council to homeless persons...

Council to Homeless Persons Submission

The Victorian Government discussion papers: Pathways to a fair and sustainable social housing system

and Options to improve the supply of quality housing

Contact: Sarah Kahn, Manager Policy and Communications, [email protected] , 8415 6203 Jenny Smith, CEO, [email protected]

July 2012

mailto:[email protected]


CHP Submission, Pathways to a fair and sustainable social housing system, July 2012 1 | P a g e

Content

1) Executive summary

2) Introduction

3) How could allocation of public housing be made fairer?

3.1 Framework for preventing and ending homelessness

3.2 Role of public housing in ending homelessness

4) How can tenure be made fairer? Consequences of finite tenure

4.1 Potential homelessness

4.2 Increased public costs

4.3 Housing and homelessness system inefficiencies

4.4 Negative impacts on health and wellbeing

5) How could the public housing system be more flexible? Increasing economic and social participation among tenants

6) How can the supply of quality social housing be improved?

6.1 Develop a statewide affordable housing taskforce 6.2 Fund an ongoing operating subsidy for future sustainability of public

housing

6.3 Develop creative finance models to take social housing to scale

6.4 Set clear goals and objectives for Victoria’s Social Housing system

6.5 Collect and monitor data on housing needs to better match resources

7) Conclusion Appendix one: National Rental Affordability Scheme (NRAS): Key recommendations Appendix two: Rapid re-housing and permanent supportive housing overview


1) Executive summary

The Council to Homeless Persons (CHP) welcomes the opportunity to make a submission to Pathways to a fair and sustainable social housing system and Social Housing: A discussion paper on the options to improve the supply of quality housing. This submission provides CHP’s response to both discussion papers, released April 2012. The submission does not respond to all the questions raised but does focus on the following:

1) How could allocation of public housing be made fairer? 2) How can tenure be made fairer? 3) How could the public housing system be more flexible? 4) How can the supply of quality social housing be improved?

1. How could allocation of public housing be made fairer? CHP’s response to question one relates to issues raised in the discussion papers about the role of public housing. As the peak body for preventing and ending homelessness, CHP is committed to expanding housing options for people with the lowest incomes, who experience the most extreme disadvantage. To that end CHP urges government to explore future public housing reforms within the context of the broader housing and homelessness response. Earlier this year CHP welcomed the new investments made in the Homelessness Action Plan and the commitment to a ‘New services approach to break the cycle of homelessness’. This new approach identifies three cohorts of people who need a homelessness response, ranging from households who experience short episodes of homelessness, to people who have been living entrenched in homelessness for very long periods of time. Victoria’s homelessness system must be able to both prevent homelessness and quickly re-house people in each of these groups. While the support components of those responses will vary, all groups will need a safe, permanent and affordable home. To that end, the suite of affordable housing options must be expanded and made accessible to people with the lowest incomes. Public housing has a key role to play in that framework for ending homelessness. To expand affordable housing options:

Public housing should be used to expand supportive housing (housing plus wrap-around supports) for people experiencing long-term homelessness.

Key recommendations: Public housing allocations must

consider the broader housing and homelessness response

expand supportive housing and rapid re-housing responses to homelessness

be accompanied by the expansion of flexible private rental brokerage programs and social housing stock.


Public housing should leverage rapid re-housing responses to homelessness by providing a permanent affordable housing option, with connections to community-based supports, where families can ‘transition-in-place’ (this could build on what we have learned from the A Place to Call Home program).

Flexible brokerage funds should be expanded and targeted to prevention and rapid rehousing programs to support people in private rental and ease the demand pressures on public housing. This includes funding for activities such as housing relocation, landlord mediation, time-limited or declining rental subsidies and case management support to connect with employment, and other cross-sector services. These activities promote successful tenancies. Additionally Programs like the Social Housing Advocacy and Support Program (SHASP) provide holistic case management support to assist households to maintain tenancies overtime.

Grow social housing stock by developing creative finance models that include investments by the private and philanthropic sectors.

2. How can tenure be made fairer? The discussion paper on public housing proposes changes to tenure policy and raises questions about proposals to facilitate tenants’ transition from public housing into other accommodation to ‘enhance the possibility for tenants to…transition from public housing to community housing and then from community housing to the private rental market’(p 35). CHP cautions against reforms that support a ‘transitional’ model of public housing. CHP’s response to question two highlights recent research into the cost and efficiencies of transitional housing in the US and also points to a growing body of evidence regarding both the importance of sufficient housing subsidies and the benefits of secure tenure. Proposals to make public housing tenure time-limited or transitional should be avoided. Time-limited and finite tenure will:

result in homelessness for some households

increase the administrative, facility and social costs of moving people through various forms of housing

create system inefficiencies, worsening the already oversubscribed and backed up transitional housing system

have serious impacts on tenants’ health and wellbeing. 3. How could the public housing system be more flexible?

Key recommendation:

avoid transitional models of public housing, and/or time-limited public housing tenure.

Key recommendation:

consider evidence-based public housing policy reforms to increase economic and social participation among public housing tenants.


CHP’s response to question three draws on evidence from a three-year research program of the Australian Housing and Urban Research Institute (AHURI) and RMIT Research Centre on housing assistance and economic participation in Australia. The research points to a range of variables related to tenants’ work participation. While the evidence demonstrates barriers caused by rent, tenure and eligibility policies, there are also other variables like poor health care and low education levels, which have serious impacts on employment participation. To improve tenant’s employment outcomes, government should consider:

Integrating public housing with other cross-sector supports to address tenant’s long-term issues related to physical and mental health, family instability and education support.

Encouraging applicants on the public housing waiting list to participate in employment by relaxing the income eligibility test requirements. Incomes could be reviewed once at the time when applicants join the public housing waiting list, but then not reviewed again while on the waiting list so that tenants are not discouraged from increasing their earnings.

Avoiding any income cap and keeping rents set at 25 per cent of income to encourage people to continue to increase their incomes. That way people can move if and when they are financially able.

Developing opportunities for tenants to increase their incomes by allowing tenants to accrue earnings that result in rents exceeding market rent (relaxing the rent cap). Rent paid in excess could be directed to a ‘Home Credit Fund’ to be accessed and used at the point of moving out of public housing and into independent housing.

Impacts of fixed-term tenancies, renewable upon income eligibility requirements. This will likely be counter-productive, as employment participation will reduce proceeding income reviews.

4. How can the supply of affordable public housing be improved?

Key recommendations:

develop a statewide taskforce on affordable housing solutions comprised of leading housing experts, peak bodies, private and philanthropic sector reps and tenants (the peak organisations

should include the Council to Homeless Persons, Victorian Council on Social Services, Community Housing Federation of Victoria, Tenants Union of Victoria, Victorian Public Tenants Association, Domestic Violence Victoria and Public Interest Law Clearing Housing – Homeless Persons Legal Clinic)

fund an ongoing operating subsidy for the future sustainability of public housing

develop new and creative finance models to grow social housing stock in Victoria

set clear goals and objectives for Victoria’s social housing system

collect and monitor data on housing needs to better match resources.


CHP applauds the government for providing, A discussion paper on the options to improve the supply of quality housing, to explore supply-side mechanisms for improving the availability of quality social housing that is financially sustainable.

Accessible, affordable and appropriate homes are a basic necessity for all Victorians, but have become increasingly difficult for the most disadvantaged in our community to obtain. As housing has become less affordable, the private housing market is clearly failing for many working families as well as for the most disadvantaged in our community.

The discussion paper includes several very important models for growing sustainable social housing stock. CHP would welcome the opportunity to work collaboratively with the government to determine which of these models will best fit within the Victorian context, and achieve the goals and objectives for Victoria’s social housing system.

CHP’s response to question four—How can the supply of affordable public housing be improved?—focuses on improving the supply and quality of social housing for Victorians with the lowest incomes.


2) Introduction

The Council to Homeless Persons (CHP) welcomes the opportunity to make a submission in response to Pathways to a fair and sustainable social housing system and Social Housing: A discussion paper on the options to improve the supply of quality housing. CHP is the peak body representing individuals and organisations with an interest in and commitment to ending homelessness in Victoria. CHP works toward ending homelessness through leadership in policy, advocacy, capacity building and consumer participation. This submission provides CHP’s response to both discussion papers, released April 2012. It does not respond to all of the questions raised but does focus on the following:

How could allocation of public housing be made fairer? How can tenure be made fairer? How could the public housing system be more flexible? How can the supply of quality social housing be improved?

CHP will continue to collaborate with other peak organisations, the homelessness and broader sectors and with people who have experienced homelessness to inform the public consultation on the future Victorian social housing framework. CHP’s submission was also informed by the CHP Peer Education Support Programs (PESP). This input was extremely valuable, as it provided the perspective of current public housing tenants, community housing tenants, people who have experienced homelessness and people on the public housing waiting list. Please contact Sarah Kahn, Manager of Policy and Communications ([email protected]) or Jenny Smith, CEO ([email protected]) to discuss any of the matters raised in this submission.

3) How could allocation of public housing be made fairer?

Key recommendations: Public housing allocations must

consider the broader housing and homelessness response

expand supportive housing and rapid re-housing responses to homelessness and

be accompanied by the expansion of flexible private rental brokerage programs and social housing stock.

As the peak body on preventing and ending homelessness, CHP is committed to expanding housing options for people who are homeless – those who often have the lowest incomes and experience the most extreme forms of disadvantage. There are many forms of affordable housing options with varying levels of subsidy, time-limits, security of tenure and links to community-based resources. To tackle homelessness effectively and efficiently, and achieve the best outcomes, housing responses must be

tailored to meet the needs of specific cohorts




evidence-based and

sufficiently resourced. Considering these complexities, CHP urges government to explore future public housing reforms within the context of the broader housing and homelessness system, and the program and policy developments necessary to efficiently respond to homelessness. A ‘framework for ending homelessness’, described in the next section, must be explored and public housing’s role in that framework, clearly defined. 3.1 Framework for preventing and ending homelessness Earlier this year CHP welcomed the new investments made in the Homelessness Action Plan (the Plan), and its commitment to ‘better target resources when and where they are needed and where they will make the biggest difference’ (p 3). The Plan describes a ‘New services approach to break the cycle of homelessness’(p 13), that builds on what we have learned about homelessness over the last twenty years from both the Australian and international research, and identifies three specific cohorts of people who need a homelessness response: (1) people at risk of homelessness, or who are experiencing homelessness for the first time, (2) people who have multiple episodes of short-term homelessness, and (3) a small but significant proportion of people who have experienced long-term homelessness, typically because of health issues combined with a financial crisis that create significant barriers to permanent housingi. In order to prevent and end homelessness, the entire housing and homelessness system must do a better job of targeting resources to each of these groups, across cohorts – young people, families, single adults and people experiencing chronic homelessness. To that end, a future framework for ending homelessness should build on evidence from innovations in Victoria, as well from communities overseas that have been successful in reducing homelessness. Successful responses to homelessness in the United States and Europe have led governments to make system reforms in the areas of homelessness prevention and re-housingii. In these countries homelessness traditionally has primarily been dealt with by providing emergency and transitional housing coupled with homelessness support services. In such a system, service users usually progress through a ‘so-called staircase system or continuum of care’, expected to eventually emerge ready for independent housingiii. It was found that these programs do not directly address one of the main issues related to a household’s homelessness – access to affordable, safe and permanent housing – and as a result homelessness is prolonged and the personal and financial costs of homelessness increase. Over the last two decades there has been a growing body of evidence on successful and cost-effective responses to homelessness, which are moving away from supporting people to transition through temporary accommodation. Instead communities are assisting people who become homeless to quickly stabilise in housing to diminish the turmoil caused by homelessness, and to connect to supports in the community that promote stability and


well-being. Consequently responses in the Australia, the US and Europe are beginning to shift the emphasis away from crisis and transition-centred responses and toward prevention and housing stability.iv v vi CHP argues that Victoria’s future homelessness services system must consider two very important models, which have emerged as a result of the evolution of homelessness responses around the globe—rapid re-housing and permanent supportive housing—in which public housing plays a role. Rapid re-housing aims to assist the majority of families and single adults who become homeless—those who have lived independently for some time and can return to housing in a relatively short period of time if they have access to an affordable home and sufficient cross-sector supportsvii viii. Rapid re-housing helps households locate affordable housing in the community, negotiate with landlords and link to health, employment and training and other supports that promote successful tenancies. Permanent supportive housing targets the smaller group of people, as mentioned in the Action Plan, who spend very long periods of time homeless and cycle in and out of emergency services, hospitals, psychiatric and correctional facilities. This has proven to be a cost-efficient solution for this group. The combination of permanent affordable housing and long-term wrap-around supports, including health, mental health and coordinated case management, ends homelessness permanently for people experiencing long-term homelessness and decreases their use of publicly-funded services. See Appendix two for additional information on rapid re-housing and permanent supportive housing.

3.2 Role of public housing in ending homelessness One major thing that is needed by all three cohorts of people experiencing homelessness identified in the Action Plan, is a stable home that is affordable. Public housing has an essential role to play in expanding housing options for people who are homeless:

Public housing should expand permanent supportive housing options for people experiencing long-term homelessness. This group is often the most vulnerable to premature death, has the most barriers to employment and training and is in need of a significant and ongoing rental subsidy.

Public housing should leverage rapid re-housing responses to homelessness by providing a permanent housing option and allowing families to ‘transition-in-place’, building on what we’ve learned from the A Place to Call Home program. Today housing is less affordable than ever before in Victoria. An important contributor to housing unaffordability for people on fixed incomes has been the

Public housing plays a crucial role for those who have experienced

homelessness to be able to contribute to community in a

healthy way, without it they will go backwards. – PESP team member


declining value of Commonwealth Rental Assistance (CRA). Over the last 10 years rents have skyrocketed faster than inflation—the rate at which CRA is capped. As a result 40 per cent or over 450,000 renters who receive CRA are in housing stressix.

This affordability gap is causing families to experience homelessness for the first time, simply because they do not have access to housing they can afford. Rapid re-housing is a highly efficient response for these households because it provides the right type of housing assistance and support, at the right time. Housing subsidies and supports in public housing could be time-limited for some households, but the ‘transitional’ assistance must be provided in ‘permanent’ housing, rather than forcing people to move. Multiple moves can be highly disruptive and traumatic, particularly for families with young children, as will be discussed in later sections.

Public housing reforms should be accompanied by expansions of flexible brokerage programs and an increase in social housing stock. Public housing is a vital ingredient but does not have the capacity to solve homelessness for all households. In addition to public housing, the availability of flexible funds should be expanded and directed toward rapid re-housing programs that support households to: find new housing in the private or community housing sector, connect to community-based supports and get back on their feet by subsidising the affordability gap between CRA and market rent. Housing and the intensity of supports can be matched to a household’s needs. For some this means time-limited or declining rental subsidies and connections to employment and other cross-sector services which promote successful tenancies. In addition to new and better tools to support people in private rental, social housing stock must also grow to increase affordable housing options for Victorians on the lowest incomes. Government should consider developing creative finance models that include investments by the private and philanthropic sectors (to be explored in another section of this paper).

Public housing plays a very, very important role in assisting people

who have experienced homelessness address trauma and gives them a chance to positively

contribute to the community – fear of having to move will bring back the trauma and make it harder to contribute. – PESP team member


4) How can tenure be made fairer? Consequences of finite tenure

Key recommendation:

avoid transitional models of public housing and time-limited public housing tenure.

The ‘Pathway’ discussion paper proposes changes to tenure policy and raises question about facilitating tenants’ transition from public housing into other accommodation, suggesting that reforms could ‘enhance the possibility for tenants to…transition from public housing to community housing and then from community housing to the private rental market’(p 35). CHP cautions against any reforms that support a ‘transitional’ model of public housing. Time-limited and finite tenure will cause:

potential homelessness

increased public costs

housing and homelessness system inefficiencies

negative impacts on tenant health and wellbeing. 4.1 Potential homelessness There is a growing body of evidence from the US and UK regarding the importance of subsidised housing for families with lower incomes. There is a risk that households who transition out of public housing and into private rental will become homeless or precariously housed. This is of particular concern in Australia, where there is far less protection from steep rent increases than in some other countries. Key findings from the international research show thatx xi:

The characteristics and needs of families who experience homelessness are very similar to other low-income families who are housed.

The important differences between families who are homeless and other families experiencing disadvantage are: (1) they are less likely to have access to subsidised housing and (2) the social networks of families are less likely to provide adequate financial support.

While support services play a key role in enhancing families’ health and wellbeing, housing subsidies alone help most families who exit homelessness stay housed permanently.

Housing subsidies prevent families from becoming homeless.

Public housing is full of really good people, doing great things. Those

that are employed often contribute in a range of ways to make public

housing a positive environment, for example by being role models and an inspiration to people who aren’t

working. – PESP member


Families who exit homelessness without a sufficient housing subsidy are almost three times as likely to experience unstable housing and/or homelessness in the future.

The type of subsidised housing received impacts housing stability, with families in public housing often being more stable than families in other rent-subsidy programs.

Housing allowances and social housing have a demonstrable impact on housing outcomes for people experiencing disadvantage and break the link between losing a job and homelessnessxii.

Given the incredible importance of subsidised housing, combined with the volatility of the private rental market and an increasing affordability gap, time-limited or finite tenure will cause homelessness for a portion of the families impacted. Furthermore, before making any reforms to tenure, comprehensive data is needed to both, determine the housing outcomes of people currently leaving public and transitional housing, and to track the future housing circumstances of people who would be forced to transition out of public housing, if such reforms were implemented. This information should be used to monitor and account for the impacts of any future reforms. In Victoria at present, we do not have comprehensive data available on the characteristics, support needs, housing affordability gaps, employability, health and wellbeing and housing outcomes of existing and future public housing tenants. In this context, CHP is extremely worried about the proposal to make public housing ‘transitional’ with finite tenure. 4.2 Increased cost In the US and Europe, shifts in policy and practice away from transitional models of housing toward prevention and permanent housing models, were driven by the benefits provided by both models when compared to their costs. There are a number of administrative and facility costs that will be incurred by more frequent moves in and out of public housing units including:

the administrative costs of more frequent rent reviews

facility costs of turning over vacant properties on a regular cycle

costs associated with relocation and resettlement assistance of people who ultimately need a permanent home after they leave the ‘transitional’ property

administrative costs associated with an increase in the number of people fighting evictions after being forced to move back into the private market.

Consequently governments in other countries are redirecting the homelessness response away from temporary or transitional models, toward responses that support people in permanent housing.


4.3 Housing and homelessness system inefficiencies

Another implication of ‘transitional’ public housing relates to system inefficiencies. Ultimately all people who become homeless need a permanent home they can afford. In this context a ‘permanent home’ means a safe place in which someone can stay for as long as they want or need. As is referenced in the next section of this submission, a permanent home strengthens a household’s ability to stabilise and rebuild their lives. Having tenure security often allows people who have experienced homelessness a new and better opportunity to reconnect with education, employment, family and/or healthcare. Secure housing is so vital to good health and wellbeing that homelessness services have developed successful models that support people in permanent housing, rather than in emergency or temporary accommodation or through the ‘housing readiness’ model described earlier. Temporary housing can play a role in ending homelessness; however it is not always used strategically to meet the needs of the select groups of people for whom support services in a transitional facility are more effective than moving directly into a permanent home, where transitional supports are made available. Instead temporary or emergency housing often become a ‘waiting room’ for individuals and families who primarily need a permanent home they can afford and links to community-based supports that promote stabilisation. (Examples of people known to benefit most from transitional-type models include people leaving institutions or young people transitioning to independence or out of foster care). Temporary models of housing attempt to increase a household’s self-sufficiency so they are equipped to achieve housing stability. As a result, the program model is lengthening stays in homelessness, as opposed to more directly and immediately supporting households to access a permanent home they can afford. Despite its implications, emergency and temporary models continue to dominate the homelessness system both in Victoria and overseas. In this type of system it becomes increasingly difficult to reduce the prevalence of homelessness:

most of the homelessness resources are directed toward supporting households while they are still homeless

a smaller proportion of homelessness resources are supporting people to sustain tenancies or exit homelessness quickly (prevention and re-housing)

structural factors have resulted in more people being pushed to the brink of homelessness and an associated increase in demand on the homelessness system

which all results in the likely scenario where more households become homeless and remain homeless for longer periods of time, creating system backlogs as less resources are available to help people exit homelessness permanently.

A more efficient system would put more resources into solution-focused interventions that support people while they are in permanent housing. Housing stabilisation and relocation assistance (and short stays in emergency accommodation where necessary) can provide a timely and effective response to households facing a housing crisis, while allowing them to return quickly to stable living situationxiii. This is a much more direct and efficient way of solving homelessness.


A ‘transitional’ model of public housing will increase inefficiencies whereby:

there is less of a focus on targeting resources directly to one of the primary causes of homelessness for most households – a permanent, secure, affordable home—and instead the focus in on providing support to increase self-sufficiency

if tenure is finite, stays in insecure housing are prolonged as a result of the program model and do not necessarily result in a long-term housing outcome

with all the health and wellbeing costs to the household described below, moving more than once results in increased costs of multiple support periods, as opposed to a once-off response that provides a long-term outcome.

4.4 Negative impacts on health and wellbeing Most Australian states and territories are grappling with increased demand on public housing. Investment in public housing has decreased, and supply has not kept pace with demand and public housing has become highly targeted to the most disadvantaged people in our communities. Less people can afford their own homes and many households have been priced out of a huge portion of the private market. Consequently there is greater pressure on public housing, as fewer households are able to exit and average tenure has lengthened. Increased demand and a significant slowdown in growth of public housing stock have led housing authorities across the country to explore a variety of measures to increase exits from public housing, including the Victorian Government’s proposal of ending ‘tenure for life’. Some states, the first being Queensland and NSW, have already changed eligibility and tenure policy. Preceding these tenure reforms, AHURI undertook research into the impacts of security of tenure on tenant outcomes. The research program How does security of tenure impact on public housing tenants? xiv points to the importance of tenure continuity as a source of ontological security; promoting a sense of identity, certainty, control and autonomy. Frequent moves and insecure tenure can lead to negative health and wellbeing consequences for vulnerable families and individuals. The research demonstrates that time-limited tenure in public housing will increase housing disruption, as well as the trauma caused by previous experiences of homelessness and precarious housing among a very large portion of public housing tenants. The study found that the flow on effect from the ontological security that comes with secure tenure has positive impacts on:

Security of tenure encourages participation in education and training because it gives you a

base. If you are in private rental you are worried you will have to

move, which makes it hard to focus on study, but also you may not find

a place near school. – PESP team member


Health and wellbeing. Public housing tenants report improved health and well-being due to reduced stress levels resulting from having a stable place to live. Public housing tenure improves social networks and assists with developing supportive relationships in the community as a result of reduced mobility. Family stability and education. Reduction in mobility among public housing tenants increases residential stability, enabling people to feel more in control, less stressed and stable. As a result people can focus on personal aspirations and family relationships. Parenting capacity improves and children are more likely to stay connected to school. Lack of security of tenure is associated with very poor educational outcomes and increases in ‘drop out’ rates among young people. Social cohesion. People with stable tenure are more likely to develop personal relationships and social networks and are more willing and able to participate in community. The longer a person remains stably housed in one neighbourhood, the stronger the community support network becomes. Employment. While barriers to employment among public housing tenants will be explored in the next section, the flow on effects of secure tenure have been found to improve capacity to find employment. Secure tenure assists work participation by providing people with stability and ontological security which enhances self-esteem and strengthens motivation to find work.

The anxiety about having to leave their home would threaten people’s mental health and make it harder to maintain housing. –

PESP team member


5) How could the public housing system be more flexible?

Increasing social and economic participation

Key recommendation:

consider evidence-based public housing policy reforms to increase economic and social participation among public housing tenants.

Research findings on the impact of housing assistance are varied and complex. Australian and international studies consistently show that public housing rent and eligibility policies create disincentives for public housing tenants to participate in employment. However there are other very important variables that impact on workforce participation that must be considered in any future strategy to improve tenant employment outcomes. A three-year research program of the AHURI RMIT Research Centre examining housing assistance and economic participation in Australia, points to some very important variables that impact on work participation among public housing tenantsxv:

Public housing tenants often lack prerequisites for employment, which directly impacts participation. Compared to the general public, public housing tenants typically have more disabilities, poorer health, lower levels of education, lower incomes and poorer work histories. As a result tenants are usually employed in less well paid and more insecure jobs and their competitiveness in the job market is low.

The major barrier to economic participation identified by tenants is poor health, in particular mental health issues. Poor location of stock and inaccessibility of transport are also barriers.

The combined impact of tax, income support and rent policies is a major factor impacting employment participation. The AHURI study, How does security of tenure impact on public housing tenants?, reports that ‘The financial gains of employment are reduced for most tenants by the combined effect of reduced or total loss of pensions and benefits, increased tax payments and increases in public housing rent. This is known as the ‘effective marginal tax rate’ (EMTR’s). EMTR’s can be so high that employment may result in no or even a reduced income for public housing tenants.’xvi

Income eligibility rules deter job searching by people on public housing waiting lists.

Introduction of fixed-term tenancies is likely to extend disincentives to work for those in public housing tenancies.

The research indicates that the policy challenge is not just about reconnecting people with paid employment, but also about addressing longer-term and difficult issues such as families’ instability, low education levels, poor physical and mental health and combining paid work and parentingxvii.

Often, even if people are working it is not full-time, and

often casual work is not guaranteed. If there was risk

that working might mean having to lose my property

I would stop working. – PESP team member


To improve economic and social participation among public housing tenants, the research points to several policy priorities that the government should consider, including:

integrating public housing with other cross-sector supports to address tenants’ long-term issues related to physical and mental health, family instability and education support

encouraging applicants on the public housing waiting list to participate in employment by relaxing the income eligibility test requirements. Incomes could be reviewed once, at the time when applicants join the public housing waiting list, but then not reviewed again so that tenants are not discouraged from increasing their earnings.

developing opportunities for tenants to increase their incomes by allowing tenants to accrue earnings that result in rents exceeding market rent (relaxing the rent cap). Rent paid in excess could be directed to a ‘Home Credit Fund’ and used toward independent housing, which the tenant would collect upon exiting public housing.

avoiding any income cap and keeping rents set at 25 per cent of income to encourage people to continue to increase their incomes. That way people can move if and when they are financially able.

the impacts of fixed-term tenancies, renewable upon income eligibility requirements. This will likely be counter-productive, as employment participation will reduce preceding income reviews.

6) How can the supply of quality social housing be improved?

Key recommendations:

develop a statewide affordable housing taskforce

fund an ongoing operating subsidy for the future sustainability of public housing

develop creative finance models to grow social housing stock in Victoria

set clear goals and objectives for Victoria’s social housing system

collect and monitor data on housing needs to better match resources.

Victoria's current Housing Act 1983 has the objective of ensuring 'that every person in Victoria has adequate and appropriate housing at a price within his or her means'. The need for a strategy with which to better facilitate this outcome has never been greater.

Accessible, affordable and appropriate homes are a basic necessity for all Victorians, but have become increasingly difficult for the most disadvantaged in our community to obtain. As housing has become less affordable, the private housing market is clearly failing for many working families as well as for the most disadvantaged in our community.

CHP applauds the government for providing, A discussion paper on the options to improve the supply of quality housing, to explore supply-side mechanisms for improving the availability of quality social housing that is financially sustainable. The paper examines development, transfer and financing models against the objectives of:

‘Protecting and enhancing the continued use of social housing resources for those people most in need of assistance’.


‘Capturing the potential for growth in social housing opportunities’. (p 16).

The paper includes several very important models for growing sustainable social housing stock. CHP would welcome the opportunity to work collaboratively with the government to determine which of these models will best fit within the Victorian context and achieve the goals and objectives of Victoria’s social housing system, which are outlined below. CHP believes that any way forward should include government’s commitment to:

6.1 Develop a statewide affordable housing taskforce

The consultation documents outline a range of options for enhancing the availability of affordable housing. However, the levers and policy settings to be applied, cannot be considered in isolation, but rather require a systemic response within the context of the entire public, non-government and private housing sectors.

CHP urges government to develop a statewide affordable housing taskforce, comprised of leading housing experts, tenants, private and philanthropic sector representatives and peak body organisations to join with government and workshop solutions to the key issues impacting affordable housing in Victoria. Those issues include, but are not limited to: ensuring a healthy social mix within community and public housing estates, considering viable operating models for social housing, and developing creative finance models that will work best within the Australian context. 6.2 Fund an ongoing operating subsidy for the future sustainability of public housing

Over the last decade public housing has become highly targeted to people experiencing the most extreme forms of disadvantage. As the discussion paper reported, Victorian Auditor-General Office report, Access to public housing (the VAGO report) ‘highlighted that the situation for public housing was critical and the system faced significant challenges including:

an unsustainable operating model and asset management approach, putting long-term provision of this public service at risk…

an unviable operating model with costs increasingly exceeding revenue.’(p 2)

This has resulted in a growing operating deficit, which must be addressed if we are to continue providing secure and affordable housing options for our most vulnerable neighbours. Considering the current tenant profile, the operating deficit cannot and should not be addressed through rent revenue alone. The future sustainability of public housing will rely on a commitment by government to a recurrent operating subsidy, which must be scaled to best support the housing outcomes described above. 6.3 Developing creative finance models to grow social housing stock in Victoria

A number of reports have highlighted the problem of not only affordable housing but affordable and available housing in the private rental market. Often properties that would be affordable to lower income households are let to higher income households. For households on the lowest 40 per cent of incomes the National Housing Supply Council estimated that there is a shortage of 493,000 rental properties that are affordable and available to low income households.


One of the only ways to overcome this allocation problem is through affordable rental housing programs that are allocated on the basis of need and income criteria, such as public and community housing and the National Rental Affordability Scheme. The government should work in collaboration with the statewide affordable housing taskforce (mentioned above) to develop creative finance models to grow these housing programs. CHP has long been advocating for new models that leverage, as much as possible, investment by the private, financial and/or philanthropic sectors. While there are a number of important supply-side interventions explored in the paper, it will be important for government to determine what is feasible to undertake within the current political context. CHP would welcome the opportunity to explore these models in more detail. One intervention that is not mentioned in the discussion paper, because it is mainly a federal initiative, is the National Rental Affordability Scheme (NRAS). CHP urges the state and federal governments to examine, improve and expand this program as a means of enhancing private investment in stock growth. See Appendix One for additional information about CHP’s NRAS recommendations. 6.4 Set clear goals and objectives for Victoria’s Social Housing system

The social housing system should be properly defined and assessed against its ability to improve outcomes for current and prospective residents. Any future social housing reforms should be firmly based on the achievement of outcomes across each of the following inter-related areas:

Accessibility: the ability to access housing, homelessness being the most evident example of failure.

Affordability: the ability to be able to pay for housing, while having enough income for the other life necessities.

Appropriateness: the extent to which the housing is suitable to the households needs including, whether the tenure is secure and the housing is well located and maintained.

6.5 Collect and monitor data on housing needs to better match resources

A key problem identified in the VAGO report is the absence of a reliable evidence base regarding the future demand for public housing assistance. This is symptomatic of the shortfall of information on the range and nature of housing assistance requirements in Victoria.

The Victorian Government should collect and monitor data to identify the current housing assistance needs of key segments of the Victorian population, particularly focusing on people who are vulnerable and disadvantaged. Information should be used to:

identify the range and type of housing market failures in the Victorian housing system with a focus on failures affecting low income, vulnerable and disadvantaged Victorians


identify the effect of such failures on specific groups and stages of household life cycles

identify any gaps in current housing assistance programs including relevant supply gaps

identity the best programmatic and supply options to address the identified gaps.

7) Conclusion

CHP has welcomed the opportunity to contribute to future public housing reforms by making this submission to Pathways to a fair and sustainable social housing system and Social Housing: A discussion paper on the options to improve the supply of quality housing. Preventing and ending homelessness will require an efficient housing and homelessness system that can effectively target the right type of housing and support assistance to households’ needs. To ensure that all Victorians with the lowest incomes have access to a home they can afford, Victoria must provide a suite of affordable options, in which public housing plays a critical role. The government must invest in the sustainability of public housing, but also develop creative and new finance models to grow social housing stock, and expand and improve programs that support households to obtain and maintain tenancies in the private rental market. CHP looks forward to continuing to work in collaboration with the government, homelessness sector, other peak body organisations, philanthropic and private sector representatives and tenants to find affordable housing solutions for Victoria.


Appendix one NRAS: Key recommendations

In 2008, the Australian Government made a significant attempt to address the affordable housing shortfall with the National Rental Affordability Scheme (NRAS). NRAS is an indirect state and federally funded subsidy that aims to create 50,000 new affordable rental units across Australia over 4 years. NRAS attempts to attract private investments in new affordable rental stock by offering successful applicants an incentive for each approved dwelling that is rented to eligible low and moderate income households at a rate that is at least 20 per cent below the prevailing market rate. ‘The Scheme offers annual incentives for ten years. The two key elements of the Incentive are:

A Commonwealth Government Incentive currently of $7,486 per dwelling per year as a refundable tax offset or payment; and

A State or Territory Government Incentive currently of $2,495 per dwelling per year in direct or in kind financial support’xviii.

Eligible properties must restrict rents for the 10-year tax credit period and there are no restrictions on the use of the dwelling when that contract expires. NRAS guidelines encourage private developers and investors to partner with non-profit organisations to manage the properties. NRAS is an important step toward solving the affordability crisis. It will increase the supply of housing in the short term, and has potential to attract large scale private investments in the affordable housing sector. Program limitations There are provisions of the program that are likely to limit growth and affordability of over the long term. The funding model uses a flat rate tax subsidy which causes problems:

The model does not account for the variability in cost of projects in high cost areas. If the subsidy is not enough to cover the costs of keeping the property affordable, this creates an incentive for investors to sell the property after the 10 year credit period in order to make money on the investment.

The model may discourage large scale investment altogether by not providing a dependable, sufficient return on investment.

The model does not account for projects that have higher costs as a result of renting to households with the lowest incomes. It has the potential to increase affordable housing stock, but projects may not be able to afford to keep rents low enough for people in the greatest need. There are no other permanent housing production programs targeting these households so NRAS should do more to ensure people with extremely low incomes have access to housing.


Recommendations: NRAS should be tweaked to attract a larger volume of private investment, ensure stock remains affordable over the long term and increase housing options for people in greatest housing stress. Australia should look to the Low Income Housing Tax Credit (LIHTC) program in the US for examples of how to make NRAS a more efficient supply-side intervention. Similar to NRAS, the LIHTC program provides tax incentives to encourage private investment in affordable housing developments. It is responsible for about 90 per cent of all affordable rental housing created in the US today.xix LIHTC tax credits are awarded to developers of qualified affordable housing projects. Developers sell the tax credits to investors to raise capital for their projects. The cash from investors reduces the amount of money developers have to borrow, thereby lowering production costs and allowing for lower rents. Investors receive a dollar-for-dollar credit against their Federal taxable income each year over a period of 10 years. The amount of the annual credit is based on the amount invested in the property. Tax credits often have a much larger impact than tax deductions, as they reduce tax liability dollar-for-dollar. The NRAS funding model should be modelled off the U.S. tax credit program to better reflect the funding obligations for each project, instead of a flat rate structure. This would provide a return on investment that could attract and retain private investors to ensure affordable housing projects remain affordable over time. If tax credits are awarded on the basis of project costs, NRAS could also do more to meet the needs of people who are homeless or on fixed or extremely low incomes. NRAS only requires that rents are restricted to 80 per cent of local market rent. Because of the rate at which rent prices have skyrocketed in recent years, a 20 per cent restriction on rent is still unaffordable to many low income households. Therefore a percentage of total NRAS units should be dedicated to households with incomes at or below 30 per cent of the area median income (households with extremely low incomes). Under the LIHTC program, the law requires properties to remain affordable for 30 years and many states provide incentives for longer commitments to affordability. Owners can sell the property after 15 years by submitting a request to the state Housing Finance Agency (HFA). The HFA has a year to find a buyer willing to maintain the rent restrictions for the balance of the 30 years and if the property cannot be sold, tenants are provided with a subsidy to keep rents affordable. NRAS reforms should adopt similar safeguards for keeping developments affordable. Rent restrictions should be placed on properties for at least 30 years.


Appendix two Rapid re-housing and permanent supportive housing overview

Over the last two decades there has been a growing body of evidence on successful and cost-effective responses to homelessness, which are moving away from supporting people to transition through temporary accommodation. Instead communities are assisting people who become homeless to quickly stabilise in housing to diminish the turmoil caused by homelessness, and to connect to supports in the community that promote stability and well-being. Consequently responses in the Australia, the US and Europe are beginning to shift the emphasis away from crisis and transition-centred responses and toward prevention and housing stability. Two models, which have proven very successful, rapid re-housing and permanent supportive housing, are explored below. Rapid re-housing A third of those who access homeless services in Victoria are people in families, the majority of whom become homeless after they are forced to leave home due to family violence, or are evicted due to a financial crisisxx. Most families and single adults who are homeless have lived independently for some time and can return to housing in a relatively short period of time if they have access to an affordable homexxi xxii. Rapid re-housing helps these households locate affordable housing in the community, negotiate with landlords and link to health, employment and training and other supports that promote successful tenancies.

Providing the right mix of housing assistance and support has proven to be considerably less expensive than providing an emergency shelter and transitional housing response.

Evidence from the US shows that in Massachusetts, the average short-term stay in a shelter is three and a half months and costs $10,900 per family, compared to average rental costs of around $3,000 in assistance over that same time period. For families with long stays in shelter the costs are equivalent to five or more years of a full federal rental subsidy where tenants pay 30 per cent of their income on private rentalxxiii

In Victoria the results are similar. The Accommodation Options for Families (AOF) program is providing a rapid re-housing response, assisting a family to establish or maintain a private rental tenancy for a total cost of around $5 to $6,000 (over a three to six month time period). Assisting that same family in medium transitional accommodation would cost around $26,000xxiv.

New investments in rapid re-housing have contributed to as much as a 40 per cent decrease in family homelessness in some US citiesxxv. Victorian examples of rapid re-housing, including the Accommodation Options for Families and Private Rental Brokerage Programs, are also showing very promising results in ending homelessnessxxvi.


Permanent supportive housing: As mentioned in the Victorian Homelessness Action Plan, there is a smaller group of people who spend very long periods of time homeless and cycle in and out of emergency services and/or hospitals, psychiatric and correction facilitates. Permanent supportive housing has proven to be an extremely successful and cost-efficient solution for this group. The combination of permanent affordable housing and long-term wrap-around supports, including health, mental health and coordinated case management, ends homelessness permanently for people experiencing long-term homelessness and decreases their use of publicly-funded services.

Due to expansions of permanent supportive housing in the United States, chronic homelessness fell by 28 per cent nationally between 2005 and 2008, and some communities have experienced much larger declinesxxvii. Local examples of supportive housing models proving highly successful in Victoria include the Journey to Social Inclusion (J2SI), Melbourne’s Street to Home, the Elizabeth Street Common Ground and Wintringham Housing.


References

i Department of Human Services 2011, Victorian Homelessness Action Plan 2011-2015, State Government of Victoria, Melbourne. ii Culhane, Dennis P. , Metraux, Stephen and Byrne, Thomas 2011, 'A prevention-centered approach to

homelessness assistance: a paradigm shift?', Housing Policy Debate, 21: 2, 295 — 315. iii Busch-Geertsema, Volker 2011, Housing First in European Contexts, Presentation at the Seminar on Social

Innovation to Tackle Homelessness: Re-enforcing the role of the European Structural FundsBrussels, 28 June 2011. iv Busch-Geertsema, Volker and Suzanne Fitzpatrick 2008, ‘Effective Homelessness Prevention? Explaining

Reductions in Homelessness in Germany and England,’ European Journal of Homelessness 2: 69 – 95. v Pawson, Hal, Gina Netto, Colin Jones, Fiona Wager, Cathie Fancy and Della Lomax 2007, Evaluating

Homelessness Prevention. London, England: Office of the Deputy Minister, Communities and Local Government Publications: http://www.communities.gov.uk/publications/housing/preventhomelessness. vi National Alliance to End Homelessness 2006, Promising strategies to end homelessness, Washington DC.

vii Culhane, Dennis P., Stephen Metraux, Jung Min Park, Maryanne Schretzman, Jesse Valente 2007, ‘Testing a

Typology of Family Homelessness Based on Patterns of Public Shelter Utilization in Four U.S. Jurisdictions: Implications for Policy and Program Planning’ Departmental Papers (SPP). viii

The Australian Bureau of Statistics (ABS) General Social Survey: Summary Results, Australia, 2010, shows that of the adults surveyed who had experienced homelessness in the last 10 years, 31 per cent were homeless for less than 4 weeks and 27 per cent for less than three months. ix Productivity Commission 2012, Report on Government Services 2012, Commonwealth of Australia, Canberra,

Table 16A.16 x Shin, Mary Beth, Dennis Culhane, Debra Rog 2005, ‘Family Homelessness: Background Research Findings

and Policy Options’ Departmental Papers (SPP). xi Shin, Mary Beth 2009, ‘Ending homelessness for families: the Evidence for Affordable Housing’, National

Alliance to End Homelessness, Washington DC xii

European Commission 2010, Study on housing exclusion: Welfare policies, housing provision and labour markets. xiii

Culhane, 2008. xiv

Lewis, Jeanette 2006, Policy Bulletin: How does security of tenure impact on public housing tenants, Australian Housing and Urban Research Institute, Melbourne. xv

Wood, Gavin 2009, Research & Policy Bulletin: What can be done to improve employment outcomes among people receiving housing assistance?, Australian Housing and Urban Research Institute, Melbourne. xvi

Lewis, 2006. xvii

Wood, 2009. xviii

Commonwealth of Australia 2009, Department of Families, Housing, Community Services and Indigenous Affairs, National Rental Affordability Scheme (NRAS): http://www.fahcsia.gov.au/sa/housing/progserv/affordability/nras/Pages/default.aspx xix

US Department of Housing and Urban Development, LIHTC Basics: http://www.hud.gov/offices/cpd/affordablehousing/training/web/lihtc/basics/. xx

Australian Institute of Health and Welfare 2011, Government-funded specialist homelessness services, SAAP national Data Collection annual report 2012-11, Canberra. xxi

Culhane, Dennis P., Stephen Metraux, Jung Min Park, Maryanne Schretzman, Jesse Valente 2007, ‘Testing a

Typology of Family Homelessness Based on Patterns of Public Shelter Utilization in Four U.S. Jurisdictions: Implications for Policy and Program Planning’ Departmental Papers (SPP). xxii

The Australian Bureau of Statistics (ABS) General Social Survey: Summary Results, Australia, 2010, shows that of the adults surveyed who had experienced homelessness in the last 10 years, 31 per cent were homeless for less than 4 weeks and 27 per cent for less than three months. xxiii

Culhane, Dennis P., Stephen Metraux 2008, ‘Rearranging the Deck Chairs or Reallocating the Lifeboats?:

Homelessness Assistance and Its Alternatives’, Journal of the American Planning Association 74.1 (2008): 111-121. xxiv

Flatau, Paul Kaylene Zaretzky, Michelle Brady, Yvonne Haigh and Robyn Martin 2008, The cost-effectiveness of homelessness programs: a first assessment, AHURI Final Report No.119

http://www.communities.gov.uk/publications/housing/preventhomelessness

http://www.endhomelessness.org/content/general/detail/2436

http://www.fahcsia.gov.au/sa/housing/progserv/affordability/nras/Pages/default.aspx

http://www.hud.gov/offices/cpd/affordablehousing/training/web/lihtc/basics/


xxv

National Alliance to End Homelessness 2010, Ending Family Homelessness: Lessons from Communities, Washington DC. xxvi

HomeGround Services, Hanover Welfare Services, VincentCare and SASHS Western 2012, Housing homeless families: An evaluation of the Accommodation Options for Families (AOF) program. xxvii

National Alliance to End Homelessness 2010, Chronic Homelessness: Policy Solutions, Washington DC.

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