Housing affordability and social housing

Parliament house flag post

Housing affordability and social housing

Posted 21/11/2013 by Matthew Thomas





Image source: Wikibooks
Australia’s housing affordability situation is dire, and looks set to worsen. The figures, as outlined in a recently released AIHW report, are stark. They indicate that between 2001 and 2011 national average house prices increased by 147 per cent, from $169,000 to $417,500, while median household disposable income rose by 57 per cent. Further, the proportion of Australian households in housing stress (that is, spending over 30 per cent of their gross household income on housing costs, either mortgage repayments or rent) has increased from 14 per cent in 1994–5 to 18 per cent in 2011–12, with 2 in 5 (42 per cent) of these being low-income households (in the lowest 40 per cent of the income distribution).

According to the recently abolished National Housing Supply Council (NHSC) the fundamental problem is one of supply and demand. As a result of a number of factors, chief of which are: Australia’s growing and ageing population; the trend toward smaller household sizes and larger dwelling sizes; major changes in household composition and relationships; taxation policy; land release and zoning; and labour costs, the NHSC argues that housing supply is simply not keeping up with underlying demand. As at June 2011, the Council estimated this shortfall at 228,000 dwellings. It projects growth in the overall gap between demand and supply to increase to 370,000 dwellings by 2016 and 492,000 dwellings by 2021.


Judging by a speech made in July 2013 by Kevin Andrews, Minister for Social Services, and a closing address given by Minister Andrews to the National Housing Conference in November 2013, the Government is well aware of the scale and potential consequences of Australia’s housing affordability problem. While the Government’s intentions in relation to housing and homelessness policy have not been specified at this stage, Minister Andrews has provided some indication as to the Government plans to address the national housing problem. Minister Andrews has suggested that, among other things, the Government wishes to make the National Affordable Housing Agreement (NAHA) ‘competitive and performance-based’. As such, it intends to introduce benchmarks for the states’ and territories’ delivery of new dwellings and to tie a percentage of Federal funding to state and territory outcomes against these benchmarks.
The Government has also intimated that it is considering making changes to the National Rental Affordability Scheme, which offers incentives to investors to make new properties available to low- to middle-income earners at 20 per cent below market price. Specifically, Minister Andrews has suggested that the scheme could be opened up to direct small investor participation, as opposed to the current system which is based on allocating bulk incentives.

These strategies, along with others that the Government may adopt, could help to increase the nation’s overall housing supply. However, given the size of the shortfall, it is likely that the gap between supply and demand will continue to grow, and that housing affordability in Australia will deteriorate.

In this context, there is a clear need for a significant supply of social housing stock to meet the needs of Australia’s low- to moderate-income households, who cannot afford private market rental in many areas of Australia. Without this essential safety net, financial stress among low-income earners in particular is likely to increase, as is the incidence of homelessness.

In his recent speeches, Minister Andrews has indicated that the Government is reluctant to invest directly in public (that is, government-owned) housing. It intends to support, where appropriate, the transfer of public housing to the community housing sector, as did the previous Rudd-Gillard Government. Perhaps the main rationale behind such a transfer (whether this be management out-sourcing or actual stock transfer) is that community housing providers are in a position to leverage their assets and seek private finance in order to build more housing stock. Because they have more ways of funding their housing services than do state housing authorities—they have access to tax subsidies and donations and many of their tenants may be eligible for Rent Assistance where public housing tenants are not—community housing providers are potentially able to fund the construction of more social housing stock (and to maintain this stock) in a way that state and territory governments are not.

The question is, just how successful is this approach likely to prove?

The policy of transferring public housing to community housing providers is relatively new in Australia and thus far only small scale transfers have been enacted. As a result, it may be some time before it is possible to assess the policy’s success in increasing the overall stock of social housing. That said, based on the limited evidence available, a number of housing researchers have observed that achieving substantial growth in affordable housing provided by the community housing sector will be ultimately dependent on increased public investment.

 


Thank you for your comment. If it does not require moderation, it will appear shortly.

Add your comment

[Click to expand]

We welcome your comments, or additional information which is relevant to a post. These can be added by clicking on the ‘Add your comment’ option above. Please note that the Parliamentary Library will moderate comments, and reserves the right not to publish comments that are inconsistent with the objectives of FlagPost. This includes spam, profanity and personal abuse, as well as comments that are factually incorrect or politically partisan. We will close comments after three months.




Captcha
Generate a new image
Type characters from the image:

Facebook LinkedIn Twitter Add | Email Print

FlagPost

Flagpost is a blog on current issues of interest to members of the Australian Parliament


Parliamentary Library Logo showing Information Analysis & Advice

Archive

Syndication

Tagcloud

Refugees asylum climate change immigration Australian foreign policy parliament social security welfare policy elections welfare reform school education health financing higher education Australian Defence Force emissions trading indigenous Australians women private health insurance people trafficking illicit drugs gambling health reform federal election 2010 United Nations Employment Asia disability income management Middle East Medicare Australian Bureau of Statistics statistics sport health forced labour federal budget Afghanistan Industrial Relations Carbon Pricing Mechanism politics dental health United States aid child protection environment poker machines Australia in the Asian Century Australian Sports Anti-Doping Agency steroids World Anti-Doping Agency National Disability Insurance Scheme detention aged care 43rd Parliament slavery health system Law Enforcement Australian Federal Police Criminal Law Fair Work Act Australian Public Service governance labour force people smuggling transport debt taxation international relations constitution New Zealand food WADA Australian Crime Commission pharmaceutical benefits scheme pensions public service reform children's health Aviation foreign debt gross debt net debt defence capability parliamentary procedure Senate Senators and Members ALP ASADA Newstart Parenting Payment multiculturalism Youth Allowance sea farers social media Higher Education Loan Program HECS federal state relations accountability Papua New Guinea youth paid parental leave same sex relationships corruption coal seam gas customs planning federal election 2013 Australian Electoral Commission doping OECD crime health risks International Women's Day Gonski Review of Funding for Schooling sex slavery Special Rapporteur Northern Territory Emergency Response social policy welfare ASIO intelligence community terrorist groups Australian Security Intelligence Organisation carbon tax mining High Court military history electoral reform employer employee renewable energy regional unemployment fishing European Union Federal Court family assistance skilled migration banking United Nations Security Council Australian economy forestry food labelling vocational education and training Drugs UK Parliament welfare systems Indonesia children Constitutional reform local government codes of conduct terrorist financing homelessness Parliamentary remuneration money laundering Trafficking in Persons Report energy science social inclusion human rights paternalism Australian Secret Intelligence Service sexual abuse terrorism World Trade Organization Australia public health China housing affordability bulk billing political parties water productivity health policy Governor-General US economy trade unions domestic violence export liquefied natural gas foreign bribery firearms question time speaker superannuation public housing election results by-election expertise public policy climate Intergovernmental Panel on Climate Change leadership voting Department of Agriculture Fisheries and Forestry regulation Pacific Islands reserved seats research and development new psychoactive substances synthetic drugs UNODC carbon markets animal health middle class welfare ADRV Census Indigenous constitutional recognition of local government referendum consumer laws PISA competition policy royal commission US politics violence against women language education baby bonus Leaders of the Opposition citizen engagement policymaking Australia Greens servitude Trafficking Protocol forced marriage Population rural and regional mental health alcohol entitlements ministries Hung Parliament social citizenship maritime Iran transparency ANZUS regional students school chaplains federal budget 2011-12 salary Medicare Locals primary care Building the Education Revolution Members of Parliament Scottish referendum early childhood education Middle East; national security; terrorism social services Criminal Code Amendment (Misrepresentation of Age to a Minor) Bill 2013 online grooming sexual assault of minors ACT Assembly national security smoking plain packaging tobacco cigarettes Asia; Japan; international relations Work Health and Safety Migration; asylum seekers; regional processing China; United States; international relations fiscal policy Racial Discrimination Act; social policy; human rights; indigenous Australians Foreign policy Southeast Asia Israel Palestine asylum refugees immigration political finance donations foreign aid disability employment Economics efficiency human rights; Racial Discrimination Act employment law bullying asylum seekers Animal law; food copyright Australian Law Reform Commission industry peace keeping contracts workplace policies same-sex marriage disorderly conduct integrity retirement Parliament House standing orders prime ministers election timetable sitting days First speech defence budget submarines workers financial sector Canada Somalia United Kingdom GDP Tasmania world heritage political engagement leave loading Trade; tariffs; safeguards; Anti-dumping public interest disclosure whistleblowing Productivity Commission limitation period universities Ireland cancer gene patents genetic testing suspension of standing and sessional orders live exports infant mortality honorary citizen railways disciplinary tribunals standard of proof World Health Organisation arts international students skilled graduate visas temporary employment visas apologies roads Italy national heritage NHMRC nutrition anti-dumping Rent Assistance obesity evidence law sacrament of confession US presidential election international days DFAT UN General Assembly deregulation Regulation Impact Statements administrative law small business Breaker Morant regional engagement social determinants of health abortion Members suspension workplace health and safety marine reserves hearing TAFE Victoria astronomy resources sector YMCA youth parliament Korea fuel rebate Australian Greens presidential nomination Racial Discrimination Act political parties preselection solar hot water Financial Action Taskforce Horn of Africa peacekeeping piracy Great Barrier Reef Stronger futures political financing political education Social Inclusion Board early childhood National Quality Framework for Early Childhood Education and Care Murray-Darling Basin sanctions Norway hospitals republic President Barack Obama Presidential visits qantas counselling Korean peninsula Work Choices biosecurity hendra environmental law federalism federation preselection therapeutic goods Therapeutic Goods Administration plebiscites computer games pests suicide nuclear COAG Ministerial Councils floods ADHD stimulant medication advertising electricity extradition standards conscience votes poverty preventative health rural health coastal erosion Parliamentary Budget Office NATO work-life balance

Show all
Show less