The biggest investment in social housing since Kevin Rudd was prime minister won’t be enough to stop life getting tougher for low-income tenants. Peter Mares sat down with Inside Story to share this thoughts on a new era for housing.
For almost a decade the Coalition government insisted the states and territories had sole responsibility for ensuring that Australians on the lowest incomes had a place to call home. Even at the height of the pandemic — when business, unions, advocacy groups and independent experts called with one voice for federal investment in social housing and cash was pouring out of Treasury coffers — the pleas for a federal investment were ignored.
As a result, getting access to social housing, whether it’s public housing provided by state authorities or community housing provided by not-for-profits, is harder than ever. The first tranche of 2021 census data shows that social housing’s share of all dwellings has fallen below 4 per cent Australia-wide, continuing a steady decline over more than two decades.
In 2018, the City Futures Research Centre estimated, the average annual gap for social housing was $12,000 per annum. On that basis, the Future Fund will need to earn $240 million each year to subsidise the 20,000 new social housing dwellings promised by Labor. If its earnings average 6 per cent each year, or $600 million, the extra income can be put towards Labor’s other promises — 10,000 “affordable” homes for police, nurses, cleaners and other “heroes of the pandemic,” repair and maintenance of existing housing stock, and a cash injection to build new crisis accommodation. And, of course, the government will need to pay interest on the $10 billion borrowed to set up the fund.
It’s important to understand that the proceeds from the Future Fund won’t be used to give not-for-profit housing providers up-front grants to build dwellings. Instead, it will guarantee to fund the gap between rent receipts and costs for twenty-five years, giving housing providers income certainty long into the future. This will enable them to seek the finance they need from private sources — including, potentially, superannuation funds (as is already happening in a limited number of cases). In this way, a relatively modest amount of public money can be leveraged to finance a lot of new housing.
Still, is the fund a cumbersome workaround? You can read Peter’s full analysis, originally published via Inside Story, here.
via Inside Story, 28 September 2022. Read the full media release here.
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