ELECTION 2022: Housing affordability will be a major issue at this weekend’s election. Here’s how the major parties are planning to address this issue.
The cost of living is one of the biggest topics concerning Australian voters before they head to the polls this Saturday. Of the around 100,000 respondents in the ABC’s Vote Compass survey conducted in mid-April, around 13 per cent put the cost of living and affordability as their most important election issue, second only to climate change.
Housing is a significant part of this picture. With the cost of living on the rise, tenants and lower-income homeowners are struggling even more with their respective housing costs.
Australia faces a housing affordability crisis. This January, it was reported that house prices had jumped by 22.4 per cent in the previous year alone, the biggest price increase since 1989. Meanwhile, rental prices in Australia’s capital cities rose by up to 21.2 per cent in the 12 months to April, with wage growth failing to keep pace.
How are the major parties pledging to address housing affordability?
Much of the media attention regarding the major parties’ housing policies centres around home ownership. Consider the fanfare around Labor’s Help to Buy shared equity proposal aimed at providing financial support to 10,000 low- and middle-income homebuyers wishing to enter the housing market each year. And this week’s announcement by the Coalition to let first time buyers dip into their super.
Yet of more importance to housing affordability than demand-side policies aimed at assisting prospective homebuyers are the supply-side policies that will boost the overall stock of affordable housing.
Here, the two major parties are both looking to support the government’s National Housing Finance and Investment Corporation (NHFIC), a corporate Commonwealth entity established in 2018 to support community housing providers (CHPs) in Australia.
The Coalition is pledging $2 billion in low-cost financing to the NHFIC, which in turn will go towards CHPs. This will bring total low-cost financing to $5.5 billion, which the Coalition claims will support around 27,500 dwellings.
Meanwhile, Labor is promising to start a $10 billion Housing Australia Future Fund, which will build 30,000 new social and affordable housing properties in its first five years. Each year, investment returns from this fund will then be transferred to the NHFIC, representing a major boost to the community housing sector.
Who houses the ordinary low-income Aussie renters?
Community housing providers (CHPs) are hybrid not-for-profit organisations, neither market nor state actors, tasked with providing affordable subsidised rental housing.
Tenants in the community housing sector are typically low-income Australians or those who are shut out of the owner-occupied market. The sector provides a much-needed safety net, for example, to older women facing the risk of homelessness, as well as victims of domestic and family violence.
According to CHIA, the community-housing sector has doubled in size over the past decade and now manages over 90,000 properties, housing one in every 100 Australians. More than 25,000 new affordable subsidised rental homes have been built by CHPs since 2008.
The community housing sector is good news for housing affordability. Unlike market actors, CHPs do not seek to make profit for shareholders, instead putting any surplus revenue they make back into housing stock for low-income tenants. And in contrast to state actors, CHPs can attract private finance and philanthropic donations to build more affordable homes.
The future of community housing in Australia
Whichever of the major parties wins this election, the community housing sector in Australia will receive a welcome boost.
Yet CHPs are also not waiting around for government policy to change. Many are being proactive now and exerting influence on the political process. In NSW, the Australian state where the sector is largest, some providers are undertaking mergers to grow their size and increase their political clout. One such example is Link Housing and Wentworth Community Housing, which merged in March 2021 to form Link Wentworth. With residents in 6400 homes, Link Wentworth is now one of the largest CHPs in Australia.
In an interview with Link Wentworth’s CEO, Andrew McAnulty, he claimed that the organisation is “taken more seriously” since the merger: “I have been invited to high level meetings, which I wasn’t invited to before. We now have a seat at the table”. This April, in the run-up to the federal election, the organisation hosted a big debate on housing issues with politicians and important players from the private sector.
In pursuing the merger, Link Wentworth drew inspiration from leading NFP housing providers in the UK, a country with a much larger sector than here in Australia. As my research demonstrates, English CHPs have conducted mergers to maintain, if not enhance, their strategic and political influence. CHPs in Australia will no doubt wish to ensure that this election is not a one-off boost for community housing, but the start of a trend towards a growing and politically more assertive sector that genuinely tackles Australia’s housing affordability problems.
Vote Compass has a major flaw – selecting that you are no more concerned about cost of living than last year – doesn’t allow the ability to include that it’s because you are just as poor as you were last year.
What is important is context – and Vote Compass appears to have been designed by people with secure, well-paid jobs who have a simple view of life.