Affordable Housing Industry Has Capacity But Lacks Government Certainty

Australia urgently needs national legislation that defines affordable housing and sets out the economic and social purpose of the industry, according to new research.

A report by the Australian Housing and Urban Research Institute (AHURI) found that alongside the growing shortage of affordable housing, the country’s largest non-government affordable housing providers had substantial under-used capacity that the Commonwealth must address.

The research, Developing the Scale and Capacity of Australia’s Affordable Housing Industry, commissioned by AHURI and led by the University of New South Wales, explored the role of affordable housing providers as players within a wider system.

It said the system extended beyond the organisations directly responsible for providing secure low-cost housing (mainly not-for-profit community housing providers) to include supporting entities and institutions such as service delivery partners, lenders, peak bodies and government policy-makers, program managers and regulators.

The research identified industry capacity challenges in four main areas:

• There is a lack of a resourced plan for tackling the national affordable housing shortage.
• There has been a major loss of housing policy-maker expertise over the past 10 to 20 years and, over the past five years, a neglected and underperforming affordable housing regulatory system.
• Stronger and more enduring leadership is needed from both governments and housing providers.
• Support for the Indigenous housing sector has lagged behind that for mainstream providers.

Inquiry leader Professor Hal Pawson told Pro Bono News there was a need for concerted and purposeful action from both levels of government to support the industry in the expansion of affordable housing supply that was recently pledged by federal treasurer Scott Morrison.

Key recommendations in the report included revitalisation of the affordable housing regulatory system, official recognition of affordable housing as a long-term national policy goal (through the Council of Australian Governments), and the creation of a joint government-industry Affordable Housing Industry Council to direct and oversee industry development.

“We believe there is a case for national legislation that defines affordable housing and sets out the economic and social purpose of the industry,” Pawson said.

“Australia’s leading affordable housing providers are, in our judgement, ready for further growth. With the right leadership, resourcing and regulatory accountability, they have what it takes to help this country tackle what has become a key problem governments can no longer ignore.

“There is no single action which would by itself solve the issue here. There are a whole range of things that need to be done – each of which of which is necessary but not sufficient.

“The biggest of them though is the lack of a clear and consistent policy message from a national level which then sets a framework for which the states and territories work alongside or within and that’s has been sorely missing.”

He said that for a brief period in 2010 under the Labor Rudd government there was an attempt to initiate such a reform direction but it had “really fizzled”.

“Since 2015, or when there was a change of prime minister, there has definitely been a marked change but it is still uncertain whether that is more a sympathetic attitude towards [the issue] or more the recognition that affordable housing is an issue that no government can ignore. It still doesn’t really have a framework or any structure to it,” he said.

“National legislation would be a way that such a structure could be put in place and have a formal standing. At the moment that doesn’t really exist.”

The readiness of the not-for-profit sector to address issues of expansion was also addressed in the research.

“There is definitely a cohort of large not-for-profit providers that have built a lot of capacity over the last five to 10 years and they have created a new management system with a level of professionalism,” Pawson said.

“People have been recruited into the sector from outside, especially from the business world into positions of finance directors that before 2010 was something being done by CEOs and their bookkeepers.

“Those organisations have professionalised quite significantly. One of the things that would assist that is more effective national regulation of the sector. But this has been badly neglected since 2010 especially by the Commonwealth and one of the results is that Victoria isn’t even part of it.

“Even the states that are in it are still struggling to try to keep going without any national incentive or national dynamic and that has been very damaging.”

He said the report shared in more detail the aspects of what AHURI thought needed to be done to review and reinvigorate the regulatory system.