Ignoring the housing crisis wont make it go away
NSW is suffering a homelessness crisis and an affordable housing crisis. But no-one in charge is actually doing anything other than saying “There, There, isn't it terrible, what to do?" or daring to do a Scomo and say ‘It’s not my job’.
In the leadup to the NSW State election on March 25th, 2023 we are going to hear all sorts of all sorts of solutions and lots of promises. The issue at hand is where are those solutions NOW? We have a crisis NOW that is only getting worse and there is little, if anything, other than band-aid treatments being handed out. The most disappointing aspect of it all is the silence we are hearing from those in charge. Yes, there is empathy and round table kumbaya sessions that are little more than placating talks fests. But everyday there are those in our community doing it tough and everyday there are new folks joining them. At a local level the rot set in after the bushfires when over 1000 homes were destroyed across the South East in the bushfires. This event heralded the first wave of those faced with having no home. There were the home owners who found themselves to be under-insured and the renters who found that there was a spike in demand for limited rental housing stock. Along with the limited number of rentals was the realisation that the rents in those houses available were outside of the budgets of those affected. Then came universal outcry that Short Term rentals were to blame for the high rental prices and the lack of long term housing availability. The fact of the matter was that if most of these house did become available they would be expensive rentals and out of reach to those in need. Next came the Covid era with its financial impacts on businesses, the decimation of incomes from the already under-employed and the spike in interest rates that saw an inevitable increase in rents to cover mortgage increases. It was inevitable that the homeless number across the South East increased. It is important to realise that the homeless that are visible in camps such as North Head Moruya are a tip of the iceberg with so many more illegally living in sheds, in caravans on properties or “couchsurfing” with friends and neighbours. The increase in homelessness, compounded by financial strains and the stress of the unknowing adds to an already stressed community that still carries the very real stress that the bushfires gave each and all of us. The smell of woodsmoke is still a major trigger of anxiety across the region. None of this is new though. We are now well into the rot that has been steadily eating its way into the lives of so many. Rents continue to spiral and affordable availability is just as it was… unobtainable. The standard response from anyone with an opinion is that the Government has to do something. The unfortunate reality is that the government has been pretty silent on solutions. It is important to note that Blind Freddy recognised this festering boil of an issue more than a decade ago. But nothing was done. In 2010 Dr Matthew Thomas, Social Policy Section and Peter Hicks, Economics Section presented a paper to Parliament on “Australia’s significant housing problem” https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BriefingBook43p/housing
In 2010 the pair advised that housing supply in Australia had not kept up with underlying demand—that is, the need for new housing stock as a result of population growth and trends in household formation saying: “This has resulted in an estimated shortfall of almost 180 000 dwellings as at June 2009 and contributed to significant levels of housing stress, especially among low income households. In 2007–08 over 300 000 lower income home buyers and 445 000 lower income households renting privately were in housing stress.
Many households have been effectively excluded from all but the lower end of the private housing rental market and are spending ever-increasing proportions of their limited income on housing. While they may receive some support through government provided rent assistance (RA), this assistance has not kept pace with rental prices in many parts of Australia.
For those low income households most in need, the federal, state and territory governments provide public housing. However, a reduction in the size of the public housing stock has reduced the ability of governments to provide affordable housing to these households. Waiting lists for public housing are high and increasing, and the housing affordability problem has contributed to sustained high levels of homelessness in Australia. Current National Housing Supply Council (NHSC) projections indicate that the gap between supply and demand will continue to increase, thus exacerbating the housing affordability problem.
They concluded that: Improving the housing outcomes of Australia’s low income households in the short to medium term, may require the introduction of further reforms to improve the fairness of housing policy.
The Henry Review of Australia’s tax and transfer system noted the stimulatory effect on housing demand of the current highly favourable treatment of owner-occupied housing. It recommended a number of changes aimed at making housing more affordable and better matching supply and demand. These include:
removing stamp duties
streamlining land taxation so as to remove disincentives to property investment
moving to a more neutral tax treatment of negative gearing and capital gains on investment in residential property
reviewing infrastructure charges to remove impediments to housing development activity, and
refining RA and increasing its maximum rate to ensure that renters are able to afford an adequate standard of dwelling.
While the institution of any or all of these proposed reforms may assist in increasing Australia’s supply of housing, and thus benefit low income households individually and collectively, they present other economic and administrative challenges for all governments. The Federal Government made all the right noises in 2018 that it recognised the problem and would do something to help fix it. The government of the day announced a comprehensive housing affordability plan as part of the 2017-18 Budget to “improve outcomes across the housing spectrum. The Government’s plan for housing affordability includes measures to unlock supply, create the right incentives and improve outcomes for those most in need”. They suggested reforms “designed to create the right incentives to improve housing outcomes by helping first home buyers save a deposit through voluntary contributions into superannuation, including through salary sacrificing, reducing barriers to downsizing to free up larger homes, improving the integrity of capital gains rules for foreign investors, better targeting of housing tax concessions and reforming foreign investment rules to discourage investors from leaving their property vacant”. All very admirable however they missed the mark completely, failed to come through with their bluster and instead turned their “plan” into electioneering promises for the upcoming 2019 Australian federal election that was held on Saturday 18 May 2019. In a nutshell it was political bullshit. The Federal Government states: The Australian Government recognises that homelessness is an important issue which affects many Australians. It requires a long-term and systematic effort across agencies, sectors, and the community.
While state and territory governments have primary responsibility for housing and homelessness, in 2020-21 the Australian Government expects to spend around $8.4 billion in housing support and homelessness services. In 2020-21 this includes around $5.5 billion in Commonwealth Rent Assistance, to assist eligible Australians meet their rental costs. It also includes around $1.6 billion through the National Housing and Homelessness Agreement (NHHA). So there it is "While state and territory governments have primary responsibility for housing and homelessness....." Scomo ‘It’s not my job’... Meanwhile at a State Level they too were happily blinkered to the festering boil about to burst.
The situation was quite well described in an editorial piece by Local Government NSW (LGNSW) written in May 2022. https://lgnsw.org.au/Public/Public/Media-Releases/2022/0511-Housing-Crisis-Has-Reached-Boiling-Point.aspx Housing Crisis Has Reached Boiling Point for NSW Councils
NSW councils say the skyrocketing cost of living is set to exacerbate an existing housing crisis across NSW, as bushfires, floods and soaring rents put more and more people at risk of homelessness.
Local Government NSW (LGNSW) President Darriea Turley AM said councils, as the closest level of government to the community, were seeing first hand the impact of rental vacancy rates at all-time lows when a significant proportion of the community was locked out of home ownership.
“Housing affordability is arguably the most pressing issue right now affecting communities across the state,” Cr Turley said.
“No one is more aware of the burdens of the rising cost of housing in NSW than our 128 councils and their mayors.
“Our councillors are hearing first hand from distressed residents in their communities about the pressures they face while paying some of the most expensive property prices in the world.
“Many people, particularly young adults in our communities, are finding it increasingly difficult to enter the housing market, with home ownership continuing to decline rapidly.
“The housing affordability crisis we are seeing right now is a dire situation.”
Cr Turley said that, despite years of advocacy by local government for greater state and federal investment in affordable and social housing, and promises that housing affordability was a top priority, investment in this critical piece of the housing spectrum had been neglected.
“We are seeing an estimated shortfall of more than 200,000 social and affordable housing dwellings in NSW,” she said.
“The economic impacts of bushfires, floods and the COVID-19 pandemic have also added to the number of people in need of affordable or social housing, exacerbating the pre-existing shortfall.
“The recent floods have wiped out thousands of homes in the Northern Rivers of NSW and this crisis has been compounded by years of state and federal government inaction, resulting in a critical lack of social and affordable housing.
“This has put added pressure on seasonal and visitor accommodation, making it impossible for businesses to attract workers, who can’t find an affordable home to live in.
“People are sleeping in cars, caravan parks are overflowing, and we see these same pressures impacting families and communities right across NSW.
“Local government plays an important role in engaging with and planning for the needs of their communities.
“But housing costs are largely driven by factors beyond the scope of local planning systems, such as financial and taxation systems, population growth and interest rates.
“Councils want to work with the state and federal governments to drive solutions for their communities.
“Councils can only play one part and without a strong partnership approach to the housing affordability crisis, governments will continue to propose band-aid solutions that are unlikely to deliver a holistic and sustainable solution – all at great public cost.
“We need to see clever solutions for this complex issue, and recognition that we need to ensure that genuine state and federal investment in social and affordable housing is a major part of the solution.” At a local level the Eurobodalla Council has been proactive. In mid-2021, Council made a submission to the NSW Government’s Regional Housing Taskforce consultation. You can read that well structured submission here: https://www.esc.nsw.gov.au/__data/assets/pdf_file/0019/225910/Submission-to-NSW-Govt-Regional-Housing-Taskforce.pdf The response from the NSW was generic saying “The NSW Government will implement all recommendations of the Regional Housing Taskforce (the Taskforce) as part of a comprehensive response to unlock 127,000 new homes needed to house the growing regions over the next 10 years”. The 5 main recommendations of the Regional Housing Taskforce were:
Support measures that bring forward a supply of “development ready” land.
Increase the availability of affordable and diverse housing across regional NSW.
Provide more certainty about where, when and what types of homes will be built.
Investigate planning levers to facilitate the delivery of housing that meets short term needs.
Improve monitoring of housing and policy outcomes and demand indicators.
Lovely recommendations that made everyone feel as if they were doing something, where in fact each element would take years of committees, studies and reports by bureaucrats already found wanting. Of the above only the last might bring a light to the real situation on the ground. So in November 2022 Eurobodalla Council took it upon themselves to begin investigating housing supply and needs using census data and talking to housing and service providers and NSW Government agencies. Currently Eurobodalla Council plans on delivering a draft Local Housing Strategy for public exhibition in 2023 that will identify the demand for new and different housing types over the next 20 years It is intended that the Strategy will also identify actions to provide the right housing to meet this demand by analysing:
the capacity of existing residential land to provide homes
the types and sizes of homes needed
the best location for new homes.
The primary concern for those who are at the coal front of the situation of homelessness and housing affordability in South East NSW is the total silence from the Premier of NSW. If he and his government do have a plan they appear to be keeping it very close to their chests. Possibly wanting to announce it as part of their electioneering in the leadup to the March 2023 elections? One hopes not. The Premier might have been beaten to the post with the announcement today (January 11th 2023) by the Leader of the NSW Labor party, Chris Minns, who announced: “Bega’s future homeowners are set to win big from a fresh plan by a Minns Labor Government to expand the number of first-home buyers paying no stamp duty or who can claim a steep discount. Mr Minns said “Labor will abolish stamp duty outright for first homebuyers buying a home worth up to $800,000, while offering a concessional rate to first-home buyers purchasing a property up to $1,000,000. “In the Bega electorate alone there are over 450 properties valued at under $800,000, which first home buyers would pay $0 stamp duty on. Under the Liberal National Government first homebuyers would pay $31,090 in stamp duty for a property valued at $800,000. Independent modelling by the Parliamentary Budget Office shows that within the first three years of Labor’s changes, an additional 27,700 first home buyers would have paid no stamp duty whatsoever. An additional 18,800 first homebuyers would have paid a discounted rate. This means an estimated 95 per cent of all of first home buyers in New South Wales will pay no tax or a reduced rate under Labor’s plan when they buy their first home”. The Labor leader said that the plan will be paid for by “abolishing Dominic Perrottet’s land tax on the family home, introduced without taking the new tax to an election. The PBO has costed Labor’s plan at no more than $722 million over the forward estimates”. “The choice for first home buyers across New South Wales will be clear – pay less tax under Labor, or a forever tax on your family home under Dominic Perrottet and the Liberals. “Labor’s initiative comes as concerns rise that rapidly rising interest rates and tumbling real-wages are combining to force first-home buyers out of the property market all-together. “The latest figures from the Australian Bureau of Statistics shows that the number of first home buyers in NSW approved for a home loan has halved since the most recent peak in December 2020. “With the market tipping interest rates to rise to their highest level in more than ten years, Labor’s plan is directed towards giving help to the first-home buyers most at risk of losing their foothold on the housing ladder. “By contrast, Mr Perrottet is threatening to saddle those first-home buyers with an increasing tax they will have to pay him every year they live in their home. “A Tax cut for first-home buyers is part of Labor’s plan to make housing more affordable for the people of the electorate of Bega and New South Wales. With more housing policies still to come, a Minns Labor Government has already committed to:
· Remove or reduce the stamp duty tax burden from an additional 46,500 first home buyers over the next three years;
· Create a new agency called “Homes NSW” that will drive the delivery of more housing options and manage social housing in order to tackle the state’s housing crisis;
· Abolish the NSW Government’s forever land tax on the family home;
· Create a Rental Commissioner;
· Protecting tenants from unfair evictions by requiring them to be given a lawful reason for terminating their lease;
· Banning the practice of secret rent-bidding, which pits tenants against each other in bidding war;
· Implement a Portable Bond Scheme to allow tenants to apply their current bond to their next lease
· Make it easier for renters to have pets in their homes
· Host a renter’s roundtable to hear from stakeholders and community groups
· Charge the Greater Cities Commission to rebalance population and housing growth by setting new housing targets on Metro lines to the city.
· Introducing a mandatory requirement for 30% of all homes built on surplus government land to be set aside for social, affordable and universal housing
· Provide longer term funding certainty for homelessness and housing support organisations and tenancy advocacy services dealing with the fall-out from the housing crisis
So that is all nice and dandy for those in a position to consider entering the housing market. Even the offer of a 'rent and buy' that is financed by the Government has major questions around it; certainly too many to list here, but at least it is a step toward thinking outside the box. While we are aware that the housing affordability issue is a national one the State Government needs to take responsibility for the failures to deliver affordable social housing into the Bega electorate. The NSW Land and Housing Commission (LAHC) owned 734 properties in the Bega Electorate as at 30 June 2022 including those managed by community housing provider. This includes cottages, townhouses, villas and units comprising 22
studios, 189 x 1 bedroom 155 x 2 bedroom, 306 x 3 bedroom, 55 x 4 bedroom and 7 x 5 bedroom properties. For LAHC owned properties, the housing programs types include:
- Pensioner 224
- Supported living 11
- General housing 476
- Crisis 23.
As at 30 June 2022, there were 17 vacant LAHC properties managed by the Department of Communities and Justice. The Department of Communities and Justice is responsible for the waiting list and demand profiles.
While many might consider the numbers shown above to be too little for the region the context is that the NSW Land and Housing Corporation (LAHC) owns and manages the largest social housing portfolio in Australia, with more than 125,000 properties across NSW.
They say “Maintaining this portfolio ensures our residents live in homes that are safe, clean and well maintained, providing secure and habitable homes for residents.
They say that, when needed, they repair and maintain properties as quickly and cost effectively as possible, spending more than $1 million per day on repairing and maintaining homes. Around 640,000 maintenance requests were received and actioned in 2020/21; an average of around 1,750 requests every day.
The cry is “Build more affordable housing stock; build more social housing!”
A reality check: How much does social housing cost?
In 2021 the LAHC completed a 6 studio apartment building on Journal Street in 2021 at a cost of $1.49 million to house up to 6 new residents.
In 2023 the build, with a massive spike in material costs and labour disruptions, would cost considerably more.
By now, hopefully, you might begin to understand why there is silence around providing crisis solutions.
There is NO WHERE to accommodate those in need. Much like the Nativity scene of Christmas there was no room at the Inn or anywhere else for that matter.
What is required is a solution from outside the box.
Where to start?
Solutions cost money. One possible source for a country crying poor?
As of 30 November 2022, there were 92 people on Nauru.
A private US prison operator, now in charge of Australia’s offshore processing regime on Nauru, will be paid more than three-quarters of a million dollars every day to provide “garrison and welfare services” for 92 people. The amount paid for the 100 remaining in Manus is undisclosed. Processing asylum seekers offshore has cost the Australian government A$9.65 billion from July 2013 to the 2021-2022 financial year. In 2021 the annual cost, per person, to the Australian government of detaining and/or processing refugees and asylum seekers was estimated as follows:
almost A$3.4m to hold someone offshore in Nauru;
A$362,000 to hold someone in detention in Australia; and
A$4,429 for an asylum seeker to live in the community on a bridging visa while their claim is processed source
Above: Around another 92 refugees are left in PNG, dumped in Port Moresby in 2019 after the closure of the Manus Island detention centre. Australia abandoned them and declared them officially the responsibility of the PNG government in 2019.
Looking at the above image it is unbelievable that Australia would allow people to live in such a shithole. But then all we need to do is look closer to home and see that the Australian governments seem content to allow its own citizens to live in even worse conditions.
But it wasn't always like this. Life for many new arrivals to Australia started out in a migrant hostel.
In order to accommodate the new arrivals the government of the day stepped in and built purpose made “villages” of Nissan huts for families.
The huts were basic but they provided shelter and the “village” was provided with the agencies that helped in employment, health and education.
At a local level in the Eurobodalla the NSW Government were proactive to establish a "township" at Granite Town, Moruya to accommodate the stonemasons they were bringing to the Moruya Quarry to cut stone for the Sydney Harbour Bridge.
Of interest is the fact that the already limited housing supply in the Moruya region will be even more exacerbated when the Eurobodalla Regional Hospital begins construction, followed soon after by the Moruya Bypass. No doubt the market will see long term tenants expelled to take advantage of increased short term rents, as was the case with the Batemans Bay Bridge project. So how much to step in and build a small village of houses capable of delivering a home that has security, provides shelter and offers the opportunity to buy, as was the case in North Belmont in 1951. In 1951, ex-Prime Minister and then-Immigration Minister Harold Holt signed off on a plan to accommodate families of British coal mine workers in fifty Nissen huts known in Belmont North, near Newcastle.
Some remain today.
But this is all too easy. There is an elephant in the room.... in fact there is a herd of very large elephants. Our homeless are a varied lot - so much so that not everyone wants to be in the same place with others suffering the same difficulties. Of the homeless we have in the South East we have those who simply can't find suitable accommodation at an affordable price as the market has spiked. These are the employed, educated, well referenced who simply can't find a rental and are on waiting lists across the region. Their primary difficulty is that rentals are rare and now represent a considerable amount more than 30% of net income. In Eurobodalla Shire, 14.9% of renting households were paying $450 or more per week in rent in 2021. That figure is now in excess of 22% yet wages have remained unchanged. Those in need of crisis accommodation add to the mix. There are those who are mentally compromised and unable to live with others, or in a social space. There are the drug affected, the alcoholics, the self harmers, and all the others who, for one reason or another simply can't get their shit together to be a reasonable, responsible tenant. As such there is little, if any opportunity for them to find a privately owned rental. These folk are already falling through the net and the intervention of social services is letting them down because of the shear numbers and the lack of budget and resources. Sadly the numbers increase each day. Then there are those escaping domestic violence and having to start afresh as well as those who have become more dependent on social security through death of a partner. With insufficient income to meet mortgages and costs we are seeing more and more of our older Australians living out of cars. Women, children, in need of protection from the predators, thieves and opportunists that lurk in the shadows where politicians fear to tread and offer no solution. These are just some of the elephants in the mix. The unspoken. What is apparent is that, without a solution, we, as a nation will see more and more of our citizens become the Australians that we all too often ignore. The Australians who have poor education, poor life choices, poor diets, poor health, poor living conditions and little hope. We were once considered the Lucky Country. Now, for most of us we would be lucky to keep our heads above water. The Solution? It's anybody's guess. For those living in crisis today there is only hope of a better tomorrow. But don't get your hopes up that the government will save you as the wheels of bureaucracy turn slow and we don't need to look to far to see the failures.
In the meantime Eurobodalla Mayor Mathew Hatcher says he remains hopeful the NSW Government will shortly offer a solution to the homelessness crisis at Moruya’s North Head campground.
Mayor Hatcher wrote to NSW Premier Dominic Perrottet in December, outlining the seriousness of the situation and asking the Premier to urgently find housing appropriate to the needs of the people currently making the campground their home.
The campground is managed by Eurobodalla Council, who is allowing the growing number of people living there to stay beyond the NSW Government’s mandated 50-day per year rule.
Mayor Hatcher said Council is showing discretion and compassion in not enforcing the regulation because there is nowhere else for people living there to go.
“The NSW Government is responsible for crisis and social housing, and they must step in and help us solve this issue,” he said.
“These are primitive campgrounds, meaning there is no permanent hot water or enclosed showers. They simply aren’t a suitable place for people to be living permanently.”
Council has been working with local homelessness agencies and case managers are visiting the campground weekly, where more than 50 people experiencing homelessness are currently living.
“The local agencies are doing great work in terms of providing support, but what no one can offer right now is a suitable place for these people to live,” the Mayor said.
“We need the Premier to act quickly. The NSW Government could buy a motel or a block of units to temporarily house people in a crisis.
“The situation has become critical and now is the time for the NSW Government to do something.
“I don’t want people living in freezing cold tents again this winter and the local council installing temporary hot showers to provide some small comfort and dignity.
“In Australia in 2023, everyone should have a roof over their head and the security of a place to call home.
“I’m asking the Premier to provide this basic human right for the people living at North Head campground.” Post script: You can find Labor's Housing Policy HERE