Victoria’s $5.4bn Big Housing Build: it is big, but the social housing challenge is even bigger



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Katrina Raynor, University of Melbourne

The Victorian government has announced the big social housing investment for which housing advocates, industry groups, academics and social service providers have been clamouring for decades.

The A$5.4 billion “Big Housing Build” aims to create over 12,000 homes in four years. Of these, 9,300 will be social housing. The rest will be affordable or market-rate housing. The program will replace 1,100 old public housing units.




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The headline programs include:

  • $532 million to build on public land, including six “fast start” sites, resulting in 500 social housing homes and 540 affordable and market homes

  • $948 million to spot-purchase homes, projects in progress or ready-to-build dwellings from the private sector, adding 1,600 social housing and 200 affordable homes

  • $1.38 billion for community housing projects to build up to 4,200 homes

  • $2.14 billion for “new opportunities” with private sector and community housing providers, producing up to 5,200 homes.

Chart showing numbers of homes to be built over four years
The Big Housing Build time frame.
Homes Victoria/Victorian government, CC BY

Up to $1.25 billion will go into regional Victoria, which is welcome.

In addition, $498 million was announced in May to refurbish and build public housing.

Just how big is the Big Housing Build?

A target of 9,300 new social housing units over four years is definitely “big” by recent Victorian standards. The state’s social housing stock grew by just 12,500 dwellings over the past 15 years – about 830 dwellings a year.

The only comparable investment in Australia in the past two decades was the Commonwealth’s $5.6 billion Social Housing Initiative in 2009. This post-GFC stimulus program built around 19,700 social housing dwellings and repaired 12,000.

Chart showing number of social housing dwellings completed each year in Australia from 1969-2018

Australian Bureau of Statistics, Author provided

Is it enough?

No. It will take a long time and continued commitments of a similar scale to overcome the massive shortages in Victoria and Australia.

Victoria has a history of spending less on social housing per person than the rest of Australia.

Chart showing net recurrent spending per head of population for states and territories

Productivity Commission, Author provided

University of Melbourne research estimated a 164,000 shortfall in social and affordable housing in Victoria in 2018. The Australian Housing and Urban Research Institute estimated an extra 166,000 social units would be needed by 2036.




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The Big Housing Build aims to increase social housing dwellings in Victoria from 80,500 to about 89,000 – about 3.5% of all housing. That’s still less than the Australian average of 4.2% and the OECD average of 6%.

Chart showing social housing stock as percentage of total housing in Victoria and OECD countries.

OECD (data from 2018 or more current available), Author provided

What the scheme gets right

This program leans heavily on the use of state and local land to reduce the cost of the new housing. My colleagues and I have previously pointed out the large swathes of “lazy” government land across Victoria that could be used for this.




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Offering $1.38 billion in competitive capital grants for community housing providers is also substantially more cost-effective for government than models that rely on private finance and provide an operating subsidy to providers. It appears the entire amount will be spent on supporting construction, rather than on creating a seed fund that drip-feeds investment returns into the not-for-profit sector like the Social Housing Growth Fund does.

Victoria is also joining Canada and the state of California in spot-purchasing homes from the private sector in response to COVID-19. This will deliver social housing quickly. It will also support developers in a depressed market while capitalising on lower prices.

The focus on victim-survivors of domestic violence, Indigenous Australians and people living with mental health conditions is welcome too.




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Remaining concerns

Privatisation of social housing

This announcement continues trends across Australia to shift social housing provision from a state responsibility (public housing) to a more partnership-based model led by community housing providers (community housing).

This approach can leverage substantial contributions from other sectors in the form of land, capital, skills and ideas, producing exemplary outcomes. An example is the Education First Youth Foyer partnership, which is changing how “at risk” young people access housing, education and other services.

However, complex arrangements between multiple partners, especially when using private finance, can be inefficient and costly. Such partnerships are often opportunistic rather than strategic, with priority given to commercial over social outcomes. Community housing residents have less tenancy rights than those in public housing and sometimes pay more of their income on rent.

An emphasis on mixed-tenure developments can lead to cherry-picking of “acceptable” tenants and destroy tightly knit communities. Previous public housing renewal programs based on private sector involvement left a legacy of poorly integrated communities and loss of public land for negligible gains in social housing. We cannot afford to make those mistakes again.

private garden area at Carlton housing estate redevelopment
Previous Victorian housing estate redevelopments have led to segregated areas of public and private housing.
Kate Shaw



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Lack of a strategic plan

The program comes with a new government agency, Homes Victoria, and the promise of a ten-year policy and funding framework. This level of strategic leadership has been lacking in Victoria and will require bipartisan support. Strong partnerships with local councils will also be needed.

Good policy depends on many elements, including:

  • research
  • housing targets with geographical and population-group breakdowns
  • transparent decision-making
  • clearly identified funding streams and responsible agencies
  • shared definitions
  • monitoring and evaluation mechanisms
  • clear time frames
  • integration with other policy areas and levels of government.

These elements appear to still be a work in progress for the Big Housing Build. The risk is that this announcement will follow Australia’s pattern of “lumpy” funding and inconsistent policy on social and affordable housing.

Without long-term funding streams, providers find it hard to to scale up, make strategic decisions, invest in internal capacity and plan development pipelines. Without overarching strategy and monitoring, Victoria’s lacklustre history of social housing provision may continue.




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Reduced community engagement

Planning approvals for larger social housing developments will be streamlined. In many cases, the state will take over final decision-making from local government. This will reduce opportunities for community consultation and the state government will need to work hard to ensure high-quality design is integrated into developments.

Where to from here?

As COVID-19 has made clear, everyone needs a home and society benefits from caring for those in need. The speed with which governments moved to house rough sleepers, a seemingly intractable problem before COVID, shows homelessness and severe housing stress can be overcome.




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The Big Housing Build is not perfect and will not solve Victoria’s huge housing challenges on its own. It must be the start of regular cycles of funding to sustain social housing in Victoria. It should also be tied to longitudinal evaluation of outputs and an aligned research agenda to shape best-practice outcomes.

And powers-that-be in Canberra, the list of partners in this program has a large federal-government-shaped gap. When are you going to come to the party?The Conversation

Katrina Raynor, Postdoctoral Research Fellow, Hallmark Research Initiative for Affordable Housing, University of Melbourne

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.




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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.




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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.

Top economists back boosts to JobSeeker and social housing over tax cuts in pre-budget poll



Wes Mountain/The Conversation, CC BY-ND

Peter Martin, Crawford School of Public Policy, Australian National University

Overwhelmingly, Australia’s leading economists want the budget to boost social housing and the JobSeeker unemployment benefit rather than bring forward personal income tax cuts.

The 49 eminent economists who responded to Conversation-Economic Society of Australia pre-budget survey were asked to rate 13 options in terms of “bang for the buck” – effectiveness in boosting the economy over the next two years.

Among the options offered were boosting JobSeeker (previously called Newstart), wage subsidies beyond the expiry of JobKeeper, one-off cash payments to households, big infrastructure spending, bringing forward the personal income tax cuts, and company tax cuts.

The options were selected by a committee of the central council of the Economics Society and were presented to each surveyed economist in a random (shuffled) order.

The economists surveyed are Australia’s leaders in the fields of microeconomics, macroeconomics, economic modelling and public policy. Among them are former and current government advisers, former heads of statutory authorities, and a former member of the Reserve Bank board.

Each was asked to nominate the four most effective options for boosting the economy.



Economic Society of Australia/The Conversation, CC BY-ND

The most popular option, endorsed by 55% of those surveyed, was boosting spending on social housing.

Monash University econometrician Lisa Cameron said the budget provided an unusual opportunity to fix things for the long term while boosting the economy.

Social housing would leave us with something worthwhile (as did the school hall building program during the global financial crisis) in addition to providing work for the building industry. Alleviating homelessness would be a lasting benefit.

If it goes to the unemployed, it will be spent

The second most popular option, endorsed by 51%, was permanently boosting JobSeeker, previously known Newstart. The temporary boost in the A$282.85 per week payment was wound back last week and will end in December.

Melbourne University economist John Freebairn pointed out that with no real increase in Newstart since 1993 and many on it in demonstrable poverty, every extra cent spent on it will be spent rather than saved.

Supported by fewer than half of those surveyed, but third most popular at 45%, was more funding for education and training.




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Flinders University labour market specialist Sue Richardson said education was
labour-intensive, which would help with employment, and would assist young people severely hit by the pandemic to get the skills they would need to get jobs rather than stay unemployed.

Matthew Butlin, who heads the South Australian Productivity Commission, said the decimation of income from student fees means universities will have less money to subsidise research. There was a case for more direct funding of university research in the form of competitive grants for projects with practical applications.

The fourth most popular option was infrastructure spending, supported by 41%.

Why not a Hoover Dam, a new Opera House?

Many made the point that the projects chosen would have to be worthwhile in their own right, and feared this might not be the case. Others looked to big “nation building” projects along the lines of the Hoover Dam in the United States which was built during the Great Depression and employed 21,000 people.

“Why not building a massive dam in Australia? Why not building a new Sydney Symphony Orchestra building like the Berlin Philharmonie? Why not expand the National Parks? Why not building green libraries all over Australia?,” asked Sydney University’s Stefanie Schurer.




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Done right, like the Sydney Harbour Bridge which was completed during the Great Depression, big imaginative projects could leave us with something valuable.

There was less enthusiasm for continued wage subsidies (35%) and an expanded investment allowance (29%) with University of NSW economist Gigi Foster saying investment allowances could be replaced with income-contingent loans along the lines of the Higher Education Contributions Scheme.

That way businesses could borrow to invest, with an obligation to repay if the investment paid off.

If it goes on tax cuts, it might not be spent

The same approach was taken by some to funding higher quality aged care (supported by 31%) and increasing subsidies for child care (29%).

Economic modeller Warwick McKibbin suggested funding child care through income-contingent loans (repayable on the basis of income) rather than subsidies.

Bringing forward the leglislated personal income tax cuts as proposed by the government and cash payments to households were relatively unpopular, supported by 20% and 16%.

Saul Eslake said that while he agreed with the treasurer that early tax cuts would “put money in people’s pockets”, there was no guarantee the high earners “into whose pockets most of that money would be put”, would take it out and spend it in sufficient quantity.




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Eslake suggested that rather than supporting households with cheques as happened during the financial crisis, households could be handed time-limited tradeable vouchers that could be spent in areas hurt by restrictions, such tourism and the arts, or used for other worthwhile purposes such as childcare or reskilling.

Among those who did support bringing forward the tax cuts was John Freebairn, who said that although presented as cuts, what was proposed would do little more than restore what had been lost to bracket creep, keeping income tax steady.

Company tax cuts an also-ran

Company tax cuts, once touted by former prime minister Malcolm Turnbull as the key to jobs and qrowth garnered minimal support, being backed by just six of the 49 economists surveyed.

The least popular option, backed by only two economists surveyed, was government support for cleaner fossil fuels such as natural gas, as the prime minister is promising. In contrast 13 (26%) backed support for renewable energy.


Individual responses

The Conversation

Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University

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.




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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.




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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.




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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.




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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.