Get into the building business

Tasmania’s housing crisis will worsen without radical change. Government must fund a building program, which will also boost our economy, write Keith Jacobs and Kathleen Flanagan

MOST readers of the Mercury are aware of the difficulties faced by low-income households in need of affordable housing. Rents and purchase prices are high and climbing, even by national standards, and at 0.6 per cent, Hobart’s private rental vacancy rate is the lowest in Australia. Meanwhile, the waiting list for social housing is increasing and waiting times have blown out to over a year, even for highpriority applicants.

The University of Tasmania’s Housing and Community Research Unit examines some of the latest data and research to consider the housing prospects of low-income Tasmanians.

The private housing market does not work for low income households — that’s the very reason state governments invested in building the public housing system in the 1950s, 1960s and 1970s. But this investment in building and maintaining secure, affordable housing for people on low wages or income support payments has waned in recent decades as governments have deliberately chosen to put their faith instead in market-led solutions, funding ‘demand-side’ responses such as subsidies for private landlords and first homeowner grants.

Fundamentally, the housing crisis arises from inequality, but it has been intensified by other factors. An increase in population, mainly in the Hobart region, has increased demand for housing. The tourist boom has encouraged some landlords to shift their properties into the short-stay accommodation sector.

The number of Tasmanian listings on Airbnb has increased by 198 per cent since 2016 and as many as 48 per cent of listings are advertised by landlords who have more than one property. The data capture and compliance measures introduced by the State Government in June are yet to have much impact.

Our conservative estimate is that nearly 400 Tasmanian properties that would have been offered to tenants for permanent housing are now let as short-stay accommodation. This leads to greater competition for remaining private rental and it is low income and marginalised renters who are most disadvantaged.

There has been a housing supply response to the crisis, with 8217 approvals granted for new residential housing over the last three years. However, there is no information about how many of these new homes are affordable to low-income households, especially as median prices reach unprecedented levels.

There is also a small but growing gap between the number of building approvals being granted and subsequent housing commencements. This may be due to the availability of finance, labour shortages or ‘land-banking’ by developers, but worryingly, the areas of Tasmania with the largest increase in population are where the building delays are most pronounced.

This all paints a clear picture. Without radical changes, the housing affordability crisis will continue, homelessness will grow, more people will need to devote a greater proportion of their limited incomes to just covering the rent and fewer first-time buyers will be able to buy in locations near to employment and essential services.

Improving housing outcomes in Tasmania presents a real challenge for governments and the wider community — but it is a challenge that can also be an opportunity. Based on the best available evidence as to housing need in Tasmania, the shortfall of social housing is 11,100 homes, with a further 3100 homes needed over the next 20 years. The Tasmanian Government is investing more per capita on social housing than any other state and aims to deliver 1500 new social housing units over the next five years.

While this commitment to social housing is welcomed, it is also clear that we need to significantly increase investment and sustain it over the longer term.

Building these homes will of course cost money, but there will be a substantial pay-off. Housing is social infrastructure: it generates a return to governments, households and communities in the form of better physical and mental health, educational achievement, social cohesion and community wellbeing. The money households are spending on paying for unaffordable housing can be redirected into the purchase of other goods and services, benefiting the whole economy. Committing to an ongoing, government-funded building program with a steady flow of work will support the construction industry and allow the development of secure career pathways and stable employment for construction workers.

Turning away from market-led solutions and recognising that government has a role in shaping the future of the housing system is radical thinking. But it is radical only because we have stopped thinking about housing in terms of a human right to shelter, seeing it instead as a commodity from which we can make money.

Treating housing as a commodity and a source of profit benefits a few with vested interests and loud voices.

Ensuring safe and affordable housing for everyone who needs it would benefit all of us. Professor Keith Jacobs and Dr Kathleen Flanagan are the director and deputy director of the Housing and Community Research Unit at the University of Tasmania. They have written an update on the housing market, which will be available this week at www.utas.edu.au/hacru