By Chris Martin. This article is republished from The Conversation under a Creative Commons license. Read the original article. Image credit: Shutterstock.

There’s a new bill before federal parliament calling for housing to be considered a fundamental human right.

The bill, introduced last week by independent federal parliamentarians Kylea Tink and David Pocock, would require the government to create a ten year National Housing and Homelessness Plan.

One part of the bill states housing should be considered a fundamental human right for all Australians. Here’s how this would work.

Housing under Albanese

Since its election in 2022, the Albanese government has had to fight political battles to pass its housing policies.

This includes the Housing Australia Future Fund: a $10 billion fund to provide an annual $500 million for social and affordable rental housing. It passed the parliament last year.

There’s also the “Help to Buy” shared equity scheme. Under this scheme, 10,000 households a year would be eligible for a government equity contribution of up to 40% of the purchase price of a new home. It’s yet to pass the parliament.

But many in the community continue to struggle with unaffordable rents, barriers to home ownership and rising rates of homelessness.

Housing and homelessness problems are complex because they crossover different areas of policy and different levels of government. There are many agencies that do housing policy.

But so far, the government has not had a clear plan. Its election promise to develop a National Housing and Homelessness Plan is still under development. And at the moment, it does not appear to be addressing important policy areas like tax and finance.

We need a plan that coordinates all government activities, to really address housing as a system.

Our research

Last year, colleagues and I published research for the Australian Housing and Urban Research Institute on how to make an effective national housing plan.

We recommended the plan should include a law that requires the government of the day to have a plan, and report on progress, according to some overarching objectives.

Since then, more than 100 other housing researchers, industry experts, civil society leaders and politicians of different political persuasions have supported our idea for a legal basis for a housing plan.

Tink and Pocock have also taken up our research and turned it into the National Housing and Homelessness Plan Bill.

What’s in the bill?

The bill would require the housing minister of the day to develop and implement a ten year National Housing and Homelessness Plan. This would mean taking a view of housing policy beyond three-year election cycles.

The legislation would also set some basic directions for the government’s plan, including “ensuring that everyone in Australia has adequate housing”, and “preventing and ending homelessness”. This reflects the legislation’s human rights-based approach.

The legislation would also require the housing minister to be collaborative and establish some new sources of information and advice for government. This includes a “consumer council”, including people with experience of homelessness. This would operate alongside the existing National Housing Supply and Affordability Council: an independent group providing the government with expert advice. The consumer council would be able to escalate matters directly to the minister to ensure it’s heard.

The existing government agency Housing Australia would be nominated as the lead agency assisting the minister with the plan. A new government officer, the National Housing and Homelessness Advocate, would independently investigate housing policy issues and monitor the progress against the plan. The housing minister would also be required to periodically report to parliament on progress.

At the end of the ten years, the minister would be required to review and develop a new plan.

Importantly, it would still be for the government of the day to decide what’s in the plan. The legislation sets objectives and directions, but not policy details. The legislation does not say, for example, “thou shalt repeal negative gearing”! One government might devise a more market-orientated plan, while another might plan for greater non-market housing provision.

A government could still come up with a bad plan. But it will more likely make a good plan when it is required to take a human rights-based approach, adopt a long view, receive independent information and feedback and report on progress.

Why should housing be a human right?

The bill formally recognises housing as a human right for two reasons.

First, it serves as the constitutional basis for the legislation. The right to adequate housing is a human right under the International Covenant on Economic, Social and Cultural Rights, which Australia ratified almost 50 years ago.

This brings it within the parliament’s “external affairs” power. The parliament relied on this power and the human right to housing when it passed the original legislation establishing the National Housing Finance and Investment Corporation (now Housing Australia). Basically, it gives the government the legal authority to make a such a plan.

Secondly, an effective plan that’s going to work across different policy areas and bring in the range of institutions needs a place to start. Human rights provides a way to organise the policy across all the different branches of government that need to be involved.

The bill wouldn’t create the right for individual people to sue the government for inadequate housing. Instead, it would enshrine the right to housing as an objective that guides housing policy-making for Australians generally.

As it’s a private members bill, it would require substantial support in both houses to pass, which may not be forthcoming. Nonetheless, it’s important to consider what can be done to better address the country’s housing woes.

The National Agreement on Social Housing and Homelessness kicks in this week, and is set to run for five years. This is the latest in a long line of periodically renegotiated compacts between federal and state governments, continually in force since 1945. For most of this period the deal was known as the Commonwealth-State Housing Agreement (CSHA) although more recently as the National Housing and Homelessness Agreement (NHHA).

The NASHH serves primarily as a funding commitment by the federal government to contribute to state/territory social housing and homelessness services. This latest Agreement sees the Commonwealth pledging $1.8 billion in 2024-25 to be divided between the jurisdictions pro rata to population. As in previous years, future amounts will be up-rated annually for inflation.

For a state like NSW, assured annual funding of $540 million is a useful contribution to these costs. For context, though, according to the latest Report on Government Services, NSW Government 2022-23 expenditure on social housing and homelessness totalled $2.6 billion. Also bear in mind that, according to a 2017 government report, the NSW public housing system was, even at that time, carrying an annual funding deficit of $950 million. And that, since the federal government’s financial firepower is vastly greater than that of states and territories, there’s a strong argument that it should be the prime funder of social housing – an integral element of the welfare state.

State/territory obligations

In return for NASHH funding, each state and territory government signs up to a range of accountability and policy commitments; specifically:

• The development of a jurisdiction-specific housing and homelessness strategy
• Annual performance and financial reporting on housing and homelessness activities
• Participation in data improvement projects.

Consistent with the 2022 National Housing Accord that commits Australian governments to enabling boosted housebuilding, a jurisdiction’s NASHH-compliant strategy must:

‘[indicate] the level of housing supply needed to respond to projected housing demand, and [outline] the reforms and initiatives that will contribute to meeting this need’.

Regrettably, though, there is no requirement to quantify unmet need for social housing.

A new feature of the NASHH that extends beyond the predecessor NHHA, and highlighted by Hon Prof Vivienne Milligan as potentially significant, is its attempt, to craft governance arrangements linking social housing and homelessness assistance for First Nations people to Closing the Gap reform priorities and mechanisms.

Data improvement priorities

Among the data improvement priorities specified in the Agreement are several of particular note.

Firstly, there is a pledge to ‘establish a research data set for the Social Housing sector, similar to the SHSC’. This refers to the AIHW’s Specialist Homelessness Services Collection, a case return system that generates detailed information about the demographic characteristics, housing circumstances and needs of homelessness service users, together with the forms of assistance provided. We might expect (hope) that a social housing dataset ‘similar to the SHSC’ might provide greatly enhanced information on the cohort of people applying for and receiving social tenancies.

Secondly, there is a declared intent to ‘investigate the feasibility of producing more frequent [than 5-yearly] estimates of homelessness based on administrative data’. Considering Australia’s current reliance on the five yearly census as the main source of homelessness statistics, figures which are usually published around 18 months after the relevant fieldwork, this could be an extremely welcome development. Whether this initiative might involve a broadly scoped definition of ‘homelessness’ as in the census, or a narrowly targeted focus on rough sleeping, as in the NSW Government’s annual state-wide street counts ongoing since 2020, is unclear.

Thirdly, and potentially most significantly, the NASHH includes a pledge to ‘investigate the feasibility of a national survey of social housing stock condition’. While funding constraints have forced state and territory governments to economise on public housing maintenance and modernisation for decades, there is little publicly available data on the accumulated impacts of this history.

Australia’s increasingly inadequate quantity of social housing is rightly a key subject of policy and media debate, and the absence of official estimates on unmet need is inexcusable. But opening up the books on the deficient quality of the portfolio – e.g. on energy performance – is equally essential. Without such data, the Commonwealth Government’s promised National Housing and Homelessness Plan will be a toothless tiger, just like the state/territory strategies prescribed by the new Agreement.

By Hal Pawson

‘[T]he emergence of a domestic market for housing provided by institutional investors … would add to, and improve the quality and diversity of, Australia’s stock of … rental housing’. Backing the case for expanded Build-to-Rent (BTR) housing provision, this was the central conclusion of the first major report from the Commonwealth’s expert advisory body, the National Housing Supply and Affordability Council, back in September 2023.

While Government responses to the Council’s wide-ranging recommendations remain outstanding, Treasury has recently published detailed tax reform proposals that address part of the agenda. These advocate equalising the (overseas investor) Withholding Tax treatment of BTR housing with that for other asset classes, like office blocks and shopping centres. They also propose to bring the depreciation treatment of BTR developments into line with that for serviced apartments.

BTR potential to fulfil housing policy objectives

In my personal view, these are broadly reasonable proposals that could helpfully accelerate the expansion of a housing typology with the potential to fulfil several important housing policy objectives as argued in the Council’s 2023 report:

1. Possible net addition to housing supply – conventional wisdom says will moderate both house prices and rents over time
2. When rental income (not capital gain) is prime landlord motivation, the product is inherently more secure tenure from tenant perspective
3. Multi-unit buildings commissioned for retention in single ownership should incentivise utility, durability and energy efficiency in design and construction
4. Professional and customer-oriented management promised by BTR is potentially beneficial for BTR tenants and perhaps beyond – as ‘positive disrupter’ for private rental housing more broadly.
5. As a new component of the rental market, BTR provision potentially broadens rental housing choice – albeit choice restricted to moderate to high income households
6. Given investor intentions for a long term hold, BTR construction demand promises to moderate housebuilding industry volatility in response to short-lived market downturns.

Inclusion of affordable housing within market BTR developments

The proposal that BTR project eligibility for the new tax arrangements will depend on the inclusion of affordable housing units is also a laudable bid to satisfy another policy objective. The specified nature of the proposed affordable housing to be provided is, though, somewhat modest. It will be targeted to relatively high income households, and its affordable status will expire after 15 years. Even within this limited period, therefore, the measures will make little or no contribution to easing unmet housing need experienced by low income Australians.

Even so, there are questions on whether a BTR project’s associated loss of future revenue (through affordable housing regime compliance) may negate the advantage to a scheme proponent conferred by the tax changes as proposed. In our response to the government consultation on the proposals, we call for the publication of the underlying Treasury modelling to allay such concerns.

If there are well-grounded fears that the net viability impact of the proposed changes may be negligible – or even negative – there could be a case for legislating the introduction of the currently envisaged affordable housing requirement for activation at a future date – e.g. applicable to schemes starting on site five years after the tax change. One argument for this approach would be to support the objective of embedding BTR industry growth during the second half of the 2020s, particularly in support of the National Housing Accord 1.2 million homes new supply target.

But assuming that the net viability impact of the proposed reform package is in fact positive, the package deserves support as it stands. Beyond that, the legislation should also stipulate an independent review after five years to consider scope for strengthening the affordable housing requirement at that stage. This factors in the expectation that, as it becomes established, the sector will begin to overcome the disadvantages of ‘novelty’ which currently continue to dampen investor interest.

The illogicality of piecemeal housing reform

More broadly, though, it seems illogical that a policy seeking to generate (sub-market) affordable housing provision in the course of market housing development is restricted to only a very small niche within overall residential development industry output. It would apply to neither domestically-funded BTR projects, nor – more importantly – to build to sell projects. This seems particularly incongruous when the targeted niche is an industry sector already operating at a competitive disadvantage to other forms of residential development due to other property tax settings not slated for reform (negative gearing, Capital Gains Tax discount, GST).

In attempting to secure a small contribution of sub-market affordable rental housing as a routine spin-off from new market housing development, a more logical approach would be to:

• Expand the scope of such a policy to all new BTS as well as BTR housebuilding projects above a given threshold size – other than in areas with low land value
• Implement the policy via the landuse planning system rather than via the Federal tax system, through arrangements where development approval is conditional on pledged affordable housing contributions (sometimes termed ‘mandatory inclusionary zoning’).

All of this highlights the unsatisfactory nature of progressing housing reform in an unco-ordinated piecemeal manner, an approach certain to further add to regulatory complexity and cost. As already evident at the time of the 2010 Henry Tax Review, and as also exemplified in our Treasury submission, Australia’s existing residential property taxation regime is riddled with illogicalities and inconsistencies. These call for a root and branch review to inform a comprehensive housing reform strategy.

By Chris Martin and Hal Pawson. This is an edited version of the abstract of our new article, Australian first home ownership assistance schemes: International comparison and assessment, published in Australian Economic Papers.

Australia, like most developed countries, has promoted homeownership as an express housing policy goal for many decades. Domestically and internationally, recent years have seen growing efforts to enhance access to owner-occupation for prospective first home buyers (FHBs).

FHB assistance takes many forms. Our new article, Australian first home ownership assistance schemes: International comparison and assessment, presents a new typology of FHB assistance measures from a multi-method study of current approaches in Australia and in seven high-income comparator countries. Australia stands out for its modern emphasis on demand-side assistance (e.g., grants and tax concessions), rather than supply-side measures (e.g., government-developed housing for low-cost sale).

Lately, several Australian governments (federal and state) have diversified approaches to FHB assistance, particularly via shared equity and low-deposit mortgage schemes, taking cues from international practice. While more administratively demanding, these types of assistance are considered attractive because they require little outlay or operate on a ‘revolving fund’ basis, with government potentially sharing capital gains. However, they potentially place governments even more among housing’s ‘insiders’, with a material interest in continually rising prices.

Our article, now published open access in Australian Economic Papers, will be part of a special issue dedicated to the memory of Hon Assoc Prof Judy Yates. Australia’s foremost academic housing economist, Judy was an incisive analyst of homeownership policy and its contradictions. Our work shows FHB assistance policy is still largely stuck in the contradictions Judy saw.

Image credit: Tatyana Kozlova

The Albanese government can justly claim to have reasserted Commonwealth leadership on housing since its election in 2022. Media attention has focused mainly on the legislative stoush with the Greens over the Housing Australia Future Fund. But that’s only one element of a raft of initiatives pumped out from Canberra over this time.

Many Australians have recently felt the impact of sharply rising rent and mortgage payments as household numbers and interest rates surged in the post-COVID period. However, several fundamental and enduring housing problems have been escalating for decades. These include:

• home ownership becoming less affordable
• private rental housing receding beyond the reach of low-income households
• increasingly scarce and deteriorating social housing.

To seriously confront these challenges, the government will need to expand its initiatives and tackle reforms of taxes and regulations, which it has avoided to date.

Tackling housing on four fronts

The government’s commitments so far can be largely broken down into four policy themes.

1. Direct assistance for low-income groups

The Housing Australia Future Fund is the largest initiative in this area. The goal is to fund 30,000 new social and affordable homes over five years.

Under the National Housing Accord, another 10,000 affordable rental homes are funded over this period.

However, the unmet need for social and affordable housing exceeds 600,000 units, so these targets remain modest.

Also in the direct assistance category is the May budget’s one-off 15% boost to Commonwealth Rent Assistance. While accurately claimed as “the largest increase in more than 30 years”, maximum payments remain far below market rents. As economist Bruce Bradbury argued, the increase should have been 100%.

These initiatives are significant contributions to relieving rental stress when compared to the previous decade of federal inaction. However, that is a low bar.

2. Direct assistance to first-home buyers

This batch of measures includes expansion of the Coalition-established low-deposit mortgage scheme, now branded the First Home Guarantee. Qualifying first-home buyers can secure a home loan with a down-payment of only 5% of property value – rather than the standard 20% deposit.

There’s also the government’s Help to Buy proposal. Under this shared-equity model, government takes a 30-40% interest in a dwelling acquired by a qualifying home buyer. The buyer’s home loan and equity contribution are much smaller as a result.

But the government may battle to secure Senate approval for this scheme. The Coalition opposes it, saying first-home buyers will dislike the idea of “[having Anthony] Albanese at the kitchen table with you, owning part of your home”. The Greens have queried the workability of proposed scheme rules.

3. Boosting housing supply

The main push here has been the National Housing Accord agreed with state governments and others in late 2022. Signatories must do their best to enable construction of at least 1 million homes – and up to 1.2 million – from 2024 to 2029. This would increase current construction rates by about a third, so it’s a challenging target.

The modest federal investment in social and affordable homes supports the accord aspirations.

More importantly, A$3 billion in new federal funding for the New Home Bonus aims to “incentivise states and territories to undertake the reforms necessary to boost housing supply and increase housing affordability”. This approach appears to emulate recent efforts in the UK and Canada.

It remains to be seen if this will work in Australia. There is reason to be sceptical about any strategy to make housing more affordable based on the belief that “inadequate” supply is largely due to planning restrictions. The main consideration for private developers and their financial backers is expected market conditions when newly built homes are to be sold.

If the prime minister is serious about achieving his government’s targets, he may need to consider more direct government involvement in housing production. Much greater social housing investment would be needed in any case to genuinely address the scale of unmet need. He might even contemplate a union-sponsored proposal to use a corporate super-profits tax to fund massively stepped-up social housing construction.

Equally, state and territory governments could look to revive the state-commissioned build-for-sale programs of the 1950s and 1960s. That is, homes built for sale at cost price on land owned by government or acquired for the purpose under compulsory powers.

4. Institutional reform

Fragmented and inadequate policymaking capacity bears much of the blame for Australia’s weak record on housing in recent decades.

In response, the Albanese government has to its credit set up an expert panel, the National Housing Supply and Affordability Council, and a national housing agency, Housing Australia. However, Housing Australia has been designated as purely a delivery agency with no policymaking remit. This seems highly questionable – especially as the housing minister lacks her own department of government.

Even more concerning are indications that the proposed National Housing and Homelessness Plan may fall far short of providing a fit-for-purpose rationale for the government’s post-2022 initiatives and, more importantly, a meaningful framework for the much more ambitious reforms Australia badly needs.

A promising start, but can do better

In the first half of its term, the Albanese government made progress on almost all its election pledges on housing. It also brought forward other notable initiatives. This activity corresponds quite well with key dimensions of Australia’s multi-faceted housing challenge.

At the same time, announced measures are somewhat disparate and many are extremely modest alongside the scale of these problems. To make a real difference, they will need to be expanded and extended over a longer time. They must be complemented by tax and regulatory reforms as yet eschewed.

If the measures to date prove to be a down payment on ambitious and purposeful future action, they may come to be seen as significant. If not, policy analysts of the 2030s will deem them of little importance.

This article draws on a fuller housing policy paper published in a special issue of the Journal of Australian Political Economy along with mid-term assessments of the Albanese government’s performance across a range of other policy areas.

This article was first published by The Conversation – read the original article here