Understanding the Australian Housing System

NSW Disability Network Forum workshopAdina Hotel, Crown St Surry Hills

4 February, 2014

Acknowledgement of the traditional owners of the land we meet on today

About Shelter NSW and what we do Focus of discussion on the Australian

housing system and how it works

Introduction

Today’s housing landscape is dominated by housing stress and an insufficient supply of affordable housing

Central proposition

To focus on some implications for your work as disability advocates through an examination of the housing system & the current crisis experienced by households on low incomes

To provide information and resources about the housing system and some of the drivers of housing policy

Aim of today’s workshop

The workshop covers

What is the housing system and how does it work?

The phenomenon of housing stress and the need for affordable housing

Housing tenures The role of governments How housing policy is formed

Anglicare Australia, 2013, Rental Affordability Snapshot

The Politics of Housing, Sarah Toohey, Campaign Manager, Australians for Affordable Housing, 2012

Renovating housing policy. Grattan Institute, Jane-Frances Kelly, October 2013

Recent reports & useful articles

“Living Independently…A Guide to the NDIS & Housing”, Bruce Bonyhady, Chair NDIA, HousingWORKS – Dec. 2013

New South Wales Auditor-General Report – Performance Audit ‘Making the best use of public housing’ 30 July, 2013

More reports & useful articles

True or false?

Talk to the person you are sitting next to and consider the eight statements on housing – true or false

Be ready to report back answers

Quick quiz:housing myth or reality?

Tenure of all Australian households, Pie chart 2011

Owned without a mortgage

32%

Owned with a mortgage35%

Rented: real estate agent

16%

Rented: state or territory housing

authority4%

Rented: other9%

Other 3%

Wikimedia Commons

McKell Institute

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The meaning of home

The establishment of a home goes to the heart of what makes us human, and the bonds and connections which enable individuals to live life with dignity and contribute to the wellbeing of others.

The health of the wider community and the economy on which it depends, hinge on the continuing contribution of individuals. Without a home this contribution is not possible.

Housing is not only a place called home, but also an asset that accrues value – which impacts on all three tenure forms:Homeownership: accrues homeowners’ wealthRental housing: accrues wealth for landlordsSocial housing: comprises an asset that can be

reconfigured by social housing providers to meet other needs

Housing as a wealth-creating asset

Today’s housing landscape is dominated by housing stress and an insufficient supply of affordable housing: A low-income or moderate-income household is in

‘housing stress’ if they pay more than 30% of their gross income on housing

Housing is generally considered to be ‘affordable’ if household members are not in ‘housing stress’ after they have paid for their housing (whether they are renting or buying)

Major housing challenges in Australia

In Australia in 2009–10, there was a shortage of 539,000 private rental dwellings that were both affordable and available for renters with gross incomes in the bottom 40% of income distribution

Insufficient supply is linked to: high levels of housing stress: in 2009–10, 60% of lower-income

rental households were in rental stress low vacancy rates in private rental market: national vacancy rate for

dwellings in the private housing market was 1.9% in January 2013. homelessness: estimate of 105,237 homeless people on census

night in 2011 — a 17.3% increase from 2006

Insufficient supply of affordable housing

Housing stress varies by tenure — in NSW in 2009–10:

62% of lower-income renter-households were in rental stress

54% of lower-income homeowner-households were in mortgage stress

Housing stress by tenure

Housing stress — census night in 2011 95.3% of low-income renter-households are in rental stress 79.3% of low-income homeowner-households are in mortgage stress

Affordable rental and purchase stock in September 2012 3% of rental stock is affordable for very low-income households 8% of rental stock is affordable for low-income households 0% of home purchase stock is affordable for very low-income households 0% of home purchase stock is affordable for low-income households

Public housing stock — December 2012 8,695 dwellings

Key housing data: Sydney LGA

Housing stress — census night in 2011 76% of low-income renter-households are in rental stress 58.8% of low-income homeowner-households are in mortgage stress

Affordable rental and purchase stock in September 2012 16% of rental stock is affordable for very low-income households 45% of rental stock is affordable for low-income households 0% of home purchase stock is affordable for very low-income households 5% of home purchase stock is affordable for low-income households

Public housing stock — December 2012 6,440 dwellings

Key housing data: Wollongong LGA

Housing stress — census night in 2011 71% of low-income renter-households are in rental stress 62.5% of low-income homeowner-households are in mortgage stress

Affordable rental and purchase stock in September 2012 5% of rental stock is affordable for very low-income households 30% of rental stock is affordable for low-income households 0% of home purchase stock is affordable for very low-income households 8% of home purchase stock is affordable for low-income households

Public housing stock — December 2012 6,083 dwellings

Key housing data: Campbelltown LGA

include:

The stock — that is, the type of housing The condition of the stock and where it is located How housing is allocated The kinds of tenure (for example, homeownership,

social housing and private rental)

Components of a housing system

The housing system

The way housing is organised is called a housing system. It is a combination of:

how housing markets work (how housing is produced, distributed and consumed — the markets are shaped by demand and supply) and

how governments intervene to correct imbalances in the markets

The way the housing systemdevelops

depends on:

• History• Values• Politics• Economics• Traditions

Recognise the existence and effects of competing paradigms:Neoliberalism – small government, reliance on the logic

of the market, individual effort and freedom, valorisation of continued growth, deregulation

Social justice – welfare or interventionist state, regulation of economy around work & job creation, mandated provisions of social security for individuals on low incomes, collective responsibility, social inclusion, human rights

A contest of ideas or paradigms

Anglicare Australia – Rental Affordability Snapshot 2013:‘Policy interventions must address housing inequality forcefully and with out hesitation. Along with income, affordable housing is one of the few issues that genuinely crosses all sectors and population groups within Australia. Like NDIS or Gonski, this is an issue that will take genuine intervention from governments, business and society as a whole. Action for change must be lead and as such it is the Federal Government which must make a commitment to intervention.’

Social justice - policy goals

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Policies are based on values and philosophies

Often we accept those values without questioning them

Three government policy directions

Market orientation: individual freedom, consumer choice, self-help, entrepreneurialism

Welfare/citizenship: community, common interest, social partnership, universal entitlement

Mixed model: targeted welfare delivery, safety net, some universal services, the market will deliver

Homeownership

The Great Australian Dream

2 barriers for low-income households becoming homeowners: high entry costs, plus the challenge of meeting recurrent costs

House price inflation is socially divisive

Price inflation of houses: it is not just about the value of the land

Homeownership

In 2011, 66% of NSW households were homeowners: 33% were owners without a mortgage: 820,004

households 33% were owners with a mortgage: 824,295

households

Private rental housing

Privately-owned housing which an owner rents out to someone else

Private rental housing

In 2011, 18% of NSW households were in the private rental market: 430,134 households

Challenges facing low-income households in the private rental market include:

Expensive Low vacancy rates Insecure Discrimination

Private rental

Social housing

In 2012, there were 141,303 households in social housing in NSW:

111,087 households in public housing dwellings 25,844 in community housing dwellings 4,372 Aboriginal Housing Office dwellings (state-owned and

managed Aboriginal housing)

Trends in social housing: Residualisation Significant decline in social housing funding between 1996 and

2008: if social housing dwellings as proportion of total housing supply had been maintained at 1996 level, there would have been additional 90,000 dwellings in 2008

Increased allocations to those in greatest need Many low-income households are no longer eligible for social

housing

Social housing

Public housing

Housing that is owned and managed by government and rented to eligible households

Public housing in NSW: Dwellings (2012): 112,310 Occupied dwellings (2012): 111,087 Households paying less than market rent (2012): 101,148 New households assisted (2012): 6,505 Applicants on waiting list (2012): 52,986 ‘Greatest need’ allocations as proportion of all new allocations

(2011–2012): 65.6%— compared to 38.9% in 2007–08

Public housing

Community housing

Housing managed by non-profit non-government landlords

Aboriginal housing organizations are not usually included

Community housing in NSW: Dwellings (2012): 25,311 New households assisted (2012): 4,021 ‘Greatest need’ allocations as proportion of all new

allocations (2011–2012): 69.7%— compared to 69.7% in 2007-08

Community housing

Aboriginal housing

Housing targeted to Aboriginal people that is owned or managed by Aboriginal organizations, including:

state-owned and managed Aboriginal housing (NSW Aboriginal Housing Office)

Aboriginal community organizations (such as Aboriginal land councils)

Aboriginal housing

NSW Aboriginal Housing Office:

Dwellings (2012): 4,478 Occupied dwellings (2012): 4,372 Households paying less than market rent (2012): 2,854 New households assisted (2011–12): 418 Applicants on waiting list (2012): 2,200 ‘Greatest need’ allocations as proportion of all new allocations

(2011–2012): 31.0%— compared to 12.9% in (2007–08)

Aboriginal community housing organisations in NSW:

Permanent dwellings (2011): 4,716 Occupied permanent dwellings (2011): 2,125 Aboriginal community housing organizations (2011): 206 Currently funded/actively registered Aboriginal community

housing organizations (2011): 97

Aboriginal housing

Supply of money — interest rates

Taxation and expenditure Taxes, e.g. goods and services tax Tax expenditures (tax concessions and exemptions become

‘foregone revenue’, e.g. exemption from capital gains tax of family home)

Direct expenditures, e.g. National Rental Affordability Scheme, National Affordable Housing Specific Purpose Payment

Regulation Legislation, e.g. trade practices law, privacy law Subordinate legislation (‘regulations’) Mandatory codes of practice

Government interventions – federal

Taxation and expenditure Taxes, e.g. land tax, conveyancing transfer duty on house sales Tax expenditures, e.g. exemption from transfer duty for first

homeowners Direct expenditures, e.g. Tenants Advice and Advocacy

Program

Regulatory interventions Environmental planning policies and instruments Tenancy protection laws Boarding house regulation

Government interventions – state

Taxation and expenditure Taxes, eg. rates, developer contributions for affordable housing Direct expenditures, eg. in-kind support to community-based

housing providers

Regulatory interventions Zoning Development controls

Government interventions – local

Join us! Become a member, connect with us on Facebook and subscribe to our Shelter NSW eBulletin

www.shelternsw.org.auTel: (02) 9267 5733

Paula Rix, Senior Policy Officer (Education and Outreach): paula@shelternsw.org.au

Shelter NSWWorking for a fair and just housing system

Shelter NSW would appreciate your feedback on this workshop.

Please leave your completed evaluation in the box or folder marked ‘evaluations’ before you leave.

Evaluation

Australians for affordable housing, Homelessness Australia, National Shelter and ACOSS have policy goals to address the constraints discussed today:

Increase Commonwealth Rent Assistance (CRA) by 30% Increase Newstart Allowance Commitment from state & territory govt’s to extend

National Partnership Agreement on Homelessness beyond 2013

Adequate/ guarantee funding for homelessness programs

Tax and regulatory reform

Possible Solutions

Commonwealth funding for housing assistance is mainly under the National Affordable Housing Agreement covers public rental housing State-owned and managed Aboriginal housing Community housing Home purchase assistance Private rental assistance Former Crisis Accommodation Program Specialist homelessness services(NAHA replaced CSHA in 2009, and includes a number of housing sector reforms)

Commonwealth housing assistance

Affordability: National Housing Supply Council – closed Nov 2013 Housing Affordability Fund First Home Savers AccountsAffordable Housing: National Rental Affordability Scheme (NRAS)Homelessness: National Partnership on HomelessnessAboriginal housing National Partnership on Remote Indigenous Housing

Commonwealth housing and homelessness initiatives

National Rental Affordability Scheme Tax-free incentives for development of new affordable

rental housing — $6,000 from Commonwealth and $2,000 from state government per dwelling, for each of 10 years

Dwellings are targeted to low and moderate-income households

Rents are set at below-market rates Aim to add 50,000 dwellings to affordable rental housing

supply

Commonwealth housing initiatives on affordable housing

Homelessness National Partnership Funding for new initiatives addressing homelessness to

implement Commonwealth Government’s white paper, The road home

National Partnership was to expire on 30 June 2013, but there is a 12–month extension, plus a future agreement is currently being negotiated

Commonwealth housing initiatives on homelessness

National Indigenous Reform Agreement (Closing the Gap) An agreement between Commonwealth, and state and territory

governments to ‘close the gap’ in Aboriginal disadvantage Its building blocks to ‘close the gap’ include healthy homes Commenced in 2008

National Partnership on Remote Indigenous Housing Commonwealth funding of $1.94 billion over 10 years for construction of

up to 4,200 new dwellings, and upgrades of up to 4,800 existing dwellings, focused on rural and remote Aboriginal communities

Commenced in 2008 and revised in 2010

Commonwealth housing initiatives onAboriginal housing

Boarding houses — Boarding Houses Act 2012 partly commenced on 1 January 2013 (introducing boarding house register), plus occupancy rights scheme still to commence

Specialist homelessness services — sector reform (Going Home Staying Home) in progress, to commence by July 2014

Planning system — review of land use planning and ‐development assessment system in progress‐

State Environmental Planning Policy (Affordable Rental Housing) 2009

NSW housing and homelessness initiatives