Extract of an article by Robert Pradolin
For those of us that have been championing housing affordability and affordable housing (two very different issues), it’s great to see the federal government taking steps (some of us might say baby steps) towards providing a framework that could unlock significant investment in what amounts to critical economic infrastructure. Sufficient and suitable housing for all, rich or poor, is vital to underpin Australia’s long-term economic future.
Having a stable form of shelter is fundamental to a prosperous society. How can anyone be productive if they do not have a place to reside and sleep in safety? How can society function if the people needed to provide essential services must travel hours to their workplace? How can parents bring up a family if there is no stability in where they sleep because they are always under threat of a forced move? How can anyone manage the emotional, physiological or traumatic events that happen in life if their primal need of stable shelter is not met?
As Treasurer Scott Morrison says, there are no silver bullets in fixing our creaking housing system. It’s a long-term game. But as with building a house, you must start with foundations. And, in my view, there is no solution that does not involve a substantial boost in housing supply.
The proposed evolution of the National Affordable Housing Agreement (NAHA) into a new deal that obliges all state governments to meet targets for affordable housing and planning reform is sensible.
For years, our state governments have been using federal government funds channeled through the NAHA to effectively patch up their existing public housing estates rather than to expand social and affordable housing provision. The implications of this change could be significant if it means they will now need to fund those works from their own operational budgets rather than using federal resources.
While the devil is always in the detail, the Treasurer’s declared intention to encourage state-level planning reform to unlock supply is also sensible, albeit a long-term game. It now becomes a choice for all state governments to either create more supply through reforming the planning process (and get financially rewarded for it – which, by the way, happens to be in the national interest) or persist in pandering to the vocal few and limit supply through restrictive planning controls.
The establishment of the National Housing Finance and Investment Corporation to provide long-term, low-cost finance to support more affordable rental housing is another positive and long overdue step to attract super funds into this sector. The bond aggregator is part of the answer, but the government still needs to reveal how it is going to provide the “co-financing” essential in making the numbers stack up for affordable rental housebuilding. Also, because it relates only to debt (rather than equity) funding a co-financed bond aggregator model can only yield a limited amount of additional supply.
SOURCE: Pradolin, robert. “The Budget on Affordable Housing: A great start, but there is more to do.”The Fifth Estate 18 May 2017
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