Victoria’s Premier Daniel Andrews Has a Plan for Social Housing, But It’s Built on Shaky Foundations
Victorian Labor premier Daniel Andrews has announced a Big Housing Build, touted as the largest investment in social housing for years. But in practice, it could lead to a net decline in public housing provision, while transferring control to nongovernment bodies.
The Victorian Labor government of Daniel Andrews recently announced a “Big Housing Build,” a $5.3 billion “spending blitz” to construct 12,000 low-income housing units, including 9,300 new social housing units. A renewed commitment to social housing expenditure is a small victory for housing activists across Victoria.
But it’s by no means an unqualified triumph. On closer inspection, the plan falls far short of what’s needed to address burgeoning demand for affordable housing amidst an economically destructive pandemic. Worse still, the proposal includes a number of potential dangers.
As the Big Housing Build is going to be subjected to parliamentary scrutiny, housing activists still have an opportunity to pressure the government to adopt more ambitious housing goals. But first we need to subject the current plan to serious scrutiny, concentrating on five points.
1) It Won’t Come Close to Meeting Demand
As of June 2020, 45,700 applicants (including families) were on the waiting list for social housing — an increase of about 12,000 applicants since 2016. If we optimistically assume that the state government will keep its promises, the new plan will increase social housing stock by 9,300 units.
This will cover only three-quarters of the growth in social housing demand since 2016, meeting the needs of only 20 percent of those on the waiting list. While Andrews’s Big Housing Build does propose to invest a bit more than usual in Victorian social housing, it is still far too little to meet an overwhelming demand for low-income housing.
To make matters worse, the looming retrenchment of JobSeeker unemployment benefits risks pushing 740,000 Australians into poverty. With unemployment rising and rental stress increasing, demand for social housing looks set to dramatically increase. It’s a scenario for which we are woefully ill-prepared, given current levels of social housing stock.
2) It Won’t Compensate for the Decline In Housing Stock
The proposed increase in units is insufficient to arrest the decline of social housing. Such housing currently accounts for 3.2 percent of all stock in Victoria (81,000 units), considerably lower than the national average of 4.5 percent, and barely half the Organization for Economic Cooperation and Development (OECD) average of 6 percent. This follows a trend of secular decline: nationally, social housing households have plummeted from 7.1 percent in 1991 to 4.2 percent in 2018.
According to Tenants Victoria, in order to simply maintain social housing stock at its current low level, we would need to build 3,500 new units every year for the next ten years. That amounts to 14,000 units over the next four years, just to maintain present stock levels. On this estimate, the Victorian government’s proposal falls short by 4,700 housing units during the same period. Even if the current proposals are implemented in full, the state government could still preside over a decline in social housing levels.
Moreover, as RMIT University housing researcher David Kelly has noted, the Big Housing Build lacks solid spending commitments. $2.14 billion is being set aside to “explore opportunities” for new social and affordable housing growth. No indication is given of how and where this money will be spent. The state government already has a poor recent track record of upholding its social housing promises. With all this in mind, we can only wonder if the total number of proposed units will ever materialize.
3) More Units Is Not the Same As More People With Homes
The devil is, as usual, in the detail. 1,100 of the 9,300 proposed housing units will be drawn from a pre-existing initiative to privatize public housing, known as the Public Housing Renewal Program (PHRP). Under the PHRP, the state government sold eleven inner-city public housing estates to private developers at well below market value.
The state government insists that this constitutes an enlargement of public housing. It claims that while around 70 percent of the units on each estate will be handed over to private developers, more units reserved for public tenants will be built on the remaining 30 percent.
This is deceptive: while more units will be built on the remainder of each estate, it appears that the housing built under the PHRP will include fewer bedrooms overall. By the same logic, the state government could construct sheds or cupboards, and they would count as “additional housing.”
Furthermore, the PHRP sets a worrying precedent. The waiting list contains 47,500 applicants — but as this figure includes many families, it amounts to almost 100,000 people, including 30,000 children. If the remaining 8,200 proposed social housing units contain fewer bedrooms, many of these families will either be stuck waiting indefinitely, or will be crammed into smaller living spaces, unsuitable for large families.
4) Social Housing Is Not Public Housing
A recent article published by ABC news claims that the Victorian government will “build more than 12,000 public housing homes over the next four years.” This is simply false.
For one, only 9,300 of these dwellings will be classed as social housing, not 12,000. But more importantly, social housing is not the same thing as public housing. Social housing is an umbrella term that refers to two types of publicly funded housing: public housing and community housing. At least $3.7 billion of the $5.3 billion Big Housing Build will go to community rather than public housing.
Public housing is owned and managed by the state government. Public housing caps rents at a maximum of 25 percent of a tenant’s income and offers tenants more protection, reducing the likelihood of eviction. Community housing, by contrast, is managed by not-for-profit NGOs who can charge higher rents, capped at 30 percent of income. It also offers fewer protections for tenants.
Recent evidence confirms the importance of this distinction. According to Homeless Law, a specialist legal service for the homeless, in 2016 in Victoria, “18.8 percent of community housing evictions faced by Homeless Law clients [involved] notices to vacate ‘without grounds,’” compared to “1 percent of public-housing evictions.”
A 2020 study published by Housing for the Aged Action Group found that community housing organizations “lack fairness and transparency in their allocation processes, and … discriminate against prospective tenants on the basis of income, health requirements, accessibility needs and assumptions about a person’s character.”
5) Community Housing Isn’t Enough for Those in Greatest Need
Community housing offers less housing for those in most need of it and is more unstable. Yet it continues to account for an increasing share of social housing stock.
As community housing stock more than doubled between 2008 and 2018, the number of public housing dwellings dwindled each year, as they were either sold off or were brought under community housing management. Growth in community housing has evidently come at the expense of public housing.
To achieve financial sustainability, community housing providers rely more on rental revenue than government funding. This creates an incentive to accept a larger proportion of better-off tenants who can afford higher rents. This tendency is further encouraged by the loose requirements of the social housing waiting list, which allows community housing organizations to allocate 25 percent of new tenancies to applicants with significantly higher incomes than those typically accepted into public housing.
Many community housing properties are even exempt from these requirements altogether. If community housing organizations continue to cherry-pick more financially secure tenants, it could leave those in greatest need out on the street — literally.
A further problem is that community housing organizations manage a number of insecure forms of tenancy which are nonetheless categorized as “long-term social housing.” For example, the 81,000 Victorian social housing dwellings listed in Australian Institute of Health and Welfare (AIHW) data includes an undisclosed number of rooming houses. These rooming houses have dramatically high rates of tenant turnover and eviction, and offer tenants fewer rights — for example, they are only required to give tenants two days’ warning before issuing an eviction notice for a failure to pay rent.
In reality, rooming houses have more in common with medium-term transitional housing. And yet, they are lumped into the same category as other social housing that is presumed to offer stable and long-term tenancies, exaggerating official representations of social housing stock. Will the Big Housing Build will also include such insecure occupancy types?
The Big Housing Build Isn’t Big Enough
Public housing is best suited to providing secure tenancies to people who need them the most. Burgeoning waiting lists, as well as still-rising housing prices, make a dramatic expansion of public-housing stock urgently necessary.
A genuinely left-wing government would tax the record profits made by real-estate developers and bankers who have profited from inflated housing prices, using this money to acquire land, build new houses and allow people to live in them securely, at a cost proportional to their means. With enough public-housing growth, both low- and middle-income tenants could be accepted into the system, with the rent revenues from the latter group allowing public housing to pay for itself.
This was once the way things worked, and it could be like that again. To fix public housing, we need to think much bigger than the Andrews Big Housing Build.