Affordable Housing

Affordable housing is a pressing and increasingly complex issue. James Birrell outlines the situation, with an emphasis on South East Queensland, and proposes ideas to consider for the future.

An urban footprint has now been created in South East Queensland. The consequences of this include community fear of the massive density required to house the expected population increase, but people must also take into account other complex issues. When the urban footprint became law, the future urban lands in the Sunshine Coast Region were held by a limited number of owners, and were often in rural or forestry use. Some have now been approved for urban development. The capital gain as a consequence of these approvals was immense, sometimes exceeding $1 billion per project. This capital gain is not taxable. Perhaps these approvals could act as pilot studies for the inclusion of affordable housing at rates similar to those established in other advanced economies.

On 16 October 2009 the Australian Government acknowledged, through the Department of Families, Housing, Community Services and Indigenous Affairs, that a fundamental cause of declining affordability is that housing supply has not kept pace with demand. Of the 35,101 allocations to social housing in 2007–08, 55 percent were to the homeless. There were 177,000 people on public housing lists and 180,000 households were paying more than 50 percent of their income in housing costs. Around 105,000 Australians were homeless on any given night, including 3,275 children. This increases about 20 percent every five years.

The Reserve Bank said, on 29 September 2009: “Housing prices look set to rise, spurred by rising interest rates and a shortage in housing supply, raising questions on housing affordability … the risk is we might move towards undesirably strong growth in Australian housing prices … improvements in housing affordability seen over the last year or so were mainly due to downward movements in interest rates and not housing prices.”

The Housing Industry Association, on 20 January 2010, said that new residential building activity began to recover in the September 2009 quarter. However, there were questions about the sustainability of the up cycle – persistent supply side obstacles, rising interest rates and an insufficient number of upgrade buyers to fill the void left by first-time buyers.

The average size of households is falling. More people are living alone. Over the past three decades, the proportion of single-person households has risen from less than one in five to one in three. Marriage is not what it used to be, although married couples remain the most common household type.

The regional social housing profile of the Queensland Government, 30 June 2008, states: “Over the twenty-year period 2006 to 2026, the number of households in the Sunshine Coast Area Office Region is expected to increase by 80 percent, which is considerably higher than the 50 percent increase expected for Queensland.”

In 2008, only 12 percent of the private rental stock in the coastal region was affordable for low-income earners – this is well below the Queensland average of 24 percent. The decrease in affordable rental supply is most acute in three- and four-bedroom dwellings, with only 8 percent and 7 percent, respectively, being classified as affordable for low-income earners in 2008. To repeat, the number of households in this region is expected to increase by 80 percent – considerably higher than the 50 percent increase expected for Queensland as a whole. Meanwhile, median rents in the coastal region increased by between 35 percent and 80 percent over the five years to 2008.

Dr Alison Taylor, principal demographer, Queensland Treasury Office of Economic and Statistical Research, stated: “… baby boomers reaching retirement age sees the number of people aged 65 plus more than double over the next two decades … Currently, one in eight people are aged 65 or older. By 2031, it will be one in five and by 2056, one in four. Even more startling is an expected sixfold increase in the number of people aged 80 plus, from 138,609 today to 844,795 by 2056. Presently only 3 percent of the population, octogenarians and older will account for one in 20 by 2031, and one in 10 by 2056 … The location and design of housing will be a critical factor.” (The Sunday Mail, 28 February 2010.)

According to National Shelter Inc, on 24 November 2009: “The National Housing Supply Council has reported a shortfall of 250,000 affordable rental houses now … We need to address the shortfall and plan for future growth of affordable housing that is well located, accessible by all and environmentally sustainable. The burden of meeting the affordable rental shortfall should not fall only on governments. Governments have provided new funding to encourage private sector investment in affordable rental … National Shelter calls on the Australian Government to … address a broad range of areas including delivery of affordable housing programmes, the tax treatment of housing and housing related income support measures … create a task force to examine … incentives for affordable housing developments … deliver this housing in communities with mixed tenure types and resident profiles … use of private sector investment … and the use of affordable housing targets in new development.”

One of the foundations of an advanced civilization is the ability to house its population. At the present rate of affordable housing supply, it may take four decades to clear the backlog. And that’s without addressing the anticipated population increase, which is becoming more and more urgent as it is more a result of natural increase than migration. It is the children of residents who cannot get housed as resistance to affordable home building continues. Government strategies must recognize that planning and housing aims should be tackled in a coordinated way. When governments realize the connection between land prices and housing shortages, they should understand that reducing prices without compromising design quality or sustainability is a tall order.

Some efforts to address similar issue are being made elsewhere. In the UK, plans for 350 new homes in London were given the go ahead in November, including 93 affordable homes, while nearby 104 homes were approved with a legal agreement that 21 would be affordable. In February, at Bridgefield on the Hastings railway line, 79 homes were approved, of which 14 will be affordable. In November Salford City Council approved a $100 million district centre and super store with 300 affordable homes, including family homes of three bedrooms, and a tree-lined boulevard. Another scheme, announced back in January 2005, comprises 337 flats with 34 percent affordable, eight of which are loft-style overlooking a public square. In January 2010 3,600 homes near Stevenage were approved, including more than 990 affordable homes. UK deputy prime minister John Prescott announced that the homes “would only be available to buyers on government housing waiting lists and the housing authorities would be given first refusal on homes put back up for sale.”

Affordable housing price could be calculated on the basis of buyers taking a 90 percent mortgage set at three and a half times their income, starting at the basic wage.

While the affordable housing crisis remains unresolved, there has also been an increase in multiple occupancy – three or more unrelated tenants in a dwelling – especially where there are high concentrations of students. This can cause problems for other residences or change the character of a neighbourhood. It may be the root cause of recent racial disturbances. Multiple occupancy dwellings should become a new land use to ensure that the accommodation is properly developed. In the UK, studies by Professor David King, director of the population and housing group at Anglia Ruskin University (formerly Anglia Polytechnic University), show a steady rise in demand for larger homes, especially those with more than seven bedrooms, alongside a decline in demand for homes with fewer than four rooms.

The price of larger homes will rise while the relative price of smaller homes will fall. There will be more overcrowding if families can’t trade up, while space constraints could lead to some couples deciding to have fewer children. This hits younger people. Today’s youth will be the first generation in a century unable to aspire to more spacious homes than their parents. Parents tend to hang on in larger family homes after their children have left, so older homes are not released into the market. Encouraging older people to trade down will not be easy – it will take attractive design, high-quality smaller homes for older people in good locations with good amenities.

Open space plays an important part in people’s wellbeing and gardens are important for biodiversity. Elderly people often find themselves marginalized and suffering from isolation, and planners should consider the needs of our ageing population to make retirement an enjoyable experience. Older people will account for half of the increase in households between now and 2026. Older residents live on their own, are not working and are less mobile than the rest of the population, yet they have considerable spending power and represent a growing body of swinging voters. Around 60 percent are occupying large homes that are not suitable for them and are expensive to maintain. If they could be enticed to move into more appropriate accommodation, this would make a great contribution to meeting the need for family housing in the suburbs.

A model for older people’s housing should have good space standards in a safe environment, with easy access to shops, cafes, libraries and other services, either on site or close by in an existing district centre. Older people help make district centres more viable. Good-sized accommodation with maximum natural light is particularly important for older people, who spend 90 percent of their time at home. They often need a second bedroom for visiting family members and carers and storage for memorabilia. Gardens and communal space could make up about 40 percent of site coverage. The best examples have some sort of “heart”, allowing residents to mix. Housing for older people requires specific recognition through the planning system.

Planners often have no idea of the age profile of the residents in their district. Designs should be tailored for making the transition from relative fitness to restricted mobility. The planning system cannot afford to ignore the increasing proportion of older people in our society. Instead, it should lead the way in demonstrating how the second part of life in our society can be made enjoyable.

Land banking by private house builders could be preventing land from reaching the affordable housing sector. Land banking should be a measure of supporting site assembly for regeneration and affordable housing. All approvals for housing should be reviewed to ensure that existing permissions are built. The proportion of affordable housing should be the obvious target for any adjustment needed, but reduced provision may not always have an impact on delivery and sustainability.

A set of design criteria for residential schemes needs to put good design at the heart of policy. Developers are becoming more aware that design can be good rather than merely cost-effective, and CABE in the UK has achieved remarkable design contributions. I hope that the Board for Urban Places assisting the Government Architect in Queensland will emulate this.


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