Industry advocates call on the government to address the affordable housing emergency, as the pandemic squeezes supply

Industry advocates call on the government to address the affordable housing emergency, as the pandemic squeezes supply
Industry advocates are calling on Morrison to address the social housing 'emergency', as the pandemic squeezes affordable housing supply. Photo: Getty Images
  • The Morrison government should act on Australia’s rental market “emergency”, as state programs fail to get a handle on surging prices and fickle affordable housing supply.
  • New research found the proportion of listings that low-income workers can afford fell sharply from 41% of all listings to just 33% over the last year.
  • Both the Greens and federal Labor have each flagged the issue heading into the federal election.
  • Visit Business Insider Australia’s homepage for more stories.

Industry advocates have called code red on Australia’s affordable housing market, and say the Morrison government should establish a national housing program as a matter of urgency, as waiting lists for social housing around the country outpace supply.

In a new report released by the Australian Council of Social Services and the University of New South Wales on Monday, experts say state housing programs simply don’t have the financial firepower required to meaningfully address Australia’s affordable housing crisis.

ACOSS chief executive Cassandra Goldie said that while state governments have done their best to protect residents across the country, the Commonwealth now needs to step in and do some “heavy lifting” to boost affordable housing supply. 

“The COVID crisis tested governments. Most state governments did a remarkably good job in protecting people who were homeless during COVID,” Dr Goldie said. 

“But with such a chronic shortage of affordable homes, the resources they are putting towards social and affordable housing are just not enough to meet existing demand, let alone future need,” she said. 

“We need the Federal Government to step up and step back into this space and do some heavy lifting to both address the massive social housing shortfall and meet the future needs of a growing and aging population.”

State social housing programs are patchy at best, the report found. In Victoria and Queensland, new social housing construction is expected to deliver on 8,300 and 4,400 affordable homes respectively over the next three years, while little more than 400 new homes are in the works in New South Wales.  

These programs combined are set to add about 23,000 new homes to public housing stock around the country over the next few years. 

But experts say they won’t provide anywhere near enough, as the number of households signing on to public waitlists has swelled to 155,000 nationwide, bringing the total number of affordable homes required across the country to 400,000. 

Housing stress has been made worse by a mass remote-working migration from urban areas to the regions, putting added pressure on already fickle housing stock. 

Michele Adair, the CEO of one of NSW’s largest community housing providers, Housing Trust, and chair of the peak body for community housing in the state, said the circumstances are as much of a human crisis as climate change is. 

“We have such a shortfall in affordable rental housing now, really, our government should be having a conversation, ‘Well, if we don’t fix it, who are we going to leave homeless?,” Adair told Business Insider Australia. 

“It’s really that dire. It really is.”

Adair said the situation is at its worst in Australia’s coastal areas, where the strain added to the local housing market by remote workers is being compounded by homeowners looking to cash in while the housing market runs red hot. 

The report found that regional rent rises are now outpacing those seen in metropolitan areas, more starkly in NSW, Victoria and Queensland, where prices are surging ahead by as much as 12.4%. 

What’s more, the report found, was that the proportion of tenancies low-income workers can afford has sharply dropped from about 41% of all listings, to just 33% over the last year alone. 

This corner of the rental market is only expected to deteriorate further, too, as the National Rental Affordability Scheme — a scheme established in 2008 to build new rentals for essential workers and other disadvantaged workers at between 75% and 80% of market rates — draws to a close.

Over the next three years, 22,000 affordable homes made available to low-income workers will drop out of the market, putting a chokehold on rental stress nationwide. 

Professor Hal Pawson, associate director of UNSW’s City Futures Research Centre, said the market is in a state so dire the Morrison government doesn’t really have a choice but to address it. 

“A crucial part of any crisis is what lessons can be learnt that could and should lead to policy reform. State governments generally responded well in their emergency actions to help homeless people and protect vulnerable renters during the worst of COVID,” Pawson said.

“And to their credit, some have gone much further by pledging billions for short term social housing investment. But there is little sign of any positive legacy on the systemic reforms and Commonwealth Government re-engagement is fundamentally needed to fix our housing system,” he said. 

Both Pawson and Dr Goldie said the Commonwealth government urgently needs to consider boosting national social housing by at least 22,000 new homes, along with a 50% boost to the Commonwealth Rent Assistance payment. 

It’s an issue the Morrison government has been reluctant to be drawn on, and leaving a gap both the Greens and the federal Labor party have each tried to fill with election policies aimed at addressing the problem. 

If the Greens are able to hold the balance of power at the next election, they promise to build 1 million affordable homes for Australians both locked out of the market, and in rental distress. 

Under the policy, 125,000 homes would form part of a shared equity ownership scheme that would offer buyers between 50% and 75% of their home’s equity, via access to a low-interest loan. 

A further 750,000 new public housing properties would be built under the scheme in a bid to reduce waiting lists and homelessness, in addition to 125,000 universal access rental homes. 

Meanwhile, the Labor Party has promised to create a $10 billion off-budget Housing Australia Future Fund to build 20,000 social housing properties over its first five years, 4,000 of which will be allocated for women and children fleeing domestic violence and older women on low incomes who are at risk of homelessness.