The recommendations of the Senate Economics References Committee report – Out of reach? The Australian housing affordability challenge – have significant implications for developers and the construction sector as a whole.
The 461-page report is a comprehensive analysis of the housing crisis the nation faces, and challenges some long-held truisms – for example, the report clearly states that the crisis is not a matter of supply not keeping up with demand. (3.33 P79)
The report’s 40 recommendations, all of which have significant implications for housing developers, address issues of:
- Governance, transparency and accountability
- Urban design and planning
- Tax, government schemes, grants and housing supply bonds
- Indigenous issues
- Aged care and housing
- The rental market
- Construction techniques
- Public, social and community housing, and homelessness
Australia has a housing affordability crisis, the report asserts, reflected in falling rates of homeownership, and has implications for many in the community. Young people cannot enter the market because of high prices, and older Australians cannot downsize because of stamp duties.
Homelessness is a growing problem, and private rents are escalating. Stocks of social, public and community housing do not meet demand. The crisis is even playing a role in Australia’s family violence epidemic, with women unable to afford to leave violent partners, for example.
While the committee believes the problem is more complex than supply not meeting demand, it warns that policies that address demand will exacerbate the problem unless supply-side issues are also addressed.
The Government has closed a wide range of programs designed to help buyers enter the market, to build public and social housing, and to help keep rents down, and this has exacerbated the housing crisis, the report found.
The report castigates the Australian Government for sidestepping its responsibility for delivering affordable housing. “In this report, the committee underscores the importance of affordable, secure and suitable housing as a vital determinant of wellbeing … the Australian Government cannot vacate the affordable housing space or step back from its responsibilities to ensure that every Australian has access to affordable, safe and sustainable housing.”
The investment in housing affordability will be amply repaid with “a more productive community with reduced costs for social, health and unemployment services and for justice and policing”.
The report offers 40 recommendations – many with sub-points which can be found in full on pages xxii to xxxiii.
A summary of the committee’s key recommendations to the Australian Government follows:
Governance, transparency and accountability
- Reinstate a dedicated Minister for Housing and Homelessness, located in the Prime Minister or Treasurer’s department.
- Create a ministerial council within COAG (the Council of Australian Governments).
- Create a statutory National Housing Supply Council.
- Place renting prominently on the affordability agenda.
- Ensure adequate funding be made to house women and children escaping family violence.
- Recommit to the target of halving homelessness by 2025 with two-yearly milestones to track progress.
- Achieve multi-party support for this long-term program across all levels of government.
- Introduce an urgent capital program to build emergency housing for Australians sleeping rough.
- Measure and report on the progress of all programs and policies.
Urban design and planning
- Deliver faster, more consistent and more useful reports on land supply across jurisdictions.
- Create a National Housing Affordability Plan with performance indicators to measure its success and a budget to deliver on those measures.
- Reinstate the National Urban Policy and Major Cities Unit to develop national housing policy and drive outcomes.
- Show leadership in urban planning policy, urban regeneration, and policy capability.
- Create a long-term strategy for regenerating Australia’s urban centres and transport corridors, as part of the National Urban Policy.
- Establish an Urban Policy Forum for key public and private stakeholders, academia and the community to contribute ideas.
- Construction techniques
- Establish a parliamentary inquiry into the prefabricated housing industry, and its potential to improve housing affordability.
- Instigate prefabricated housing targets in plans.
- Provide research and development support for world-class pre-fab housing manufacture.
Tax, government schemes, grants and housing supply bonds
- Phase out conveyancing stamp duties.
- Consider the use of government-owned land for affordable housing.
- Take a long-term approach to funding housing bodies.
- Introduce more effective taxes such as broader-based land tax.
- Investigate using Tax Increment Financing (and other innovations) to fund new housing developments.
- Publish a separate study on the influence of negative gearing and the capital gains tax discount on home purchase affordability and the rental market.
- Maintain state first-homebuyer grants, but introduce means testing.
- Reactivate the First Home Saver Account Scheme, or similar.
- Expand shared equity programs, both government and private.
- Consider community land trusts, rent-to-buy schemes and the like.
- Consider introducing housing supply bonds.
- Establish a cross-sectoral high-level industry and government Housing Supply Financing Taskforce.
Aged care and housing
- Investigate new housing policies for retirees, such as the Housing Help for Seniors pilot.
- Consider the specific needs of the aged in the private rental market.
The rental market
- Review tenancy laws (state and territory) to ensure all rental properties meet minimum standards.
- Set specific minimum standards for tenure, stability and fairness of rent, efficiency and comfort, safety and security, and better protection for marginal housing tenants.
- Review and improve tenants’ dispute systems.
- Consider a tenants’ Ombudsman.
- Increase landlords’ obligation to modify properties for tenants with particular needs, and to improve the efficiency of their properties.
- Reinstate the National Rental Affordability Scheme (NRAS), and investigate improvements to the scheme, including tax implications.
Public, social and community housing and homelessness
- Commit to an overall proportion of public housing and social housing as a percentage of housing stock.
- Increase the proportion of public and social housing to reduce waiting lists.
- Integrate public housing and locate it close to services, such as transport and hospitals.
- Ask the Productivity Commission to inquire into the merits of transferring public housing to the community sector.
- Reverse the cuts to the National Partnership Agreement on Homelessness.
- Task Homeless Australia with investigating and quantifying the service delivery gap to the homeless, and commit to funding the National Partnership Agreement on Homelessness to meet that gap.
- Investigate Centrelink as a one-stop-shop for homelessness services.
- Reinstate funding for housing and advocacy peak bodies.
- Include access to affordable and appropriate housing in the Prime Minister’s Close The Gap report.
In a dissenting report, Government senators stated that they did not support all but eight of the Senate Committee’s recommendations.