Position paper

How to reduce homelessness and boost incomes and jobs: social housing as infrastructure

affordable housing Social housing Low income housing Homelessness Australia

With the economy already slowing, the recent decline in housing construction is bad news for jobs, household incomes, and for people with low incomes searching for a home they can afford to live in. Construction of new apartments in major cities is expected to fall by half next year.

The federal government is open to bringing forward public infrastructure investment, if needed to spur growth. A neglected area of public investment - social (public and community) housing - could help bridge the looming gap in housing investment, job creation and income growth and at the same time reduce homelessness.

The rise in homelessness is unacceptable in a nation as wealthy as Australia. At least 116,000 people are homeless, priority should go to people who are already homeless or at high risk of this - those on the lowest incomes whose rents are unaffordable. Research indicates there is a national shortage of just over 400,000 homes for these two groups.

Social housing investment is the most effective way to reduce homelessness, due to its affordable rents, security of tenure, and other supports that are not available to people in the private rental market. Financially vulnerable people in social housing are less than half as likely to become homeless as a similar group renting privately. Over one third of new tenants in social housing were previously homeless.

The deleterious effects of the decline in social housing investment were recently brought home by Senator Lambie’s push for more social housing dwellings in Tasmania (where people are living in tents in the Hobart showground in winter). Yet the problem is nationwide. Direct public investment in social housing is also a cost effective way to boost growth in jobs and incomes. For every dollar invested, it is estimated to boost GDP by $1.30. Importantly, housing construction can be undertaken more quickly than major road or rail projects.

Well-designed Commonwealth investment in social housing is cost-effective. It can leverage additional resources from State and local governments (for example, public land), from Community Housing Providers (CHPs) whose borrowing capacity would be enhanced by a larger asset base, from the community sector itself, and from partnerships with private developers through ‘mixed’ developments that include social housing.

We propose that the federal government work with states and territories, local government and CHPs to develop a social housing investment package, for announcement in the Mid-Year Economic and Fiscal Outlook (MYEFO) statement towards the end of 2019.

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