The origins of the "housing crisis" are myriad - federal tax settings, shrinking household sizes, planning inertia, lack of supply and the list goes on.
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What if the answer to what has caused the housing crisis is simply significant underinvestment in public housing?
And to be more nuanced and precise, underinvestment in public and community housing?
The housing crisis solution industry is very creative and there is no shortage of potential solutions. Maybe we already had the solution and we have forgotten about it.
Figures from the Australian Institute of Health and Welfare suggest in 2006, Australia had around 406,000 dwellings primarily across the public and community housing sectors. By 2022 this number was almost 443,000. This is an increase of around 9 per cent or around 37,000 properties.
Over the same period Australia's population grew from 20.5 million to 26 million - an increase of 27 per cent.
![The ACT government has unsold blocks of land in Whitlam. Why not use some of that land for public housing? Picture by Sitthixay Ditthavong The ACT government has unsold blocks of land in Whitlam. Why not use some of that land for public housing? Picture by Sitthixay Ditthavong](/images/transform/v1/crop/frm/8WgcxeQ6swJGymJT6BMGEL/3f7b9ac3-489d-42a4-90d3-c8b09237ffeb.jpg/r0_338_4000_2587_w1200_h678_fmax.jpg)
So, ignoring other potential economic factors, if we work to the principle that growth in public and community housing should ideally match the growth in population, then the growth in the public/community housing sector should have been approximately 110,000 dwellings. This is a shortfall of almost 75,000 properties.
Would the housing crisis magically disappear if 75,000 properties were to materialise across the country? Hard to say but it would surely go a fair way to alleviating the current situation.
In the ACT over the same period, community and public housing fell from almost 13,000 properties to just under 12,000 while the population increased by around 37 per cent.
Governments have the power to supply all the land they want and speed up planning approvals to help solve the housing crisis, however it's the private sector that builds the private housing in Australia and that sector is rightly motivated by profit. Uncertainty due to rising interest rates and/or a weak property market means the private sector often delays building which delays new supply. Recent falls in building approvals across the country is evidence of the impact of rising rates.
A drop in building activity also corresponds with the risk of rising unemployment. Building public (and community) housing can have a secondary benefit of providing employment opportunities when markets contract.
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Governments across the country have taken many actions to boost community housing. There are many state-based schemes, the National Housing and Infrastructure Finance Corporation (established by the former federal Liberal government, which raises money from investors and then lends cheaply to Community Housing Providers so they can grow their portfolios), the Housing Accord, and the Housing Australia Future Fund, just to name a few. In the ACT, the government this year launched the Affordable Housing Fund which is supporting community housing providers to grow their portfolio.
What about investing in and growing the levels of public housing?
And this means investment in additional public housing not just simply maintaining the current holdings by selling off old detached housing stock and replacing them with small apartments (with a small sprinkling of townhouse developments on blocks old public houses used to be on).
For example, the current ACT government, via the Suburban Land Authority, has over 100 blocks of land sitting unsold out at Whitlam. Why not take a third of those blocks and allocate the land for Housing ACT to build additional public housing?
Spending on public housing is not an operating expense, it is an investment.
It sits on the balance sheet of the relevant government and accumulates capital growth like the rest of the property market. It is also an income generating asset via rent.
Yes, these rents are less than market rents but it is income nonetheless.
Yes, it needs to be funded but government does not need to deliver an investment on the same commercial terms as the private sector. Investment in public housing is an investment in our social fabric.
- Dan Carton is chair of Havelock Housing, former chief economist of Defence Housing Australia and interim chief finance officer of SEARMS Aboriginal Housing Corporation.