Australia could end homelessness

Why the government must open the door to public housing

Adrian Pisarski

Economics and finance, Government and governance, Social policy | Australia

26 September 2017

With proper financing of community housing, Australia has the ability to end homelessness – if only its leaders have the political will, Adrian Pisarski writes.

The recent establishment and removal of large camps of people experiencing homelessness in Sydney and Melbourne provide the media with dramatic images and stories, replete with tragic victims, nasty villains and heroic defenders. Such stories mask a general indifference and collective culpability that has allowed our housing policy to fall victim to greed and division.

Homelessness is the consequence of a failure of housing policy and good planning. It feeds on a rise of selfishness, and a public willingness to accept chasmic division in Australian society.

Most homelessness is invisible, with too many living out of cars and tents, or huddling in the nooks and crannies of our cities, awaking from their cardboard beds to the contempt of commuters ignorant of the ease in which the same fate may befall them.

We bemoan their fate, but too often secretly condemn them as individual failures, our selfishness refusing to see the long decline of the principle of fairness that once insisted we ensure no one can fall that far.

The growth of homelessness has come about at the same time as, and owing to, the decline of public housing.

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This story necessarily begins with inequalities in our tax system. Australia has sufficient, yet currently wasted and market-distorting, resources available now for any party willing to use it. The re-application of our current tax expenditures on Capital Gains Tax discounts, Negative Gearing excess, over-generous depreciation allowances, superannuation concessions and trust accounts, would provide a sufficient subsidy essential to the provision of affordable and social housing. It would also start to rebalance our markets by eliminating currently market-distorting policy settings.

Let me establish some basic points. First, no amount of encouragement and cajolement of private market processes will build affordable housing, let alone social housing. There will always be a subsidy gap between the housing, location, and amenity needs of the occupant, and the resources provided by the private sector.

Second, most social housing is occupied by people who can’t find housing in the general market. This category is over-represented by Aboriginal and Torres Strait Islander people who are often excluded from housing via discrimination; people with disabilities; frail elderly people; traumatised people; sole parents; and people who have previously experienced homelessness.

Even leaving aside moral obligations, our decision to not provide housing to these people costs society far more than it would to provide it.

Third, Australia’s housing system is broken. It has been insufficiently funded for decades and only houses the most in need with the lowest incomes. You virtually have to become homeless before you are housed. That’s crazy policy.

Fourth, despite various inquiries, reports, studies and government announcements, there has been little tangible progress made on homelessness in Australia.

So is there any good news?

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One glimmer of hope is in the makings of a vibrant affordable housing system, through the growth and development of community housing, as a supplement to private housing. This system was boosted by the Rudd and Gillard government’s economic stimulus and National Rental Affordability Scheme (NRAS), but now languishes in an insufficiently robust national regulatory framework. The creativity and ingenuity of this sector need to be unleashed for Australia to see ongoing benefits.

Recently the Turnbull government added some important system architecture with the extension of tax breaks to Managed Investment Trusts, and the establishment of the National Housing Finance Investment Corporation (NHFIC), which will oversee a Bond aggregator and an infrastructure fund. The government is also ready to unlock parcels of federal land and state contributions through a renegotiated National Affordable Housing and Homelessness Agreement (NHHA) with states.

These are all reasonable measures, however they will not be enough to find the resources needed to truly grow community housing in Australia. Instead, we need a new approach.

The elements for successful policy exist, but what is lacking is political will. It starts with admitting the problem, and it proceeds by developing a national plan led by a national Minister – someone with the ability to weave the available threads of government, private finance and community contributions into a robust policy fabric.

The threads are many. In terms of financing, they include: tax reform to create the financial capacity to make long term commitments and negotiate outcomes with states; a capital fund for net new growth in social housing, which can be measured and made transparent to all; tax credit arrangements to meet a range of subsidy levels and to attract equity scale investment; and the establishment of minimum portfolio requirements to allow bidders to utilise tools flexibly.

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In terms of housing policy, the government should look at gradually transferring the existing social housing ‘estate’ to Community Housing Providers (CHPs), who can then establish the capital base from which growth and renewal may occur. With the additional resources, CHPs should be allowed to manage a range of real estate within established parameters.

The government should also encourage a broad mixed tenure approach to affordable housing. This could involve a range of negotiated rental points, including full market rates and discounted market rates, all tested against benchmarks which don’t exceed a set percentage of income.

In addition, the government should start by establishing accurate data on current housing needs, and establishing targets to be met and measured. And throughout the whole process, the focus must remain on outcomes for the occupants.

All of this would create a suite of tools and facilities which CHPs may automatically apply for and draw on without having to submit to programs or wait for the next new funding bucket. It would allow approval to proceed based on meeting objectives and robust regulatory requirements nationally.

It will grow affordable housing and allow tenants to move between tenures as their circumstances change, without having to change dwellings unless need requires it. It will allow the Commonwealth and States to become the backer and regulator of a system of housing provision which fills gaps in our current system, without challenging the role of private housing markets but which offers genuine choices to households.

Private markets may work for the majority of Australians, but they fail a large minority who deserve another option. If we grasp the opportunity to fight for and win a new way forward, we might even have a chance of ending homelessness.

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One Response

  1. Dr Sean Foley says:

    Not long ago there was an interview (on the ABC of course!) with a man from Finland. There they have put providing housing at the centre of their national policy for addressing homelessness, poor health, substance abuse, unemployment, social violence, and other socioeconomic.
    If I recall correctly, they call it ‘Housing First’. They have built some 100,00 housing units in the last 5-10 years, in parallel they have seen significant improvements in social ‘psotives’ (employment, health, etc.) and parallel declines in social ‘negatives’.
    In their view and experienvce access to stabel housing is the key for resolving a wide range of other supposedly ‘intratatable’ social problems.
    How might such a policy and approach work in Australia?

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