Submission: Social, public, and affordable housing inquiry

This submission has two purposes. First, it reviews the current state and recent history of the housing market, with particular attention to the huge inflation in house prices over the past two decades; the causes of inflation in policy settings that encourage speculation; and the further effect of speculative inflation in the loss of affordable rental housing. At this point we consider briefly what can be done by governments to address affordability problems, and legal problems, in the wider rental sector.

Second, within the context of these wider problems of housing market policy, we consider the current state and recent history of the social housing system, with particular attention to the insufficient supply of social housing. This is the basic problem of the social housing system in New South Wales today, and from it flows so many of the social housing system’s other problems.

A key point of reference for our discussion of this problem is the report of the NSW Auditor-General, ‘Making the Best Use of Public Housing’ (2013). We agree with the Auditor-General’s finding that the system is in decline, leaves too much need unmet, and is not sustainable. We strongly agree that ‘the time has come for the NSW Government to set a new, sustainable direction for public housing in New South Wales’ (NSW Auditor-General, media release, 30 July 2013). We respectfully disagree, however, that this is a matter of Housing NSW ‘making better use’ of a declining stock, or otherwise trying to administer or ration its way out of the social housing supply shortfall. The only real solution to the shortfall is for governments to fund increased supply.

This is easily stated, less easily effected; however, it is the only real solution to social housing’s basic problem. Without sustained additional funding for increases in supply, the social housing system will continue in its present spiral of declining revenues, declining stocks and declining services.

Housing NSW cannot administer or ration its way out of this problem. It has been trying to do so for years, by various measures that have tightened eligibility, increased rents and reduced security and other conditions of housing assistance, with the intention of more narrowly delivering assistance to the neediest targets. The experience shows that these measures can do little good, and may do considerable harm. Some – such as the recent reforms to ‘succession’ in public housing – have only marginally increased opportunities for assisting new clients, but at the cost of hardship for some tenants and increased administrative complexity and inefficiency for the system. Others – in particular, reviews of tenants’ eligibility, and higher rents for ‘moderate income’ tenants – have failed disastrously, by making public housing a poverty trap and actually reducing opportunities to assist new clients.