CEO’s Report

Why aren’t governments investing more in social and affordable housing? It’s not as if we all can’t see the results, indeed, a growing number of us are feeling the consequences.  A recent AHURI reportestimated that over the last 20 years social housing numbers increased by 4%, far outstripped by household numbers which grew by 30% over the same period. Combine this with house prices rocketing upwards and incomes for most people just stuttering forwards and it looks very like a car crash waiting to happen.

The 2016 census data released a couple of weeks ago shows that one consequence of this under investment is the rise in homelessness across Australia and in NSW particularly, where the numbers of homeless people jumped to almost 38,000, an increase of 37% on the 2011 figures.  In NSW the main explanation seems to be the severe overcrowding many people face in exchange for getting an affordable roof over their heads.

It isn’t just people on the lowest incomes feeling the pinch, as demonstrated by research from the University of Sydney’s Urban Housing Lab for the Teachers Mutual Bank, Firefighters Mutual Bank and Police Bank. This shows that nurses, teachers and police are being driven to the outer reaches of the city (and beyond) as high house prices price them out of communities close to jobs.

So again, why aren’t we seeing governments take up the infrastructure challenge and invest in a large scale social and affordable housing program? In the absence of robust housing needs assessments common in other jurisdictions the Federation asked Judith Yates, currently an Honorary Associate in the School of Economics at the University of Sydney, to prepare estimates of the need for additional social and affordable housing in NSW.  Her conservative estimates – based on getting back to the proportion of social housing we had in 1996, meeting the needs of households eligible for affordable housing who are currently in rental stress and responding to household growth over the next ten years – demonstrate the challenge – 12,500 additional social and affordable homes per annum. It will get larger the longer we wait to start.

So is the reason that it costs too much? Well it also costs not to invest, as Cameron Parsell at the University of Queensland explained in an article in which he showed that governments were spending on average $13,100 more each year to keep someone homeless than if they had provided them with a home and support services.

And governments do invest big dollars in improving Australia’s infrastructure. The Commonwealth 17/18 budget earmarked $75B over ten years for spending on ‘critical airport, road, and rail infrastructure projects’. While in NSW the state government increased its four year infrastructure spending to $80B on transport, as well as water, energy, education, justice and cultural projects

So perhaps we need to take a few lessons from the transport lobby and make an additional and compelling argument for social and affordable housing. It is the reason that the Federation, with support from the national industry body, CHIA, and nine community housing providers commissioned an investigation into the impact of the housing market’s performance on economic productivity from the City Futures Research Centre at UNSW. See Making Better economic cases for housing below.