the settings right.

It is vital that any strategy to address homelessness must include a commitment to provide an adequate number of homes that are genuinely affordable and appropriate. The market has failed to deliver for households on low incomes, putting too many people in precarious housing situations or even pushing them into homelessness.

It is in this context that we set out 10 recommendations for boosting the supply of social and affordable housing which will make a significant contribution to preventing and addressing homelessness:

1) Deliver 200,000 new social homes and revive current social housing stock

Targets for social housing growth must be set in each state. Increases in social housing stock need to meet the housing needs of the 200,000 people currently on waiting lists across Australia. Renewal of social housing that has been left to languish without vital maintenance and repairs also needs to be a priority.

While this is not an easy task, there have been recent efforts to grow social housing stock that we can learn from. For example in New South Wales the Social and Affordable Housing Fund is providing the subsidy needed for community housing providers, developers and financial institutions to invest in social housing and support for tenants, while Communities Plus will revive ageing estates and deliver more homes. There are good models out there, but they need to be scaled up into a comprehensive national approach, through a long-term consistent government investment program.

2) Create a new class of truly affordable housing and deliver 250,000 new affordable rental homes

We will always need social housing, as a critical part of the housing continuum. But more affordable private rental housing is also necessary, especially given sky rocketing rents in many areas which are now pushing unprecedented numbers of people into rental stress.

For rental housing to be truly affordable to households on low incomes, a substantial discount of up to 50% is needed on market rents. While the current gap between social housing rent and market rent is impossible for many people to meet, a new class of ‘mezzanine’ level affordable housing will allow some social housing tenants to move into the private rental market, reducing pressure on social housing waiting lists.

Over 500,000 low-income households across Australia are in rental stress, so planning for 250,000 new affordable homes will make a big impact on reducing the prospect of homelessness for many high-risk families.

3) Bridge the funding gap for both social and affordable housing

The States cannot deliver any significant increase to social or affordable housing in isolation. It takes a multi-government approach to address the funding gap over the long term and in any meaningful way.

The Commonwealth’s recent announcement of a bond aggregator model will make a useful contribution by assisting Community Housing Providers (CHPs) to finance new developments. But it is insufficient in itself to generate greater investment in social and affordable housing. Cheaper finance is not the key problem stalling delivery of new below-market rental stock. What is desperately needed is a clear subsidy from government, so that investors in affordable rental housing have surety around the future viability of their investments.

A direct government subsidy would address the funding gap in both social and affordable housing.

4) Adjust tax settings to address housing affordability and fund new social and affordable housing

Many governments across Australia have professed housing affordability to be a key policy priority, but all too often this is narrowed to providing assistance to first home buyers. The Federal Government has shown an ongoing reluctance to address the significant tax breaks given to investors through negative gearing and capital gains tax discounts and little attention is given to those struggling to pay the rent in increasingly difficult markets.

Tax breaks provided to property investors come at an annual cost of $11.7 billion to government revenue. If the significant tax concessions provided to investors were re-directed to social and affordable housing we could significantly boost supply.

To see this approach in action, we only need to look to the United States where a stable funding mechanism has been in practice for 30 years. Introduced in 1986 with bipartisan support, the Low Income Housing Tax Credit provides a mechanism for private institutional investors to purchase tax deductions. The funding generated from this deduction goes directly into the creation of new below market housing. Since 1986 it has stimulated the production or rehabilitation of nearly 2.97 million affordable homes.

Reviewing concessions for property investors will also begin to level out the playing field for first home buyers while providing investors with a tax advantage in a social good – greater supply of social and affordable housing.

5) Deliver permanent supportive housing for vulnerable groups

For vulnerable people including those who have experienced chronic homelessness, have health issues, are ageing or are leaving institutional care, the Housing First model is the most effective way to maintain tenancies and improve wellbeing. These models have been shown to achieve strong positive outcomes for vulnerable clients, as well as providing substantial savings to governments. The MISHA Housing First project delivered by Mission Australia demonstrated savings of $8002 per person per year as well as 89% of tenancies sustained; a halving of mental health disorders; and a decrease of substance use disorders from 37% to 30% over 2 years.

Supported accommodation models such as Common Ground provide a wrap-around person-centred approach for people with complex needs such as trauma, mental illness, disability and substance abuse. Permanent housing is the critical stabilising factor for vulnerable cohorts, and provides a base for the supports they need for improved wellbeing and greater independence.

6) Deliver supportive accommodation in a stepped care approach

There are many effective models of supported accommodation that cater for particular needs. This includes: Youth Foyers which link young people to education and employment while they are safely accommodated; rehabilitation facilities for people seeking treatment for substance misuse; and supported accommodation for people experiencing mental illness and exiting institutions.

This intensive service provision delivers good results, but what is missing is the next step in their journey to independence which would include a safe place to live and scaled back support. The expectation that people can exit directly to the community can create unsustainable outcomes, putting people into a cycle of insecurity and homelessness. Capital investment is required in purpose built or adapted buildings for a stepped care model with person-centred services.

7) Listen and facilitate solutions for Aboriginal and Torres Strait Islander housing needs

The pressing need for investment in Aboriginal owned and controlled social and affordable housing to address over-crowding and the shocking over-representation of Aboriginal and Torres Strait Islander people among those experiencing homelessness in Australia is well documented. Such investment must be directed by Indigenous organisations, with local responses developed to suit each community’s strengths, housing needs and development aspirations. At a minimum, immediate investment is required to provide 4,200 new Aboriginal owned and controlled homes in remote communities and regional centres.

8) Reforming planning laws

Inclusionary zoning – where planning instruments require a component of below-market rental housing in specified areas – is an effective and proven way to stimulate new supply. It is widespread and effective across the USA, but only has fragmented and small-scale use in Australia. Along with planning experts and economists, we have advocated for a minimum target of 15% of all new developments on private land, and 30% on government land in order to have a long-term and significant effect on the housing crisis. The affordable housing stock should be managed by CHPs in accordance with current regulations and allocation processes, in order to significantly boost community housing stock. To be effective this will also require changes to affordable housing planning rules. Reforms to planning laws should also ensure that a proportion of value gained through rezoning and public infrastructure investment is captured for broader community benefit.

9) Use housing investment to build stronger communities

Communities of entrenched disadvantage need more than just new homes. To enable long-term change and facilitate true transformation, community housing providers must work with community service providers to enable understanding of each local community’s social assets, strengths and focus areas for improvement. The best prospect for community development comes when support provision is coordinated and communities are empowered to be directly involved in decision making around construction or renewal. Mission Australia and Mission Australia Housing have taken such a long-term community development approach in Clarence Plains in Tasmania. A 10 year plan was developed by the community to achieve both physical and social change including improved safety, links to jobs and training and better health and nutrition. 

10) Set clear targets to reduce homelessness

We have been consistently advocating for whole of government commitments to halve youth homelessness by 2020 and to halve overall homelessness by 2025. These are achievable targets but depend on strong commitments and immediate action from the Commonwealth Government and from States and Territories. What gets measured is what gets done and we are hoping for genuine commitments to targets in the National Housing and Homelessness Agreements.

Conclusion

While we welcome ongoing funding for homelessness services, a secure pipeline of social and affordable housing is needed to curb the growing numbers of Australians experiencing homelessness and housing stress, let alone start reducing the problem. Now that there is a national dialogue about the “housing crisis”, this is the time to set the agenda for the future of national homelessness policy with courage and vision.

We cannot continue to tinker around the edges of the supply side, waiting for the market to provide for those desperately in need. The NHHA must include targets and investment in social and affordable rental housing that are of a scale that will actually make an impact on homelessness.

Catherine Yeomans and Chris Bratchford