The time is right to act on housing affordability

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By: Sam Almaliki

The latest report on the housing crisis graced newspaper front pages last month and the coverage of the afford- ability and supply crisis has only intensified. The peak housing advisory body, the National Housing Finance and Investment Corporation (NHFIC), has released its flagship’ research re- port on the nation’s housing shortage. And, bottom line, it is bad and getting worse.


The ‘perfect storm’ of high inflation and interest rates, ballooning construction costs, record low vacancy rates as well as strong population growth and post-pandemic groans, has met decadal neglect and underfunding. The headline-making figure that demand will outstrip supply by more than 100,000 over the next five years seems to have taken some by surprise. But we have been hearing this for years. Our housing system is failing everyday Aussies, notably young and vulnerable Australians.


At the federal level, the Albanese government’s key legislation, the Housing Australia Future Fund, which could see some 30,000 new social and affordable homes built, has stalled in the Senate, with the Greens Party impeding progress to the detriment of working people. This dance feels unbearably familiar. And all the while we as a nation accept people living in tents for years following national disasters and accept single parents escaping abuse living in cars. These are social problems with political causes and political solutions. 


According to census data, homelessness is at a record high with a worrying trend of young people increasingly experiencing homelessness compared with the 2006 figure. Sydney and Melbourne consistently rank in the top five most unaffordable cities to live globally but, in our suburbs and regions too, the cost of living and, in particular, household rents and mortgages are alarmingly on the rise. According to research published by the Community Housing Industry Association (CHIA), over 100,000 Victorian households are experiencing rental stress. “The status quo just isn’t working. Everyone knows we need a new approach”, said CEO Wendy Hayhurst in response to last week’s report.


The supply of affordable, social and community housing stock is sorely missing. We need to refocus on outer suburban and regional development projects to make living outside Melbourne and Sydney attractive to young people, especially front line workers.

We need long-term investment to make our second cities and towns the cultural and employment hotspots that they could be. The reimagining of Parramatta is a good starting point for what we can do elsewhere in places like Sunshine in Melbourne.

 

Tinkering and driving the demand side of the equation will not fix this problem. It goes without saying our solutions should try to avoid creating other problems down the track. For example, giving aspiring home owners access to super or lowering the deposit threshold may address some of the short-term symptoms but changes nothing about the background unaffordability of the housing stock.


As our recent report at the John Curtin Research Centre, Super Solutions, recommends, the role of superannuation rests with the fund managers themselves and creating a policy framework that encourages and enables institutional investment.

Namely this could be done through supply side regulatory, tax and zoning reform. Australia needs a mature conversation about housing affordability. We have a planning system that is clogged up by bureaucratic red tape, as well as a deficit of leadership and anything close to the political man- date required to solve our housing crisis and drive outer urban development and infrastructure projects. Of course, we would need buy-in from the whole of society to get the right outcome. Broad support and contribution from major players as well as often side-lined voices.


The city of Birmingham in the UK is hosting their National Housing Summit this September. Great initiative we should be planning on having one in our very own Birmingham Gardens in NSW. Rents going through the roof, mortgage repayments sky-high, homelessness and housing insecurity at all-time highs, as well as a backdrop of a cost-of-living crisis we need action on now.


There is a valid argument that we do not need yet another summit, another conference to hear what we already know. Wrong.


We need coordinated action with consensus from all the key players to ensure there is genuine willingness to act on the root causes. We need a national summit that centres the dignity of affordable, secure and safe housing, and coordinates action addressing supply bottlenecks and dated tax settings. One that brings all levels of government, industry, superfunds, homelessness organisations, unions, representatives from renters and landlords together into a truly multi-sector coalition to act on housing afford- ability across the country.

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