It is well known and agreed there is a housing crisis in the ACT. The levels of housing stress are on the rise and rising interest rates are and will continue to make things worse.
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The Australian Institute of Health and Welfare specialist homelessness services report for 2020-21 showed that one in 107 people in the ACT accessed homelessness services in 2020-21 citing financial difficulties, housing crisis, and housing affordability stress.
In July 2022, chief executive officer of ACT Council of Social Services Emma Campbell said "the ACT has an immediate shortfall of 3100 social housing dwellings and 2400 affordable rentals. Every day 2000 Canberrans experience homelessness".
Federal tax policies that provide the ability for investors to negatively gear and obtain capital gains tax discounts have no doubt contributed to the current housing market however local land release policies misaligned to the preferences of the majority of Canberrans have also contributed.
The 10th parliamentary agreement between the ACT Greens and ACT Labor promises an increase in new dwelling site supply to meet increased demand across the housing spectrum, 400 additional public housing dwellings by 2025 and 600 additional affordable housing dwellings by 2025- 26.
The government is also looking at build-to-rent which promises to potentially increase the supply of affordable housing. It is halfway through the parliamentary term and while progress appears to be being made, is it enough to solve the problem?
The solution to the housing crisis is simply more dwellings, more dwellings, and more dwellings! That is the simple and obvious answer.
As interest rates continue to rise the market will inevitably slow in Canberra.
Due to inflated construction costs from high regulation plus sticky land pricing from ACT government there may be a period where it could cost more to build a house than what the house will be worth - how will builders respond?
Builders may not build for a short time which has wider implications for jobs and the ACT economy.
As the market will not build a boundless supply of dwellings even if the government release land in abundance what is the trick to getting more dwellings on the ground?
There are potentially two simple solutions and possibly a third.
Firstly, work with the community housing sector to deliver more non-market housing by providing them with land at zero cost to build on. This land could be transferred in the form of shared equity or as a caveat-laden-gift where the dwelling built on the land must remain owned and managed by a community housing provider into perpetuity.
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Secondly, make properties appear "magically from thin air" by incentivising investors with short-term rentals through Stayz and Airbnb to bring their properties back to the long-term rental market.
This could potentially include a one-off rates or land tax exemption offered for a short window of time contingent for a limited number of properties on evidence of a long-term lease being struck with a tenant.
A third suggestion is perhaps a greater role for public housing particularly if the market slows.
Public housing construction activity can perform a counter-cyclical role in creating crucial jobs in the construction sector during a period of slowdown.
The housing spectrum runs from homelessness and emergency shelters through to full market rental and home ownership - alleviating pressure in one or more parts of the spectrum can take pressure off adjacent parts and have a profoundly positive impact on the community.
Housing is the bedrock of dignity and a good life in our community - more should be done and can be done.
- Dan Carton is the chairman of Havelock Housing, director of housing at Delos Delta and former chief economist at Defence Housing Australia.
