The government killed housing success, but why?

Nothing to sell… the CHC website.

JON STANHOPE and Dr KHALID AHMED continue their forensic examination of how ACT’s government policies regarding land release and community housing are devastating those struggling for housing.

IN Australia, community housing is provided by non-profit organizations under different management and ownership models.

It is generally accepted in the housing sector that community housing provides better outcomes for tenants in terms of coordination and delivery of support services, individual capacity building and achievement of social equity, cohesion goals. and community development.

Although community housing providers (CHP), as a rule, generate this range of benefits, it is recognized that the provision of housing at below market rent requires public support, which is usually provided in the form of tax benefits due to the lack of a CHP. for-profit status, access to ARC and direct funding.

Recognizing their potential to provide social benefits, some states (notably NSW, Victoria and SA) have at different times transferred the public housing stock to cogeneration plants to facilitate their growth.

The community housing sector in ACT is relatively small. For example, there are currently seven CHPs in ACT, while Tasmania – a jurisdiction of comparable size – has 56 CHPs.

It is in this context that in 2007, the ACT government decided, along with a series of other initiatives, to develop the community housing sector as part of its Affordable Housing Action Plan (AHAP). Support for the largest CHP at the time, Community Housing Canberra (CHC), which had 19 units, included:

  • $ 3 million in capital injection;
  • Transfer to the latter of the title of 132 social housing units;
  • Provision of a $ 50 million revolving financing facility with access to funds at the 90 day bank note exchange rate; and
  • Guaranteed access to suitable land for 120 residential sites per year at market rate through a memorandum of understanding with the Regional Planning Agency.

Targets set for CCS included:

  • Increase the supply of affordable rental housing by 250 units in five years (February 2013) and by 500 units in 10 years (February 2018);
  • Increase the supply of affordable housing for sale by 470 units in five years; and 1,000 homes within 10 years; and
  • Renew 75 percent of assets transferred to CHC within five years and 100 percent of assets within seven years

The CHC model has generated considerable national interest from housing experts due to its success, in particular, the significant growth it has achieved in its fleet. In a 2009 report, the Australian Housing and Urban Research Institute (AHURI) noted that “CHC is now one of Australia’s most successful non-profit developers.”

In a subsequent report, AHURI again referred to the success of CHC by noting “the key ingredients that made this possible were easy access to cheap debt financing and access to land”.

Regarding the revolving financing facility, the report considered that “the provision of low-cost government funding to CHC was unique in Australia. [in 2007] and was one of the main reasons CHC could produce so much affordable housing without significant direct capital contributions from the government ”.

Graph 1 shows the initial progress of the CHC in relation to one of its objectives (on the rental stock).

TABLE 1.

Oddly, from 2014 government support for CHC was phased out. First, its guaranteed access to land has been reduced from 120 to 50 sites. As the government further reduced the supply of land for housing, the memorandum of understanding was scrapped, with CHC having to bid on the open and undersupplied market.

The revolving finance facility was not renewed and the loan was called in 2018. Greens Minister Shane Rattenbury reportedly claimed, sadly, that this “will give CHC more flexibility than was anticipated in the ‘initial agreement’.

Likewise, in the 2021-2022 budget, the government announced “a restructuring of government support to Community Housing Canberra Ltd (CHC) to ensure the continued provision of social housing for the community of Canberra”.

Incredibly, the “restructuring” referred to by the government involves the compulsory repossession, presumably of all of the 132 properties, currently valued at $ 63 million, transferred to CHC by the government in 2007.

How the ACT government believes that removing $ 63 million in real estate assets from CHC property will support community housing is beyond comprehension. The transfer not only reverses the previous policy, it goes against the political position increasingly adopted in other jurisdictions and to which we refer above.

Incredibly, the current Minister of Homeless Services and Housing and member of the Greens, Rebecca Vassarotti, was the CHC board member appointed by the ACT government throughout the period in which Labor and Greens have dismantled every component of the CHC operating model.

The ACT government’s apparent disinterest and disregard for the community housing sector can be gleaned from a comparison, across jurisdictions, of the amount of social housing (public housing and community housing) that each jurisdiction has, in proportion of the total number of households. It is also a useful measure of the level of government assistance to households that cannot access the private rental market.

AIHW data shows that between 2014 and 2020, the largest decline in the share of social housing in Australia occurred in ACT (Graph 2).

CHART 2 – Note: Comparable data for NT before 2018 is not available.

In order to maintain the share of social housing in ACT at the 2014 level, 1,600 additional social housing units are needed. Deteriorating rent affordability and low vacancy rates have further increased demand pressures for social housing. ACTCOSS estimates that ACT is missing more than 3,000 social housing units, a waiting list of almost a year for priority social housing, and at least 1,600 homeless people every day.

Achieving an increase in the social housing stock of the order identified by ACTCOSS will require an investment of more than one billion dollars. Based on the accomplishments of CHC, when supported by government, this increase in housing numbers could be achieved at a fraction of this cost through an appropriate community housing growth model.

We do not understand the ACT government’s decision to emasculate the CSC and effectively neutralize its ability to increase its stock of affordable housing. The fact that the ACT Greens not only discreetly and tacitly facilitated the demise of this once national leader CHP, but also publicly defended their decision to do so, baffles us.

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Ian Meikle, editor

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