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Is the NDIS housing exodus coming?

Posted by on August 31st, 2015 · Affordable housing

Just how big is the NDIS? Total funding for disability services will triple from $7 billion in 2012-13 to $22.2 billion in 2019-20, the first year the scheme will be fully rolled out nationally. Approximately 460,000 people with significant long-term disability will receive individualised NDIS funding packages to purchase disability support services.

And just how big are the housing implications of the NDIS? The estimation of unmet need in affordable housing for 83,000-122,000 NDIS participants certainly says something about the scale of the challenge. But this crude estimation also demonstrates a very high degree of uncertainty and it is unclear how much of it can be interpreted as growth in demand that can be directly attributed to the NDIS.

One scenario where growth in demand for affordable housing can be directly attributed to the NDIS, is where an adult with disability receives an NDIS funding package that allows them, for the first time, to move out of their parents’ home to live independently in the community. A recently published study led by City Futures estimates that over 50,000 people with disability over 25 years old, who currently live with parents, will be eligible for NDIS packages. Most will aspire to move out and establish their own home.

To date, many adults with disability living with parents did not have access to support services and therefore have not actively sought affordable housing (e.g. by applying for social housing). It is likely that in previous estimations of affordable housing demand and supply they were discounted because they were part of households that were considered appropriately housed (e.g. counted as ‘owner-occupiers’ if living in homes owned by their parents).

So, the NDIS housing exodus is looming. But it will only transpire if people leaving their parents’ home – most with low-income – will manage to secure affordable housing close to their informal support networks. The capacity of the social housing system to accommodate such growth in demand is very limited. And under current legislation, the NDIS itself is not responsible to provide housing assistance for participants, with the exception of user cost of capital for specialist housing for only a very small minority (6%) of the Scheme’s participants.

Most will struggle to afford private rental in metropolitan areas. One strategy to overcome the affordability barrier is home sharing. In addition to reducing the cost of housing for each co-resident, sharing also enables pooling individual support packages to maximise support options. Sharing can also reduce loneliness and improve social contact. Building community networks will be an important strategy to enable NDIS participants to identify potential housemates and have meaningful choice about who they share with. Establishing informal links with landlords and real estate agents will also assist in overcoming additional barriers, such as applicants’ lack of a rental history record and references.

People with mobility restrictions will face additional barriers to private rental, because so little stock is appropriately designed or can be modified to meet physical accessibility standards. Legislative requirement for minimum access features in all newly built dwellings is necessary to address this barrier. Enhancements to security of tenure in private rental could also potentially increase the viability of modifying existing private rental stock.

Most NDIS participants moving from their parents’ home will not be able to afford home purchase on their own. However, some will achieve this thanks to substantial financial assistance from families. Historically, some families were willing – even keen – to contribute capital to assist a relative with disability purchase a home. The difficulty to secure funding for ongoing support to live independently was a barrier to such investment. However, with the NDIS this finance source could potentially be unlocked.

Unlocking family finance will require sophisticated instruments, including mechanisms to identify families that are able to assist; incentives to encourage such investment; financial mechanisms (such as reverse mortgages) to release finance locked into families’ homes; aged-care policies to reduce the financial risk for retired parents; and housing models – such as shared equity schemes – to leverage finance from families who can afford to make only a partial equity contribution to home purchase. At the same time, it is important that such policies do not disadvantage those cannot get financial assistance from families.

Social housing will remain a key housing solution for many people with disability. With the full rollout of the NDIS, approximately 60,000 (or 13.5%) NDIS participants are expected to live in social housing. While over-represented in the sector compared to the general population, this is still only a very small proportion of a group in high need for social housing. It can be expected, however, that the number of NDIS participants in social housing will incrementally increase over time, as their proportion of all new allocations is likely to be relatively high.

The NDIS is a social policy reform of historical significance. Housing will be one of the key challenges in its implementation, and one of the key factors determining its success (and cost). Unmet need in affordable housing for NDIS participants reflects a much larger problem of housing affordability affecting low- and moderate- income households of all abilities. It is no simple problem, but solutions – complex and multifaceted – do exist. If Australia can fundamentally reform its dysfunctional disability services system, it can also fundamentally reform its dysfunctional housing system.

Published report:

Wiesel, I., Laragy, C., Gendera, S., Fisher, K.R., Jenkinson, S.,
Hill, T., Finch, K., Shaw, W. and Bridge, C. (2015) Moving to my home: housing aspirations, transitions and outcomes of people with disability, AHURI Final Report No.246. Melbourne:
Australian Housing and Urban Research Institute.

 

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