Monthly digest on housing affordability and homelessness – May/June 2019

Jun 28, 2019

This is a monthly digest of interesting articles, research reports, policy announcements and other material relevant to housing stress/affordability and homelessness – with hypertext links to the relevant source.

The business case for social housing as infrastructure  As part of a wider inquiry into social housing as infrastructure, this AHURI report (15 May) raises the central question of whether infrastructure business case methodologies (including cost benefit analysis or “CBA”) are the most appropriate for application to social housing. It explores alternative approaches to developing business cases for social housing, including the “avoided cost” approach, and notes the limitations of infrastructure concepts such as CBA in the context of welfare interventions.

What are the different types of homelessness?  This AHURI brief (27 May) summarises the six categories of homelessness defined by the Australian Bureau of Statistics (ABS), and provides a good reminder that rough sleepers constitute only one of the six, representing some 7% of the 116,427 people counted as “homeless” on Census night 2016. The most numerous category (almost 44% of the total) incorporated those living in “severely” crowded dwellings, of whom close to half were aged 19 to 34. Of this category, a third lived in NSW, and 54% were male.

The changing geography ofhomelessness: a spatial analysis from 2001 to 2016  This detailed AHURI report (30 May) shows where homelessness has been rising and falling over a 15-year period. It finds increased concentrations in Australia’s major cities, particularly in NSW and Victoria and notably in the homelessness category of “severely” overcrowded accommodation. It also points to rises in areas with a shortage of affordable private rental housing, most acutely in capital cities such as Sydney, Melbourne and Hobart. The study finds a substantial spatial mismatch between the distribution of homelessness, and specialist homelessness service capacity. Also noted are demographic and cultural differences in the changing mix of the homeless, pointing to the prevalence of overcrowding in areas with young children and amongst younger generations, along with high rates of homelessness amongst indigenous people. A number of policy development options are canvassed.

When is a dwelling considered “crowded” and “severely crowded”  According to this AHURI brief (30 May), Australian agencies, including the ABS, define crowding by the principles established in the Canadian National Occupancy Standard (CNOS), which measures the number of people per bedroom for each dwelling and is based on the “norms” of sleeping and living in a western nuclear family culture. It is based on a nuanced understanding of the social and family relationships of those in the dwelling. For example, it assumes that couples and their children should not share a bedroom, and nor should children over age 5 of different genders. A “severely” crowded dwelling is one which needs 4 or more extra bedrooms to house the people living there in accordance with the principles of CNOS.

More people are retiring with high mortgage debts, with huge implications  This article from The Conversation (12 June) references ABS survey of income and housing data covering the 25 years from 1990 and 2015, which shows the increasing proportion of mortgage debt holders across every home-owning age group, with the sharpest increase among those approaching retirement. For home owners aged 55 to 64, the proportion with mortgage debt tripled from 14% to 47%. Among those aged 45 to 54, it doubled. The average mortgage debt-to-income ratio amongst mortgage holders roughly doubled across every home-owning age group. Since 1970, the national dwelling price to income ratio has doubled. The implications of all this include increased psychological distress, particularly for older mortgage debtors, and increased pressure on the age pension system.

Citizen led movements designed to improve housing affordability  This article from The Conversation (18 June) notes the NZ’s government recent backtracking on their proposed introduction of a capital gains tax aimed at tempering speculation in the housing market, one of the world’s most unaffordable. In so backtracking, NZ PM Jacinda Ardern bowed to significant opposition and media pressure – surprising given the leadership and courage she displayed in the aftermath of the Christchurch massacre. The article lists some international examples of citizen led movements designed to counter the challenges of housing affordability. Berlin (where 85% of the population rents) has witnessed a grass roots movement opposed to the sell-off of public housing in the mid-2000s, which resulted in rapid rent increases.

Loneliness looms for rising numbers of older private renters  This article from The Conversation (12 June) reminds us that a growing number of older Australians don’t own their own homes. These older renters are at high risk of loneliness and anxiety as a result, particularly when renting privately. The article explores the critical impact that certain types of housing tenure have in increasing people’s feelings of loneliness. It concludes, based on interviews with about 80 older private renters and social housing tenants, that those in private rental are far more likely to feel lonely than those in social housing.

Is this a housing system that cares?  The newly re-elected Morrison government, and new Housing Minister (Michael Sukkar), should recognise that the value of housing is not just economic, but an infrastructure for care, say the authors of this article from The Conversation (28 May). They point out that houses are hubs of care practices and relations, places where we care for children, elders, partners and ourselves. Houses are also anchors for community and neighbourhood-based care. Without secure and affordable housing, care becomes very much more difficult, particularly for those who are forced into expensive private rental, with low security of tenure.

Chilly house? Mouldy rooms? How to improve low-income renters’ access to decent housing  This article from The Conversation (5 June) shines a light on the impact that poor-quality housing can have on people’s quality of life, their physical and mental health and comfort, and in particular the problems this poses for low-income households. The authors call for tighter tenancy laws (noting that long-term rental is becoming more common), which not only impose “minimum standards” (including energy efficiency) for rental housing but also improved security of tenure, with the onus for legal enforcement shifting from tenants (who have little power and leverage) to suitably empowered regulators. Social housing providers could lead by example, with transparent reporting on property conditions.

If it’s voluntary for developers to make affordable housing deals with councils, what can you expect?  According to this article from The Conversation (7 June), voluntary programs under which developers negotiate with local development consent authorities often generate less affordable housing than mandated systems, and do so in more opaque ways. The authors contrast mandated inclusionary zoning in certain overseas markets with voluntary systems (such as that in Victoria), and highlight the limitations of the latter, particularly given disparities of knowledge and negotiation advantage between developers and consent authorities. They note that San Francisco’s mandated policies have generated 4,600 permanently affordable units since 2002, with developers receiving no incentives in return for being required to deliver this housing. Vancouver requires developers wishing to build above a 3:1 plot ratio in the CBD to provide social housing or other community amenities.

Housing affordability has improved slightly, but people on lower incomes will continue to struggle  Despite some slight improvements in affordability across NSW, Queensland and WA since 2017, the recently published Housing Affordability Report by the Bankwest Curtin Economics Centre (BCEC) shows that affordability for those on lower incomes remains challenging, despite falls in house prices and rents in key markets since 2017. This article from The Conversation (31 May) notes that some 37% of all households recently surveyed reported difficulty regularly meeting housing costs (at least a few months a year), rising to around half of all renters and low-income households, and 56% of one-parent families. The authors point to the need for “a large and sustained supply of subsidised rental housing and a secure private rental sector that offers a real alternative to ownership”.

Berlin is freezing rents for the next 5 years, as part of the city’s efforts to stem the housing crisis  According to a report by Reuters, reflected in this piece from Business Insider Australia (25 June), the Berlin government will freeze rents in the city for 5 years starting in January 2020. Reuters also reports that rent in the German capital has doubled since 2008. Around 85% of Berlin residents choose to rent instead of owning their home.

Solutions to affordable housing, according to Frasers Property CEO  Rod Fehring, CEO of a leading property developer group, Frasers Property, told the Australian Financial Review (8 May), in the lead up to the recent Federal Election, that if he were in the “top job” he would tackle affordable housing once and for all through a set of tax reforms (including to GST) designed to give institutional investors in build-to-rent housing the same benefits of ownership as any other investment grade asset, and require at least 10% of such housing to be affordable for short, medium and long-term tenure. The withholding tax rate for foreign institutional investors in residential housing is currently double the rate of investment in other real estate. He would also remove relevant land tax and GST barriers.

Affordable housing: who needs it and why  This text of a short interview (15 May) by UNSW’s Ben Knight with UNSW City Futures Research Fellow Dr Laurence Troy, provides some plain English explanations of basic issues about “affordable housing”, including: what it is; who is responsible for providing it; how it differs from social housing; how it has been impacted by the housing boom; and why we need to improve supply of it.

Share and Enjoy !

Subscribe to John Menadue's Newsletter
Subscribe to John Menadue's Newsletter

 

Thank you for subscribing!