On the weekend, the Albanese government announced a two-year $2 billion housing accelerator fund to build new social housing stock which is most welcome. The ACT government will receive $50m of this funding.
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Unfortunately the Greens have not supported the $10bn Housing Australia Future Fund (HAFF) with debate now not set to resume until October this year.
It is worth noting that all the money in the world can be made available to address the housing crisis but it does not guarantee the fast deployment of that much needed housing. It still takes time to get houses on the ground.
There are so many things beyond a lack of investment capital that hold up the delivery of housing. These include but are not limited to the following:
- Community consultation is a non-negotiable and essential part of planning but it does take time. This consultation time is compounded in some circumstances by NIMBYS protesting new developments which is at its most deplorable when the development in question is proposed to help the most vulnerable in the community.
- Under-resourced and under-skilled planning departments across the country that cause material delays to development approvals.
- Skills shortages in key trades such as carpenters, plumbers and electricians.
So what can be done to get new housing on the ground as fast as possible?
Approve extra floors
With the stroke of a pen, developers of multi-unit dwellings could be granted an extra floor or two with minimal practical or aesthetic impact. It does not require any additional land to boost supply, just air. This obviously gifts additional economic gain to the developer so why not make that gain conditional on leasing half of the additional apartments produced to community housing providers for 20 years for affordable housing.
Remove red tape
Bureaucratic red-tape and bureaucracy have a huge impact on the speed of planning approvals. Governments should do all they can to remove friction from the development application system. One simple initiative includes fast-tracking planning approvals for the most urgent housing such as social, disability and crisis housing. Another would be setting short planning deadlines for compliant dwellings similar to the NSW government's Low Rise Housing diversity code where compliant developments are approved in 20 days.
Boost planning resourcing
Bureaucratic planning reforms cannot help if planning departments are not properly resourced. The speed at which development applications are approved is a function of the qualified town planners available to assess the applications. There is a shortage of town planners across the country however, town planners are not listed on the ACT critical skills list - yet real estate agents are.
Use modular housing
Factory-built or "modular" housing can be delivered faster than regular housing. The delays caused by skills shortages can be avoided. Modular is a little more expensive but maybe that is the price to pay to get housing built as fast as possible. Government can take leadership with modular housing via public housing delivery.
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The more modular is used to build, the cheaper it will become. Factory-built homes are very common in Europe. Local Canberra company Reimagined Habitat imports passive factory-built homes from Poland that can be erected to lock-up stage in just four days.
Tame inflation
The big one - getting inflation under control. This unfortunately is probably not something that can be done fast or without material impacts. A builder will not take the financial risk of building if they cannot realistically predict their input costs. The builder cannot be sure that there will be any profit remaining by the time the home is delivered when costs are rising quickly. High interest rates make it harder for projects to stack up but that impact is at least measurable. The uncertainty around input costs dramatically increase the odds of an investment decision being delayed.
Government throwing money at the housing crisis is fantastic and the HAFF - if it eventually passes - will help deliver an ongoing supply of critical social and affordable housing. Governments and their planning departments need to consider the impact they have on the speed in which much needed housing is delivered. We need to agree as community that solving the housing crisis and acting with urgency is actually a priority and act accordingly.
- Dan Carton is chair of Havelock Housing, director of housing at Delos Delta, and is the former chief economist at Defence Housing Australia.