Submission re: NSW Social Housing Discussion Paper

Submission from Hands off Glebe Inc.

to the NSW Government’s

Discussion Paper on Social Housing in NSW

 

OVERVIEW

“We are in a housing crisis that extends from the homeless on the street well into the middle class. We have couples deciding not to have children because they do not have the space to house them. We have people paying exorbitant rents … Yet ministers just sit there like gouty old men in the 19th hole.” (Nick Cohen, Spectator 7/1/13 quoted in Dorling p.37)

There are a number of assumptions in the Discussion Paper which make its proposals for resolving the housing crisis unworkable and unacceptable.

  • Social housing is viewed as an element of the welfare system. However, to solve the current housing crisis requires that we understand it as an essential sector of the whole housing system.
  • The proposed “pathway to independence” is in reality a pathway to dependence upon the less secure and less affordable private rental market. Age, disability and family responsibility are common bars to the labour market. For those able to work, secure jobs are not always available. The national unemployment rate in January 2015 was 6.1% and in NSW it was 5.9%. Youth unemployment is even higher.
  • The Discussion Paper says “The overall objective of the new system is to provide a safety net.” Why? It would be socially and economically fairer and more sustainable if eligibility was significantly expanded.
  • Social housing is presented as dependence, private rental is independence. Why? The only real difference is the landlord.
  • Housing in the private sector is the preferred form of housing. Why? Affordable public housing, in various forms, is equally acceptable. Small government and market dominance are not better than state involvement in public infrastructure which can deliver fairer outcomes.

Hands Off Glebe argues for an expanded and improved national, publicly funded housing program. Government has a responsibility for the well-being of the citizens, including the provision of accessible, good quality, affordable, well-maintained public housing, for families and individuals. We cannot rely on the private rental and sales market to provide for our housing needs.

The Discussion Paper says nothing about injecting money into public housing. This should be a priority. It is only with access to decent, affordable housing that members of our community can achieve their potential in education and employment.

PILLAR 1 — a pathway not a destination

The Discussion Paper says:

 “A social housing system should provide opportunity and pathway for client independence and work to break the cycle of disadvantage, while supporting vulnerable people.”

“The current focus of the social housing system is on sustaining tenancy, rather than encouraging opportunity or independence.” P13

Very few public housing tenants will ever be able to afford the rocketing cost of private rentals. Why should they be cast adrift on the private rental housing market?

The presumption that private rental accommodation is a better housing outcome for tenants than public housing is not justified. Private rental accommodation may be in a poorer condition than public housing, and tenure is often less secure. A government policy promoting private rental accommodation in lieu of public housing would of course benefit landlords.

Hands off Glebe seeks a broadening of public housing so that once again public housing becomes a significant element of the housing system. There is no reason public housing should not be a destination. It may be the only realistic goal for many people.

As the Discussion Paper notes, “Private rental housing in NSW, especially in the greater Sydney metropolitan region, has become increasingly unaffordable for low income households over the past ten years. In addition, social housing tenants are faced with the risk of losing stable housing should they voluntarily transition to the private rental market, given the difficulty faced in re-entering the social housing system.”

“In terms of home ownership, Sydney is one of the least affordable cities in the world…

“The deterioration in housing affordability is even worse for private renters. On average, in the last decade, Sydney private rents increased by 47 per cent in real terms.“(Eastgate pp. 5-7

An Anglicare report highlighted the unaffordability of the private rental market for 99% of people on Centrelink benefits.

Security of tenure is highly valued by social housing tenants but it is put at risk by the insistence on social housing as ‘a pathway not a destination’. For most social housing tenants it is clearly a destination. Once they have social housing they have no desire to go anywhere else. This view is based on a realistic assessment of the alternatives on offer. Home ownership is beyond their resources while private rental, even if it is available, is neither affordable nor secure..

Social housing is highly successful in delivering affordability to its tenants. While in 2009-10, 60% of low income tenants in the private rental market were experiencing housing stress (paying over 30% of their income in rent) and 48% of low income home purchasers were in mortgage stress, only 1.3% of low income social housing tenants were reported as being in housing stress. (Eastgate p 9)

The insistence on trying to move tenants out of social housing and into the private market, and on making the system merely a safety net represent further steps in the direction of the government trying to shed its responsibilities by operating social housing as a residual welfare measure.

PILLAR 2 — a fair system

Average tenure in social housing is long and increasing with more than 50%of tenants living in public housing for ten years or more. This is only to be expected in a climate where governments are increasingly focussed on the provision of public housing as a safety net for the disadvantaged rather than as integral to our society, like public education and health.

The Discussion Paper says “There is a trend for tenants to stay longer in social housing meaning there are fewer opportunities to assist new people.” (p24).

This is only true if no new public housing stock is built. Additionally, the inference that current social housing tenants are being unfair by staying in their homes when the waiting list is so long is unacceptable. This is blaming tenants for the waiting list and trying to solve the problem by throughput of tenants and not increasing the amount of social housing available for “new people”. This is a political wedge to play social housing tenants off against those in the private rental market and those on the waiting list.

The Discussion Paper claims that “A fair social housing system is also one where tenants value the support they are receiving, by taking care of their dwelling, paying rent and contributing to their community.” (p21)

This is a view that social housing equates to support rather than a human right and it presupposes that all people have a mindset where beds are made and dishes washed before people leave the house. This simply does not reflect the profile of many social housing tenants.

The government is setting up this standard while not acknowledging the widespread need for assisted living support systems. This does not mean re-institutionalisation of large numbers of people but appropriate support within a social housing model which does not put timeframes on tenancy but accepts that a large number of people need permanent housing options.

The Discussion Paper states: “the NSW social housing system as a whole requires a fundamental shift in emphasis from a stated objective of ‘maximise opportunities for all’ to a clearer objective that prioritises those most in need.

In the opinion of Hands off Glebe, the reverse is true. Rather than cater only for the disadvantaged, there is a need to maximise opportunities for the many hundreds of thousands of people coping with housing difficulties.

Priority to housing those most in need (mental health, disability, illness, poverty, seniors) is fair, but if the system is to start meeting the real housing need it needs to absorb working families and those with moderate incomes facing rental stress. A larger social housing portfolio would make a much fairer system.

Hands off Glebe support the objectives of the Housing Act, including:

(a) to maximise the opportunities for all people in New South Wales to have access to secure, appropriate and affordable housing,

(b) to ensure that housing opportunities and assistance are available to all sections of the community with housing needs,

(c) to ensure that public housing is developed as a viable and diversified form of housing choice.

PILLAR 3 — a sustainable system

Revenues under the income-based rent model have declined relative to growing operating costs.

According to the Discussion Paper, the decline in revenue is the result of two things. Firstly, payments from the Commonwealth have been declining in real terms over the last two decades. Since 1995-96 funding is estimated to have declined by more than $200 million per annum in real terms — a total reduction of $2.7 billion over4 twenty years. Secondly, rental revenues have grown more slowly than market rent, especially as the tenant mix has changed from being historically skewed towards working families to now having more tenants who rely on government income support as their main source of income.” (p 38)

A broader tenant base will improve rental income relative to costs. The new public housing built by the NSW Government in the past few years has been transferred to affordable housing providers, who charge higher rents. The older stock has been retained in government hands and is used to house more impoverished tenants.

Why does the system have to be sustainable?

As Ferrer points out,: “Most public services in NSW are usually much less self-sufficient than housing and require substantial operational subsidies. For example, recurrent health expenditure is 86 per cent subsidised, education is 96 per cent subsidised, and trains are 52 per cent subsidised.” (p 7).

Why is social housing a special case? Ferrer notes that it is possible to sustain and grow the social housing system in New South Wales but that this will require “the establishment of an explicit annual capital program for social housing in a similar way as it operates for services in health, education and transport.”  (p 15)

THE ALTERNATIVE

Governments have a responsibility for the provision of basic infrastructure and services to meet the needs of the community. Governments are expected to support for those unable to provide for themselves.

The NSW Government must provide access to safe, secure and well maintained affordable housing. This requires sufficient housing availability and planning in response to social needs, not the demands of the market or the private interests of developers.

Hands off Glebe supports the implementation of a program to build tens of thousands of new homes in New South Wales.

Entry into social housing should be available to those who want it, on incomes of less than $90,000 per annum. Tenants should pay rent of no more than 25% of their gross income

There should be greater involvement of tenants in management and maintenance with maintenance provided by local maintenance crews and apprenticeships for young unemployed people in social housing communities.

Public housing should be readily accessible to transport, jobs, education and health services.

Sales of existing public housing stock should cease immediately.

The government must increase funding, recurrent and capital investment, for affordable public housing.

Hands off Glebe believe that the NSW Government should allocate a portion of the large income stream it receives by way of stamp duty and land tax to build new public housing. Most of that revenue is derived from housing, and should be reinvested in housing, rather than be absorbed into consolidated revenue. The 2014 Budget was $1.2 billion in surplus due to increased revue from sales tax and land tax.

Core services go hand in hand. Health, education and corrective services should all bear some of the cost due to the benefits provided by secure housing.

Superannuation funds should be used as a source of funding for construction of new social housing

Community Housing Services should not be used by government to offload its housing responsibilities onto the non government and charity sectors. Where there is a genuine demand for group housing or local control of public housing consideration could be given to funding same.

 

 

Australians for Affordable Housing, media release August 2013

Dorling Danny, All that is Solid, Allen Lane, London 2014

Eastgate Jon with Rix Paula, Social housing visions: what tenants and frontline workers value in social housing, report prepared for Shelter NSW, January 2015

Ferrer Emilio, The cost of increasing social and affordable housing supply in New South Wales, report prepared for Shelter NSW, December 2014