We need public housing, not social housing

15 September 2023
Martin Barker

We are in the midst of a housing crisis. One obvious way to alleviate this would be to build hundreds of thousands of public housing properties. But the state and federal Labor governments have refused to do this. Instead, they are offering tax cuts for the rich and handouts to private developers.

When the government does say it will fund the construction of new homes, such as those under the inadequate Housing Australia Future Fund, it still doesn’t commit to building public housing; instead it offers “social housing”.

What is this? Social housing is not synonymous with public housing. It’s an umbrella term that includes both public and community housing.

Public housing refers to properties that are built by the government and then managed by its own relevant department. Community housing is owned and/or managed by not-for-profit, non-government organisations (NGOs). Much of it is built with public money and then handed over to these private providers. It is promoted as being just like public housing, but more “flexible” and “responsive” to tenants. That is just spin. Compared to public housing tenants, community housing tenants often have fewer rights, higher rents and more difficulty in challenging decisions made by their housing providers.

And these NGOs are mostly not “community” organisations, but big companies that, while they might not pay dividends to shareholders, are run like any other business. A survey of community housing executives conducted by the Australian Housing & Urban Research Institute in 2017 made clear that profit and efficiency are the priorities for the sector. One CEO respondent said: “For me [social enterprise] is an alien term. We’re a ‘profit-for-purpose’ company”. The Community Housing Industry Association’s 2021 report boasts of a 15 percent revenue surplus, $15 billion in assets and $11 billion in net equity for the sector.

The rise of social housing represents government abandoning its responsibility for ensuring people have affordable homes. It continues the shift towards the market under way in other areas of essential social support, like disability and aged care.

That shift started in the United Kingdom under the Thatcher government in the 1980s and was part of the neoliberal assault on public services that soon spread across the world. Governments became “purchasers” of social housing services, and lower-income tenants became “consumers” who were supposedly to choose between housing providers as they would between brands of biscuits.

In Australia, the shift towards social housing started later but is gaining pace. In NSW, community housing now accounts for more than one-third of social housing stock, and across Australia it is around 25 percent. In 2017, the NSW government forcibly transferred 14,000 public housing properties to community housing providers, having changed the law so they no longer had to get the public housing tenants’ consent (so much for consumer choice).

The other new housing scam is the rise of “affordable housing”. Don’t be fooled by the name: affordable housing is nothing of the kind. “Affordable” properties are rented out to people on low-to-medium-incomes at a discount (usually set at 20–25 percent below the market rate). The problem with this is fairly obvious—if the median rental price for a unit in Sydney is $670 a week, shaving 20 percent off is still unaffordable for people on the minimum, or even median, wage. With the current pace of rent hikes, what the government considers affordable today are the utterly unaffordable rates of just a year ago.

The tenants have no security of tenure, while the developers who build these units get planning concessions, and the investors who buy in get tax breaks. On top of all that, most affordable housing programs require the properties to be rented at a discount only for a limited time, usually ten years, after which the owner can charge whatever they want.

In NSW, the Minns Labor government has instructed its departments to find whatever “spare” public land they can in inner-city suburbs (including land currently occupied by public housing), which they will then hand over to private developers. Only 30 percent of units in each new build must be categorised as affordable housing in order for developers to access the land. Regardless, rents set at 85 percent of current inner-city prices would cripple low-income earners.

The public housing sector is in crisis. Reduced government funding and sell-offs are shrinking the number of public housing properties while the need for them is growing. The properties that remain are often in an appalling state of disrepair, and tenants are commonly treated by housing departments with contempt and disrespect.

The state is a terrible landlord, but the solution is not social housing, privatisation and further moves towards the market. Instead, the government should properly fund a public system that provides people with the good quality and secure homes that they need.

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