A Response to the Social Housing in NSW Discussion Paper

A Response to the Social Housing in NSW Discussion Paper

1 Prepared by: Anglicare Sydney Churches Housing Endorsed by: Aged and Community Services NSW & ACT Anglican Retirement Villages (ARV) Anglicare North Coast Anglicare NSW South, NSW West & ACT BaptistCare NSW & ACT Ecclesia Housing NSW Ecumenical Council February 2015 A Response to the Social Housing in NSW Discussion Paper

A Response to the Social Housing in NSW Discussion Paper

2 Contents 1. EXECUTIVE SUMMARY ___ 5
2. SUMMARY OF RECOMMENDATIONS ___ 7
3. WHO WE ARE AS AGENCIES ___ 10
3.1 Anglicare Sydney ___ 10
3.2 Churches Housing ___ 10
3.3 Endorsing agencies ___ 11
4. SCOPE OF THE SUBMISSION ___ 13
4.1 Scope and definitions ___ 13
4.2 The need for affordable housing: underlying assumptions ___ 14
5.

PILLAR 1 A SOCIAL HOUSING SYSTEM THAT PROVIDES OPPORTUNITY AND PATHWAYS FOR CLIENT INDEPENDENCE ___ 15
5.1 Continuity of secure, appropriate and affordable housing ___ 15
5.2 Shortage of affordable dwellings ___ 16
5.3 Unaffordability of the private market ___ 16
5.3.1 First home purchasers ___ 16
5.3.2 Renters ___ 17
5.3.3 Commonwealth Rent Assistance ___ 18
5.3.4 Rental Affordability Snapshot 2014 ___ 19
5.3.5 Household types in social housing ___ 19
5.3.6 Insecurity of tenure ___ 20
5.3.7 Housing NSW products and services ___ 20
5.4 Link between housing insecurity and food insecurity – Anglicare Australia research ___ 21
5.4.1 Concepts of food insecurity ___ 21
5.4.2 The links between food and housing insecurity ___ 22
5.4.3 Low income, renting and housing insecurity .

A Response to the Social Housing in NSW Discussion Paper

3 5.4.4 Low income and rental stress ___ 23
5.5 Vulnerable groups and the link between affordable housing and social disadvantage ___ 24
5.5.1 People with a disability ___ 24
5.5.2 Older renters ___ 25
5.5.3 Young single mothers ___ 26
5.5.4 Single older women ___ 27
5.5.5 Single parents on Newstart ___ 29
5.5.6 Aboriginal and Torres Strait Islander People ___ 30
5.5.7 Homeless individuals and families ___ 30
5.5.8 Refugees and asylum seekers ___ 32
5.6 Summary of Recommendations ___ 33
5.7 Increase supply and availability of affordable housing in the private market ___ 33
5.7.1 State housing portfolio ___ 34
5.7.2 State and local policies to increase affordable housing supply ___ 34
5.7.3 National Rental Affordability Scheme ___ 35
5.7.4 Review housing taxes and concessions ___ 35
5.8 Improve pathways, conditions and sustainability for private rental tenants ___ 36
5.8.1 Review residential tenancy conditions ___ 36
5.8.2 Rentstart ___ 36
5.8.3 Adequate income support and Commonwealth Rent Assistance ___ 37
5.8.4 Greater assistance for social housing applicants and unexpressed need ___ 38
5.9 Improve potential for opportunity and pathways for client independence ___ 38
5.9.1 Location of social housing ___ 38
5.9.2 Supported accommodation for single young mothers ___ 39
5.9.3 Integrated housing models for at-risk or homeless youth ___ 39
6.

PILLAR 2 A SOCIAL HOUSING SYSTEM THAT IS FAIR ___ 40
6.1 Fairness across the housing market . . 40

A Response to the Social Housing in NSW Discussion Paper

4 6.2 Length of tenure and exit rates ___ 41
6.3 Allocation of social housing dwellings ___ 41
6.4 Recommendations ___ 41
7. PILLAR 3 A SOCIAL HOUSING SYSTEM THAT IS SUSTAINABLE ___ 43
7.1 Essential State infrastructure ___ 43
7.2 Social housing stock ___ 44
7.3 Recommendations ___ 44
7.3.1 Federal and State government investment ___ 44
7.3.2 Disposal of social housing assets ___ 45
7.3.3 Community Housing Providers ___ 45
7.3.4 Rebuilding of existing social housing dwellings ___ 46
8. CONCLUSION ___ 47
9. REFERENCES . . 48

A Response to the Social Housing in NSW Discussion Paper

5 1.

EXECUTIVE SUMMARY As agencies at the forefront of social and affordable housing and service provision to those at risk of homelessness, we are of the view that sustainable and affordable housing is essential for those who live on the margins and experience multiple forms of disadvantage and deprivation. Appropriate, secure and affordable housing is foundational for the well-being of individuals, families and communities. This submission addresses the three Pillars as outlined in the Discussion Paper: Pillar 1: A social housing system that provides opportunity and pathways for client independence Pillar 2: A social housing system that is fair Pillar 3: A social housing system that is sustainable Pillar 1 Unaffordability and shortage in the rental market for very low, low and medium income households Housing is one aspect in a complex interplay of factors in social disadvantage.

Our experience in social service delivery is that housing is often the foundational element upon which individuals and families are able to build or re-build their lives when facing difficulty. Households who are in secure and affordable housing are much better placed to tackle other issues they face such as financial insecurity, unemployment, ill-health and social exclusion. The most critical obstacle faced by many of our clients is indeed the procurement of secure, appropriate and affordable housing. Households in the lowest 40% of income distribution usually encounter great difficulty procuring safe, affordable and appropriate housing in the private rental market.

For households in the social housing system, client independence should not be simply measured by an exit from that system, but rather a scenario whereby very low, low and medium income households have access to appropriate, secure and affordable housing in either the social or private sector without entering housing stress over the longer term. Families and individuals in the private rental market are competing in a tight rental market where there is an extremely limited supply of suitable dwellings available to low income households without entering rental stress. Families experiencing rental stress may be at risk of other social disadvantage factors such as housing and food insecurity.

Vulnerable groups Certain groups in the community may have greater difficulty procuring affordable, appropriate and secure housing; people with a disability, older renters, young single mothers, single older women, single parents on Newstart, Aboriginal and Torres Strait Islanders, homeless families and individuals, and refugees and asylum seekers. These groups are at particular risk of housing insecurity and housing stress. We are particularly concerned about the very low, low and medium income households in these groups that are endeavouring to survive in the competitive and unaffordable rental market.

6 Summary of recommendations Greater pathways and opportunities for client independence across the lowest two quintiles of household income are fundamentally dependent upon the household’s access to long-term appropriate, secure and affordable housing. The shortage of affordable housing stock for very low, low and medium income households in both the public and private sectors is of grave concern for our organisations. Shortage and unaffordability of current stock is having a detrimental impact on this generation of individuals and families experiencing housing stress, insecurity, transitional accommodation and homelessness.

These consequences will inevitably impact future generations. We make three suites of recommendations to ensure that very low, low and medium income households have access to affordable, appropriate and secure housing: 1. Increase supply and availability of affordable housing in the private market; 2. Improve pathways, conditions and sustainability in the private rental market; and 3. Improve potential for opportunity and pathways for client independence. Pillar 2 Fairness across the housing market The notion of fairness in the social housing system should be considered in the broader housing market for very low, low and medium income households.

This includes current social housing tenants, approved applicants, and households in the lowest two quintile income brackets experiencing housing stress and insecurity in the private rental market. Together, these groups should have access to appropriate, secure and affordable housing (private or social) without entering rental stress. Adjustments to the current social housing eligibility criteria may have the effect of reducing the approved applicant list, but it will not address the broader issue of vulnerable households struggling in the private rental market, experiencing rental stress, insecurity, homelessness and associated social disadvantage.

Summary of recommendations Fairness for social housing clients should include greater flexibility for households that are attempting to improve their independence and financial circumstances. It should also entail understanding of the important economic, social and familial connections that households have in their home areas and allow for those connections when relocation is required. Pillar 3 Social housing stock as essential State infrastructure Housing is essential infrastructure which provides safety, shelter and a base for day-to-day and longterm social and familial functioning. It is paramount for the well-being of individuals and families.

As outlined in Pillar 1, safe and appropriate housing enables social and economic participation, and affordable secure housing improves well-being and familial relationships. The shortage of affordable dwellings in NSW presents an opportunity for both the government and non-government sectors to invest in the social housing system for the social and economic benefit of the entire state.

7 Summary of recommendations The sustainability of the social housing sector is dependent on capital input from the government and non-government sectors. However, an absence of input from the government will continue to perpetuate the belief that investment in social and affordable housing for very low, low and medium households is not a worthwhile activity and has limited or no financial or social benefits for the community at large. Social and affordable housing needs to be treated as essential infrastructure which triggers sector involvement and opens up diversity in the system for other stakeholder investment.

Community Housing Providers have an important role to play in the sustainability of the social housing system. The long term leasing and asset transferral from the public to community sector would increase the supply of social and affordable dwellings from the community housing sector. 2. SUMMARY OF RECOMMENDATIONS Recommendation 1: The NSW State Government appoint a dedicated Minister for Housing tasked with a portfolio to increase the supply of affordable housing and improve housing affordability. Recommendation 2: The NSW State Government set affordable housing targets at the state and regional level with numerical targets, as well as facilitate and ensure that every LGA has an affordable housing strategy in place with numerical targets.

Recommendation 3: The NSW State Government allocates 10% of the sale of any multi-unit public asset to social and affordable residential dwellings in the greater Sydney region. Recommendation 4: The NSW Department of Families and Community Services establish a pilot scheme of shared equity and affordable home loans for eligible persons, including social housing tenants, former recipients of private rental subsidies and households in the lowest 40% income distribution. Recommendation 5: The NSW State Government and Affordable Housing Taskforce investigate the feasibility of the Community Land Trust model for New South Wales, in recognition of international housing trends.

Recommendation 6: The NSW State Government reviews the SEPPs concerning affordable housing for older people and amend so that exemptions to specific planning requirements can be made for projects providing affordable accommodation for older people. Examples of exemptions may include concessions on building density, the zoning of land on which accommodation can be built, and the amount of parking that must be provided. Elements that should be strengthened to improve appropriateness include accessibility and safety, given the mobility constraints that come with older age.

Recommendation 7: The NSW State Government make representations to the Federal Government to reinstate the National Rental Affordability Scheme.

Recommendation 8: The NSW State Government review the effect of state taxes and duties (and their respective concessions) on housing rental and ownership affordability, and modify the taxation

8 system accordingly to improve affordability. The NSW State Government make representations to the Federal Government to undertake a similar review and modify accordingly. Recommendation 9: The NSW State Government review the residential tenancy law and modify it to ensure greater tenure for private renters and tighter regulation on rental increases. Recommendation 10: Housing NSW restore Rentstart to its previous rate of assistance for the payment of rental bonds and advanced rent, and exempt all new Rentstart tenants from loan repayments for the first six months of their tenancy, in order to reduce their risk of immediate and/or repeat homelessness.

Recommendation 11: The NSW State Government make representations to the Federal Government to: Raise the level of Newstart by $50 per week, in line with calls from international bodies and business and welfare groups; Restore Single Parenting Payments to single parents whose youngest child has turned 8 years old until the child reaches 16 years of age; Increase the maximum rate of Commonwealth Rent Assistance by $30 per fortnight and index the payment to any increase in market rent price; Continue to benchmark the Carer, Age, Disability and Veteran pension payments to 27.7% (for single) and 41.76% (for couple) of the Male Total Average Weekly Earnings (MTAWE), if the indexation according to the higher of the Consumer Price Index (CPI) or Pensioner and Beneficiary Living Cost Index (PBLCI) does not reach that rate; and Constitute an independent body to regularly review the adequacy of all Government allowances to ensure that payments are sufficiently indexed to increase the capacity of individuals to enter the workforce and alleviate housing stress for very low, low and medium income households.

Recommendation 12: Housing NSW use the housing waiting lists to inform a needs analysis document for the planning and construction of new social housing dwellings and/or the revitalisation of existing housing estates in ‘high demand’ electoral areas. Recommendation 13: The NSW Department of Family and Community Services research the size and profile of the unmet demand for social housing to inform a strategy to ensure that essential support services are available and closely located to these households who can demonstrate need regardless of their social housing tenancy status.

Recommendation 14: The NSW Land and Housing Corporation maintain existing and construct new social housing stock across a range of LGAs in metropolitan areas, including medium and high socioeconomic areas which usually have better infrastructure and greater opportunities for independence. Recommendation 15: The NSW State Government increase the supply of supported housing to assist women and their children who are experiencing or at risk of domestic violence and/or entering

9 the child protection system. This should be complemented by services where support workers follow up on families who are exiting the supported housing system, particularly if they have been identified as being at risk of repeat homelessness.

Recommendation 16: The NSW State Government reinstate funding for the Yallah Youth Housing Program and increase funding in general for integrated housing models assisting youth at risk of homelessness and homeless youth. Recommendation 17: The NSW Land and Housing Corporation and Housing NSW offer to social housing tenants who need to be relocated due to change in circumstances, dwelling unsuitability or asset disposal, an appropriate dwelling in the same LGA as previously tenanted. Vacant bedroom charges or similar penalties/charges should not be enforced whilst ever an appropriate dwelling is unavailable.

Possible incentives should be explored for households to relocate when a dwelling is no longer appropriate for them.

Recommendation 18: The NSW Department of Family and Community Services analyse and report on its data on the profile and circumstances of households that exit the social housing system and subsequently re-apply for a dwelling, and modify the eligibility criteria accordingly to allow for short to medium term flexibility as households experience changes in their circumstances. Recommendation 19: The NSW State Government allocate 20% ($4 billion) of its Rebuilding NSW funds to investment into new and existing social and affordable housing stock, as essential state infrastructure.

Recommendation 20: The NSW State Government commit to capital investment in social housing for the next 10 years and make representations to the Federal Government for capital funds, in order to generate at least 2,000 new social housing dwellings per year over 10 years.

Recommendation 21: The NSW Land and Housing Corporation and Housing NSW direct all social housing asset proceeds into the establishment of new social housing stock. Recommendation 22: The NSW State Government and Local Governments be required to ensure no net loss in public and social housing in each LGA, through the use of, and adjustment to, planning controls.

Recommendation 23: The NSW Land and Housing Corporation and Housing NSW transfer public housing stock to registered Community Housing Providers (CHPs) with long-term leases (at least 20 years) or transfer of title so that CHPs can leverage these properties for development and growth. Recommendation 24: The NSW Land and Housing Corporation and Housing NSW investigate the opportunities presented by greyfield precinct developments outlined by AHURI and consider partnerships with Community Housing Providers to deliver its outcomes.

10 3. WHO WE ARE AS AGENCIES 3.1 Anglicare Sydney Anglicare Diocese of Sydney (Anglicare Sydney) is a Christian organisation operating a wide range of community services and programs across the Sydney Metropolitan and the Illawarra regions of New South Wales. Our range of services include: homelessness support services, counselling and family support services (including Family Relationship Centres); community education for families; disability case management and respite; youth services; emergency relief for people in crisis; migrant services including humanitarian entrants and newly emerging communities; English as a second language classes; foster care and adoption for children including those with special needs; aged care both through nursing homes and community services; opportunity shops providing lowcost clothing; emergency management in times of natural disaster; and chaplains in hospitals, prisons, mental health facilities and juvenile justice institutions. 3.2 Churches Housing Churches Housing Inc. is the peak body for the ecumenical church and its faith based community housing providers in the area of affordable community housing. Churches Housing sees churches ministering to their communities through the development of affordable community housing. We do this by:
  • Providing consultation, information, inspiration and education in the area of affordable housing to churches of all denominations;
  • Brokering partnerships between churches, government and businesses to facilitate the development of affordable housing;
  • Networking faith based Community Housing Providers with one another, the sector and the church; and
  • Advocating for affordable housing as a representative of the ecumenical church to government at all levels.

Initially begun as Churches Community Housing in 1996, Churches Housing continues to represent the major Christian denominations engaged in the construction, supply, management and ministry of affordable housing across a broad spectrum of needy and disadvantaged people including low income earners, refugees, the aged and elderly, the disabled and many other vulnerable groups. Churches Housing represents the Catholic, Anglican, Salvation Army, Churches of Christ, Uniting, Baptist, Pentecostal and Orthodox churches. Churches Housing attracts most of its funding from a grant from the Communities, Homes and Place of The Department of Family and Community Services (FaCS).

11 3.3 Endorsing agencies Aged and Community Services NSW & ACT is the leading peak body supporting church, charitable and not for profit providers of retirement living, community and residential care services for older people. Anglican Retirement Villages (ARV) is a Christian not-for-profit organisation and an arm of the ministry of the Anglican Diocese of Sydney. Following the establishment of the first village in Castle Hill in 1959, ARV has grown and developed to become one of Australia’s leading aged care service providers. The organisation now cares for around 6,000 residents and home care clients, employing more than 2,400 staff across a network of 26 villages throughout greater Sydney and the Illawarra.

ARV has a particular desire to provide affordable and appropriate rental accommodation for seniors at risk of being excluded from the housing market. This is done through the provision of affordable rental units at a number of villages and at locations specifically designed to offer long-term, affordable rental accommodation.

Anglicare North Coast delivers a range of social welfare services across the North Coast of NSW, including financial counselling, emergency relief, refugee resettlement and other services to migrants, disaster recovery and mental health recovery services. The organisation is a long term registered community housing provider, currently managing a portfolio of approximately 50 properties. All services are aimed at assisting those in the community who are vulnerable or disadvantaged in some way, with the need for appropriate and affordable housing being recognised as a common area of need across all of our service delivery areas.

Anglicare NSW South, NSW West and ACT is the welfare service arm of the combined Anglican TriDioceses (The Dioceses of Canberra-Goulburn, Bathurst and the Riverina). Anglicare provides a range of community based services across this very large, diverse geographical region, including homelessness and housing services in the NSW Capital Region, the Eurobodalla and the ACT. Other main activities include foster care and residential care for children and young people in statutory care; disability services in NSW and NDIS services in the ACT; early education and care services; retirement villages, youth and family counselling and support services including targeted programs for Indigenous youth; families at risk of entering the statutory care system; and child sexual abuse therapeutic services.

We also provide specific youth health services in the ACT. Our parish partnership community services including emergency relief, financial counselling, micro-credit finance, op shops and disaster recovery services.

12 BaptistCare NSW & ACT is a leading not-for-profit Christian-based care organisation that has been serving the aged and people living with disadvantage for 70 years. The organisation supports thousands of people across NSW and the ACT through more than 160 facilities and programs. From humble beginnings in 1944, BaptistCare has grown into one of the nation's most respected care providers, employing more than 4000 staff, with a further 1000 volunteers. The organisation operates a continuum of care model servicing senior Australians and people living with disadvantaged through a range of products and services including retirement living, home care, residential aged care, housing, counselling and on the ground services to support some of the communities most disadvantaged; the homeless, abused and financially burdened.

Ecclesia Housing is a unique provider of housing and management services with a particular focus on improving the living standards for those under housing stress, and those with high support needs. Ecclesia Housing works in close partnership with the church welfare sector as well as private developers and is a not for profit company. Our portfolio of properties includes transitional accommodation and general housing. Support for many tenancies is provided by church and welfare agencies. Our belief is in a loving God who came to earth in Jesus Christ to share our humanity and give an example of the potential for a full human life.

Ecclesia Housing constantly seeks new ways of engagement in realising this belief through practical expressions of concern for others.

The NSW Ecumenical Council comprises of fifteen churches in the state of New South Wales and the Australian Capital Territory. We are committed to a journey of peace and reconciliation for ourselves and our world, rediscovering our unity in the love of Christ in order that God's love and healing may be known to all. Being together enables us to know God more deeply, to express a common voice on issues of concern in society, and to work together on specific projects concerning the churches and the needs of the wider community. Through the Peace and Justice Commission, we focus on issues such as: Asylum Seekers and Refugees; Peace Making; Caring for Creation; Indigenous Issues and other matters as they come to our attention.

13 4. SCOPE OF THE SUBMISSION 4.1 Scope and definitions As agencies at the forefront of social and affordable housing and service provision to those at risk of homelessness we are of the view that sustainable and affordable housing is essential for those who live on the margins and experience multiple forms of disadvantage and deprivation. Appropriate, secure and affordable housing is foundational for the well-being of individuals, families and communities. We strongly believe that the social housing system cannot be considered and re-visioned in isolation from the remainder of the housing market for very low, low and medium income households.

When renting households in the lowest two income quintiles experience transition from social to private rental and vice versa, many encounter issues of housing insecurity, rental stress, transitional housing or homelessness at some stage in their lifetime. For this reason, our submission will consider households in the bottom 40% income bracket and the social and private rental markets available to this cohort.

Households in the lowest 40% income distribution are increasingly experiencing rental stress. Whilst there are various ways to measure housing stress, a commonly accepted method is the 30:40 indicator, which identifies housing stress when households have an income in the bottom 40% of income distribution and pay more than 30% of that income on housing costs (DPMC 2014:10, NHSC 2013:72-73). Many of our clients will at some stage in their lives interact with the NSW social housing system and encounter issues of housing tenure and affordability in the social and private housing market. This submission endeavours to address the three pillars as outlined in Social Housing in NSW: A discussion paper for input and comment (“the Discussion Paper”): Pillar 1: We submit that client independence be conceived as: households in the lowest two income quintiles (whether socially or privately renting) having access to appropriate, secure and affordable housing without entering housing stress; individuals and families having access to educational and employment opportunities to encourage financial independence (where appropriate); individuals and families having access to essential support services such as health, social support, public transport; and that, after housing costs, households have an adequate income to afford essential items including food, utilities, education, clothing, health and transport.

Pillar 2: We submit that the notion of fairness in the social housing system be considered in the broader housing market for very low, low and medium income households: current social housing tenants, approved applicants, and households in the lowest two quintile income brackets having access to appropriate, secure and affordable housing (private or social) without entering housing stress.

Pillar 3: We submit that a sustainable social housing system be conceived as: essential state infrastructure in which government and non-government sectors invest capital funds and resources for the benefit of social housing tenants and the community at large.

14 4.2 The need for affordable housing: underlying assumptions Our organisations deliver housing services and other social services that impact the lives of people who are disadvantaged on a daily basis and seek to address their short, medium and long-term needs in a holistic way. Long-term housing security and affordability feature prominently in the primary needs that our clients face.

They require a stable housing foundation on which to build or re-build their lives in the face of significant social and economic disadvantage, including disability, mental or physical illness, unemployment, homelessness, family violence, child abuse, frail ageing, full-time caring for a person with mental illness or disability and recovery from natural disasters. Our clients invariably need a pathway to affordable and sustainable housing in order to lay a secure foundation for all other aspects of their lives and those of their families. Appropriate, affordable and secure housing is essential to the wellbeing of both individuals and community.

When people are uncertain about the sustainability of their housing situation, they experience what the literature refers to as housing insecurity. A lack of stable, secure and affordable housing has significant impacts on individual and family wellbeing. It can exacerbate financial hardship which impacts on the acquisition of basic necessities including food, adequate clothing and heating. It can lead to transience and dislocation, compromising people’s sense of place and belonging in communities. The stress and anxiety which housing insecurity generates can lead to relationship breakdown.

Often people who live with housing insecurity are transient and may be forced to move to locations which are cheap but have poor transport infrastructure, creating barriers to employment. The lack of stable housing impacts on parents’ capacity to attend to their children’s developmental needs. This compromises children’s educational opportunities and subsequent employment options and life opportunities. For these reasons, we will canvass the issues faced by many of our clients who are vulnerable and socially disadvantaged. For many, the issue of affordable housing cannot be disconnected from other factors of social disadvantage.

The increasing scarcity of affordable housing for low to medium income households therefore has the potential to seriously impact individual, family and community well being and there is evidence that scarcity is a problem. We believe that the current state of the affordable housing market (public and private) must be viewed together and not in isolation, and the need amongst our clientele demands immediate, coordinated action from all levels of government.

15 5. PILLAR 1 A SOCIAL HOUSING SYSTEM THAT PROVIDES OPPORTUNITY AND PATHWAYS FOR CLIENT INDEPENDENCE Discussion Paper question: Given tenants living in social housing often experience disadvantage which is disproportionate to other areas of the community, what measures are required to provide tenants of social housing with pathways to opportunity and independence? 5.1 Continuity of secure, appropriate and affordable housing Very low, low and medium income households may experience multiple forms of disadvantage as outlined in the Discussion Paper [page 15], and Pillar 1 describes housing as one aspect of a complex interplay of factors in disadvantage.

Addressing and providing opportunities for employment, education and social inclusion for example, will in many cases impact and improve housing security. Whilst we concur with this proposition, we believe that the current housing market does not provide an adequate supply or base for the assumed premise underpinning Pillar 1: increased financial independence leads to transition from social housing into the private market, in which households will continue to thrive and remain independent.

We submit that this premise largely ignores the experience of low income households, as it is predicated on a housing system in which a household may easily transition from a social housing dwelling into the private rental market; from a situation of paying 25-30% of household income for housing costs, to a tight and competitive private rental market where in NSW 62% of the lowest 40% income households expend more than 30% on housing (rental and owner-purchaser), and 28% spend more than 50% of their household income (NHSC 2012:45). Transition to the private rental market is neither easy nor affordable for households who may experience improved financial or social circumstances but who nevertheless remain in the lowest 40% of income distribution.

As such, client independence should not be measured by an exit from the social housing system, but rather a scenario whereby low income households have access to appropriate, secure and affordable housing in either the social or private sector without entering housing stress over the longer term. For such households in the private rental market, housing stress, housing insecurity, short tenancies and regular moves, and re-location to more affordable and regional/isolated areas with less infrastructure, can exacerbate other risk factors for disadvantage; food insecurity, reduced opportunities for education and employment, and ill-health.

Vulnerable population cohorts at risk of rental stress and social disadvantage in the private market will be discussed under Pillar 1. We believe that the most significant measure that can promote pathways to opportunity and independence is that of continued access to secure, appropriate and affordable housing. Access to such housing is an important aspect of individual and family well-being, and plays an important role in enabling economic and social participation (DPMC 2014, SCRGSP 2015:G.2). Our experience in social service delivery is that whilst housing is only one factor to consider when assisting clients experiencing disadvantage, it is often the foundational element upon which individuals and families are able to build or re-build their lives when facing difficulty.

Households who are in secure and affordable housing are much better placed to tackle other issues they face such as financial insecurity, unemployment, ill-health and social exclusion. The most critical obstacle faced by many of our clients is indeed the procurement of secure, appropriate and affordable housing.

16 Our concern is that a discussion that concentrates solely on the tenure and profile of social housing tenants without consideration of the unaffordability of the broader housing market will unfairly portray tenants as dependent on social housing and unwilling to transition to the private housing market, when for many households such a transition is unaffordable and unattainable. Conversely, low income households that are attempting to access social housing usually need to wait until their circumstances are critical before they can be allocated the secure and affordable dwelling that the social housing system can offer them (DPMC 2014:10).

The affordability, supply, security and availability of housing in the broader housing market must be considered when addressing the housing and social needs of low income households experiencing disadvantage. Opportunity and pathways for client independence are only achievable in a housing sector that offers affordable, appropriate and secure housing for very low, low and medium income households. 5.2 Shortage of affordable dwellings Improvement in housing affordability for Australians remains heavily dependent on increased housing supply immediately and into the future. The National Housing Supply Council (NHSC) projected that the national housing shortfall (in 2012) was 228,000 dwellings, with NSW experiencing the most acute shortage with 89,000 (NHSC 2012:vi).

The NHSC projects that the national shortfall will increase to 370,000 dwellings by 2016, 492,000 by 2021 and 663,000 by 2031, assuming historic demographic and supply trends continue. In 2014, AHURI estimated that Australia has a shortage of 212,000 affordable dwellings for households in the lowest two income quintiles, with Sydney having the greatest numeric shortage of affordable and available dwellings of all the capital cities (Hulse et al 2014:34, 44).

NHSC reports that the total number of dwelling approvals (private and public) remains low by historical standards, and that house building activity is generally sluggish. A slow housing market, reflecting sluggish effective demand, is not inconsistent with an underlying housing shortage. A low volume of new dwellings in the market potentially exacerbates the problem of inadequate supply and is most likely to be felt by the most disadvantaged and vulnerable in society as they attempt to enter the out-of-reach private market (NHSC 2013:8).

The housing supply gap for low to medium income households directly impacts affordability for both private renters and purchasers.

House prices are inflated with more buyers than sellers in the market, out-pricing the lower income households. Low income renters experience unavailability of affordable dwellings, as landlords are able to increase rents in the tight market. Lower income households will continue to be priced out of the private market as these trends continue (AIHW 2014:20). 5.3 Unaffordability of the private market 5.3.1 First home purchasers Home ownership for first home buyers is increasingly out of reach in the current housing market, with the Australian property market one of the least affordable in the world.

A Demographia study comparing home ownership affordability in 9 geographies across the world found that out of 39 markets across Australia, 14 were ‘seriously unaffordable’ and 25 were ‘severely unaffordable’

17 (Demographia 2014:4). In comparison with the other 8 regions on the whole, Australia’s housing was found to be less affordable than 6 of the countries, on par with New Zealand and more affordable than only Hong Kong. Comparison of the major markets across the 9 geographies found that Sydney was the fourth least affordable market after Hong Kong, Vancouver and San Francisco and Melbourne was rated the sixth least affordable market. Nationally, house prices increased from about three and a half times the annual earnings in the late 1990s/early 2000s to over five times by 2003 (AIHW 2014:17).

The ratio remains at about five or more, depending on the location in Australia, with Sydney the least affordable. The median house price in Sydney was $650,000 in June 2013. This was a new record high, up by $44,000 from the previous year (ABS 2013a). Prospective first-home buyers in Sydney now face the longest wait of all capital cities to save for a home deposit, taking an average of 5.1 years if 20 percent of income is saved. This period fell slightly to 4.3 years for the rest of NSW (Bankwest 2011). According to the latest Survey of Income and Housing (ABS 2013b), there has been a decline in the number of recent home buyers in Australia (households who purchased their home three years prior to the survey).

There were 988,000 recent home buyers in 2011-12, down from approximately 1,074,000 in 2009-10 (decline of 8%). Historically, real house prices have risen at a yearly rate of 2.7 percent between 1960 and 2006 – faster than the rate of growth in household real incomes (1.9% p.a.) (Yates et al 2007:14). The lack of affordable housing is particularly notable in Sydney, which was recently found to be the least affordable city for key workers looking to purchase a home (Bankwest 2011:2).

The unaffordability of the private market is cited by 57% of NSW renters surveyed by the Tenants’ Union as the key reason they remain in the rental market (Tenants’ Union 2014:3). The difficulty that first home purchasers have in the unaffordable private market further exacerbates the tight rental market, thereby impacting the availability of dwellings for lower income households. 5.3.2 Renters The Discussion Paper describes the social housing system ideally as a “stepping stone” for some clients [page 17]. The difficulty with this notion is that there are extremely limited pathways between the social and private rental market which do not entail a significant leap in housing costs.

The implicit message is that independence is gained when clients exit the social housing system, and long-term social housing tenure is pejoratively described as dependence. Such associations largely ignore the disconnect between the social housing system and the private rental market as they assume that financial and holistic independence may be reasonably obtained by low income households in the private rental market.

Almost 1 in 4 (22%) households in Australia are privately rented (Hulse et al 2014:18). Private rentals are a competitive market and remain an unaffordable prospect for many seeking suitable housing. The NHSC reports that compared to a decade ago, the average nominal rent paid is up by 75.8% for houses and 91.8% for other dwellings (mostly flats/apartments). By comparison, average earnings rose by 57 per cent over the same period and house prices rose by 69 per cent. A further factor suggesting that the market remains tight is that vacancy rates remain low, at around 2 per cent (NHSC 2013:7).

18 NSW has the highest proportion of low income households experiencing rental stress, with 62% spending 30% or more of their income on rent, and 28% spending more than 50% of their income on rent (NHSC 2012:45).

Previous modelling on housing and ageing undertaken for the NHSC predicts an increase in relative demand for rental tenure (including in social housing) across Australia. This is based on assumptions that future aged cohorts will undertake similar housing pathways or transitions as their predecessors (NHSC 2013:57).

Sydney rental prices continue to increase in a tight rental market, notwithstanding record activity from investors throughout 2014. Median rental prices in Sydney at the end of 2014 were $520 per week for houses and $500 for units, with a tight vacancy rate of under 2.5% (Wilson 2014). There does not appear to be any reprieve for Sydney renters in the near to long-term future, where the underlying demand on Sydney rental properties continues to outstrip the supply (Wilson 2014). The unavailability of affordable properties for purchase will continue to be exacerbated by the increasingly speculative market in NSW, where this state accounts for 48% of investor lending across Sydney (Nicholls 2015).

Investor lending in NSW reached its highest ever at $5.5b in November 2014. Increasing investor share in the housing market reduces the affordability for first-home buyers, who in turn remain in the private rental market and compete for housing in a tight market. AHURI reports that there was a loss of lower rent dwellings and an increase in higher rent properties between 2006–11, to a greater degree than in previous years (Hulse et al 2014:24). Using the 2011 Census data, the researchers cautiously estimated that there is a shortage of 212,000 affordable dwellings across Australia for households in the lowest two quintiles (Hulse et al 2014:34), with Sydney having the greatest numeric shortage of affordable and available dwellings of all the capital cities (Hulse et al 2014:44).

Across Sydney, 92% of households in the lowest quintile did not live in affordable housing in 2011, while 55% of the two lowest quintile households did not live in affordable rental housing (Hulse et al 2014:34).

5.3.3 Commonwealth Rent Assistance The Australian Government provides Commonwealth Rent Assistance (CRA) to 1.27 million recipients each year (SCRGSP:Table GA.15). Rent assistance provides low income households with an additional income to help offset the cost of private rent, and its success relies on the availability of dwellings that can be accessed and afforded by low income households. 53% of this group were single persons with no children, followed by single parents (21%) and couples with children (17%). CRA is indexed twice per year in line with Consumer Price Index. 76.1% of people who received CRA paid enough rent to be eligible for the maximum rate of CRA (SCRGSP:Table GA.23).

Over the last decade, the proportion of recipients getting the maximum payment has increased from 59% to 76.1% (NWRN 2014b:13).

Although CRA assists renters in their rental payments and decreases the number of households in rental stress, an alarming 48.6% of CRA recipients renting in Sydney are still in rental stress after they have received their CRA payment (SCRGSP:Table GA.23). CRA payments are losing real value for recipients as the payment is indexed to CPI and rents have increased at a faster rate (DPMC 2014:16). Research from RMIT and the Tenants Union of Victoria found that between 1995 and 2009, median weekly rental prices in all capital cities rose by 41%

19 (Colic-Peisker et al 2009:4).

At the same time, the maximum rates of CRA remained steady in real terms, meaning this assistance covered a smaller proportion of rent in 2009 (between 17% and 24%) when compared with 1995. 5.3.4 Rental Affordability Snapshot 2014 Anglicare Australia conducted its annual Rental Affordability Snapshot across 45 Anglicare networks throughout Australia on 5 April 2014 (Anglicare Australia 2014).The Snapshot was carried out in every state and territory covering a large part of Australia. In total 62,862 properties were assessed on the collection day as to whether they were either appropriate or affordable for households living on low incomes.

The Snapshot looked at 13 household types of varying composition and payment type and was conducted in both regional and metropolitan areas. For a property to be considered suitable for any of the household types both tests must be satisfied (ie, suitable = affordable and appropriate).

The Snapshot highlighted the seriousness of rental affordability across the nation, as the cost of private rental would move most households on low incomes into rental stress and the number of suitable rental properties on the market was minimal. Less than 1% of listed properties were rated as suitable for any of the single households in receipt of a government payment. Couples on Newstart with two children would find 1.4% of properties suitable on the Snapshot day. Age Pensioner couples would find 3.6% of properties suitable on the Snapshot day. Single people on minimum wage would find 3.2% of listed properties suitable if they have two children and 4% if they are living on their own.

Households with two adults on minimum wage and two children would have access to 12.2% of the available listing.

The results for the Anglicare Sydney Rental Affordability Snapshot paint a grave picture for private renters in the Greater Sydney area (Kemp et al 2014). Of the 11,397 properties available for private rental in Greater Sydney (excluding Central Coast) on the snapshot weekend, only 21 properties were identified that satisfied the criteria for affordability and appropriateness without placing income support households dependent upon income support payments into rental stress. Couples receiving the Aged Pension had only 13 suitable properties available to them across Sydney. There were even fewer suitable properties available for other household types, including singles on the Aged Pension (n=7 properties), couples with children on Newstart (n=2) and single parents on the Parenting Payment (n=1).

No suitable properties were found for single people on Youth Allowance, Newstart or the Disability Support Pension.

Results revealed that having two Minimum Wage earners in a household improves the chances of obtaining housing without being under rental stress. There were 213 unique properties identified that would be appropriate and affordable for households on the minimum wage without placing them into rental stress. Results were highest for couple families on the minimum wage (n=186), followed by single persons (n=28) and single parents (n=5). 5.3.5 Household types in social housing 94% of current social housing tenants have Centrelink Benefits as their primary source of income, with 5% listing wages as their primary source of income [Discussion Paper, page 22].

NSW Social

20 Housing currently houses 150,000 households, assisting approximately 290,000 individuals [Discussion Paper, page 5]. A further 59,500 approved applicants are waiting for a social housing dwelling [Discussion Paper, page 22], which does not include the unexpressed demand of approximately 133,847 NSW individuals for social housing (Audit Office 2013:45). For those tenants, approved applicants and households on low incomes who find themselves searching for an affordable and appropriate private rental property in the Greater Sydney area, 21 properties were available to those on Centrelink benefits as at 5 April 2014 (Kemp et al 2014).

Households that fare better on minimum wage will still struggle in the tight and competitive rental market, with 213 properties available from the 11,397 properties listed for rent. AHURI research amongst public housing tenants who exited into the private rental market indicates that tenants encountered financial stress, insecurity of tenure and numerous rental property moves, which were more significant in metropolitan areas (Wiesel et al 2014:44, 46). The gap between public and private rental costs is significantly higher in metropolitan areas, making it difficult for social housing tenants who gain employment to find incentive to exit from a relatively secure and affordable social housing dwelling (Wiesel et al 2014:48).

Current public housing tenants view their low income (76% respondents) and housing unaffordability (52% respondents) as the two major barriers for those tenants who wish to rent privately or own a property (Wiesel et al 2014:29). As social housing clients experience opportunities for employment and improved financial circumstances, allowance must be made for the likelihood that households on minimum wage and similarly low incomes will continue to encounter housing stress and insecurity in the private rental market.

5.3.6 Insecurity of tenure Whilst the flexibility of the private rental market suits some households, it is not a choice that others would voluntarily make. Having been priced out of home ownership, many low to medium households reside in private rental dwellings out of necessity, not choice (Tenants’ Union 2014:3). Private renters generally experience less control over their property compared with owners, as their tenancies are less stable and secure than their social housing counterparts (Kelly 2013:7,19). 5.3.7 Housing NSW products and services As outlined in the Discussion Paper [page 14], Housing NSW (HNSW) offers a range of products and services to assist eligible low income households enter, re-enter or continue in the private rental market.

The Rentstart scheme is managed by HNSW and aims to assist low income households access accommodation in the private rental market. Currently the scheme offers an interest-free bond loan that covers up to 75% of the bond, advance rent, help for tenants who need to move if they become ineligible for public housing, short-term financial support for clients in rental arrears facing eviction and temporary accommodation. Rentstart was modified by HNSW in 2012 to be advanced as a loan payment only. Previously it was provided as a grant, and any unclaimed money returned to the funding pool at the end of the tenancy.

Now tenants will repay the loan to Housing NSW on a fortnightly basis usually over 12 or 18 months. In exceptional circumstances a 36 month payment plan may be offered. The payment plan

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