Millers Point, Dawes Point and The Rocks and Australia’s Housing Crisis
The current controversy around the sale of public housing at Millers Point in Sydney is a graphic demonstration of the real-life impacts of the housing affordability crisis in Australia, and the failure of governments at all levels to deal with it.
The NSW Government is struggling to meet the increasing demand for social and public housing. According to the Auditor General there are currently over 55,000 people on the waiting list for public housing which is expected to continue growing.
On 19 March 2014 the then Minister for Family and Community Services Pru Goward announced that almost 300 publicly-owned properties in Millers Point, Gloucester Street and the Sirius building in The Rocks will be sold. The Sirius building was purpose built to house community elders.
The Minister for Community Services, Hon Gabrielle Upton MP, has claimed that the sale of every property in Millers Point will fund the construction of three properties elsewhere in Sydney.
Since coming to office, however, the NSW State Government has sold more public housing properties than it has built. This is likely to continue, as the proceeds from asset sales are being used to pay for maintenance on existing properties, rather than funding the construction of new dwellings. The NSW Auditor General has criticised the use of proceeds from asset sales maintenance as being unsustainable.
Without investment in new supply, or programs to meet the growing need for affordable housing, there is little hope of any progress on reducing the public housing waiting list. Forcing people to leave their homes and to be separated from their community is a harsh “solution” to this problem. What’s more, the evidence shows that this approach is not working. The 2014 NSW State Budget forecasts a net increase in the number of people supported in social housing of zero.
Questions for NSW Politicians
• Why has the State Government sold more public housing properties than it has built?
• Does the State Government forecast an increase in demand for public and social housing in light of the Federal Government’s decision to scrap the National Rental Affordability Scheme?
• How much of the proceeds of the sale of properties in Millers Point, Dawes Point and The Rocks will be reinvested in new properties, and how much will be directed into maintenance for existing properties?
• How many new properties will be built from the sale of properties in Millers Point, Dawes Point and The Rocks, and where will these properties be located?
• How many extra people will be housed in public/social housing residences as a result of the sale of properties in Millers Point, Dawes Point and The Rocks?
• Will the public housing waiting list get shorter or longer in the 2014/15 financial year?
• What is the plan to reduce the waiting list for public housing and to address the housing affordability crisis?
Australia’s housing affordability crisis
Australia is in the grip of a housing affordability crisis. Population growth, along with tax incentives which encourage speculation in housing as an investment, has fuelled strong demand for housing. At the same time, restrictions on new developments and lack of investment in housing for the “bottom” end of the market has restricted growth in supply. As a result, the cost of housing is at unprecedented levels in Australia, and Australian cities have become some of the most expensive places in the world to live.
From the 1960s through to the 1990s, Australians could expect to buy a house for three to four times their annual income. Today the median cost of a house is seven to eight times the average annual salary. The average loan for a first-home buyer is six times their annual salary.
As the cost of buying a house has risen, so have rents. Between 2006-2001 the cost of rent rose by twice the level of inflation, and it has continued to rise since. There are now over 720,000 low to middle income households who pay more than 30% of their income on housing, and more than 460,000 households who spend over half their income on housing.
The high cost of housing puts enormous stress on low-income families, and affects their capacity to pay for food, clothing and education. Furthermore, there are around 105,000 people who are homeless on any given night around Australia.
The Federal Government’s decision to scrap the National Rental Affordability Scheme will exacerbate the problem by removing an important market incentive to increase the supply of low-cost housing. At the same time, draconian cuts to financial support for unemployed youth will lead to more people requiring emergency housing assistance, placing further stress on safety net services.
For older Australians, the increasing cost of rent is forcing more people to seek assistance from social housing services. The Australian Housing and Urban Research Institute (AHURI) has projected that the number of people aged 65 and over in low income rental households is expected to increase 115% from 195,000 in 2001 to 419,000 in 2026. The number of people in these rental households aged 85 and over is projected to grow from 17,300 to 51,000 over the same time period, approximately two-thirds of whom will be sole women.
The Federal Government appears to have no plan for addressing one of Australia’s most pressing social problems. In fact, it seems to have no understanding of the problem either. The Government has poured fuel on the fire of the housing affordability crisis, and justified the harsh social impacts of its policies through patronising slogans about ending the “age of entitlement”.
Questions For Federal Politicians
• What is being done to address Australia’s housing affordability crisis?
• Do you think that measures to stimulate demand for housing (such as first home owners grants) have made any difference to housing affordability, or have they just made the problem worse?
• Why should we continue to support policies like negative gearing and capital gains tax exemptions which encourage speculation in the housing market and subsidise investors to compete with genuine home buyers?
• Is having a roof over your head a “right” or an “entitlement”?
• What can be done to increase the supply of affordable housing across Australia?
• Should people be able to access public/social housing in their local community, or should they be forced to move away from family, friends and services to access social housing?