Response to the Queensland Government Working Together for better housing and sustainable communities discussion paper.

Transcription

1 Response to the Queensland Government Working Together for better housing and sustainable communities discussion paper. June 2016.

2 Contents Introduction 3 Theme 1 Sustainable Communities 4 Theme 2 Housing Affordability 8 Theme 3 Responsive Housing System 10 Summary 13

3 INTRODUCTION Compass welcomes the Housing Consultation initiated by Minister for Housing and Public Works, the Honourable Mick de Brenni, MP. We particularly welcome the recognition that every Queenslander has the right to a place to call home. This is in close accord with the United Nations recognition that access to adequate housing is a universal Human Right. Such a view provides an essential under-pinning to any review of the housing system and sets the standard that a Housing Strategy should achieve. Compass also fully supports the development of a Queensland Ten Year Strategy for Housing and has advocated the development of such a plan by the Commonwealth Government. The conscious design and delivery of a strategy is essential to resolve the current crisis being experienced throughout the housing continuum. Taking a long-view is a pre-requisite of achieving the investment framework that providing every Queenslander with access to housing will require. The Minister s recognition that housing is a continuum with interconnected sectors is also a firm foundation for the development of a strategy that resolves barriers to home purchase, eases demand pressure in the private rental sector and reduces or eliminates waiting lists for social housing. Compass has recently initiated a review of the national policy context for housing in partnership with other leading housing organisations, peak bodies and academics experts on the Australian Housing system. The analysis in the document Towards a National Housing Strategy ( reinforces the analysis in the Queensland Government discussion paper and identifies a number of key problems across the housing continuum. Substantial barriers to first time purchasers in a market dominated by investment purchases. A tax system which promotes investors over first time home buyers, with generous Capital Gains exemptions and discounts and negative gearing on investment purchases Insufficient supply of affordable housing, with a particular impact on key workers in capital cities, including Brisbane. A private rental system with inadequate supply and unaffordable rent levels. Over 40% of families in receipt of Commonwealth Rent Assistance still pay more than 30% of household income on rental charges. This is judged to place families in financial distress. A social housing system characterised by old stock, which does not reflect, contemporary family size and patterns of household formation. A shortage of supply of social housing that creates significant numbers of people on waiting lists with associated long waiting times. A long-term lack of investment in public housing leading to declining availability of homes and an unsustainable financial model experienced by state governments. Specific problems for people experiencing marginal housing and homelessness. Acute problems for people with disability and specific access requirements, and for indigenous people whose housing does not reflect family and cultural patterns. These issues can be clearly identified at national level and are experienced in unique combination at state, regional and community levels. Solutions to the perceived crisis in housing in Australia will require close cooperation between the Commonwealth, State and local levels of government. Arising from the Compass-led Towards a National Housing Strategy, 10 key action points arise at the national level. These can be linked to key elements of a State-led 10 Year Housing Strategy that enables a full reflection of local patterns of supply and affordability. The key actions at national level are: ACTION 1. Establish a bi-partisan commitment to create and maintain the role of a dedicated, single portfolio Minister for Housing for at least 10 years, supported by the necessary institutions such as a reinvigorated National Supply Council.. ACTION 2. Engage in a national program of house building to achieve 500,000 new homes across all tenures by the end of the 10 Year National Action Plan for Housing, including a target of 300,000 social and affordable homes. ACTION 3. Eradicate social housing waiting lists by the end of the 10 Year National Action Plan for Housing. ACTION 4. Enact legislation and fund associated policy to recognise access to housing as a basic right and to reduce homelessness to residual levels by the end of the 10 Year National Action Plan for Housing. 3

4 ACTION 5. Establish a national minimum housing quality standard to which all social and affordable housing should comply by the end of the 10 Year National Action Plan for Housing. ACTION 6. Establish a program of Commonwealth Government land transfer within a master-planned process, to develop mixed tenure housing supply. ACTION 7. Work with States and Territories to develop a national standardised approach to inclusionary zoning which identifies a minimum proportion of affordable and social housing for all new developments. ACTION 8. Support the introduction of an affordable housing financial intermediary by establishing a loan guarantee mechanism to attract institutional investment into the market. ACTION 9. To initiate a major independent review of housing investment and rent subsidies including Commonwealth Rent Assistance, capital gains tax exemptions and negative gearing to establish a more equitable distribution to avoid rental stress on low income families. Renters should not pay more than 30% of their income in rent. ACTION 10. To establish a national framework and target for transfer of at least 50% of public housing to community housing providers in all States and Territories by the end of the 10 Year National Housing Action Plan. Transfers should be either with title or minimum lease periods of 30 years. The sector consultation leading to these action points underlined a general consensus around the pattern of problems and the potential solutions that the Commonwealth Government can contribute in order to create a national framework in which specific states can develop their own additional responses. The remainder of this document examines the potential elements of a 10 Year Housing Strategy for Queensland. Theme 1 Sustainable Communities Building housing and communities that maximise people s economic and social wellbeing and are sustainable for future generations. 1. How do we create an environment that enables a human services approach to housing that puts people at the centre in Queensland? The statement in the consultation paper that every Queenslander has the right to have a place to call home places a major leadership role on the Queensland Government to make this a reality. The issues identified in the paper illustrate that for many Queenslanders this is not currently the case. A functioning housing environment is one in which those who are able to, meet their own housing needs through purchase and private sector rental. For those with low incomes or particular vulnerabilities this is not always possible and housing assistance is required. The danger in this dichotomy is that housing assistance is rationed only to those with acute needs and the public and social housing system becomes an ambulance (Fitzpatrick and Pawson, 2014) or welfare service. This relegates social housing communities in the public and community sector to highly residualised and stigmatised communities where the majority of residents have acute social and health related problems. A well-functioning housing environment creates mixed tenure communities with opportunities for home ownership, intermediate ownership, such as in shared equity schemes, affordable private rental accommodation as well as social housing. The social housing element should be available to low income, working families, as well as those with acute needs, in order to create balanced and functioning communities that avoid marginalisation and stigma. The key to achieving this is to ensure adequate housing supply for all tenures. This can be achieved by implementing a range of measures that support supply development. These include: Queensland government creating a land bank of surplus land that can be transferred to private sector developers. Land transferred in this way can be substantially de-risked by prior brown field site remediation, prior planning approvals and payment deferment pending initial sales. The resulting reduction of developer overheads is used to negotiate a proportion of the consequent development as affordable and social housing The general use of inclusionary zoning in new housing developments 4

5 The redevelopment of social housing estates at higher density and to result in more mixed tenure models. Such developments can be funded by sales for home ownership to first time buyers The creation of a Queensland housing bond to provide a financial intermediary between developer and institutional lenders to promote more housing development for all tenures The transfer of significant public housing stock to community housing providers to improve social outcomes for tenants and secure institutional lending for further social housing development These and other potential solutions are discussed in detail in relevant sections of this response to the consultation document. 2. What do the department and other service partners need to do to operate more effectively as human service providers? There is considerable evidence for the benefit of coordinated services that avoid overlap and competition. In any geographical locality it is likely that a significant number of public and third sector service providers regularly provide routine services and special projects. Coordinating these processes and ensuring that there are common interpretations of need and shared objectives can have considerable impact on the quality of services provided to clients of a range of human services. This has been clearly demonstrated in the Total Place model of intervention developed by local government in the UK (Local Government Leadership Centre, 2010). In Logan LGA, the Logan City of Choice initiative has also achieved better coordination of a range of service providers and achieved better outcomes from public and third sector services. The Logan Together program amply illustrates the benefits of close collaboration and the development of a shared approach to innovation. A collaborative review and service redesign process can significantly improve the capacity of all partners to operate more effectively as human service providers. This not only ensures better outcomes for a range of clients, including social housing tenants, but can contribute significant budget savings and a more efficient and effective delivery of services. Programs of service coordination require good leadership and encouragement to service providers to become involved and assist in the development of a coalition for change (Adamson and Lang, 2014). The Queensland State Government is ideally placed to perform that leadership role and provide incentives to organisations to develop shared objectives across the range of human services. A place-based approach can form the organisational and partnership basis for this approach and is best able to reflect local conditions including issues of regional and remote localities (Adamson and Lang, 2014). 3. How can we maximise the contribution of housing to social and economic development and environmental outcomes in Queensland? What are the key issues we need to work on together? Housing is a critical component of the physical infrastructure of any region, city, town or community. Housing can be recognised as a key element of the triangle of poverty along with health and education. In many ways housing underpins health and well-being and educational attainment and living in safe, adequate housing potentially makes the greatest contribution to economic development and the economic performance of individual members of society. The building industry is widely accepted as a major economic driver with clear multipliers derived from expenditure on house construction and renovation. This general impact can be amplified by the deployment of social procurement practices that tie the award of construction and repair contracts to the achievement of training and employment outcomes for disadvantaged and marginalised sections of the population, including aboriginal and CALD groups. By introducing social clauses requiring training and targeted employment places, contracts can lever considerable social and economic development opportunities. This is especially true of social housing repair and construction programmes, where the delivery of projects is in places where greatest employment and training needs exist. Marrying redevelopment objectives with social objectives can reach populations who can benefit most from opportunities (i2i, 2010) Housing can also make a significant contribution to general sustainability whilst at the same time improving affordability for residents. Difficult to cool and heat homes place additional financial burdens on families whilst also consuming disproportionate energy resources. This contributes to carbon emissions generally. Retrofit of low energy consumption measures to existing homes and ensuring that new homes comply with contemporary energy efficiency standards can make a major difference to collective energy consumption whilst reducing costs to households. Where social housing is targeted specifically, the contribution to reducing energy costs can avoid families experiencing housing finance stress (generally recognised when housing costs exceed 30% of household income.) 5

6 Retrofit programmes can be particularly suited to social procurement practices and provide a range of low and intermediate skill opportunities to introduce people to the labour market. In Wales the ARBED program has levered considerable levels of training and employment opportunities (see response to Question 7). 4. What are the opportunities for the non-government sector (private and community) to achieve better outcomes for people and communities through housing? Internationally and in Australia the private sector involvement in housing provision has been generally limited to supply of homes for purchase and for private sector rental. Developers have not played a major role in social housing provision and institutional finance has generally not recognised social housing as an investment class. In some European nations, particularly in the ex-soviet Union satellite nations, privatisation of public housing stock has occurred and is generally recognised to have only limited achievement in improving either quality of stock and services or in levering increased social housing supply. In contrast, Community Housing Providers (or housing associations in Europe) have provided a model that is not recognised as privatisation but provides ownership by not-for profit organisations in the third sector of non-governmental organisations (NGOs). The UK has engaged in the largest transfer programme of public housing to housing associations and the policy has widely been judged to have been a success (JRF, 2009). Benefits deriving from transfer are: Improved housing management Better services to tenants Achievement of community renewal benefits Better social and employment pathways for tenants Leverage of increased borrowing for asset maintenance and new housing development Further discussion of the role of Community Housing Providers is presented in response to Question 11. In reality there are considerable gains to be made from ensuring partnership between the public, community and private sectors within a holistic housing system. There are excellent examples in Australia that combine the skills and assets of each sector to deliver innovative housing solutions. Examples at Bonnyrigg and Riverwood in NSW point to effective partnerships between a state housing department making public housing stock available for redevelopment, private sector developers securing funding and programming new build at higher density and community housing providers bringing asset and tenancy management skills to the resulting mixed tenure developments. The consequences are more mixed and economically diverse communities that overcome the past stigmatisation of what were mono-tenure public housing communities. At a higher level, state government can provide, through long-standing strategies and clear legislative environments, a stable investment environment to attract institutional investment, particularly into the social housing sector. In this context community housing providers can offer safe locations for the investment funds to deliver improved housing supply and enhancement of existing social housing stock. Large-scale stock transfer, preferably with title, can also assist this creation of a high security asset class to attract institutional investment. Again this requires a three-way partnership between the State, the private sector and community housing providers. 5. Do existing legislative frameworks provide the right level of protections for housing consumers and how could they be improved to ensure fairer and more equitable access to housing? The primary determinants to fair and equitable access to housing tend to operate at national level. In particular the current tax regimes for home and investment owners introduce major inequalities of access. Capital Gains Tax exemptions and discounts, coupled with negative gearing on investment properties, represents a major subsidy to, generally, the highest income earners in Australia. Whilst there is controversy about the impact of these subsidies and the consequences of their removal, almost all independent reviews conclude that they artificially inflate house purchase prices and effectively favour investors over first time home purchasers. 6

7 The primary subsidy is the Capital Gains tax (CGT) exemption for the main residence. The cost to the budget in the Financial Year was $46 billion, more than double the expenditure on Medicare and more than on both Defence and Education (Grudnoff, 2016). This expenditure compares with $3.9 billion on Commonwealth Rental Assistance in the same period (Australian Institute of Health and Welfare, 2015). Furthermore, 90% of the benefit from the concession is experienced by the top 50% of earners. High earners in the top 20% receive 55% of the benefit (Grudnoff 2016). Further CGT subsidy is provided in the form of the general CGT discount of 50% on capital gains, which also applies to homes bought as investment properties and later sold for gain. The 50% CGT discount will amount to $121 billion by (Khademm & Waters, 2016). Further subsidy of home ownership is also provided on income tax deductions for negative gearing where investors in property can claim tax exemptions for all annual outgoings on a rental property. This has added further inflationary pressure to the housing market, particularly in major cities (Heaton, 2016). A review of the impact of these tax subsidies is required at national level to resolve many of the housing issues experienced at State level. There are also aspects of the Queensland Housing regulatory system that could benefit from reform. In particular, the Compass experience of the Transitional Housing program points to a general failure of the approach to ensure fair and more equitable access to housing, particularly for the most vulnerable tenants. Transitional housing is provided to those judged to have very high or high needs. By definition this means they experience critical vulnerabilities and challenges that directly impact their ability to sustain a tenancy. However, the maximum term in transitional housing is 24 months, a period of time generally inadequate to resolve major challenges. At the end of this period tenants are expected to enter the private rental market where it is even less likely that they can maintain a tenancy. Tennants rapidly come back into the social housing system as an emergency. This revolving door is an unintended consequence of the program and suggests that a reform of the approach could be most beneficial for the tenant and at the same time more efficient for the housing system. One useful reform would be to make the term of transitional tenure available to each individual or family more flexible and conditional on the initial assessment of need and their progress towards greater stability. This could extend the term of the tenancy for up to three years. These difficulties with transitional housing are common and are also reported within the Victorian Transitional Housing Model. Fine tuning of the approach offers opportunity to derive the benefits of meeting crisis and urgent housing needs for homeless people, offenders, mentally and physically ill people and families in crisis. However, this needs to be balanced by sufficient flexibility in the term of the tenure to allow tenants to resolve their personal difficulties before they are required to exit. A further anomaly is that on entering the transitional program a tenant s general social housing application is suspended for six months. On resumption of the application they tend to be downgraded in their needs assessment because they are now housed and become less eligible for social housing despite the non-resolution of their needs. It is also the case that the regulation regime has high levels of recording and reporting requirements and that front-line workers find themselves pulled away from direct support for tenants in order to comply with requirements. Compass would welcome an opportunity to explore with the Minister and the Department of Housing and Public Works how this system might be redesigned to benefit all parties in the delivery of the service, especially tenants. 6. Are there differences in issues and approaches for housing that need to be considered in rural, remote and regional communities? The current housing crisis is experienced differently in city urban, regional urban, rural and remote communities. The specific pattern of issues is intricately connected to wider demographic and economic factors. Population levels and employment availability are critical influences on housing demand and consequently on housing costs throughout the housing continuum. These factors can also produce rapid and at times extreme fluctuations, for example when mining activity booms, declines or ends in a specific location. The impact of such changes is felt most by vulnerable groups who can find themselves excluded from private rental and dependent on social housing which tends to be less available in rural and remote areas. Similarly, indigenous populations in remote areas experience specific issues of housing quality and cultural appropriateness (Martel et al, 2012). In more urban areas affordability of home purchase for first time buyers can be the major issue alongside the availability of affordable homes for key workers. This is most exaggerated in the capital cities where major employment centres act as drivers of demand for accommodation. The long commute of key workers from suburbs to city centres has become a fact of life for many people in the contemporary economy. This contributes 7

8 to poor quality of life as well as congestion problems. Efficient cities require adequate housing supply. This variability ensures that any 10 year strategy has also to have local levels of analysis and planning that recognise the different issues and solutions that operate at local level. Spatial planning of responses to these conditions offers a way to both develop an overarching strategy and at the same time address local issues. A spatial plan recognises the relations between cities and their wider hinterlands and addresses the interconnectedness between employment, transport and housing need. Theme 2 Housing Affordability Our goal is to improve people s access to housing in both the rental and home ownership markets. 7. How can we improve people s access to housing by making better use of existing assets, subsidies and incentives? For example, incentivising the market and non-government sector to respond to people and communities. See responses to Questions 10, 11, 13 and How can we improve housing affordability, through sustainable housing practices such as energy efficient designs and other initiatives? After rental costs the most significant housing related cost is usually energy expenditure. Heating and cooling homes is highly energy intensive, especially for older properties without any form of insulation. In the UK, considerable attention has been paid to retro-fit of energy efficiency measures to the older social housing stock both as a means of tackling affordability but also in support of general sustainability gains. Measures can address both energy conservation and energy supply. Conservation is usually achieved by installing insulation. This can be roof insulation, cavity wall insulation or external cladding. This can benefit both cooling in summer and heating requirements in winter. Energy supply is usually derived from photo voltaic (PV) installation to both supply electricity for household need and to feed surplus to the supply grid to capitalise on feed-in tariffs. PV efficiency levels in Australia far exceed those in the UK and this represents a major potential affordability gain for social housing tenants, currently largely experienced only by home owners. The installation of insulation and supply capacity also has considerable job creation potential and if subject to social procurement approaches can target recruitment of residents and tenants currently not in the labour market. Some of the work is characterised by low-skill requirements and can provide soft-entry points to the labour market for long-term unemployed people. The ARBED scheme in Wales in Phase One addressed energy affordability in 7,500 social housing units with an expenditure of approximately $136 million. Supply chain development support was provided to 100 companies and 41 of the 51 installers were companies located solely or primarily in Wales. Employment of long-term unemployed people was targeted with an achievement of 156 weeks training per $2 million expenditure (Welsh Government, 2013). For new build properties the opportunity exists for implementing design standards that achieve high levels of carbon performance. The Minimum Energy Efficiency Standards within the Building Code of Australia represents the current best practice standards and can ensure that building energy performance supports housing affordability. These standards can be exceeded but in general there is a trade-off between high levels of energy efficiency and building costs which has to be taken into account. 9. What are the benefits of creating an affordable rental sector? What needs to happen for that to be successful? For those who cannot afford home ownership, private rental provides the primary route to securing accommodation, with almost a quarter (23.4% in 2011) of households in private rented homes (Stone et al, 2013). The private rental sector has played an increasing role as the state sector has declined in significance and been less available for families with low to moderate incomes. Additionally, rising house prices have pushed more people for longer periods, into the private sector rental market. Private renting can no longer be seen as a transitional phase of housing with 33.4% of private rentals being for a period of 10 years or longer (Stone et al. 2013). 8

9 Supply of affordable rented accommodation has not increased significantly (Hulse et al. 2012), creating high demand and increases to rent levels. Some 62.6% of long-term renters experience housing stress with those lowest 40% of income households paying more than 30% of income for rental accommodation (Stone et al, 2013). Households, experiencing this level of housing stress are less resilient and more likely to experience difficulties sustaining their tenancies at times of financial or family crisis (Stone et al, 2015). Frequent changes of ownership create a precarious tenure and private rental is associated with frequent dislocations, triggered by enforced residential moves. Social housing tenants often cite this insecurity of tenure as a disincentive to enter the private rental sector, even when their economic circumstances improve considerably (Wiesel et al, 2014). Legislative and regulatory attention paid to longer and more secure tenancies in the private rental sector would be beneficial to all parties, including landlords. In an such legislative or regulatory change the interests of tenants and landlords will need to be balanced. There are major benefits to be derived from increasing the supply of affordable rental homes. Negative gearing is intended to be an investment incentive to encourage the supply of rental home but in reality has focused investment mainly on existing properties. Because investors also wish to maximise negative gearing it pushes investment towards larger homes, more expensive homes and to apartments that are not affordable or suitable for the majority. Limiting negative gearing to newly built properties could provide some incentive to increase supply but would be offset by the continued enjoyment of major subsidy by the largely wealthiest sections of society. The National Rental Affordability Scheme (NRAS) provided an alternative approach which has been generally recognised as successful in improving new affordable housing supply. As an investment incentive scheme it only targeted new build and provided a rent subsidy for 10 years if the property was rented at 20% below current market value rent. The program was ended in the 2014 Commonwealth Government Budget. Replication of a similar approach could significantly improve private rental housing supply. In the NRAS scheme Community Housing Providers played a major role in the achievements of the scheme. 10. How should the department work with its partners to extend the supply of social housing? For example, renewal of the existing social housing portfolio and financing and developing new supply. See Question What is the role of community housing providers in delivering people-centred services, responding to local needs, and growing supply through potential housing transfers in the future? This response combines Questions 10 and 11, given the centrality of community housing providers to solutions of supply and effective management of social housing. The supply issue is central to any improvement of the overall housing system but is particularly relevant to the problems associated with social housing. The largescale building of social housing in the immediate post war period (760,000 homes between 1945 and 1956) has not been replicated since and there is now a major shortage of social housing. One consequence of this is the increased rationing of allocations to those in critical social need. This causes a residualisation of social housing stock in which only those with severe social, physical, mental and economic problems are provide with social housing. Many social housing communities have become characterised by a body of older residents, housed in that first wave of social housing provision, living alongside an increasing population with mental and physical health problems, addiction issues and long-term patterns of anti-social behaviour. Only improved supply and a more balanced allocation strategy can improve this situation. Community housing providers can play a central role in resolving current problems within the public housing sector. A partnership between the Department of Housing and Public Works, community housing providers and institutional investors can provide an investment orientated environment with considerable potential for improving supply. This partnership is predicated on a substantial transfer of public housing assets to the community sector. To maximise borrowing leverage by the community sector, transfer should where possible be with title. Title transfer provides assurance to institutional investors that loans are backed by an asset as well as projected rental income. Where transfer of title is not possible, management leases should be long-term to secure borrowing against projected rental income. The creation of a favourable investment asset class in the community housing is also dependent on the scale of Community Housing providers being sufficient to guarantee governance to a high standard in order to satisfy public scrutiny of the use and management of public assets and to ensure full compliance with the national 9

10 registration and regulation standards for the community sector. The larger Community Housing Providers emulate the strong governance procedures of board managed companies with full public scrutiny of accounts and operational procedures. Expert boards coupled with full financial audit can provide assurance of the competence of the sector to receive large-scale asset transfers and manage them effectively on behalf of the public interest. This should provide the State Department with sufficient confidence to minimise contract compliance requirements and avoid excessively burdensome reporting and performance management requirements. The assurance required by institutional investors can also be enhanced by innovative financial models created by state government, including housing bonds and loan guarantees. These are discussed in detail in the response to Question 16. Supply can also be improved by redevelopment of public housing estates. Typically built with low density, older estates are capable of redevelopment at much higher density. Redevelopment should be for mixed tenure with homes designated along the housing continuum. These can be for first time purchase, intermediate ownership (shared equity, affordable private rental and social housing. Typically, higher density redevelopment can yield up to five times more housing, with secured accommodation guarantees for those displaced in the process. Issues of decanting during construction can be managed in a variety of ways including ensuring that social housing is provided in the first construction wave. Ideally, such redevelopments of existing social housing communities should, when completed, be tenure blind in terms of housing quality and the pattern of distribution of allocation. The consequent creation of mixed communities can significantly improve the management challenges of the remaining social housing premises and create communities that are more socially cohesive and less stigmatised. Community housing providers are also well-placed to provide a range of wrap-around services to meet tenant needs and improve tenancy sustainability. Partly deriving from access to Commonwealth Rent Assistance funding, a range of grant programs and from charitable status, community housing providers are able to fund innovative community development and individual support activities to improve tenant outcomes. Historically, these have focused on sustaining the tenancy by avoiding issues such as rent debt, poor housekeeping and antisocial behaviour. Increasingly, community housing providers are also assisting tenants with their employability to improve tenant pathways and make movement into independent housing more achievable. The delivery of such support services can improve the demand for other public services and offer considerable savings to wider government services. 12. What is the role of local governments in housing affordability and how can the state better support this? For example, if we provided incentives, or implemented inclusionary zoning for affordable housing at a local government level, where (or how) would you see this working and what would it deliver? Local government has a clear role to play in improving housing affordability from its planning functions to reform of the stamp duty. Many developers cite planning delays and restrictions as one of the factors deterring new investment in housing supply. However, this can be contested and seen as part of a process by developers to maintain land values and consequently elevate purchase prices. However, streamlined planning procedures can be a critical element of reducing development costs and encouraging new supply. Local government can also play a major role in overcoming the nimbyism that often follows new development proposals, particularly where social and affordable homes are proposed in more affluent neighbourhoods. Through master-planning and local leadership, objections can be minimised and developments can be demonstrated to be of value to the whole community. This can often revolve around improvements of local infrastructure including public transport, roads, medical and social facilities. There is a considerable weight of opinion behind the value of inclusionary zoning (Spiller and Anderson, 2015) and developers in the UK and many European countries take for granted an expectation that a proportion of any development will be for affordable or social housing. Typically, 20-25% of new developments are designated for such uses. The costs are factored into the calculation of land values and the pricing of the for sale element of any development, subject to local market prices. This contributes to the achievement of mixed neighbourhoods. Theme 3 Responsive Housing System Our goal is to create a single, accessible and integrated homelessness and housing assistance system. 13. What should be the roles and relationship of government and the non-government sector in the 10

11 delivery of homelessness and housing assistance in the future? Government and the non-government sector work in complex partnership to deliver an extensive range of services to support homelessness and housing assistance delivery. Government s role is usually to provide a regulatory context and to ensure compliance by those providing services. Government can also have a funding role that allocates funds to service providers. Funding can be both in the form of specific grant streams or fee for service contracts. In this sense government is an enabling body that sets the environment for service delivery and ensures that services meet the needs of a complex range of clients. This is a vital role and determines the context for service delivery. Ideally the relationship between government and service providers should be one which achieves: Mutual trust in which the service provider and government are seen as equal partners, each bringing different contributions to the achievement of shared objectives. Relative autonomy for the Non-Governmental Organisation (NGO) without restrictive and burdensome regulation and compliance procedures. Strong governance in the NGOs to provide assurance and accountability Policy stability to provide the basis for long-term planning and investment by NGOs. Coordination and collaboration between all parties to ensure efficient and effective delivery and maximise impact 14. How do we better develop and integrate the housing and homelessness service systems so they operate as one housing assistance system centred on peoples needs and what is required to make this happen? Homelessness results from a combination of structural failures in the housing system and personal behaviours and characteristics. Conventionally, the emphasis has been on the homeless as an intractable cohort of people with mental health or addiction issues that prevent them securing and maintaining accommodation. Homelessness in this model was almost perceived as an elective condition or an unfortunate collateral effect of unsolvable personal issues. A consequence of this view was that providing accommodation was often not appropriate and a harm reduction approach was delivered to mitigate the impact of homelessness. Experience internationally, for example in Utah (McCoy, 2015) has challenged this view and demonstrated that the most direct approach to homelessness is to provide someone with a home. The provision of a stable place to call home often means that previously intractable mental health and addiction issues can be stabilised and major improvement achieved by the individual. This stereotype is also changing in the face of rising homelessness amongst families, older people and particularly older women who throughout their lives have maintained housing independence. Domestic violence as a primary cause of homelessness for women and children has also attracted attention in recent years (AIHW, 2016). This suggests that more explanation can be found in the structural causes within the housing continuum. Specifically, affordability in the lower end of the rental housing market and the short supply of social housing is impacting homelessness levels and forcing more people into marginal housing or homelessness. Consequently actions which address structural issues throughout the housing continuum impact homelessness levels. Over 60% of those allocated social housing in were homeless at the time of allocation. Measures to increase supply are fundamental and have been addressed throughout this response to the discussion paper. Improvement for first time buyers reduces pressure on private rental and on demand for social housing. This ensures that individuals on low incomes can enter the housing system. However, structural changes of this order require time to become effective and critical need still has to be met within a well-funded and effectively coordinated system for the homeless. Reliance on boarding houses and other forms of marginal accommodation is not an effective response and places families and children in premises where personal safety is low and quality of live is poor. The real solution lies in a rapid program of house building to address shortage of supply in the social housing sector. 15. How do we best support collaborative regional and local place-based initiatives? For example, how do we make best use of our collective limited resources to achieve outcomes for people? Spatial planning provides a mechanism to ensure that economic and infrastructural development is evenly distributed across state regions. If housing is seen as an important element of the physical infrastructure of 11

12 society then it has to be planned in much the same way as roads and railways. Market forces acting alone tend to concentrate development at points of least resistance and where market response is most favourable. Government intervention is required to provide steer and regulation of development to maximise benefits for the whole of society. An important, but often absent, metric for successful regional and place planning is the extent to which it fosters social inclusion and combats poverty. Housing makes a critical contribution to social inclusion and inadequate supply of good quality housing directly contributes to the inter-generational reproduction of poverty. Consequently place based initiatives are essential to overcome market derived anomalies and inequalities. Place making is a complex task (Deloitte, 2015), but consciously planned and delivered can maximise the beneficial impact of public expenditure, including expenditure on housing provision. The development of a 10 Year Strategy for Housing provides opportunity to see how housing links to other spatial planning imperatives for the State of Queensland and its different regions. Compass employs a specific approach to place-making, termed the Deep Place method. It provides a comprehensive approach to integration of human services and identification of economic development opportunities for all locations in a given area. It is grounded in theories of the foundational economy developed at Manchester Business School. It marshal s existing resources and asks how things could be done differently for maximum impact ( 16. How can government support innovation in the development of mechanisms that increase the finance, resources and investment available for homelessness and housing assistance? Attraction of institutional funding has been the holy grail of governments seeking to reduce their obligations to housing spending (Pawson & Milligan, 2013), (Milligan et al, 2013). Commentators cite the United States 1986 Low Income Housing Tax Credit (LIHTC) scheme as a primary example of private sector incentivisation to develop housing for affordable rent. The Australian National Rental Affordability Scheme (NRAS) partially emulated this approach but with considerable shorter terms for which housing had to remain in the affordable sector (10 years) compared with the US 30 year period. Attempts to emulate the success of the LIHTC in both the UK and Australia have generally failed to attract significant levels of institutional investment and the NRAS scheme was discontinued before its target of 50,000 homes was achieved. There has also been considerable international innovation in investment models (Lawson, 2013), (Milligan et al, 2013). With conventional borrowing routes limited since the GFC by withdrawal of international finance institutions from Australia and a tightening of loan conditions by Australian banks, securing finance for private sector development has become challenging, especially for small to medium size developers (Rowley et al, 2014). Existing finance models range from conventional bank borrowing, historically characteristic of community housing borrowing, to innovations in bond issues, private placements with lending institutions and sale and leaseback models (Pawson & Milligan, 2013). Any or all of these funding models have potential to develop if the Commonwealth Government contributes to an environment that both raises net returns and reduces investment risk (Berry, 2002), (Rowley et al, 2014). This can be achieved by direct subsidy (e.g. demand side support through widened Commonwealth Rent Assistance) and financial guarantee models (e.g. NRAS type rental subsidy directly to the developer/owner). There is also considerable potential for Government and private sector partnerships, usually at State level, which use joint venture structures to partially de-risk development. For example, use of Government-owned land, Government guarantees to purchase unsold units, pre-sales to Government, and direct-profit sharing (Rowley et al, 2014, p5). There is also potential for three way partnerships between property developers, the community housing providers (CHPs) and Government. There are emerging examples of public housing estates being redeveloped at higher density, followed by CHP tenant management on behalf of developers. There is considerable potential in developing current public housing communities in partnership with private developers and CHPs, where demolition can provide opportunities for densification, matching housing size with current demand and creating more mixed income, mixed tenure communities with dilution of the concentrated distribution of households with high levels of need. These opportunities have yet to be fully recognised and comprehensively developed in improving supply in the private rental and social rental sectors. The role of CHPs can also be enhanced by developing the aggregated borrowing capacity of CHPs with security provided by Government funds. In this approach, Government acts as or creates an independent intermediary between borrower and lender, providing independent assessment of investment value and additionally providing loan guarantees to protect fund investment. This housing bond model has much to commend it and provides an effective means of aggregating borrowing from Tier One CHPs capable of operating at sufficient scale (Lawson et al, 2014). It would attract more favourable borrowing rates and the aggregated borrowing is more likely to be at 12

13 sufficient scale to attract institutional investment. However, achieving favourable borrowing terms is not only a question of the scale of the loan facility sought but also balances security, collateral, and the term of the facility. Sufficient security to attract institutional investors to the affordable housing market is likely to be dependent on either State or Commonwealth Government providing loan guarantees. The example of the Housing Finance Corporation (THFC) in the UK underpins the need for such schemes to be Government-led to provide guarantees to investors that all loans are under-written by Government in the event of default. In the UK model two schemes provide over 10 billion in sureties. The bond is managed by an intermediary (THFC) contracted to the Department of Communities and Local Government. This model suggests a tri-partite partnership between a Government-sponsored agency established specifically for the purpose, the community housing sector and institutional lenders. Usually referred to as the Affordable Housing Finance Corporation model, this approach has enjoyed success in a number of European nations including the UK, the Netherlands and Switzerland (Lawson, 2013). Lawson et al (2012) examine the specific example of the Austrian Housing Construction Convertible Bond (HCCB) and argue for its relevance, with some adaptation, for the Australian housing context (Lawson et al, 2012). This and similar approaches could assist in overcoming some of the current institutional reluctance to invest in CHPs, despite their competence to bring product to market (Lawson et al, 2014). SUMMARY The discussion paper has raised important questions that need to be answered if a new model of housing is to be fostered in Queensland. Whilst some of the overarching factors are the subject of Commonwealth Government reform, much can be achieved at State level. The Queensland Government has shown a political will to take on these questions and the issues they raise. There is also a very receptive range of potential partners in the community and private sectors to join government in a 10 year housing strategy. The stability that such a strategy could offer can provide the basis for long-term investment and renewal of public and social housing and address the needs of some of the most vulnerable groups in Queensland. Compass Housing firmly believes it can be an effective partner to the Queensland Government and assist the emergence of an innovative and exciting future for housing in Queensland. The Logan Renewal Initiative presents one such opportunity and can be a beacon project for all Australia. 13

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