COVID spurred action on rough sleepers but greater homelessness challenges lie ahead


Hal Pawson, UNSW and Cameron Parsell, The University of Queensland

COVID-19 triggered multimillion-dollar commitments by state governments to tackle homelessness. Our research for the Australian Homelessness Monitor 2020, released today, reveals at least 33,000 rough sleepers and other homeless people have been booked into hotels and other temporary accommodation during the crisis.

Beyond this, several states have pledged funds and support to move beyond this short-term fix and ensure former rough sleepers find long-term housing.




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If we realised the true cost of homelessness, we’d fix it overnight


These are commendable actions in a long-neglected policy area, even if largely inspired by public health anxieties rather than concern for the welfare of people without a home.

Still, our research also shows the burst of activity over the past six months builds on several years of stepped-up state government action to tackle street homelessness across Australia.

What prompted governments to act?

Three factors seem to have contributed:

  1. around 2016, rising inner-city rough sleeping apparently crossed a threshold of political embarrassment

  2. people experiencing homelessness challenged official complacency with direct action, including protest camps in Sydney’s Martin Place and outside Melbourne’s Flinders Street Station during the 2017 Australian Open tennis tournament

  3. a new level of activism, often inspired by developments overseas, led to initiatives such as the Everybody’s Home campaign, the Australian Alliance to End Homelessness, the Constellation Project and Adelaide Zero.




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In response, several state governments boosted efforts to reduce street homelessness. Measures included expanded outreach services and offers of housing assistance, increased spending on rental subsidies and personal support for former rough sleepers, and leasing of private rental properties as temporary social housing.

Some states even set specific targets to reduce homelessness. New South Wales, for example, pledged to cut rough sleeping on Sydney’s streets by a quarter between 2017 and 2020. Statewide, the aim is to halve street homelessness between 2019 and 2025.

Such targets are a welcome sign of ambition. They could even spur other states and territories to make similar commitments.

Rough sleepers are just the visibly homeless

As our report explains, though, these aspirations raise tricky issues of definition and measurement. And they focus narrowly on rough sleeping. Though highly visible, it’s just one of the forms of homelessness.

This approach risks airbrushing the wider, and much larger, homelessness problem. Of the 116,000 homeless people counted by the 2016 Census some 8,000 were rough sleepers. Homelessness also includes experiences such as as couch surfing and living in badly overcrowded dwellings and short-term, unsafe accommodation like rooming houses.




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Crucially, homelessness cannot be overcome purely through better management and co-ordination of existing services. Nor can it be seriously tackled by state/territory governments without federal support.

New wave of homelessness is looming

The most immediate concern now is an imminent surge in homelessness. This is likely in coming months as a result of JobKeeper payments and JobSeeker Coronavirus Supplements being scaled back and bans on evictions lifted.

These protections staved off a new, recession-induced, homelessness crisis through the winter months. But, since mid-year, rough sleeper numbers have been on the rise once again in cities including Adelaide and Sydney. This is almost certainly a problem deferred, rather than a problem avoided.

We know, for example, that many tenants who lost incomes and sought reduced rent have only been granted deferrals. They are building up big arrears.




Read more:
Cutting JobSeeker payments will cause crippling rental stress in our cities


Rough sleeper packing up in Melbourne laneway
Sleeping rough is on the rise again in Australian cities.
Indigo Skies Photography/Flickr, CC BY-NC-ND

For their part, many landlords have lost rental income – by negotiation or otherwise. They represent about one-third of the more than 400,000 mortgage accounts on which banks have agreed to defer payments.

The extent of any surge in homelessness will depend on the public health situation, the timing and vitality of post-pandemic economic recovery, and on how quickly eviction bans and income-support measures are withdrawn. However, if unemployment hits 10% as predicted, homelessness could rise by 21% according to one projection for NSW.

For state governments, housing the mid-2020 rough-sleeper cohort has been enough of a challenge on its own. Even with stepped-up assistance programs, the states lack the capacity to cope with a surge of households newly evicted from private rental housing.

The main problem is a lack of homes at rents that low-income tenants can afford. A large part of the reason is decades of official inaction that effectively halved Australia’s supply of social housing since the 1990s. On top of that, the shortfall of private rental properties affordable for low-income tenants grew by 54% in the decade to 2016, as detailed in our report.

What needs to be done?

Lessons from Australia’s success in tackling street homelessness during the pandemic must be integrated with ongoing services. We have to reduce reliance on band-aid interventions that are costly and, at best, only lessen the harm. Homelessness is bad for health and for our society at all times, not just during pandemics.

Governments at all levels must recognise that the growing homelessness problem of the past two decades calls for a comprehensive housing policy rethink.




Read more:
Australia’s housing system needs a big shake-up: here’s how we can crack this


Yes, governments have partnered with community organisations to get people off the streets during the pandemic, which is something to celebrate. But these successes do not resolve the underlying structural problems.

The federal government has a critical role to play in both policy and funding. It must be far more active in owning and tackling the issue. Essential first steps are to permanently boost JobSeeker payments and the rate of Commonwealth Rent Assistance. And the government should properly index these payments, as it does the Aged Pension.

Beyond this, the Commonwealth must use its greater budget capacity –
more than the combined resources of the states and territories – to invest in building new social housing at scale. For almost the entire period since 1996 we’ve been building only 2,000-3,000 social housing units per year. Just to keep pace with a growing population, that needs to be 15,000 a year. It’s essential not just as a stimulus for post-pandemic recovery as proposed, but as a routine national program long into the future.

Such action should be part of a comprehensive national housing strategy to design and phase-in the wide-ranging reforms of taxes and regulations needed to rebalance Australia’s housing system and tackle homelessness at its source.


The authors are very grateful to Peter Mares for his input into this article.The Conversation

Hal Pawson, Professor of Housing Research and Policy, and Associate Director, City Futures Research Centre, UNSW and Cameron Parsell, Associate Professor, School of Social Science, The University of Queensland

This article is republished from The Conversation under a Creative Commons license. Read the original article.

COVID impacts demand a change of plan: funding a shift from commuting to living locally



Conventional transport infrastructure planning has been based on wholesale commuting to and from the city centre.
Taras Vyshnya/Shutterstock

Benjamin Kaufman, Griffith University

Long-term planning has delivered mass transit systems to cater for high-patronage, hub-and-spoke transport systems. Unfortunately, this has left many city residents without basic access to public transport services. And we could never have planned for the impacts of COVID-19.

Our previous plans were based on the best available data at the time. Today, these plans must be critically reviewed using new data that properly represent the world and our transport needs as they are now.




Read more:
If more of us work from home after coronavirus we’ll need to rethink city planning


Important facts to keep in mind

1: Fewer people commute to work.

The work-from-home transition is well under way. Our current transport networks (except for roads, which have rebounded to traffic equal to or above pre-pandemic levels in some cities) are operating far below previous levels, even allowing for social distancing. This may not be the best time to break ground on major infrastructure projects planned under previous assumptions of population and demand growth.




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2: Disadvantaged populations lack access to opportunities.

Public transport is key to enabling everyone in a population to be a productive member of society. Many disadvantaged groups cannot drive or afford car ownership. However, they also lack access to public transport, particularly in the outer suburbs.

Unfortunately, coronavirus impacts will hit the disadvantaged the hardest. If we want everyone to be able to participate in the economic recovery, we need to promote basic levels of access regardless of an individual’s circumstance.




Read more:
Why coronavirus will deepen the inequality of our suburbs


3: Population growth will not meet projections.

Migration bans will greatly reduce short-term growth. Current projections show a population up to 4% smaller in 2040 than it would have been in a non-COVID world. This will further decrease demand for urban transit services as well as demand across many sectors of our society. These trends are important because much of our planning is based around these population growth metrics.




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1.4 million less than projected: how coronavirus could hit Australia’s population in the next 20 years


However, our suburbs still lack basic public transport services. If we want to increase patronage, we need to bring services to more people by improving coverage of our sprawling, low-density cities.

Over 80% of the population of our biggest cities live in the outer and middle suburbs, yet this massive majority have limited to no basic public transport service. Across our five largest cities, Infrastructure Australia reports, “public transport disadvantage in outer suburbs is significant”.

Populations living in inner, middle and outer suburbs of Sydney, Melbourne, Brisbane, Perth and Adelaide
Estimated resident population by suburban classification, as count and proportion of city population.
Infrastructure Australia: Outer Urban Public Transport: Improving accessibility in lower-density areas

Households’ access to jobs and services gets much worse with increasing distance from the city centre. Development of suburban and regional mobility-as-a-service (MaaS) offerings could promote better access in these “harder to serve” areas.




Read more:
For Mobility as a Service (MaaS) to solve our transport woes, some things need to change


Moving the country forward

Job creation will be an important aspect of economic recovery. Yet too often we look to large construction projects as the answer. There is plenty of other job-creating work to be done in our communities.

We could, for example, increase the miserly funding for our piecemeal walking and cycling networks.

We could also expand on-demand services to suburban and rural residents who lack basic public transport access. On-demand transit does not follow fixed routes or timetables. Riders book a trip for a cost similar to a bus fare.

Passenger waiting to board a Bridj on-demand bus service.
Bridj is one of the operators that is expanding on-demand services in Sydney and other cities.
Bridj Transit Systems/Facebook



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1 million rides and counting: on-demand services bring public transport to the suburbs


These options will encourage local spending to support small businesses. These are an important piece of our social fabric and improve livability in our communities.

We need to look locally

A focus on localised investment in the many neglected communities across the country will deliver major benefits. Money already committed to large projects that are under way represents sunk costs that may be too deep to renegotiate. However, future plans using public funds must be re-examined.

Investments should target disadvantaged groups and broaden access to transport networks, encouraging new potential users. For many, assistance in gaining access to the necessities of life will be invaluable during the coming economic recovery. Guaranteed access to groceries, medical services, work opportunities and recreational activities must not be reserved for the elite.

We need better localised public transport and we need it for the majority of citizens, not just those who live in the inner suburbs of our capital cities. Most regional populations lack even rudimentary public transport coverage at reasonable frequency.

Increasing services in these areas will create valuable jobs that will stick around, unlike large one-off construction projects. The money will stay local, going into the pockets of operators who live and work in their own community.

While our long-term planning is not to blame for our current situation, we need to develop for the future, not the past. The financial costs of building and maintaining our current infrastructure are not going away. However, we can no longer refuse to invest in many of our underserved communities.

It is time to ensure everyone, regardless of their income or where they grow up, has the basic services they need to be a productive member of society.The Conversation

Benjamin Kaufman, PhD Candidate, Cities Research Institute, Griffith University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Social housing was one hell of a missed budget opportunity, but there’s time



Yuttana Contributor Studio/Shutterstock

Hal Pawson, UNSW

Tonight Labor will deliver its alternative budget and promise that if it was in government it would be investing A$500 million in fast-tracking repairs to social housing, and urging state governments to match it dollar for dollar.

The federal budget itself, delivered on Tuesday, offered nothing extra for social housing, even though when polled by The Conversation and the Economic Society of Australia more of Australia’s leading economists wanted money spent on social housing than any other stimulus measure.

They are right to place it above investment allowances, wage subsidies and tax cuts as a sure-fire way to boost economic activity and employment.



Conversation Economic Society of Australia survey, September 2020

Unlike those other measures, it has a track record.

The Rudd government’s social housing initiative, introduced as part of the package that staved off recession during the global financial crisis, delivered 20,000 new units on time and on budget while creating 14,000 well-paying jobs.

It was the only Commonwealth public housing or community housing initiative of any size since the Howard government effectively ended routine public home building in 1996.

Pre-tested, pre-prepared

On a per capital basis, social housing supply has halved since then.

At the same time, private rental housing has moved upmarket, making it even harder for low-income Australians to find a suitable and affordable home.

The Community Housing Industry Association put forward a $7.7 billion Social Housing Acceleration and Renovation Program (SHARP) that would have delivered an extra 30,000 homes and renovated thousands more over four years.

Calculations by SGS Economics and Planning in June suggested it would have supported between 15,500 and 18,000 full-time equivalent jobs in each of those years.




Read more:
Australia’s housing system needs a big shake-up: here’s how we can crack this


Why, in the face of this analysis, did Treasurer Josh Frydenberg turn the option down?

It’s hard to say, but the omission of social housing is consistent with the budget’s lukewarm attitude towards infrastructure investment more broadly.

Adding up everything the government is planning to spend on infrastructure over the next four years, the budget comes up with a total of $6.7 billion, which is rather small beer compared with the four-year spending plan before the crisis, which was $4.5 billion.

Lukewarm on infrastructure generally

It’s also small when compared to the business tax and other incentives, which amount to $26.7 billion.

Kick-starting the recovery via social housing or other infrastructure would have been out of kilter with a strategy focused on creating “private sector-led growth”.

The strategy, spelled out formally in the budget papers, is to, wherever possible, support markets rather than act directly.

It’s thinking that allows the government to distinguish itself from the Rudd response to the global financial crisis in 2008.




Read more:
Coronavirus lays bare 5 big housing system flaws to be fixed


But – unlike direct action, such as through social housing investment – the favoured approach relies heavily on assumptions about how market players (firms and consumers) react to incentives.

Those reactions might help bring about the post-pandemic snapback the most optimistic forecasts envisage.

There’s time

If not, there’s an opportunity to try again, even reluctantly. SHARP is ready and pre-tested.

There’ll be an opportunity in the mid-year budget update, due in December (in two months’ time), and next year’s budget (due in seven months).

Regardless, resumption of a routine national social home-building program is seriously overdue.

Australia’s housing system has become increasingly unbalanced – not just in the past six months, but over the past 20 years and more.

The crisis provides an opportunity to fix it.The Conversation

Hal Pawson, Professor of Housing Research and Policy, and Associate Director, City Futures Research Centre, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Cutting JobSeeker payments will cause crippling rental stress in our cities



Antonio Guillem/Shutterstock

Simone Casey, RMIT University and Liss Ralston, Swinburne University of Technology

As soon as the COVID-19 pandemic caused businesses to shut down, state governments acted to avoid evictions by introducing moratoriums, and the federal government introduced the Coronavirus Supplement of A$550 on top of the fortnightly JobSeeker payment. These measures were intended to enable 1.6 million Australians to ride out the pandemic-related business shutdowns.

This welcome but temporary support is being withdrawn. The JobSeeker supplement was reduced to A$250 a fortnight from September 26. It will end in January 2021.

Timeline of Coronavirus Supplement.

Our modelling for Victoria shows the tapering down and withdrawal of the JobSeeker supplement will cause crippling rental stress for unemployed and underemployed private renters. In Melbourne, we have found the unemployed will face the same problem of rental stress as those on the former Newstart allowance experienced before the pandemic. (Rental stress is defined as a low-income household spending more than 30% of its income on housing costs.)




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Before COVID, private rentals in nearly all capital cities were already unaffordable for unemployed and low-income renters even in typical share households. What makes the scenario worse than before COVID are the sheer numbers affected. Many of these people may have had incomes prior to the shock that enabled them to maintain higher rents.

To illustrate the extent of the rental stress crisis we modelled rental affordability for the typical low-income household types in Victoria. The first chart shows the effects of the withdrawal of the supplement on rent affordability for two and three sharers and lone-parent families. The second chart later in this article shows the effects across a range of household types.

Impacts of Coronavirus Supplement withdrawal on three household types. (Median rents calculated from Real Estate Institute of Australia June 2020 data. Income calculated to include Commonwealth Rent Assistance (CRA) and lone-parent income includes Parenting Payment Single with Family Tax Benefit.)

The modelling shows the interim rate (A$250) of the Coronavirus Supplement will help for a limited number of household types, particularly in the outer part of Melbourne and regional towns like Ballarat. However, it will not help many households in the inner region of Melbourne where rentals will remain unaffordable. This pattern is worrying because that’s where many of the jobs will become available once economic recovery is under way.




Read more:
Why coronavirus will deepen the inequality of our suburbs


Households with more than one adult receiving the supplement will be better off than lone-parent households. That is because all the adults in those households receive the supplement, and lone-parent households generally need to rent properties with more than one bedroom.

Impacts of Coronavirus Supplement withdrawal on major rental household types. (Median rents calculated from Real Estate Institute of Australia June 2020 data. Income calculated to include Commonwealth Rent Assistance (CRA) and lone-parent income includes Parenting Payment Single with Family Tax Benefit.)

The scenario here plays out across Australia, but is particularly bad for Victorians because the extended lockdown has deferred recovery.

COVID impacts have hit low-income households hardest

Is is important to note that the COVID economic shock has hit low-income households particularly hard. Those in precarious work, young adults and women have had the biggest hits to their incomes and jobs.

Map of JobSeeker increases indicating pandemic impacts on employment across Melbourne.




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Coronavirus puts casual workers at risk of homelessness unless they get more support


In Melbourne increases in unemployment are concentrated in inner-city suburbs like Brunswick and St Kilda. This reflects the loss of jobs for young people in hospitality and retail.

Job losses have also occurred in working-class areas such as Brimbank, Melton and Hume. These losses reflect the impact of shutdowns in the processing, manufacturing and transport sectors.

It is predicted it will take some time for earnings to return to pre-COVID levels. This means renters who have not been able to get jobs will once again be in dire rental stress in most capital cities when the Coronavirus Supplement cuts out in January 2021.

What about household savings?

The Finder Consumer Sentiment Tracker shows household savings have temporarily increased. But it is difficult to assess how much reserve people on JobSeeker payment have been able to lay down, relative to the loss of normal earnings. Any optimism on this count needs to be tempered by the observation that the Coronavirus Supplement did not start until late April and early May — five to six weeks after the job losses started.

Our modelling shows that even during the temporary tapering down of the supplement until January 2021, there will be a rental crisis in cities like Melbourne. These findings can be extrapolated to other capital cities and the scenario will be worse in Sydney.

Cutting the JobSeeker supplement is risky policy because the labour market has not “snapped back”. People who depend on unemployment payments will now face the same problem of rental stress as those on NewStart experienced before the pandemic. But this stress will be more widespread than before. This underscores the need to develop policy that counters the risk of rental stress.




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If we realised the true cost of homelessness, we’d fix it overnight


The Conversation


Simone Casey, Research Associate, Future Social Service Institute, RMIT University and Liss Ralston, Adjunct associate, Swinburne University of Technology

This article is republished from The Conversation under a Creative Commons license. Read the original article.

How might COVID-19 change what Australians want from their homes?



Shutterstock

Wendy M Stone, Swinburne University of Technology; Amity James, Curtin University; Sharon Parkinson, Swinburne University of Technology, and Steven Rowley, Curtin University

New research released today asked Australians how well current housing met their needs and their ideals, both in the short and longer-term.

We found safety and security was the main aspiration of householders across age groups. Given the turbulent year for many households, we wished to explore how the pandemic might change what people want from their homes.

What do people want from a home?

We surveyed more than 7,400 Australians in young, mid-life and older households, including Indigenous, non-Indigenous and widely diverse Australians, online or in interviews.

We asked what they want from housing, and the constraints that mean they haven’t been able to get there.

We found “safety and security” were fundamental to the housing aspirations of young, mid- and later life Australians. Some 75% of respondents indicated these basic characteristics were the key housing attributes they value. For a majority of Australians, these attributes were associated with home ownership.

The figure below shows four in five Australians are satisfied with their current housing in the short term, but when they consider their longer term needs these levels of satisfaction drop considerably. This is particularly so among renters, linked to a lack of security in the tenure.

How well current housing meets longer-term housing aspirations.
Original analysis of Australian Housing Aspirations Survey (2018) data, unweighted

The survey asked participants to choose their ideal housing in terms of location, tenure, dwelling type and number of bedrooms. The results showed there was a preference for owning a house with three or more bedrooms within the suburbs of capital cities, with a notable number also showing a preference for regional living.

But not all households believe they can attain this ideal with rising inequality also fuelling the housing aspirations gap. When we asked households what they need to achieve their ideal housing, results show targeted support is critical — such as assistance with up-front deposits, fees or bonds, and support to manage ongoing housing costs in the context of disruptions such as COVID.

What about post-COVID?

If anything, the pandemic has reinforced trends in housing aspirations.

First, housing security matters. The disruptions of 2020 have highlighted housing insecurity, particularly among those with precarious incomes. Government interventions including JobKeeper, JobSeeker, evictions moratoria and schemes such as the Victorian Rental Relief Grant have been necessary to keep renters in their homes, with banks having deferred mortgage payments for tens of thousands of additional households.




Read more:
400,000 women over 45 are at risk of homelessness in Australia


Second, walkable neighbourhoods are the way of the future. COVID-19 reaffirms the importance of local neighbourhoods as amenity centres. This includes local areas that include green space, local produce and a sense of community. Our findings show suburban living and regional towns are attractive options for households across all ages, including younger adults.

Third, adaptable living is key. Home has never been as important as a hub of both productivity and care. Working from home and online education have become the norm for many households in Australia and globally. This requires adequate space, quality digital connectivity and adaptable living areas that can accommodate the whole family and different activities.

Young adults have needed to relocate quickly in some cases, with households at mid-life finding themselves potentially housing both young adult children (and maybe grandchildren) as well as elderly parents. As fears rise about the safety of existing aged care residences, housing that supports home-based elder care also becomes critical.

Creating a better housing future

Our research shows safety and security is key to what people want from housing, so reducing entry costs to home ownership and delivering rent-buy models (that enable people to transition from renting to buying) are important policy directions.

Improving housing knowledge and housing market skills to enable households to explore options, make more informed housing decisions and plan for their housing futures are also key elements. Creating optimal housing requires collaborating with residents as experts, on what they value.




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‘Uprooting, no matter how small a plant you are, is a trauma’: older women renters are struggling


The Conversation


Wendy M Stone, Associate Professor, Centre for Urban Transitions and Director, Australian Housing and Urban Research Institute Swinburne Research Centre, Swinburne University of Technology; Amity James, Senior Lecturer, School of Economics, Finance and Property, Curtin University; Sharon Parkinson, Senior Research Fellow, Centre for Urban Transitions, Swinburne University of Technology, and Steven Rowley, Professor; School of Economics, Finance and Property, Curtin University. Director, Australian Housing and Urban Research Institute, Curtin Research Centre, Curtin University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

After COVID, we’ll need a rethink to repair Australia’s housing system and the economy



Shutterstock

Hal Pawson, UNSW; Bill Randolph, UNSW; Chris Leishman, and Duncan Maclennan, University of Glasgow

A new report from the New South Wales Productivity Commission (NSWPC) announces that “[higher] housing costs […] impose broader economic costs”. That chimes with our own newly published research. The implication is that Australia’s heavily capitalised housing market will weigh down economic recovery from the shocks of the coronavirus pandemic.

A niche group of economists and epidemiologists had warned the world for decades that a pandemic would have devastating economic and social consequences. When it comes to Australia’s housing, though, the COVID-19 crisis has only served to highlight deep and long-standing faultlines.




Read more:
Coronavirus lays bare 5 big housing system flaws to be fixed


The housing system has produced triple crises of rising homelessness, growing queues for non-market, affordable housing and the pervasive affordability problems for middle- and lower-income households who depend on the private housing market. All these pressures were building well before the pandemic.

However, a particularly cruel COVID-19 effect has been the concentration of pandemic impacts on public-facing economic sectors and jobs. Younger people and female employees have been hit hardest. The fallout in the lower end of the labour market will only make existing pressures worse.

Australia is about to embark on an audacious economic and social experiment as it tries to wind back the JobKeeper and JobSeeker programs temporarily protecting about 3.5 million people. Treasury projections envisage a gradual withdrawal. In reality, especially if any eviction moratoria are allowed to lapse, the start of this process will likely trigger huge immediate challenges in managing the housing and homelessness fallout.

Beyond that, the recession will drive home the need for political leaders to more fully appreciate the integral role of housing in the economy. The housing system plays key roles in shaping economic productivity, stability and inequality.

How on earth did we get here?

For many decades economics-leaning policymakers have assumed the housing market is largely a well-functioning system driven by helpful economic forces. Most famously personified in comments by former prime minister John Howard, and very much in tune with dominant media messaging, Australian governments have generally welcomed rising house prices as signifying consumer confidence. Even academic researchers and government analysts have cited house prices as a sign of the “success” of cities and regions.

More recently, ever-rising house prices have finally been recognised as a driver of wealth inequality. The problem is linked to rising mortgage debt and increasingly recognised as likely to add to instabilities in the macro economy and financial system.




Read more:
The housing boom propelled inequality, but a coronavirus housing bust will skyrocket it


There are also growing policy concerns that city living is becoming too expensive. This in turn harms economic productivity. [OECD data] show Australia is on a similar path to the US, with the metropolitan share of national GDP per capita falling in recent years.

Chart showing metropolitan GDP per capita as percentage of national value
Metropolitan GDP per capita has been declining in Australia and some other countries.
Data: OECD, Author provided

How has policy thinking become so blurred?

The NSWPC report recognises that the combination of excessive rents and insecure tenure can damage children’s educational attainment and prospects. Prices and rents are particularly unaffordable in Sydney, making it a more stressful place to live and work. Resulting migration to other parts of the country reduces employers’ access to the supply of willing and productive labour, thus damaging productivity.

But the NSWPC analysis of housing-to-economy interactions does not go anything like far enough. As our research shows, Australia’s dysfunctional housing system results in a battery of other economically harmful impacts. These include:

  • long-term policies that have diverted savings and investment into rising property and land prices, with minimal or no employment or productivity benefit

  • excessive rent and mortgage burdens diverting household spending from other consumption with greater productivity impacts

  • a dysfunctional housing system that reduces household savings for the longer term, as well as contributing to falling rates of home ownership and personal asset accumulation for future generations of older people.

Perhaps worst of all, the high private housing debt in Australia is among the worst in the world. The International Monetary Fund (IMF) and the OECD recognise this debt as a threat to financial and economic stability.




Read more:
Housing policy reset is overdue, and not only in Australia


Economics students are taught the “paradox of thrift”: when an individual saves, it benefits them in the long run. When too many people save, it harms economic growth.

In a similar way, rising housing prices benefit owners of houses and/or investments. But when we scale up to the level of a locality, city, state or economy, rising prices have a profound negative impact.

Young couple in kitchen looking at household bills
The impacts of high rents and mortgage debt on people’s behaviour have significant consequences for the economy.
Shutterstock

Setting a new agenda

With all this in mind, our report lays out a wide-ranging “housing and productivity” research agenda. The hope must be that the resulting evidence helps trigger the policy reboot needed to transform the housing system from being part of the problem to part of the solution.

Much more attention needs to be focused on how owners and renters adjust savings and spending as a result of excessive housing costs. Without knowing about these behavioural responses, it is impossible to design appropriate policies.

We must find ways to restore the housing prospects of younger and/or less affluent households. We must research the potential for schemes to help first home buyers with deposits, and assess how better credit scoring methods could reduce pressures on rental markets. This is particularly important because currently used credit scoring methods disproportionately reward access to wealth, and do not adequately capture important aspects of prospective borrowers’ consumption and saving behaviour.

Delayed home ownership entry or permanent exclusion have major long-term implications. Worryingly, the negative impacts on economic productivity and stability have been largely ignored to date.

The Grattan Institute estimates home-ownership rates for the over-65s will fall by 19% by 2056. The impacts on retirement incomes will be significant.




Read more:
Home ownership foundations are being shaken, and the impacts will be felt far and wide


Policymakers haven’t planned for the inevitable rise in need for social housing from impoverished older private renters. The present system has glaringly failed to provide housing affordable for more than half of Australia’s low income tenant population. Acting on the mounting economic imbalances caused by the housing crisis could, at the same time, generate a more productive and stable economy.

Australian housing research and policy urgently needs a new economic conversation.The Conversation

Hal Pawson, Professor of Housing Research and Policy, and Associate Director, City Futures Research Centre, UNSW; Bill Randolph, Director, City Futures Research Centre, Faculty of the Built Environment, UNSW; Chris Leishman, Professor of Housing Economics, and Duncan Maclennan, Professorial Research Fellow in Urban Economics, UNSW; Professor of Strategic Urban Management and Finance, University of St Andrews; Professor in Public Policy, University of Glasgow

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Why NSW is skewing its tax system toward build-to-rent apartments and away from mum and pop landlords


Harry Scheule, University of Technology Sydney

In an apparent about face, the NSW government has halved land tax for developers of build-to-rent housing.

It came weeks after the the Treasurer Dominic Perrottet launched a report that called for a greater reliance on land tax as a replacement for stamp duty.

The greater reliance on land tax is a long-term goal. At the moment family homes are exempt, along with boarding houses, caravan parks, retirement villages and farms. Most other users pay land tax, including landlords and businesses.

The change will give developers who invest in build-to-rent schemes offering long tenancies a 50% discount on their land tax for 20 years.

Why build-to-rent?

Most Australian rental properties are owned by individuals, units in apartment blocks as well as free-standing houses. Half are owned by landlords with only one property; three quarters by landlords with only one or two properties.

If you want to rent from a corporation, or from someone with wide experience in owning and renting properties, you’ll find it hard.

It makes Australia unusual.

Nails in walls can cause problems for tenants.

In other countries corporations rent out housing, big time. America’s five largest corporate landlords own 420,000 properties. Germany’s largest landlord, Vonovia, owns more than 330,000.

Overseas experience suggests corporations provide more affordable housing, and in many ways they make better landlords.

Individuals who own just one property have put most of their eggs in one basket.

Because they can’t afford for anything to go wrong they check the condition of the property regularly.

They prohibit nails in walls and pets, and typically offer only short-term leases.

Corporations can play the law of averages.

Because they know most properties will be well maintained they are satisfied with less-frequent inspections. They allow modifications, and typically offer long-term leases.

They offer an experience pretty close to ownership, in return for rent.

It’s this that the NSW government wants to encourage.

To ensure it happens and to ensure built-to-rents don’t revert to the Australian pattern of individual investors owning individual units, it will specify that the apartments have at least 50 units and are managed under unified ownership.

Tax makes it hard

At the moment such developments are discriminated against when it comes to land tax. No tax is due if the land value is below a threshold.

Individual landlords are usually below the threshold (some spreading their portfolio between multiple states to ensure they don’t trigger each state’s threshold).

Wholly-owned apartment blocks are above the threshold and can’t escape it. University of Technology Sydney calculations suggest land tax on build-to-rent developments can consume up to 27% of the annual rent collected.




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‘Build to rent’ could be the missing piece of the affordable housing puzzle


And they are subject to goods and services tax. They can reclaim some of it but not all.

The announcement comes at a time when the COVID crisis has cut stamp duty receipts and created an oversupply of vacant apartments, particularly around universities.

The initiative appears to have been crafted before the crisis and to be more forward looking. Many of the build-to-rent projects will take years to complete.

It’s about changing the mix

That said, any extra building activity will support the construction industry and extra stock will reduce home prices and rents.

The initiative doesn’t spell the end of mum and dad landlords. They will still predominate for a long time.

It’s about providing options and security for tenants that isn’t widely available and will become more important as a greater proportion of Australians rent.

Other states will be taking note.




Read more:
What Australia can learn from overseas about the future of rental housing


For a government that wants to eventually make land tax universal, the 50% cut is a step in the wrong direction. It might have been better to remove the threshold for small landlords.

But there’s no sign the NSW government has given up on its longer term goal. It’s unlikely to be the last time land tax rules are changed.The Conversation

Harry Scheule, Professor, Finance, UTS Business School, University of Technology Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Social housing, aged care and Black Americans: how coronavirus affects already disadvantaged groups


Hassan Vally, La Trobe University

While it’s true anyone is at risk of catching and becoming ill with COVID-19, it’s becoming increasingly clear this virus discriminates.

From early in the pandemic, we’ve seen how COVID-19 disproportionately affects older people and those with other health conditions, who are more likely to develop severe symptoms and die.

But as well as discriminating on the basis of biology, this virus discriminates on the basis of socioeconomic disadvantage. It ruthlessly picks on the most vulnerable in society.




Read more:
Our lives matter – Melbourne public housing residents talk about why COVID-19 hits them hard


The Melbourne tower blocks

The recent COVID-19 cases in social housing, which saw nine public housing towers in Melbourne’s north put into hard lockdown, brought this into sharp focus. These tower blocks accommodate some of the most vulnerable people in our community.

People living in these buildings experience high levels of unemployment and job insecurity, generally exist on low wages, have limited access to education, are often from migrant backgrounds, and in some instances are victims of trauma.

The fact we saw the virus spread through these towers should be no surprise given what we know about how it spreads in crowded conditions and shared spaces. Physical distancing is almost impossible when you have big families living in two-bedroom units.

An elderly person is assisted by a carer.
Aged care residents are at higher risk from COVID-19.
Shutterstock

Importantly, for cultural and language reasons, generic health messaging may miss the mark for these groups.

These factors combine to put social housing residents at increased risk of contracting the virus.

Aged-care facilities

Another group this pandemic disproportionately affects is aged-care residents. In aged-care facilities we have a perfect storm: an environment conducive to virus transmission and residents who are among the most susceptible to serious outcomes from infection.

Add into the equation the well-documented system deficiencies and workforce issues that have plagued Australia’s aged-care sector, and we have another situation in which some of the most vulnerable in our society are disproportionately affected by COVID-19.

We’ve seen this in Australia and around the world. Once you have community transmission of COVID-19 it’s hard to keep it out of aged-care facilities, and once in, outbreaks in this setting can be difficult to stop.




Read more:
4 steps to avert a full-blown coronavirus disaster in Victoria’s aged care homes


African Americans in the United States

The disproportionate effect of the pandemic on the most disadvantaged, vulnerable and marginalised in society is not just evident in Australia, but throughout the world.

There is perhaps no better example than the plight of African Americans in the United States. Figures released in May reported Black Americans were dying at almost three times the rate of white Americans from COVID-19.

One of the main reasons Black Americans face a higher health burden from COVID-19 is their increased rate of accompanying health problems such as heart disease, high blood pressure and diabetes.

This burden is amplified by the fact many are excluded from the basic access to health care we take for granted here in Australia.




Read more:
We could have more coronavirus outbreaks in tower blocks. Here’s how lockdown should work


And it’s not only the health effects of the virus which hit the disadvantaged harder. These people are also much more vulnerable to the indirect economic impacts of the pandemic, by virtue of their lower financial resources to begin with.

Looking across the globe

COVID-19’s discrimination against the vulnerable also extends to entire countries. Poorer and less developed nations, such as in Africa and Latin America, will potentially suffer the most in the immediate and longer term.

With weaker health systems, scarcity of medical resources (less equipment such as ventilators, for example) and large, vulnerable populations, these countries are less able to cope with a crisis of this magnitude.

And beyond the demands placed on their health systems, these countries have less capacity to withstand the economic shocks of the pandemic. Its effects could well catapult them into further crises, such as food insecurity.




Read more:
Coronavirus discriminates against Black lives through surveillance, policing and the absence of health data


We know infectious diseases, like other health conditions, are highly influenced by the social determinants of health. That is, the conditions in which people live, learn and work play a significant role in influencing their health outcomes.

Broadly speaking, the greater a person’s socioeconomic disadvantage, the poorer their health.

In shining a light on these inequities the pandemic also provides an opportunity for us to begin to address them, which will have both short and longer term health benefits.The Conversation

Hassan Vally, Associate Professor, La Trobe University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Our lives matter – Melbourne public housing residents talk about why COVID-19 hits them hard


Sandra Carrasco, University of Melbourne; Majdi Faleh, University of Melbourne, and Neeraj Dangol, University of Melbourne

The toughest lockdown imposed on residents of public housing in Australia has been lifted, but their COVID-19 ordeal isn’t over – and recovering from their traumatic experience will take time. Recent events have highlighted the inequalities that make residents of the locked-down Melbourne housing towers highly vulnerable in the COVID-19 emergency. Nearly 350 residents have been infected to date.




Read more:
Melbourne tower lockdowns unfairly target already vulnerable public housing residents


This article draws on our interviews with residents and community and religious leaders after the buildings were locked down. The interviews followed a two-year study of the housing conditions of migrants from the Horn of Africa living in inner Melbourne estates.

These are places of social and economic disadvantage. The current crisis has laid bare the conditions that endanger this community. These include large extended families (up to nine people), low incomes, high unemployment, limited access to education, challenges of communicating in English and poor internet access.

Click on table to enlarge.
Data: ABS 2016, Author provided

COVID-19 doesn’t discriminate, but its impacts do in ways felt far beyond the health sector. Studies of disasters and emergencies have shown events like these hit the poor hardest. Recent studies in the US confirm the COVID-19 pandemic is exposing existing inequalities and vulnerabilities of lower-income groups and ethnic minorities.

Voices from the towers

African residents of the Melbourne public housing estates raised their voices during the lockdown, despite their fears and sense of exclusion.

Residents locked down inside Melbourne’s public housing towers speak out.



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Anisa, a Somali-Australian resident of a North Melbourne tower, told us:

The enforced lockdown is a direct reflection of the systematic inequalities [people face] in public housing.

The lockdown brought back wartime memories of dispossession and the sense of persecution they still feel. Iman, a Somali resident of one of the affected towers, said:

This community is made up of many people who have fled war, who have complicated mental health issues, whose families have been racially profiled and targeted by police.

Anisa told us:

We need a health response, not a police response, at the end of the day.

Lack of communication between residents and authorities is the result of a pre-existing disconnection and lack of mutual trust.




Read more:
Voices of residents missing in a time of crisis for public housing


This explains residents’ claims that initial government support was incompatible with their values. Awatif, a Sudanese resident of the Flemington towers, said:

Many people [here] are Muslims. They [the government] brought non-halal food, they do not understand what we eat.

The precarious living conditions of public housing have also been exposed. Issues such as poor ventilation already affected people’s health. Muhubo, a Somali resident of Carlton’s public housing estates, said:

I have asthma and I need to take fresh air because inside the houses sometimes it is stuffy. Ventilation inside is not good enough.

Overcrowding makes isolation of ill residents impossible, and there other, related challenges. As Muhubo said:

In many families only the mother lives with the children. If she gets sick it will be difficult for the children, especially if they are small.




Read more:
‘Vertical cruise ships’? Here’s how we can remake housing towers to be safer and better places to live


Police attend North Melbourne public housing under lockdown.
Sandra Carrasco, Author provided

Adding to residents’ problems

The lockdown made existing problems worse. Tewelde Kidane, who chairs the Melbourne Eritrean United Community, spoke of family tensions increasing in confined spaces, which combined with lack of privacy results in increases in domestic violence. Sultan Abdiwali, the imam of the North Melbourne mosque at the heart of the Australian Muslim Social Services Agency (AMSSA), also referred to increased family violence and drug use, as did Awatif:

Some young people get sometimes drunk, scream at night, [and use] drugs.

However, the lockdown also showed the community’s capacity to support their fellows in need. “We have been receiving support and help from our local community even before this extreme lockdown,” the resident Iman said.

Asked how the African communities were supporting their members, the imam said:

[A] Somali community group collected donations and provided help to public housing residents. Other groups found it hard to manage such activities.

Most residents do not question the lockdown, but object to the lack of information. Anisa said:

I do know that if we, the residents, were treated with some decency and respect and received enough information on the lockdown, our concerns would be a lot more at ease than they are now.

Carlton estate residents volunteered to assist health professionals with door-to-door COVID-19 testing. The volunteers helped overcome language and cultural barriers. Muhubo explained:

People are scared about being ill so they are happy to get tested. People know that they need to get tested and they help with that.

Carlton public housing volunteers help with door-to-door COVID-19 testing.
Tewelde Kidane, Author provided



Read more:
We could have more coronavirus outbreaks in tower blocks. Here’s how lockdown should work


Residents use social media, WhatsApp and Zoom to maintain communication within the community. However, many lack internet access. Muhubo said:

[…] for the families that do not have the internet at home and have kids it is difficult. The school gave some kids a small modem with some internet access, but it is slow and the data is limited.

Good communication between authorities and residents is crucial to understand and manage the risks, but this requires proper risk governance. As Tewelde explained:

Many people just live here and rely on the community and don’t know what happens in the rest of the city. We sometimes feel disconnected from the rest.

Language barriers and low literacy in our community members is a big issue. Some people might even have troubles calling emergency numbers like 000.

Building trust will take time

Mutual trust must be built. Yet, surprisingly, government agencies often do not communicate directly with residents.

These days the Carlton public housing residents receive regular communication from Carlton Neighbourhood Learning Centre (CLNC). The centre has gained their trust by working with vulnerable communities for many years. Muhubo said:

Even now we do not get more information from the housing commission. These days we get messages and updates from the school [CNLC], although most of the messages are in English.

Community members’ social networks are part of what has been called an “economy of affection”, a collective support structure characteristic of African communities.

A community meeting during a weekly farmers’ market at a public housing estate in Carlton before the COVID-19 outbreak.
Sandra Carrasco

Government agencies need to start building communication channels that acknowledge existing community leaders and networks. Awatif said:

They [the government] need to link the leader and community workers to work with them, teach people how to use sanitisers, make them aware of social distancing, bring professional cleaners.

Understanding these communities and the risks they face will lead to better and more inclusive prevention, response and recovery from COVID-19.The Conversation

Sandra Carrasco, Teaching Assistant and Research Fellow, Melbourne School of Design, University of Melbourne; Majdi Faleh, Teaching Assistant, Melbourne School of Design, University of Melbourne, and Neeraj Dangol, Research and Teaching Assistant, Melbourne School of Design, University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.