On Eden Street, in the southern Sydney suburb of Arncliffe, the last residents of a rundown public housing estate moved out this week as a crane delivered a display apartment.
Although the eventual $253 million redevelopment of the site – which received construction approval from the local council last month – will create an additional 38 public housing dwellings, it will deliver 564 private apartments sold at full market rates to help pay for the project.
The display and sales office hoisted onto the site last week isn’t a symbol of the New South Wales government’s commitment to those with nowhere else to go but a reminder to those already forced out that the future belongs to people who can pay.
While the government says every tenant moved out of public housing on the site will have the choice of returning once construction is complete at the end of 2025 – and they will come back to modern apartments that are easier to maintain – the revitalisation will do little for the 60,000 people on housing waiting lists in NSW alone.
The Arncliffe land has been sold to a private developer in exchange for roughly 13 new public houses each year for three years.
Nationally, the waiting list for public housing jumped by more than 20,000 people to 163,500 in the five years to 2021, while those in greatest need – a significant chunk of that list – almost doubled from 38,000 to 67,600.
This is the backdrop to the Productivity Commission’s review of the National Housing and Homelessness Agreement between the Commonwealth and state and territory governments. The commission handed its report to the federal government just over a week ago, and its findings will inform the next six months of talks on what a reformed national agreement in this sector will actually look like.
The submissions to the review make powerful reading.
“In view of the large increase in the cost of housing in the last year even more people are having to resign themselves to a life of renting and to compound their problems rental vacancies have decreased while rent has gone up resulting sometimes in bidding wars between people desperate to secure somewhere to live,” the Adelaide Day Centre for Homeless Persons said. “People who have otherwise been able to live a reasonable working class life until recently are now having to live in their vans and cars. Landlords are able to profit from this shortage by increasing rents substantially further putting even rentals out of reach of an increasing number of people.
“Eventually this vicious spiral will lead to social unrest.”
These are astonishing claims. But consider the state of housing from the top down. By some metrics, mortgage stress is at 20-year highs. On Tuesday, the Reserve Bank of Australia lifted the official cash rate by another half-percentage-point to 2.35 per cent. The average home loan is about $600,000 nationally, up from nearly $250,000 in 2005.
The interest rate hikes delivered by the RBA since May have already added almost $1000 a month to mortgage repayments on a $750,000 loan.
While the Covid-19 pandemic proved that some professional jobs could be done from anywhere, it also catalysed a city-to-country conversion. This began to add new pressure to regional communities that had traditionally been partly spared the mortgage madness in the capital cities. House prices shot up. Catastrophic floods in northern NSW literally wiped out thousands of homes in an area already under significant strain due to lower income levels and high rates of vacant holiday or short-term rental homes.
In Dalby, on Queensland’s Darling Downs, renters are having to bid above asking price to secure a place to live – just as the Adelaide Day Centre for Homeless Persons warned. It’s a landlord’s market out there.
This convergence of pressures is amplifying the social impact. On Tuesday, Suicide Prevention Australia released a report including a nationally weighted YouGov poll of more than 1000 people asked about the major drivers of elevated stress beyond normal levels in the past year. Easily the biggest factor was “cost of living and personal debt”, cited by 40 per cent of respondents. Just over a quarter said “social isolation and loneliness”, followed by family and relationship breakdown, unemployment and job security and housing access and affordability. A catalogue of other concerns ranked lower. When asked what would be the biggest contributing risk to increased suicide levels over the next year, the report was resolute.
“Housing affordability and cost of living/debt have substantially increased since 2021, becoming two of the top three risk factors,” the report says.
It is impossible to untangle some of these conditions.
Financial stress can lead to family breakdown, which can lead to social isolation, which can lead to unemployment or housing stress. Domestic and family violence, exacerbated by any of the above, is the leading cause of homelessness for women and their children.
At the launch of the Suicide Prevention Australia report in Parliament House on Tuesday, Prime Minister Anthony Albanese was asked about these existential triggers and whether the government ought to be more ambitious in dealing with them.
“What we’re talking about today is just an absolute tragedy – the fact that nine people will end their life today is something that is a scourge on our society,” he said.
“And that’s why we’ll be introducing legislation this fortnight on cost-of-living measures, including for cheaper medicines and cheaper childcare. That’s why we put forward a submission to the Fair Work Commission to increase the wages of people who are on the minimum wage, and successfully argued for the result, which was a 5.2 per cent increase.
“That’s why we ensured that the pension increases and increases for those in social security have occurred this month. We understand the pressures that people are under, and we wanted to undertake measures that alleviate cost-of-living pressures.”
This statement on the matter of social security payments needs an asterisk. Pensions and payments did rise by the most in three decades, but not because Labor made it happen. These six-monthly indexation adjustments are legislated across the social security system and they are linked to inflation via the consumer price index.
Still, the prime minister came perilously close to conceding an important point made by a chorus of others: housing and poverty are inseparable matters of public policy.
The ALP came to power this year having ruled out transformative housing policy changes such as termination of negative gearing or capital gains tax reform, two powerful levers that cost the budget billions of dollars each year and distort the property market. It has also confirmed it will not lift income support rates in the forthcoming budget. We’re now two years past the 2020 deadline that former Labor prime minister Kevin Rudd cited in 2008 as the target for halving homelessness in his national strategy, “The Road Home”. In the interim, during nine years of Coalition government, successive surveys have shown the numbers of homeless people have risen steadily.
In NSW, an analysis of the state’s homelessness data by analytics and actuary firm Taylor Fry, released in December, shows that 10 per cent of people on working-age payments and rent assistance accessed homelessness services in any given year. Extrapolated to the population, this is some 107,000 people. Further, one in 12 people on parenting payments with rent assistance access homelessness services in a year. Mapped to the national population, that is 79,000 people.
It is receiving Commonwealth Rent Assistance in this analysis that has the most explanatory power.
“Those who received income support for the full three years to 30 June 2016 and also RA [rent assistance] were 5.2 times more likely to access homelessness services over the following year compared to those without RA [rent assistance],” the report says.
“This suggests people receiving income support who are renting [privately] are at greater risk of falling into housing distress than those on income support who own property, are in social housing or are living rent-free.”
Perhaps this is an intuitive point, but it is important to understand the housing chain reaction: movement to squeeze out potential home owners pushes rents higher, which adds to strain on lower-income workers. This increases competition among those with the least capacity to compete – the unemployed, single parents and carers, those who are sick or disabled.
“Due to the continuing decline in rental affordability and social housing stock, many SHSs [specialist homeless services] are unable to meet the needs of people experiencing homelessness as there are simply no longer-term housing options,” Homelessness NSW said in its submission to the Productivity Commission’s inquiry.
“A crucial connecting factor is the level of Federal Government support for people at risk of homelessness including the level of Centrelink entitlements and childcare subsidies.
“For example, when examining the homelessness cycle for the largest cohort of people experiencing homelessness, women and children leaving domestic and family violence, crucial factors exist beyond the control of SHSs including social housing stock and low rate of Centrelink entitlements or unaffordability of childcare meaning that the people they are assisting are likely unable to exit homelessness.”
The Productivity Commission’s findings have been delivered to government although not yet released. However, it is almost certain to conclude that economic and social determinants drive housing insecurity as much as a severely depleted public housing stock or portfolio-specific policy failures. Infrastructure Victoria argued to the commission that the National Housing and Homelessness Agreement, which is due to expire in July, exists mainly to place “restrictions on state and territory governments in spending Australian government funding”.
“It does not capture other government commitments, or document cooperative approaches to achieve shared housing policy goals. A revised NHHA or national housing strategy could incorporate these functions,” the agency said.
“State and territory governments do not achieve housing outcomes alone. As the NHHA acknowledges, the national and state and territory governments have different housing policy instruments and share others. In this situation, governments must co-ordinate their policy responses so different policy instruments act together to generate the desired outcome. The NHHA, or a national housing strategy, could fulfill that co-ordinating function.”
The Victorian Public Tenants Association echoes these sentiments, noting in its submission to the Productivity Commission review that “Australia is in the midst of a significant housing crisis”.
“It is not clear to the VPTA that the [national agreement] allows for States to be financially equipped to address these issues. Particularly as their overall resolution hinges on Federal policy levers which, to date, consistent advocacy on behalf of the broader community sector has been unable to shift.
“These include tax settings related to the treatment of property and real estate, as well as the level of income support payments.”
And yet Victoria has just unleashed the largest-ever social housing package by any government in Australian history. It’s an incredible investment that will see $5.3 billion spent over four years to build almost 50,000 new and refurbished homes.
According to Melbourne City Mission, this represents “less than 10 per cent of the estimated shortfall in social and affordable housing in Victoria”.
Meanwhile, conditions for people in the most stress continue to worsen. “Instability of income, for example, cessation or significant reduction of Centrelink benefits due to a breach of conditions, can derail an individual’s journey out of homelessness,” is the finding from the “Ending Homelessness in Australia” report released late last year by researchers at the UNSW Sydney Centre for Social Impact, University of Western Australia and Swinburne University of Technology.
“As it can take a number of weeks to restore benefits, it would be highly unlikely that an individual that is in accommodation (be it temporary, short term or potentially long term) would be able to maintain that accommodation for the duration of their time without welfare,” wrote the researchers, led by Professor Paul Flatau.
This feature of the new employment services system also remains under the Albanese government.
Labor’s minister for Housing and Homelessness, Julie Collins, told The Saturday Paper that the existing national agreement is “clearly … not delivering” for Australians who are facing homelessness or struggling to pay rent, let alone purchase a home.
Collins met state and territory housing ministers in July and again on Friday, marking a dramatic shift in tone from the previous government.
“July’s meeting was the first in almost five years,” she said.
“Almost a decade of housing policy inaction at a federal level has left the new government with serious challenges. We are dedicated to working collaboratively across all levels of government to make it easier for Australians to access safe and secure housing.”
On Friday, ministers finessed some of the technical details of federal Labor’s commitment to establish a $10 billion Housing Australia Future Fund, the investment returns of which it says will fund 30,000 new social and affordable homes in its first five years. At the high-level jobs and skills summit, it was also agreed that almost $600 million from the National Housing Infrastructure Facility should be made available to entice the $3.3 trillion superannuation industry into making social housing investments.
“It is absolutely critical the Albanese Labor government help to drive the delivery of more social and affordable housing as quickly as possible,” Collins says.
“I intend to be a powerful advocate for the benefits of building more social and affordable housing right across the country.
“This housing is critical to ensuring that opportunity is shared equally in this country, and is a springboard to a better life for so many.”
On Wednesday, Social Services Minister Amanda Rishworth announced some more tinkering around the edges by extending to two years the grace period pensioners have after selling a home and before the proceeds of the sale affect income and asset tests.
The policy is meant to help people downsize, freeing housing stock to be used more efficiently. But it also speaks to an uneasy fact about Australia’s retirement system: so much of it is predicated on owning a home.
While home ownership rates in Australia have remained broadly similar since the 1970s, the size of mortgages has increased dramatically and the age groups able to secure a house have been wildly distorted.
The Australian Institute of Health and Welfare says that home-ownership rates for both 25- to 29-year-olds and 30- to 34-year-olds fell 14 percentage points between 1971 and last year – from 50 to 36 per cent and from 64 to 50 per cent, respectively. This is bad news now, and worse news come retirement. On that note, home-ownership rates for people nearing retirement (aged 50-54) have fallen by 7.9 percentage points since 1996.
Who fares worst among these cohorts? Women and mothers, especially if they are First Nations or disabled. Between the 2011 and 2016 census, women aged 55 and over were the fastest growing group in homelessness statistics, leaping 31 per cent.
It is just not enough to provide housing as an “aspirational” platform from which people such as single mothers in their late 50s can suddenly springboard to a better life. For many, it is the only place of sanctuary they will find. This is doubly true if policy settings within the control of governments that might alleviate poverty are left to rust.
This article was first published in the print edition of The Saturday Paper on September 10, 2022 as "Monuments to homelessness".
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