Social housing as infrastructure: an investment pathway
This research modelled five alternative pathways to funding social housing and found the ‘capital grant’ model, supplemented by efficient financing, provides the most cost effective model for Australia. The research also established the current and future unmet need for social housing in different parts of Australia.
This research builds a customised method for establishing both current unmet need (the backlog) for social housing and future projected need, based on a proportionate share of expected future household growth. It also provides evidence for the diverse geography of land and construction costs based on industry and project level data.
Amplify Insights: Housing Affordability and Homelessness
Delves into the key drivers of homelessness and looks at the critical issue of housing affordability in Australia, while offering insights into the way forward.
Homelessness in Australia is an urgent and growing problem. On any given night, 1 in 200 people are homeless. The total number of people experiencing homelessness grew by 14 per cent between the last two censuses (2011-2016), to over 116,000 people.
Homelessness is not just rooflessness. We have seen the greatest increases in homelessness among people living in severely overcrowded dwellings; thus making homelessness increasingly hidden. Certain groups are particularly at risk of homelessness, including Aboriginal and Torres Strait Islander peoples (3 in 100), young people (1 in 100), and people from culturally and linguistically diverse backgrounds (1 in 100). The key drivers of homelessness include domestic violence, the high costs of housing, the inadequacy and inappropriateness of existing housing stock, and the discharge of people from institutions who do not have safe, stable, affordable homes to go to.
We do not have a housing supply crisis in Australia; we have an affordable housing supply crisis.
Energy Stressed in Australia
New report finds energy spending has hit a new high for low-income households, who spend 6.4% of their income on energy on average, with a quarter spending more than 8.8%.
High-income households spend just 1.5% on average.
ACOSS and the Brotherhood of St Laurence (BSL) commissioned Associate Professor Ben Phillips, from the ANU Centre for Social Research and Methods, to analyse the cost of energy (electricity and gas) for a range of household types in Australia. Households living with low incomes or experiencing disadvantage, who are paying disproportionately more of their income on energy than the national average, are more likely to experience energy stress. Combined with the current housing affordability crisis, low wage inflation, long-term unemployment and only one job for every eight people looking for paid work, higher energy costs have had serious consequences for some households.
Some have been tipped over the edge, and are going without heating and cooling, meals, and other basic essentials in order to afford their energy bills.
To inform the development of appropriate policy solutions, policymakers need to better understand who is most impacted by high electricity prices.
Homelessness in Western Australia: A review of the research and statistical evidence
The release of the Australian Bureau of Statistics' 2016 Census estimates of homelessness revealed that homelessness in Australia had risen 4.6% relative to the 2011 Census.
Despite national reforms and significant policy and practice efforts, homelessness continue to persist and, indeed, grow. This calls for a reflection and further research to develop a stronger understanding of the drivers of homelessness and, from a policy perspective, a way forward that engages all groups of societal stakeholders to end homelessness rather than manage it.
WA Strategy to End Homelessness
The Western Australian Strategy to End Homelessness has been developed by the WA Alliance to End Homelessness following an 18-month community campaign bringing together contributions of many people from homelessness services, those experiencing homelessness, funders of services and members of the community.
The Strategy is intended to be replicable in terms of process and acts as a guidance in terms of approach. The plan can act as a blueprint and be adopted by any community wishing to end homelessness.
The Alliance encourages other communities and stakeholders to use the plan which will assist in ensuring there is a consistent approach being used across the state.
The WA Alliance to End Homelessness is comprised of a group of organisations that have come together to end homelessness in Western Australia.
You can read more about the Alliance here. Click the document to read in full.
Area of housing continuum: Social housing and affordable housing for key service workers.
Client group served: Social housing clients as well as individuals on low incomes in Broome.
Project value: $11.21 mil inclusive of land.
How it was delivered: The Broome North homes were built in partnership with LandCorp (Estate Developer)and Foundation Housing
Funding: Foundation Housing
How affordability is ensured long term: Some properties within the development have attracted NRAS funding. All homes feature a wide range of low maintenance passive thermal design appropriate for the Kimberly environment.
Awards: 2014 Master Builders Award
Housing affordability issues likely to persist
The Committee for Economic Development in Australia (CEDA) recently (August 29, 2017) released a report Housing Australia which provides a holistic review of housing in Australia.
The report provides a raft of recommendations for all tiers of government that should be further explored.
These recommendations include: relaxing planning restrictions, particularly those imposed by local councils - making them more consistent and allowing for increased density; developing consistent planning and funding models for transport infrastructure to better connect new housing developments to the various employment hubs; improving protections for long-term renters; further relaxing rules around the means testing of income received from downsizing in situations where it results in greater housing density; moving towards annual land tax in place of transaction taxes on housing such as stamp duty and taxing a larger component of capital gains.
Read and download Housing Australia report
67 Bennett Street, East Perth
Area of housing continuum: Long term accommodation for low income singles and couples and low income individuals who earn above social housing limits.
Client group served: Singles and couples on low incomes.
Project value: $26million
How it was delivered: 67 Bennett St, was previously the site of an old style 21 bed lodging house owned by Foundation Housing.
Foundation Housing funded the development, with a $1.7m contribution from the WA Housing Authority. The 70 units were a significant part of the organisation’s commitment to deliver 112 new affordable units of accommodation following the stock transfer that occurred through the Community Housing Agreement with the Western Australian Department of Housing.
Funding: Funding was provided by Foundation Housing with a $1.7m contribution from the WA Housing Authority.
How affordability is ensured long term: Bennett Street has been designed with sustainability in mind. Sophisticated design features have been incorporated into the building to minimise utility costs for residences and maintenance costs for Foundation Housing. Its position in the inner city, close to transport, education, training and employment opportunities and services such as healthcare, all contribute to a better standard of living for tenants.
If you know of any affordable housing projects that you would like showcased, please contact: Karen Valenti at firstname.lastname@example.org
Rents still not affordable in WA
National Shelter, Community Sector Banking and SGS Economics and Planning earlier this year released the Rental Affordability Index that revealed rents were still not affordable in Western Australia.
The index, which is released on a biannual basis, is an indicator of rental affordability compared with household incomes.
See Rental Affordability Index interactive map here: http://www.sgsep.com.au/maps/Joseph/RAI_May17/
The RAI is based on Western Australian households with an income of $85,000, and it is a much different picture for those people living under those incomes.
For people on income support - for instance the Newstart allowance - rental properties are still extremely unaffordable.
Also, for people on very low incomes - which is less than 50 per cent of the median income of $85,000 - most of Western Australia, including the city, remote, rural, and regional areas, remains unaffordable.
Shelter WA wants to see the development of more social housing to support Western Australians doing it tough.
See the Rental Affordability Index (RAI) https://tinyurl.com/n4vmm2n
• Western Australia is the only Australian jurisdiction where average household incomes for households, that rent their accommodation, are higher in regional areas than in metropolitan Perth.
• When housing is unaffordable, low income households pay a large proportion of their income on rent, often foregoing basic necessities. If this cannot be sustained, it can lead to homelessness.
• With more than 18,500 people on the Housing Authority wait list, and an average wait time of three years, the housing needs of Western Australians most in need are not being met.
• The average household that rents accommodation in greater Perth pays 21 per cent of its total income on rent – the most affordable of all the metropolitan areas in Australia.
• Some areas north of the river remain unaffordable to severely unaffordable, while some urban pockets can be further considered moderately unaffordable.
Mental health, housing and homelessness
Recent research shows more than 25 per cent of Specialist Homelessness Services (SHS) clients with a mental health issue reported housing crisis as the main reason for seeking assistance.
The Australian Institute of Health and Welfare (AIHW) has recently updated its Mental Health Services in Australia (MHSA) website with the new research.
The site also includes information from the Specialist Homelessness Services Collection (SHSC) describing clients who receive services from specialist homelessness agencies and the assistance they receive, including clients with a current mental health issue.
The report talks about the need for appropriate accommodation and support as critical for individuals in both prevention and response.
The impact of unaddressed homelessness and insecure housing among people with a severe mental illness has significant social and economic dimensions broader than health.
Key points from the report include:
- About half of SHS clients (47.6%) with a current mental health issue reported an episode of homelessness in the 12 months before presenting to an agency, compared with one third (32.6%) of those clients without a current mental health issue
- For clients with a current mental health issue, 18–24 year olds had the highest rate of SHS agency use followed by 15–17 year olds (635.0 and 586.3 per 100,000 population respectively) in 2015–16
- Rates of SHS agency use were higher for females with a current mental health issue than males with a current mental health issue
- The rate of Aboriginal and Torres Strait Islander SHS clients with a current mental health issue was more than 6 times that of non-Indigenous Australians
- More than 1 in 4 SHS clients with a mental health issue reported housing crisis as the main reason for seeking assistance, followed by domestic and family violence inadequate or inappropriate dwelling conditions and financial difficulties. In contrast, domestic and family violence, housing crisis and financial difficulties were the top three main reasons for seeking assistance for SHS clients without a current mental health issue.
To find out more go to: https://mhsa.aihw.gov.au).
The End of the Road – Rooming Housing in South Australia
Shelter SA has been working on a project, over the past year, focused on the operation of for-profit rooming houses. This is the first methodical study of the rooming house sector in South Australia since 2003.
The Shelter SA project was instigated in response to clear findings in the earlier research that provision of housing in this sector lacks sufficient or consistent regulation and is ill-suited to the diverse and often severely compromised health and personal circumstances of vulnerable residents.
Shelter SA has undertaken a targeted examination of for-profit rooming house provision in our State, evaluated research into practices here and in other jurisdictions, considered relevant legislative frameworks regulating the sector, and conducted a direct consultation with residents, landlords and service providers.
While there is variability in the quality of housing provided in this sector, and some landlords who endeavour to meet the needs of their residents, our study has identified that some rooming houses are well below accepted community standards. Participants in our consultation cited various safety issues they have seen including unsafe stairs, faulty electrical wiring and leaking roofs.
The Shelter SA project also found that the congregate nature of rooming houses has meant that highly controlled approaches to management of vulnerable residents have become enshrined in the housing model. At their worst, rooming houses contravene the rights of residents to privacy, visitation from family and friends, control over bedroom space and the details of everyday life. For vulnerable citizens facing multiple health and personal issues, a monitored and restrictive environment does not support recovery or independence, with established research confirming such environments can undermine mental health.
Housing Industry Forecasting Group's 2016-17 Update
The WA Housing Minister Peter Tinley this week formally launched the Housing Industry Forecasting Group’s (HIFG) 2016-2016 Update at an event in Perth.
The HIFG is a joint industry and government organisation that provides independent commentary about the housing sector.
Rents Still Not Affordable for Western Australians on Low Incomes
A new report has found rents are still not affordable for people on low incomes in Western Australia.
National Shelter, Community Sector Banking and SGS Economics and Planning recently released the Rental Affordability Index (RAI).
The index, which is released on a biannual basis, is an indicator of rental affordability compared with household incomes.
Please see the Rental Affordability Index (RAI): https://tinyurl.com/n4vmm2n
Please see the Rental Affordability Index (RAI) map: http://www.sgsep.com.au/maps/Joseph/RAI_May17/
Inquiry into funding and delivery of programs to reduce homelessness
New research by the Australia Housing and Urban Research Institute (AHURI) investigates the funding and delivery of programs to reduce homelessness in Australia, providing the first comprehensive examination of the funding of Specialist Homelessness Services and other services assisting those experiencing homelessness. It found current levels of funding are below levels required to meet client demand, and that any additional funding sources supplement, not replace, government funding.
Key points from the research:
- Government funding is the dominant for of funding, accounting for 84.6 percent of funding for SHSs
- Current levels of funding are below levels required to meet client demand
- Non-government funding sources, including philanthropic foundations and the corporate sector, fundraising, and sponsorship play a minor role in the financing of homelessness services
- Given the high level of unmet need, it is important that additional funding sources supplement, not replace, government funding
- Government homelessness programs examined do not have specific funding programs targeted to Indigenous homelessness
Read the full report on the AHURI website.
The housing affordability crisis; fringe FoMO & shifting priorities
Guest article by Simon Venturi - Director + Architect, NOMA*
The term 'housing affordability crisis' is increasingly used in Australia suggesting to many there are no affordable houses available. Houses are certainly more expensive but are also much larger, whilst accommodating fewer occupants and spread over a much larger urban footprint. Buying a small house on the fringe was an option for many first home buyers in the past, but is no longer acceptable to most young people gripped by infrastructure FoMO (fear of missing out).
Housing prices in Australia grew at an annual rate of around 3% from 1950 to 1990. This increased to 6% in the period between 1990 to 2015. The ratio of median house price to household income was around two from 1950 to 1985 but increased to around four between 1985 to 2015. These statistics are often used to support the 'affordable housing crisis' however there are many complex factors contributing to this. Within the same timeframe the average house size has steadily increased from 100sqm to 243sqm while the average occupants per household has decreased from 3.5 to 2.61.
In recent years priorities have also changed amongst young people and standards of living have increased significantly. The 'smashed avocado' syndrome is not altogether un-true. Many young people are choosing to spend their money on lifestyle rather than property paying a higher proportion of their income to rent in established inner city locations rather than purchasing. Previous generations entered the market in small houses on the fringe, gradually working their way up to living in larger houses in inner city locations over a period of time.
The 'housing affordability crisis' has largely resulted from increasing standards of living rather than unpredictable spikes in property prices. It is somewhat unrealistic to expect a large supply of affordable housing in premium inner city locations. It is equally unrealistic to expect the average house to maintain a level of affordability when its size has increased 2.2sqm per year for the past 65 years.
Housing priced at the lower end of the market is typically located on the outer suburban fringe, much further from the city than in previous years. Affordable house and land packages on the fringe are still accessible to many, the problem is most people don't want to live in these areas. Urban sprawl is one of Australia's most significant economic, social and environmental challenges. Our state and federal governments have been reluctant to fully commit to addressing urban sprawl over a long period of time. Fringe suburbs have poor access to established social, recreation, education, employment, transport infrastructure and require significant commuting times for those who choose to live in them. Outer suburb residents suffer from fringe FoMO.
The other option for first home buyers is smaller developer generated inner city apartments which are often typically low in quality. Older residents have worked for years to afford to live in established inner city suburbs. They are increasingly alarmed by the emergence of cheap apartment complexes adversely impacting on their neighbourhoods, to satisfy the younger generation’s locational preference. Local community backlash to apartments is a significant negative force in achieving higher inner city densities.
Most government agencies working in the affordable housing space generate extensive investigations establishing price caps for one and two bedroom apartments. These are typically achieved by maximising plot ratios, minimising apartment sizes and reducing developer profit margins which all inevitably impact on the quality of outcomes. This results in a product not dis-similar to that commonly found in the market at a marginal cost saving and doesn't often produce innovative outcomes.
These are a few of the complex forces influencing housing affordability in Australia. Housing generated over a long period of time however has not adapted to these forces and our changing needs. Flexibility of use within houses is gaining traction, accommodating shared use by multiple family generations or non-family occupants. Home owners increasingly want flexibility to expand and contract zones in their house for work at home, semi-independent teenagers, young adults, elderly parents or to rent to others at certain times in their life cycle. Local councils have also relaxed the requirements for ancillary dwellings and 'granny flat' in recent years. These are important fine grain responses to our changing needs signalling a change in thinking.
The importance of design efficiency however is not fully acknowledged. A well designed small house can be more usable than a much larger house which is poorly designed. If you consider this notion in relation to the entire housing stock in Australia one could easily imagine a small lift in the design efficiency of the mass housing we are typically generating would have a significant impact on housing affordability by reducing the areas we need to construct.
Examining the economic procurement of apartment projects is critical to achieving successful outcomes. Conventional procurement structures are limited by commercial market forces which restrict the outcomes that can be achieved. The Commons development by Breathe Architecture in Brunswick, Melbourne was conceived on the notion that the market is not achieving good outcomes but while apartments generated in conventional ways are selling, there is no incentive to lift the standard. Purchasers as future residents were heavily involved in the decision making process. An 'ethical procurement structure' was developed to achieve a sustainable and affordable outcome. Located next to a train station the development provides no parking or air conditioning, simple finishes with no ceilings, a shared laundry and a dedicated shared car, all of which provided significant cost savings. The procurement structure named Nightingale is being replicated to generate other successful outcomes in Melbourne.
The City of Fremantle is currently establishing a scheme using the Baugruppen housing model which originated in Europe and has been used extensively throughout Berlin. The term translates as 'building groups'. Future residents co-operatively design the complex based on communal values and are free to explore non-standard housing typologies which developer led projects requiring marketing wouldn't consider. This procurement model typically generates unique outcomes and a strong sense of community at significantly lower costs by eliminating developer profits as well as marketing costs. Resident led and funded development is an alternative to the conventional developer led, investor financed model and has delivered many high quality, sustainable as well as affordable outcomes in Europe.
These are the types of innovative initiatives requiring further exploration and development which may hold the key to addressing the issue of housing affordability in Australia. They require and inherently possess a change in thinking. We cannot continue to generate larger, spatially inefficient houses accommodating increasingly fewer inhabitants and also expect them to be affordable. Simply reducing the size of houses is also not an adequate solution in itself. Young people and retirees for that matter, are increasingly open to living in smaller inner city dwellings near established infrastructure. As such we need to generate high quality, spatially efficient and flexible dwellings to accommodate them which also contribute to, rather than adversely impact on our established inner city communities.
*Data sourced through Australian Bureau of Statistics