Homelessness Archives - thegoodwills.com

Where social housing meets the working poor

social-housing-working-poor — Graph supplied by the Grattan Institute

I suppose you have been waiting for me to wax eloquent about the Federal Government’s $10 billion housing plan and why don’t they get on with it?

Don’t blame me. I didn’t vote for The Greens, who seem to think their role in government is to block legislation just because they can. The Greens MPs in Parliament want the Federal Government to freeze rentals for two years. This seems to be predicated on some naïve proposition that the Labor Premiers buddy up with the Feds and persuade the others to fall in line.

What part of States Rights do they not understand? As Prime Minister Anthony Albanese rightly says, the Federal Government could not impose a nation-wide freeze on rentals even if it wanted to. The mechanism for such a move lies with the respective State and Territory governments. I can’t imagine that telling the landlords (and developers) in their constituencies that they can’t raise rents for two years would help State or Territory government re-election chances next time round. Having said that, the Australian Capital Territory has implemented a rent ‘cap’ so anything’s possible.

The Bill, which stalled through lack of support in June, has been tabled again this week although not much has changed. There is talk (at chat show level) of a double dissolution – that is, Mr Albanese will go early to the people and let them decide. Unlikely.

There are a few things to note about the Housing Australia Future Fund. For one thing it’s not a new idea. The $10 billion fund was an election promise, which means its formation goes back well before 2020. We already had a Future Fund (which primarily invests in the share market and in commercial property). The Labor Government’s plan to co-opt this fund into investing in the volatile housing market has made it a target for the Coalition and dissident independents.

One of the issues as I see it is the Bill has been designed as an economic/financial policy instrument. Given the size and severity of the housing problem in this country (affordability, rental housing shortages and homelessness), it should have been designed foremost as social policy, letting the numbers take care of themselves, as numbers do.

The Greens are not alone in their critique of the Albanese government’s housing policy. Numerous housing advocates say that despite the size of the Housing Australia Future Fund, it will scarcely touch the sides of the problem. The legislation promises 30,000 new social and affordable houses in the first five years. Once the fund starts generating returns, more social and affordable projects can be started. And as Housing (and Homelessness) Minister Julie Collins added, this will include 4,000 homes for women and children affected by family and domestic violence, or older women at risk of homelessness.

That’s all very well, but numerous reports concur that the current social housing need is for more than 100,000 dwellings. A report by the National Housing Finance and Investment Corporation (NHFIC) showed that Australia is facing a shortfall of 104,000 houses in the next five years. This is brought about primarily because the construction industry can’t keep up with demand. Then there are mitigating factors like rising interest rates and the ever-increasing cost of raw materials.

This glum forecast came at a time (April) when rental vacancy rates in every capital city in Australia were at or below 1% (Ed: and likewise in regional cities and towns). Bad weather in 2022 added to the woes of builders; some of whom closed their doors, leaving home buyers with half-finished dwellings and cost over-runs.

The NHFIC is forecasting 1.8 million new households over the next decade, with just 148,500 new dwellings added this financial year. The total will drop to 127,500 in 2024-25, with the biggest drop in apartments and multi-density dwellings (40% down on levels experienced in late 2010).

In 2021, the Grattan Institute took a futuristic look at how we could build 100,000 social housing dwellings by 2040. As you can see by the table above, this would depend entirely on State and Territory government assigning matching contributions.

Grattan Institute economic policy director Brendan Coates wrote:

“If matched state funding was forthcoming, the Future Fund could provide 6,000 social homes a year – enough to stabilise the social housing share of the total housing stock. It would double the total social housing build to 48,000 new homes by 2030, and 108,000 by 2040.”

Four Corners should do an investigation on what exactly is meant by the terms ‘social, affordable and community housing’ and who benefits. Once upon a time there was just public housing. It was owned by the government and traditionally leased to people who were on government pensions and unlikely or unable to find paid work. The rental for people in these circumstances was traditionally struck at 25% of income. The Department of Human Services also calculates rent assistance for people in this category. Now, however, we have public/private partnerships which develop ‘affordable’ or ‘community housing’ properties. While the rents charged to these properties still look attractive (to those in the private market), it can represent up to 40% of disability or aged pension income. The properties are typically built new by private developers on land bought or provided by the relevant Government (or Council). These projects are financed by investors, so even though the housing provider may be a ‘not for profit’, the profit motive is inherent, whereas with public housing it is not.

Whatever the Federal Government and its State and Territory counterparts are going to do about social housing, they’d best get on with it. The Australian Housing and Urban Research Institute (AHURI) has estimated that the need for future social housing will be 1.1 million dwellings by 2037.

The 2021 Census recorded there were almost 350,000 social housing dwellings across Australia (just under 4% of the number of all households), at the end of June 2021.

AHURI recently reported there were 165,000 applicants on the waiting lists for public housing, more than 40,000 applicants for community housing and just over 12,000 applicants for State owned and managed Indigenous housing.

“If we add together all the households on the waiting list and those already in social housing, we find that over half a million (close to 565,000, or just over 6%), Australian households were living in, or had requested to live in, a form of social housing.”

All that aside, there is the ever-growing cohort of ‘working poor’ – Australian families where one or both parents have jobs. But their household income can’t keep up with high private market rentals and the cost of living in general. Not to mention the 1.8 million Australian households Roy Morgan Research says are at risk of mortgage stress.

No quick fixes in sight although the CFMEU (one of the country’s last robust unions), wants the government to impose a Super Profits tax on the top echelon of companies.

The Guardian reported that CFMEU says a super profits tax of 40% of excess profits would ‘comfortably’ cover the cost of building more than 750,000 new social and affordable homes.

The CFMEU revealed this bold plan last week at the National Press Club, tabling a commissioned report by Oxford Economics. The report assumed that a permanent 40% tax on excess profits on companies with over $100m annual turnover, would raise an average $29bn a year, enough to fund the construction of 53,000 new homes each year.

Yep, that’ll happen.

Submarines or social housing?

housing-crisis-homelessness — Image by Jon Tyson www.unsplash.,com

One of our readers commented that on the same day the media were banging on about the Federal Government’s $368 billion submarine plan, a lone SBS panel programme focused on the national housing crisis.

It is tempting to compare spending on affordable housing with the capital cost of up to five nuclear-powered submarines. The Federal Government’s (annual) commitment to affordable housing (currently $1.6 billion), equates to about 13% of its annual submarine budget (ie if the $368 billion is spread equally over 30 years). This assumes that successive governments will continue to spend that much on affordable housing (and submarines).

While housing is the responsibility of individual States and Territories, the Federal Government develops national policy and funds it with grants to the States and Territories.

That’s the theory, but in reality the critical shortage of housing, the cost of housing and the rising tally of homelessness is a clear and present danger to Australia’s social stability. Just this week the 2021 Census data on homelessness was released – what kept them, you might ask?

More than 122,000 people in Australia experienced homelessness on Census night, an increase of 5.2% from 2016, according to the Australian Bureau of Statistics (ABS).

The ABS interpreted the numbers as representing 48 people for every 10,000 people, compared with 50 people for every 10,000 in 2016.

While that is a reduction, the historical snapshot would seem to be an unreliable statistic, given that measures to reduce the spread of COVID-19 throughout 2021 contributed to some of the changes in the data.

“During the 2021 Census, we saw fewer people ‘sleeping rough’ in improvised dwellings, tents or sleeping out, and fewer people in living in ‘severely’ crowded dwellings and staying temporarily with other households,” ABS spokesperson Georgia Chapman said.

The affordable housing issue is not just about people sleeping in doorways. A new report produced by the Queensland Council of Social Services (QCOSS) clearly shows that working families are among those falling prey to the acute rental housing market shortage. It’s worse in some States than in others.

The report from QCOSS and The Town of Nowhere campaign is sobering reading. It predicts more than 220,000 households in the State will not have affordable housing within 20 years.

The report was prepared by national housing expert, University of New South Wales Professor Hal Pawson, and UNSW colleagues.

The tough conclusions include that there are around 150,000 households across Queensland with unmet housing needs. This includes 100,000 households who would typically be eligible for social housing. These households are either experiencing homelessness, or are low-income households in private rentals, paying more than 30% of household income in rent.

The figure is more than twice the official indicator of 47,306 households on the Queensland social housing waiting list. The latter has grown by 70% over the past three years.

Un-met housing needs are highest in satellite cities south of Brisbane. Pawson’s study shows that 10% of all households in Logan, Beaudesert and Gold Coast are homeless or living in unaffordable housing.

Professor Pawson said Queensland would need 11,000 affordable and social homes each year for the next 20 years, about 2,700 of which would need to be social housing.

He told the ABC the government had promised to build 13,000 social and affordable homes by 2027. But the QCOSS report found that the number of people with “very high need” for social housing was 37% higher than the system could accommodate.

In the decade leading up to 2017, there was “minimal” investment by State and Federal governments in affordable and social housing, Professor Pawson said.

“Unless they can get a grip on the situation, it’s a problem that over the next generation will continue to become more stressed and more pressurised.”

Much of the blame for the current problem is laid at the feet of private landlords. Private rentals in Queensland have risen as much as 33% since 2020. The sharpest increases, however, have been in regional markets. For example, over the past five years median rents rose by 80% per cent in the industrial town of Gladstone, by 51% in the tourist town of Noosa and 33% in the Gold Coast area. Nearly 60% of low-income households in the private rental market are facing unaffordable housing costs, with 15% in extreme housing affordability stress (rent accounting for more than half of total income).

While rentals have risen steeply, the bigger problem is a lack of rental accommodation. Rental vacancies are close to zero not only in Brisbane and the Gold Coast but also in regional towns.

The report states: “Queensland’s private rental housing has seen several years of declining vacancy levels and rent inflation rates far above the national norm. More generally, the sector remains entirely dominated by small-scale investor landlords whose usual prioritisation of capital growth over rental revenue inherently compromises tenant security.”
The upshot of this is that landlords are selling on the rising market, resulting in fewer houses for rental. Coupled with this is the inadequacy of tenant rights on rents, security and conditions. The Queensland Government enacted significant rental regulation reforms in 2022, but these fell far short of the changes advocated by tenants’ rights campaigners.

The Productivity Commission reported last year on the National Housing and Homelessness Agreement framed by the Albanese Government.

The agreement provides $1.6 billion a year in federal funding to the States and Territories, with the aim of improving access to affordable and secure housing.

However, the Commission judged the programme ineffective and in need of a major shake-up. With rents rising and vacancies falling, low-income private renters are spending more on housing than they used to. One in four households have less than $36 a day left for other essentials, the Commission said.

For those who might argue against more investment in social housing, there are success stories. The Queensland Government has funded a small number of permanent supportive housing (PSH) tenancies for people who have experienced long-term homelessness. PSH combines subsidised long-term housing with access to intensive but voluntary support services. One PSH programme, Brisbane Common Ground (BCG), established in 2012, is a 146-unit apartment block with 24/7 on-site support. Studies reported high tenancy sustainment rates and tenant satisfaction levels. It also produced significant savings via reduced use of emergency services and crisis accommodation. (QCOSS Report).

Despite the success of projects like BCG, there are many examples of State governments backing away from the commitment to social housing. For example, the New South Wales government is reportedly preparing to sell its Waterloo social housing complex in Sydney. The ABC reported that Waterloo Estate, the biggest social housing estate in Australia, houses almost 2,500 people.

The 18ha site will be redeveloped under a NSW government strategy called Communities Plus, where public land is offered to developers on the proviso 30% of what they build is dedicated social housing. This is clearly a retrograde move away from a project that is 100% dedicated to social housing. Meanwhile, more than 51,000 hard-pressed households are waiting for a home in NSW.

In an even more backward step, Darwin’s local Council has reportedly been issuing $162 fines to ‘rough sleepers’. The latter may or may not be indigenous people known as ‘longgrassers.’ (see link below)

Darwin Council issued a statement saying it had been subject to significant pressure from some current Northern Territory government MLAs. The MPs wanted to increase the number of infringements (and the size of fines), issued to vulnerable people who are sleeping rough in public places. (And what happens when these people cannot pay the fines? Imprisonment for non-payment? I guess that’s one way of getting people off the streets..Ed)

In its defence Council said council rangers issued fines as a “last resort”.

“We do not consider the fining of vulnerable people the solution to complex issues such as homelessness.”

More reading

https://www.theguardian.com/australia-news/2022/jul/12/queenslanders-miss-out-on-social-housing-due-to-failures-to-build-homes-and-inaccurate-waiting-lists

https://www.drbilldayanthropologist.com/resources/Longgrass%20people%20of%20Darwin%202012.pdf

Rental crisis raises risk of homelessness

rental-crisis-homelessness — A roof over your head (eventually). Image by www.pixabay.com,

This topic was sparked by news from a near-neighbour who had received the dreaded ‘landlord requires vacant possession’ letter.

All tenants go into a lease today knowing that the landlord can decide to sell the property, at which point they will be evicted. A lot of landlords have been doing that over the last two years, taking a profit as property prices spiralled.

The rental vacancy figures in this town and just about everywhere else would suggest that once a rental property is sold, it disappears from the rental pool – at least for a while. The national rental vacancy is 1.2% – at a time when analysis of Census housing data suggests that 700,000 private dwellings are locked up and uninhabited. More on that later.

We all know people who are renting and finding it increasingly difficult to feed their families. In recent months, there have been many stories in the media about families struggling to find a place to live. Those who find themselves at the end of a lease with no new home in the pipeline are at risk of becoming homeless.

Even when we are told the reasons for the shortage of housing, solutions are less obvious. Mostly due to self-belief and a strong self-image, some people caught between a lapsing rental and a tight vacancy rate will find their way round it.

It isn’t hard to find caravan parks, farm-stays and outback tourism ventures that need residential caretakers. The successful candidates get to park their vans for free and quite possibly pick up a small stipend as well.

People in these circumstances (a) do not regard themselves as homeless and (b) they can enjoy the luxuries afforded by a 22 ft caravan and an annexe.

June quarter data from CoreLogic shows that Australia’s rental market continues to tighten as low supply levels cause national vacancy rates to dive. Rents continued to rise across all capital cities and property types over the past three months.

Dwelling rents in the June quarter were 9.1% higher across the capital cities and up 10.8% in regional areas, compared to June 2021.

CoreLogic report author Kaytlin Ezzy said the recent upwards trend in rents has occurred mostly in the absence of overseas migration.

“This sustained period of strong rental growth has seen national dwellings record the highest annual growth in rental values since December 2008, when rental demand was supported by record levels of international migration,” Ms Ezzy said.

Vacancy rates across national dwellings fell to a record low of 1.2%, down from 2.2% this time last year.

In March, CoreLogic contributed to a report in The Guardian that found rents in Queensland had risen by as much as $200 a week over the previous two years.

The report found that steep rent rises in parts of Queensland forced people into caravans, sheds and poverty – even before widespread flooding displaced thousands more people.

While the ABS has released 2021 Census housing data, it will be “early to mid-2023” until we see the homelessness data. The most recent official data was collected in 2016 and released a year later. The homeless tally then was 116,427.

The Australian Institute of Health and Welfare (AIHW) estimates that in 2020–21, around 278,300 people received assistance from Specialised Homelessness Services (SHS). Around 111,100 clients were homeless when they first began support.

There are different categories of homelessness, apart from those who literally have nowhere to go and end up sleeping rough or in a charitable shelter. Then there are people living in sheds, garages and other unconventional buildings, couch surfing (staying with friends), hostels and unsuitable temporary accommodation.

Since late 2019, the onset of the Covid pandemic, the escalating price of real estate and an ever-increasing scarcity of rental properties has unquestionably added more individuals and families to the homeless tally. There is an increasing cohort of ‘hidden homeless’, that is people who are either not eligible to apply for support or feel they do not need it.

In Australia, some of these people head for the great outdoors. Accommodation demand driven by ‘Grey Nomads’ has produced hundreds of free camps and low-priced camp-grounds run by local show societies. The free roadside reserves, which may nor may not have a toilet/and or shower, usually have rules about how long you can stay. In Tasmania, many free camps allow you to stay for up to a month.

.Everyone’s circumstances are different, but we have met many people who had sold their house and bought a road rig. Many of the so-called Grey Nomads are retired tradies and public servants who can afford a $200,000 self-contained rig and go on the road for months at a time.

But if you travel the country and stay in free camps, you are just as likely to see a couple living in a 30-year-old caravan towed by an equally ancient car.

The big problem waiting for Australia’s new Prime Minister to tackle (after he has settled down our Pacific neighbours), is the housing crisis.

Believe me – it is a crisis. There are simply not enough houses to go around. This is particularly so in Queensland, where interstate migration has put the housing sector under massive strain.

There are reasons for the dire shortage of housing and they include delays in building new homes amid adverse weather in 2022. Then there are homes destroyed by floods or bushfires.

But as residential property analyst Michael Matusik discovered, the housing shortage is in part due to some 700,000 private dwellings that are “deliberately left vacant”.

Matusik reached this conclusion after analysing 2021 Census housing data, which showed there were one million unoccupied dwellings in Australia (about 10% of the country’s private residential accommodation).

The ABS defines unoccupied dwellings as: holiday homes (for owner’s use or rented out); investment properties without a tenant; newly built but vacant dwellings; habitable dwellings being renovated and/or vacant dwellings for sale or lease.

Matusik wrestled with those categories and calculated that after discounting the latter, 700,000 unoccupied dwellings were investment properties that were locked up rather than tenanted.

“Many of the unoccupied dwellings are in capital cities, especially Sydney and Melbourne where more apartments are in the dwelling mix,” Matusik wrote in his regular subscriber bulletin, Matusik Missive. “In these cities the proportion of overseas buyers, especially from Asia, and particularly from China, is the highest in the country.

“It is somewhat safe to say that something like 70% of the unoccupied dwellings across Australia are deliberately locked up.

“Assuming past immigration levels return, then there is a need to build some 150,000 new dwellings across Australia each year.

“If we could unlock these 700,000 empty homes, we would not need to build a new home for 4.5 years.”

While admitting this is ‘fantasy land’, Matusik says that any move to open up these dwellings would go a long way to improving short-term dwelling supply.

As we approach National Homelessness Week (August 1-7), some agencies will no doubt be calling for an earlier release of Census data on the homeless.

I asked the peak body, Homelessness Australia, for a comment; but remembered it was de-funded by the Federal Government in 2014. When one of their volunteers gets back to me, I’ll include their comment.

For now I’ll say that however bad the news is, it is better that we know sooner than later.

Homeless people sleeping in their cars

homeless-sleeping-cars — Image: Lucas Favre, www.unsplash.com

Today’s headline about homeless people could well be an urban myth; that is, a story people tell each other, swearing that it’s true. The housing crisis in Australia – a combination of unaffordable housing and scarce rental properties – is forcing people to live in their cars. I’ve done a bit of fact checking on this, but hang around while I relate this story from Tasmania.

We’d stopped at Scottsdale, a high country town in Tasmania’s north-east. We’d chosen the town’s free camp, which provided toilets and showers (the latter powered by three one-dollar coins). We were settling in for the evening when it became obvious that the older woman next to us was preparing to spend the night alone in her small Japanese car. The overnight forecast was a minimum of 7 degrees. She’d hung towels in the side windows and fixed a screen over the windshield. She seemed to be withdrawn, so we respected her unspoken need for privacy. But as far as I could tell (being next door and all), she went to bed as soon as it got dark. I decided my penance for not engaging in conversation was to make her a coffee in the morning. But when I arose (at 7.30am), she had gone.

It’s not illegal to sleep in your car in Tasmania – I looked it up. In theory if you are homeless, you could free camp your way around Tassie and nobody would hassle you. Some free camps allow you to stay for up to a month. But it does get cold from April to November, and rough campers would have to travel to town to find a public shower.

In Queensland, it’s illegal to sleep in your car unless you are parked in somebody’s driveway (with their permission). In which case you’d probably be inside, on the couch with the dog. There are similarly tough rules in the Northern Territory.

As blogger Tim Beau Bennett discovered, many local governments have specific by-laws vetoing this practice, so it would pay to check.

The biggest problem with assessing the level of homelessness in Australia is that the most reliable data (the Census) only comes out every five years. It could well be Spring before we see the first results of the 2021 Census. We therefore rely on data that is six years out of date (116,471 in 2016). But what’s been going on in the interim?

Recent reports show that up to 44,000 women of all ages are vulnerable to homelessness, with domestic violence being a key risk. Homelessness Australia (the National peak body for homelessness in Australia) released an analysis of housing data from the Australian Institute of Health and Welfare that showed that 1,600 women over 50 sought help from homelessness services in 2016. These women were either ‘couch surfing’ – that is, staying temporarily with friends or family members, or sleeping in their cars. The numbers had increased 75% and 81% respectively between 2012 and 2016.

Homelessness Australia launched a campaign in March this year calling for $7.6 billion to be allocated to long-term housing for women over the next four years.

The research identified a shortfall of 16,810 homes, the building of which would provide economic benefits of $15.3 billion and create 47,000 jobs across the economy.

The 2019-2020 research report Nowhere to Go, prepared by Equity Economics, showed that 9,120 women are becoming homeless every year. Women who had experienced family and domestic violence were the biggest client group seeking assistance. In 2019-20, 119,200 clients, or 41% of all such clients, sought assistance while experiencing domestic and family violence. More than half (55.8%) required accommodation. Alarmingly, the data also revealed that 7,690 women go back to abusive relationships, out of necessity.

It is perhaps illuminating to discover that Homelessness Australia was funded by the Federal Government until December 2014. Since then, it has been staffed by volunteers and has no paid staff.

As we mark the eighth birthday of Friday on My Mind, those of you who have hung in for a long time would know I often write about this topic. Australia has had a steadily increasing homelessness problem since 2011. The elevation of housing from a place to live and grow a family to a wealth-generating asset is the key issue.

An Australian Housing and Urban Research Institute (AHURI) investigation from November last year found that up to two million renters aged 15 or over are at risk of homelessness. AHURI’s brief to researchers was to identify those at risk of homelessness in smaller regional centres.

The resulting paper shows just how close so many people are to becoming homeless, primarily because of rental increases and ever-tightening rental vacancies.

All it would take is one life crisis – a relationship breakup, a serious illness or losing work due to economic circumstances, the authors concluded. Many people found out at the peak of the COVID-19 pandemic how circumstances can quickly change.

The survey was commissioned by AHURI from researchers from Swinburne University of Technology, University of Tasmania and Launch Housing. The task was to estimate rates of people at risk of homelessness for small areas (with a population ranging from 3,000 to 25,000).

Those interviewed were considered at-risk of homelessness if residing in rental housing and experiencing at least two of the following:

low-income;

vulnerability to discrimination;

low social resources and supports;

needing support to access or maintain a living situation;

a tight housing market.

The AHURI study is an important one at this fragile stage of the electoral cycle. It bridges the gap between what we officially know about the homeless and the ‘hidden homeless’ – those who are couch surfing, sleeping in their cars, house-sitting or doing the slow lap of Australia.

Even if you have a job, the next challenge is to find a rental property. This week our local paper, The Daily Journal, carried a report that the Southern Downs region has the lowest rental vacancy rate in Queensland (0.1%). The figure, a 10-year low, comes from a Real Estate Institute of Queensland survey of 50 local government areas.

While rentals in the Southern Downs are cheap compared to metropolitan cities (advertised weekly rentals start at $210 for a one-bedroom unit, to a three bedroom house in Warwick ($600). I am assured on at least an anecdotal level that the scenario is being replicated all over Australia.

The Federal Government’s main response to this shameful crisis was the National Housing and Homelessness Agreement (NHHA). The scheme started on July 1, 2018 and provides around $1.6 billion each year to States and Territories.

The NHHA included $129 million a year for homelessness services. States and Territories must match the sum applied for when claiming this money.

The NHHA identifies ‘priority cohorts’, which is public service jargon for people most in need of a roof over their heads. (Dehumanising language is but one of the many issues when considering homelessness. They are not ‘cohorts’ – they are people. Harumph. Ed)

women and children affected by family and domestic violence,
children and young people,
Indigenous Australians,
people experiencing repeated homelessness,
people exiting from care or institutions into homelessness and
older people.

Yes, it’s a depressing topic, but better solutions and attitudes could be developed, starting by not demonising those who either can’t find work or can’t work. Then we need to stop stigmatising those who for whatever reason have nowhere else to go.

In Nomadland, Francis McDormand’s character Fern is asked: “My Mum says you’re homeless. Is that true? Fern: “No, I’m not homeless. I’m just houseless. Not the same thing, right?”

I’ll leave you with a ‘three chords and the truth’ country song, Somebody’s Daughter by Tenille Townes.

Affordable housing – a key election issue

affordable-housing-election — A roof over your head – image by Capri23 at Pixabay.com

Wherever you go in Australia to visit friends and family, the conversation very soon turns to the scarcity and high cost of rental housing. The topic will then quickly shift to the ever-rising cost of houses and why parents worry about their adult kids taking on seven-figure mortgages. As residential property analyst Michael Matusik recently said, it comes down to the Bank of Mum and Dad.

Few cities or towns have escaped the 20% rise in residential real estate prices (for the year to September) or the inevitable rental hikes that followed. Stories that circulate about landlords taking advantage and tenants deciding they’d be better off sleeping in their cars are not uncommon. Check in with any emergency housing agency and they will tell you things are as tough as they have ever been.

AMP Capital chief economist Shane Oliver says that while housing affordability has always been an issue in Australia, it has moved from a periodic cyclical concern to a chronic problem.

“The 20% rise in prices over the last year has put the spotlight on the issue again. With the surge in house prices since the 1990s has come a surge in debt which brings with it the risk of financial instability should something go wrong in the ability of borrowers to service that debt.”

Oliver said the gains have been driven by record low mortgage rates, buyer incentives, a tight jobs market, a desire for more home space as a result of the pandemic and working from home, numerous government home buyer incentives, the “fear of missing out” and lower than normal listings. This has pushed average prices to record highs and real house prices to 23% above their long-term trend.

Oliver says the average capital city dwelling price rose 200% over the past 20 years, compared to an 82% rise in wages. The disparity has become more telling in the last 10 years with dwelling prices increasing by 58% and wages rising by only 26%.

The popular wisdom, if your parents taught you such things, was to spend no more than a quarter of your gross household income on housing. Over the decades, this figure has risen to 33% and in the major cities has peaked at 50%.

As we are now in pre-election mode, it’s appropriate to mention the Affordable Housing Party, a single-issue party which is on a membership drive to avert the risk of de-registration. Led by Andrew Potts, the party had its first tilt at Federal politics in 2017, fielding a candidate in the Bennelong By-Election.

The party’s policies include phasing out negative gearing, ending the capital gains discount on investment properties, stopping foreign investment in Australian property, taxing investment properties which are left empty and cracking down on full-time AirBnB operators.

Radical? Yes, but the problem needs some radical thinking before we end up with 200,000 people couch surfing and sleeping in their cars.

The AHP’s research on the housing sector focuses on negative gearing, which means the cost of owning an asset exceeds profits, resulting in investors claiming this loss to reduce other taxable income.

As the research suggests, one ought not to expect the Federal Government (or any government), to shut the scheme down. As of April 2017, Federal MPs and Senators owned a total of 289 investment properties.

This could be a good time to bust a few myths about negative gearing, Tax Office statistics from 2017 show that 64% of the 2.2 million people who own investment housing have an annual income of less than $80,000. This seems to scuttle the argument that only the wealthy benefit from investment housing. Less than 10% of Australia’s 2.2 million property investors earn more than $180,000 a year. Likewise, 71% of investors own only one home, with 19% owning two and 10% owning three or more houses.

Labor Leader Anthony Albanese upset some of the affordable housing campaigners in July when he abandoned pledges to impose restrictions on negative gearing. The opposition went to the 2016 and 2019 elections promising to halve the 50% deduction on capital gains and limit negative gearing to new properties only.

National Shelter chief executive Adrian Pisarski said by ditching its commitment to reforming negative gearing, Labor had “abandoned” would-be home-owners and low-income households wanting to buy homes.

“It took 15 years of campaigning by many to get the ALP to find a spine on CGT and negative gearing and commit to helping reduce house price inflation,” Mr Pisarski told the SMH at the time. “This is a sad day for affordable housing.”

In May Mr Albanese launched the Opposition’s $10 billion Housing Australia Future Fund. The fund would build social and affordable housing and create thousands of jobs now and in the long term, he said.

Annual investment returns from the Housing Australia Future Fund will be transferred to the National Housing Finance and Investment Corporation (NHFIC) to pay for social and affordable housing projects.

Over the first five years, the investment returns would allow the building of 20,000 social housing properties, 4,000 of which would be allocated for women and children fleeing domestic and family violence and older women facing homelessness.

Residential property analyst Michael Matusik has a few ideas to fix housing affordability. He says part of the problem is the focus on new builds rather than the existing market.

Matusik-style reforms would include removing negative gearing (a policy set when interest rates were sky high) and charging stamp duties at a flat $2,000 per transaction.

Matusik suggests a 20% tax on all property transactions – including owner stock if sold within, say, three years. This would stop ‘flipping’ (buying a house, renovating it and selling again within a short period of time) which is a major driver of prices. The government should limit foreign buyers to new dwellings and they must also have a 50% Australian business partner who pays 20% tax. These new rules would also include measures to stop developers land-banking.

“If they don’t start building the project within five years, they lose development approval. After 10 years, if there is no action the site is sold underneath them. In short, you cannot buy a home (new or existing) unless you have an Australian passport and pay 20% tax. No Passport no buy.”

As for new housing, Matusik says all housing related incentives should be removed because they distort the housing/building cycle. He also suggests that greenfield developments be required to provide minimum levels of community infrastructure set as targets. No doubt he will extrapolate on these ideas in a future Matusik Missive.

More radical ideas from Gwyn Hooper, writing for a Byron Bay newspaper (the median house price in Byron is $2.8 million (units $1m):

Under Hooper’s affordable development plan, the Federal and State governments would provide finance and free land. Local Government’s role would be to manage the buildings and tenants and waive its usual development fees.

“The tenants would have a secure tenancy, pay an affordable rent (based on income), and would importantly be able to live and bring up their families without financial stress – an issue that can cause family breakdowns that only compound these issues.”

As these examples suggest, this issue needs to be de-politicised and brought out into the sunlight with an ‘open to new ideas’ sign attached.

Written in the comfort of my freehold home, ameliorating some of my baby boomer guilt, I think.

Last week: People who lived in the UK for more than six months between 1980 and 1996 are prohibited from donating blood because of Mad Cow disease.

Homeless or “Houseless”

homelessness-grey-nomads — Goondiwindi Showground at dusk, photo Bob Wilson

I felt obliged to write about the vexed topic of homelessness after witnessing people sleeping rough in Queensland’s small towns. It shouldn’t happen, but it does.

The stereotype of a homeless person is the hobo asleep in the doorway of a city store, worldly goods in two carrier bags as a pillow. The reality is closer to an unhappy teenager, couch surfing with friends, or an 60+ women in a van on her own. Or Mum and two kids living in their car in a small town where they are less likely to be hassled. She’s cooking stew on a two-ring propane stove at the local park while using a public power point to charge her mobile. The kids are running about, being kids.

As we all should know, the official data (at the last Census in 2016), confirmed there were 116,000 people in Australia who were defined as homeless. However, the Australian Homelessness Monitor 2020 estimated the numbers had climbed to 290,000 by the close of 2018-2019 – that’s one in 86 people.

Queensland has big challenges when it comes to helping the homeless. The state is so physically large (1.835 million square kilometres) that social workers can sometimes rack up a 1,300 km round trip just to see one client.

This FOMM started forming after we watched the Academy Award winning movie, Nomadland, on Sunday night.

Emerging into a chilly early evening I said, “Better get home and light a fire,” despite being well aware our cosy brick house doesn’t yet need much heating (Warwick recorded 1degree Celsius last night-Ed).

Nomadland, if you have not seen it, is a docu-drama focusing on a 61-year-old widow, Fern, who has joined the legions of people known in the US as van-dwellers. Fern has been hit by a quadruple whammy: husband dies, factory closes, job goes, town is abandoned.

Left with a house she cannot sell, Fern hits the road in a beat-up van she has modified for her own purposes.

In Australia she’d be known as a Grey Nomad, although as in the US there are two distinct classes of traveller. First there are the well-to-do nomads, able to afford a big road rig with all the trimmings. Most often they are self-funded retirees, letting their hair down after a lifetime working. In the US they’d probably be known as Snowbirds (wintering in Arizona).

The other type of nomad, perhaps like those portrayed in Nomadland, live permanently on the road, in whatever style of motor-home or caravan they can afford. Like Fern, these people do not regard themselves as homeless (so are therefore not a statistic).

They favour free camps, recreation reserves and roadside rest areas where local governments have sanctioned overnight stays.

Some just pull off into the bush, far enough away that they cannot be seen from the road. In Australia, free camps will usually have a toilet; some may have a shower and a few have electricity. Fees range from nothing to $10 or $15 a night, the latter usually only applying to camps that have power and showers.

So while we toured around playing at being nomads, in Nomadland, Fern lives permanently with these restrictions and more. In one scene she is tucked away in her camper van at night eating a pizza when a man creeps up and peers through the van window. Then he hammers on the door.

“You can’t park here!”

“I’m leaving, I’m leaving.”

In Australia, our version of van-dwellers gather together in large numbers at the better known “free” camps. They also favour the physical space and lack of bureaucracy found at local showgrounds. These facilities are popular with big rigs (buses, motor homes and fifth-wheelers). If you own such a vehicle it is hard to find a caravan park which can accommodate an 8m-long van plus towing vehicle.

In Goondiwindi, I counted 50 rigs staying overnight at the showgrounds on the edge of town, close enough to the highway to hear the constant roar of heavy traffic. For $25 we got a powered site, TV reception and (as always out west), patchy mobile reception. There was a camp kitchen, toilets and showers and a separate toilet and shower with disabled access. Also the all-important dump point (for vans with chemical toilets).

Many small town showgrounds charge between $15 and $20 a night, less if not using power. It is often an honour system, with no way of knowing how many people came in after dark and left before dawn.

It’s probably impossible to establish how many Grey Nomads live permanently in their vans and own no real estate. They’re not homeless as long as the money holds out and the vehicle does not break down. As Fern explains to someone who is hiring casual staff – “No, I’m not homeless – I’m houseless.”

According to Tourism Research Australia, about 2.6 million Grey Nomad trips were taken by 55 to 70-year-old domestic travellers in 2019. This was up 12% on the previous year. As we found on our journey north in 2021, restrictions on international travel are accelerating this growth.

In a submission to the Inquiry into Homelessness in Australia, the Queensland Government stated that in 2018-19 , one in 116 people in the state received homelessness assistance.

“While this was much lower than the national rate of one in 86 people, it shows an increase from the previous year.”

The submission said that 55% of Housing Register applications had been identified as being at risk of homelessness.

Homelessness in Queensland is driven in part by housing affordability pressures, increased cost of living, stalling wages growth and welfare payments that don’t keep pace with the cost of living.

The majority of the 43,000 people seeking Special Homelessness Services (SHS) were spread among three cities (Brisbane, Townsville and Cairns) and seven regional centres.

Aboriginal and Torres Strait Islanders accounted for 33% (14,432) of all those seeking SHS (40% men and 60% women).

The largest cohorts seeking help were people fleeing domestic and family violence (31%), people with mental health issues (27%) and young people aged 15-24 (20%). My demographic accounted for just 6% (2,676), men and women (50/50) aged between 55 and 70.

I always had this somewhat romantic notion that being homeless and sleeping rough in tropical Queensland might not be a hardship. I said as much in the lyrics of Big Country Town: “We caught the ferry back to Main Street, there’s fellas sleeping in the park, beneath the blanket of the summer, they’re safe and warm there in the dark.”

Well, maybe in the height of summer, but on this caravan trip we shivered through a few single figure nights. As many Grey Nomads would know, sub-zero night temperatures are common in the interior of the country.

Meanwhile, as autumn turns to winter in Warwick, charities are doing their best to fill the gaps in services for those suffering hardship. Volunteers from the Seventh Day Adventist Church take their Community Van to Leslie Park every Sunday evening. The Salvation Army organises a ‘community gathering’ every Saturday, offering “a free meal, a positive and practical message and friendship.” These well attended free meal sessions attract more people than one might expect in a town of 15,000. Until you remember than one in 116 Queenslanders were homeless in 2018-2019, and that was before the pandemic.

More reading

https://bobwords.com.au/tales-of-quarantine-and-homelessness/

https://www.abc.net.au/news/2021-04-17/queensland-homeless-crisis-rental-shelter/100074284

Footnote; The Conversation, which I often cite, is on a donation drive to ensure it can continue providing independent, academically sound, not-for-profit journalism. https://donate.theconversation.com/au