Homelessness and the Federal Budget

There is no sign of the housing crisis abating without serious policy intervention and leadership from the Commonwealth, including provision for more public and social housing stock in this budget, writes Launch Housing deputy CEO Dr Heather Holst.

With the federal budget looming there is a lot of discussion in the mainstream media about the nation’s AAA credit rating and fiscal responsibility. Most of the discussion around housing is concentrated on affordability in the homeownership context and the squeeze on first home buyers.

To his credit Treasurer Scott Morrison has indicated that more needs to be done in increasing affordability in the rental market but refuses to concede that changes are needed in tax policy in order to achieve this. Not to mention the role of the Commonwealth as a leader in coordinating the response on this critical issue between all levels of government.

As a provider of housing and homelessness services to the growing number of people who are priced out of the private rental market in Melbourne it is clear that what is needed above all else is a serious increase in affordable housing stock.

A recent report led by Compass Housing, Towards a National Housing Strategy, sets out a practical approach to achieve “a system that guarantees as a basic human right to every member of Australian society, access to ‘adequate housing’ as defined by the United Nations”.

Importantly this strategy confirms that the priority must be increasing Australia’s housing stock at the affordable end of the market. We know that a combination of factors has led to the current crisis in homeownership among younger people and first home buyers getting into the market and rental affordability for low income earners.

The number of people competing for rental properties – particularly at the affordable end – has increased in part because aspiring first home owners are staying in rental properties longer until they can afford to buy. This increased demand and competition in the private rental market is a serious barrier to low income households who can’t keep up with rising rent prices.

A recent article in The Age newspaper identified Melbourne suburbs that once provided affordable housing stock. Now they are a battleground as renters across the social divide struggle to find homes they can afford to rent in more “desirable”’ suburbs. Brooklyn, Braybrook and Sunshine North in Melbourne’s west are now attracting middle income earners who offer above the asking price to secure these properties.

Australian Institute for Health and Welfare data (2015) confirms that single older women are one of the fastest growing groups of people accessing housing and homelessness services. Commonly, these women are being pushed out of the private rental market after losing employment, being separated or widowed and having grossly inadequate superannuation.

The homelessness sector is witnessing a steep increase in the number of people attending services who were previously housed in the lower end of the private rental market. This not only impacts people on income support benefits but those who are in casual and low paid jobs.

There is no sign of the housing crisis abating without serious policy intervention and leadership from the Commonwealth, including provision for more public and social housing stock in this budget.

Our housing market doesn’t make adjustments to cater for increased demand among people who are socially and economically disadvantaged. As a civilised society we must ensure everyone has access to suitable and sustainable housing.

The Compass Housing report referred to earlier estimates that current capital gains exemptions cost our community $54 billion in lost revenue in 2016/17 alone. It also estimates the 1.2 million people who negatively gear a property save around $3,000 on their annual tax bill. It is worth remembering here that politicians are overrepresented in the home ownership and property investment statistics compared to the general public.

If the Commonwealth government made changes to capital gains and negative gearing policy – even at the higher end – it could save billions of dollars and reinvest this money in public and social housing.

The treasurer has indicated a willingness to boost the capacity of the social housing sector through social investment bonds and this is a welcome move. This alone will not meet the needs of the rapidly growing numbers of people at risk of homelessness in a hot property market.

With over 200,000 people in Australia currently on public housing waiting lists we need a financial commitment in the federal budget to build homes that will provide long term and appropriate housing for those who can’t rely on a free market model of housing supply.

About the author: Dr Heather Holst is the deputy CEO of homeless and housing service provider Launch Housing. The organisation was formed from the merger of two of Melbourne’s largest and homelessness services, HomeGround Services and Hanover, in July 2015.