In an article published this week on The Conversation on housing affordability, researchers from the Australian Housing and Urban Research Institute (AHURI) make ten recommendations that they believe will contribute to alleviating the current national housing crisis. These recommendations, made after ten years of research by numerous educational institutions as well as the Australian Housing and Urban Research Institute, include:
- A phased reduction of existing tax incentives favouring rental investors, in particular concessional treatment of negative gearing and capital gains tax liability: This measure would have the overall effect of lowering the upward pressure on housing costs, and in turn alleviating pressure on the public housing system by allowing more low-income Australians to enter into the private rental market.
- Redirecting additional tax income from the above measures into provision of affordable rental housing at a range of price points, and offering incentives to prospective home buyers with limited means: Any investment in affordable housing is welcome, and encouraging lower-income households to purchase where possible will not only lessen the pressure on the public housing system, but may facilitate tenants in public housing moving into home ownership.
- Measures such as housing supply bonds, aimed at encouraging superannuation funds and other institutions to invest in rental housing: With government commitments to public and social housing unreliable at best, establishing models to encourage investment in housing by other interested parties is a worthwhile experiment.
- Replace stamp duty with a broad-based property value tax. Stamp duties raise the price of housing, and increase on a sliding scale according to sale prices: As a result, as housing prices continue to increase, stamp duties increase with it. In addition to this, as a land tax would be levied annually rather than only when a property is sold, this would encourage those who are holding on to unused properties to relinquish them to the market, relieving pressure on housing supply. Governments need to consider the impact of stamp duty, and consider its replacement with a flat rate land tax.
- Expand affordable ‘partial ownership’ tenures such as shared equity: Systems such as South Australia’s HomeStart have allowed lower-income residents to enter the home ownership market at a more affordable price, with the option of increasing their share of the ownership as time goes on. Such systems alleviate the demand for low-income rental housing, and should be expanded by both government and private investment groups.
- Implement the Henry Tax Review recommendations on enhancing Commonwealth Rent Assistance (CRA): The Henry review recommended a number of measures, including restricting CRA to those who are receiving income support payments rather than family assistance or other payments, amending the rate of payment based on the location, and increasing the maximum rate of payment to better reflect the increases in rent in recent years. If these (and other) measures can allow people who would otherwise be reliant on public housing to remain as part of the private rental market, the public housing system will be better equipped to assist lengthening waitlists.
- Reduce urban land price inequities by improving mass transit infrastructure and encouraging targeted regional development: Mass transit is an essential service for low-income households, in particular public and social housing residents, who are less likely to have access to a car. Enhancing public transport infrastructure will also have the added benefit of reducing the social and physical isolation of residents that are served by it, in both highly-populated urban areas and less-dense regional areas.
- Continue to simplify planning processes to facilitate housing supply while retaining scope for community involvement and proper controls on inappropriate development: While any simplification of planning processes is welcomed and community involvement in the process is necessary, planning authorities should be encouraging more medium-density public and private housing (particularly along public transport corridors). Carefully designed and socially responsible medium-density development should be evenly distributed throughout the community in a considered way, and not as easily obstructed by frivolous public objection as they currently are.
- Require local authorities to develop affordable housing targets within private housing developments over a certain size: With the public and community housing programs in desperate need of new stock, all new developments should include a percentage of housing for low-income households. Providing local planning authorities with a clear set of guidelines to aid in the assessment of new development applications will streamline the process as well as adding to the existing stock in a sustainable manner.
- Develop a costed and funded plan for existing public housing to see it upgraded to a decent standard and placed on a firm financial footing: Some public housing stock in Australia is over 50 years old, and like any dwellings of that age, requires significant maintenance. A plan for affordable yet high-quality maintenance and renewal will keep down maintenance costs in the future.
The VPTA believes that these measures represent part of a considered approach to the future of low-income and affordable housing in Australia, at a time when the housing affordability of all Australians is under increased scrutiny. However, the measures will only be implemented with a long-term commitment from political and other stakeholders of all persuasions. As long as public and social housing policy is treated as a political football, Australia’s most vulnerable are being further left behind.