What can be done about Australia’s housing crisis? We spoke with Cathy Callaghan from Shelter NSW about the issues and how governments can act to reduce the burden on the Australian community.
Housing affordability remains a pressing issue throughout Australia, prompting the Labor government to introduce amendments to its Housing Australia Future Fund legislation in a bid to garner support from the Senate, approve the legislation, and commence the social housing building program that Prime Minister Anthony Albanese promised in the lead-up to the 2022 federal election.
The proposed changes aim to secure the backing of the Australian Greens and several other Senators, signaling a concerted effort to address the country’s housing challenges. However, critics argue that the suggested amendments still fall short of the drastic measures required to combat the crisis.
One of the key amendments put forward is the removal of the fund’s proposed cap, accompanied by a pledge to allocate a minimum of $500 million annually towards social housing initiatives. While this commitment is an improvement, experts argue that it is woefully insufficient. Depending on the type of housing, this would create between 2,000 to 5,000 dwellings per year, whereas based on the current demand across Australia, an estimated 640,000 dwellings are needed immediately. It is clear that a more comprehensive approach is urgently required.
The Australian Greens – a key political player in the Senate if the Labor government wishes to have its legislation enacted – have decided to postpone their vote on this legislation until October and are expected to push for more substantial changes, emphasising that addressing housing affordability extends beyond social housing alone and that the magnitude of the crisis necessitates action across multiple facets of the housing sector.
Insufficient infrastructure provided by governments to support new housing developments further compounds the challenges faced by communities. An example is found in south-western Sydney suburb of Canterbury, where 3,000 apartments were constructed without adequate accompanying social services.
Developers were mandated to include social amenities but provided a supermarket and several cafes, instead of crucial facilities such as additional hospitals, police stations, medical services, and schools. This oversight has resulted in considerable difficulties for both existing and new residents of Canterbury, who have struggled with the ramifications of rapid expansion. Similar issues have arisen in other parts of the country, demanding a comprehensive re-evaluation of housing policies.
To tackle these complex issues, governments must convene a summit that goes beyond the developers’ perspective, a summit which should include town planners, environmental thinkers, anthropologists, and sociologists to collectively determine the best strategies for managing cities and achieving affordable accommodation.
This approach should aim to alleviate problems such as overcrowding, inadequate public transportation, and limited access to essential social services such as hospitals and police stations. Currently, too many individuals are grappling with the scarcity of suitable housing, particularly in major cities where their skills and contributions are highly sought after.
Balancing the interests of small investors and preserving the value of existing properties while simultaneously enabling affordable home ownership poses a considerable challenge for the government. It is crucial to strike a delicate balance to ensure the financial stability of homeowners without further exacerbating the housing crisis.
As the housing affordability crisis continues to escalate, the Labor government’s proposed amendments to the Housing Australia Future Fund represent a step in the right direction. However, greater efforts and a multifaceted approach are essential to alleviate the burden on individuals seeking affordable housing. The path forward requires proactive collaboration and innovative strategies to ensure that housing affordability becomes a reality for all Australians.
Urgent action is needed to address the housing affordability crisis
Advocate groups such as Shelter NSW have been at the forefront of this battle for housing affordability for some time, tirelessly lobbying for improved housing conditions for lower-income communities. According to Cathy Callaghan, senior policy adviser with Shelter NSW, the dire situation facing many Australians today is a culmination of government actions and inactions over the past few decades.
“Government policy over the last 20 years has been dominated by a philosophy that the private housing market will take care of housing, and governments have stepped away from its traditional role to provide housing through public social housing,” says Callaghan. “We’ve seen policies that have really, in some cases, made the problem worse.”
Recent years have also witnessed an alarming rise in homelessness, even among traditionally middle-class individuals. Stories of women in their 50s and 60s, who once led regular lives, finding themselves suddenly homeless have become distressingly common. Additionally, the sight of hundreds of people queuing for rental properties highlights the intensity of the housing shortage.
To tackle these pressing issues, Callaghan believes it is crucial to determine which level of government should take responsibility for finding solutions. “There needs to be a national strategy and plan, where we have national political and civic leadership that repositions housing as an essential service and not as a financial product. But probably the biggest thing that that governments could do right now, particularly in New South Wales, is step back into the game of being responsible for building and growing the stock of social housing.”
Callaghan also feels that addressing the housing crisis requires a multifaceted approach that considers various factors contributing to the problem. “There’s some underlying structural issues in the Australian taxation system, for example, that disproportionately ramps up investment in housing as a speculative product.
“The changes that were made under the Howard government around the capital gains discount, that’s widely credited as being something that made housing much more speculative, brought investors in and saw people wanting to buy homes, competing with other investors. And even just the way the retirement income system is structured, everything assumes you own your own home. There’s been very little recognition that we have a large and growing population that rents and will rent probably for their lives.”
Other piecemeal solutions, such as first homeowner grants and government subsidies for buyers, have proven ineffective and often worsen the problem, whereas co-ordinated, big-picture initiatives are necessary to effect real change. The federal Labor government has shown promising signs of prioritising housing and homelessness, emphasising the need for a co-ordinated and strategic approach across the country.
How will we know if the housing affordability crisis is easing?
While implementing solutions will undoubtedly take time, Callaghan points to certain factors that can signal progress and show whether any significant improvements are being met. “The Census, for example, counts every five years the rate of homelessness in the country – in the last Census in New South Wales, are over 122,000 people identified, self-identified as homeless. If we had a better system of housing in this state, we will see that figure go down.
“We also have some clear ways of tracking the degree of housing stress – if households are paying more than 30 per cent of their gross household income, whether it’s mortgage or rent, then they define as being in a state of housing stress. And we know that households that are in housing stress, are forced to compromise on other critical spending, like their health, like food. If we will see rates of housing stress come down, we would see people not forced to make those unreasonable choices between paying rent and eating food or playing a power bill.
“And one key indicator would be the safety net of social housing restored and become –and it is in other countries – a substantial player in the rental market. This would mark a vital step toward resolving the crisis.”
As governments deliberate on housing decisions, they must consider the broader implications and long-term consequences. With projected population growth, careful planning and integration of social and affordable housing into new developments will be critical to avoid compounding the existing housing issues.
It is crucial to act swiftly and decisively to combat the housing crisis in Australia. Only through a co-ordinated, comprehensive approach, backed by strong leadership and genuine political will, can the country hope to provide secure and affordable housing for all its citizens.