Governments lead strategy development

WITH almost 20,000 Western Australian households now on the public housing waiting list, calls for substantial reform in the sector are timelier than ever.

During the past decade, the stock of social housing has remained stagnant, making up just more than 4 per cent of the housing market in WA.

During that time, Perth house prices have almost doubled relative to income, with housing affordability issues for low income earners becoming even more acute during the mining and property booms.

The drive towards social housing reform is being led by both the federal and state governments, which have committed extra funding to help boost the volume of social housing stock.

The bulk of the federal government's housing stimulus package, about $640 million for WA, will be spent on construction of new social housing in the metropolitan and regional areas.

Its National Rental Affordability Scheme (NRAS) initiative, which offers incentives to investors to increase affordable housing supply, is also under way with funding for 401 WA houses successful in the first round of offers.

At a state level, the government is working on more strategic reforms to create a better functioning, more sustainable social housing system.

In December, the state government convened a taskforce to review the acute shortage of public housing in WA and to come up with new and innovative strategies to address the issues.

Chaired by Anglicare chief executive Ian Carter, the taskforce handed its interim report to Treasurer Troy Buswell late last month, which highlighted a series of key directions it was pursuing.

One area of particular interest to the taskforce is looking at funding models designed to make the sector more attractive to private investors, as well as greater community engagement potentially through the creation of not-for-profit housing companies.

Other key directions point to improved planning systems, including changes to density zonings to allow for multi-unit developments, and finding ways of working with property developers to include affordable housing in their developments.

Mr Carter said the sector was in need of substantial reform.

"The former Liberal and Labor governments failed in this state to adequately invest in public housing," he said.

"We need to make sure we have options available to maximise every opportunity for social housing supply to be put in place."

Mr Carter said it was encouraging that both the federal and state governments were committed to addressing the issues within the current system.

But they have a lot of ground to make up. The public housing waiting list has risen dramatically after a period of relative stability during the first half of the decade, and is increasing by more than 200 a month.

The priority waiting list, which includes applicants with an urgent housing need, has risen from 382 in June 2006 to 1,880 in June 2008.

Wait times have also blown out, from an average of 65 weeks in 2003-04 to 83 weeks in 2007-08.

"We've had a booming economy, a rapidly exploding labour market, people coming in and there has been massive pressure on all forms of housing," Mr Carter said.

"Those with the good jobs in mining could compete strongly in the housing market.

''Our clients, Anglicare clients, couldn't compete, and were pushed further and further to the margins."

Mr Carter said while the government had a key role, other providers could be brought in to alleviate some of the pressure.

"The federal government may provide that, but it may also provide opportunities for the private sector, not for profits and charities, churches, local government, retirement funds, superannuation funds, to create options for people in the total system," he said.

The social housing sector is heavily reliant on government for both the supply and management of houses.

At the end of June 2008, there were 35,473 public housing dwellings in WA, and more than 3,600 community housing dwellings, which are generally managed by not for profits or local governments.

Recently, the government has tried to increase involvement by community and not-for-profit organisations in the management of housing assets.

Government agencies, including the Department of Housing, LandCorp and redevelopment authorities, have adopted their own policies to ensure that social and affordable housing is retained in land developments.

But while these programs have experienced some success, they are restricted to government development areas and do not have any impact on the broader housing market.

And while initiatives like the NRAS designed to encourage private investment have been welcomed by the sector, the limited take up of the scheme so far suggests the incentives may not be sufficient to generate the large-scale private investment needed.

National Australia Bank WA state general manager and taskforce member, Andrew Whitechurch, said he was looking at various funding models and incentive programs that potentially entice private investors.

"There are some potential incentives that can be provided. We're currently going through a consultation process saying to these investors, what would be needed to make this asset class more attractive," Mr Whitechurch said.

He said there were a number of models operating successfully in other areas to grow and manage housing assets that could potentially be used in WA.

An example is not-for-profit housing company Brisbane Housing Company, a joint venture between the state government and Brisbane City Council set up to develop and manage inner-city urban housing.

The Queensland government provided seed funding in the form of 50 per cent dollar funding and the remainder in grants and supply of existing buildings to redevelop or upgrade. Rents and ongoing fundraising activities are the main sources of revenue.

"Essentially it's self sustaining, the cost of managing and maintenance was covered by the rental plus other income that flowed through that,'' Mr Whitechurch said.

Two other successful models Mr Carter believes WA could draw from are the Common Ground program from the US and Foyer, which originated in the UK.

Foyer provides apartment-style accommodation for homeless and vulnerable youth, with associated support services contained on-site.

"Seventy-two per cent of people going through Foyer exit in 12-18 months and leave being in full-time education, training or employment. That's a phenomenal figure," he said.

Common Ground runs on a similar model, catering for a wider demographic, providing accommodation, support services and common facilities.

WA Council of Social Services chief executive Sue Ash said the housing stimulus package was only part of the solution to boosting social housing stocks.

"There is a concern that the housing stock delivered under the stimulus plan will not exactly match the demand demographics. But, any increase in the number of social housing units available is welcome," she said.

"Going forward, we need to see an increase in the number of one- and two-bedroom properties available."

Ms Ash said the ageing population and the current economic climate was only going to increase the demand for social housing.

Figures released earlier this month from the Supreme Court of WA showed 399 property possession applications were commenced in the court in the March 2009 quarter, the largest number of applications per quarter on public record.

"One of our concerns in the immediate term is the rise in unemployment. There's already a significant number of people in housing stress in private rental paying 30-35 per cent of their income on rent, and any changes to their circumstances could put them at risk of losing their home," Ms Ash said.

"Equally, people living in mortgage stress, if one member of a couple lost their job they'd find themselves in serious financial difficulty."