All Tasmanian’s must have a house to live in that is safe, appropriate to their needs and affordable, but housing should also be provided in ways that minimise or avoid environment impacts. The good news is that affordability and sustainability can go hand in hand.
The impacts on people affected by the housing affordability crisis have been well publicised but in summary:
there has been a rapid increase in housing stress, with more renters and mortgage holders suffering as an increasing proportion of their income goes into accommodation;
an increase in the number of people living in low quality and insecure housing;
an increase in demand and waiting periods for social or subsidised housing as more people give up trying to get a mortgage, can’t cope with rent payments or are not offered renewals when leases expire; and
as the queues for social housing get longer more people are left homeless and demanding emergency shelter and other help.
Housing, particularly the building of new houses, has a huge impact on the environment, in particular through urban sprawl and consumption of resources for construction, maintenance and occupation. Tasmania’s housing crisis is most severe in the greater Hobart area where recent population growth has exacerbated the problem while putting the environment under greater threat.
In his article published in the latest Planning Institute of Australian (Tasmania) newsletter, Will Building More Houses Help Housing Affordability?, esteemed planner and geographer, Bob Graham says that in Tasmania most new houses are being built on greenfield sites at the fringes of existing developed areas. The University of Tasmania’s Institute for the Study of Social Change’s submission to the state government’s housing summit highlighted the fact that the population of greater Hobart had grown 26.5 % during the ten years from 2006 to 2016. In the 18 months from June 2016 to December 2017 greater Hobart’s population is estimated to have grown by 3500 people, twice the growth rate for the previous five years. Seventy percent of Tasmania’s population growth during the year from June 2016 to June 2017 occurred in the Greater Hobart area. The University of Tasmania’s report concluded that population growth and new housing supply during this period ‘was concentrated in the peri-urban fringe and was a structural cause of the increased traffic congestion in Greater Hobart’ (page 2).
Bob Graham cites evidence that the average size of new dwellings across Australia has increased from 100m2 to 240m2 since 1950 while the average number of people per dwelling decreased. This is increasing the demand for building materials and energy demand for the life of the building as well as being a key factor in the increase in the cost of houses.
What is the TCT’s interest in affordable housing?
While building and living in a house has some unavoidable environmental impacts, the level of impact can be reduced with careful planning in terms of the location, design and materials used. Housing like any industry should aim to deliver on environmental, social and economic objectives.
The housing industry, government polices and the planning system should be aiming to deliver affordable housing while achieving the following environmental objectives:
- New houses:
should be of a size that fits the occupants’ reasonable needs;
avoid the clearing of bushland;
higher density development carefully planned to avoid or minimise the negative impacts;
infill development or located close to existing urban centres;
be close to places of work and services, especially transport;
a high standard in terms of thermal control, energy efficiency and dryness#;
should be built using materials that have a lower ecological footprint to produce.
- To increase supply of houses the Government should focus on making more existing houses available and improving the affordability of them.
- Government should focus on construction of social housing where it is needed and not encourage construction of new private houses.
- Population growth should be minimised and overall population growth and movement of people better managed.
{# Media reports from the mainland have said that in the rush to supply low cost houses some developers are constructing poor quality houses that turn out to be uncomfortable and expensive to occupy, particularly to heat and cool. }
Bob Graham provides evidence that Tasmania’s “supply and price of housing are rising more quickly than increases in population”. The University of Tasmania’s Institute for the Study of Social Change has revealed that while the population of Greater Hobart spiked dramatically over the last 18 months, the ten years prior saw an increase in housing supply which exceeded population increases in the area.
It seems that on the long term more houses are being built than are demanded but many of them are not being made available (they are unoccupied) or are not affordable.
These facts clearly contradict the Treasurer, Peter Gutwein’s simplistic claim following the Government’s Housing Summit that ‘we just need to supply more houses’.
The state government’s response to the housing crisis
The state government’s affordable housing policies have focused on measures that will generally have higher environmental impacts primarily by encouraging new houses.
Smaller houses
There is little mention of smaller houses in the affordable housing debate and no mention of the fact that most houses being built are grossly over sized for the inhabitants. The state government only encourages smaller houses where they fund social houses for single people and otherwise leaves house size to the market to determine. Neither the state nor Federal governments have policies that encourage smaller private houses to improve affordability or for environmental reasons. Although there is perhaps less potential for regulation, it is important to note that marketing by house builders and banks through their lending polices encourage people to build the biggest house they can afford, causing people to take greater financial risks and pushing prices up.
Population
Rather than limiting population growth the state government has a target that Tasmania should increase its population to 650,000 people by 2050 and has offered financial incentives for more people to relocate to Tasmania. It has taken no action to better plan how Tasmania deals with a growing population.
Increasing the use of existing houses
There are a vast number of vacant house yet the state government seems implacably opposed to regulation or taxation which would encourage these to be made available on the rental market.
Prosper Australia (a non government social justice organisation) has published research on its web site which shows that 3% of Australia’s houses are vacant and not for sale or available to rent. This amounts to a total of 338,000 houses across Australia, 7,000 in Tasmania. There could be as many as 3,500 of these in greater Hobart.
It was after the state election that the extent of the vacant housing problem became known, and the government responded by announcing a hastily prepared Private Rental Access Program. The properties in question are generally owned by investors and there is no evidence that the incentives of $10,000 to $13,000 will make it worthwhile for them to put a vacant house on the market. Even if significant numbers of houses are made available there are no strategies to ensure these houses are of an appropriate size, type and location.
The state government is also opposed to stronger regulation of AirBNB. The University of Tasmania’s Institute for the Study of Social Change found that in the Hobart municipal area in 2018 there are 876 entire properties listed on AirBNB, which is up from 250 in July 2016.
In the lead up to the March 2018 housing summit the government came under great pressure to address this problem but simply responded by announcing a program to collect more data on AirBNB properties to better understand the issue. This deferred any action but succeeded in dampening down the public debate.
When pressed on shop tops, the state government says that new planning provisions enable them to be transformed into accommodation but it doesn’t acknowledge that this process can be very difficult (including for some understandable reasons such as safety and fire prevention) and the reality that few people seem to be attempting it.
Provision of new houses
The state government is focused primarily on the provision of new houses, funding new social houses and providing incentives for construction of privately owned houses with little regard for the environmental impacts. To their credit, the social housing it is funding are being planned to be fit for purpose, energy efficient, close to services and includes smaller houses and flats for singles and smaller families.
In contrast, the policies that aim at encouraging building of more private housing are being implemented with no planning for environmental outcomes and have little chance of providing more affordable housing.
Recipients of incentives such as the first home owners grant, stamp duty rebate and land tax holiday are left to decide how they use this tax-payer subsidy. Such incentives may encourage some people to buy a slightly larger and poorly insulated house which increases resource demand. Most economists and housing advocates dismiss the first home buyer’s grants and stamp duty rebates as simply driving up demand and prices, to the benefit of house sellers and developers.
The state government is building more social houses but housing providers and advocates keep telling them that the waiting list is growing faster. The government has no policy to explicitly address the reasons for more people leaving the private rental or mortgage market and seeking social housing.
The state government says it endorses infill and higher density development but has done nothing to encourage this, nor have they provided planning guidance to limit the negative impacts.
The government has never considered using affordable housing mandatory targets which have been highly successful in South Australia. The SA government’s mandatory targets program has resulted in 5500 new affordable houses being built in 12 years.
The state government and development lobby claim that changes to building regulations and planning schemes is needed to make new houses more affordable, principally by reducing approval fees and timeframes. However, Bob Graham cites evidence that the costs of approvals are as little as 1% to 1.5% of the cost of a house.
There is no specific planning provisions that aim to stop or inhibit urban sprawl. To the contrary, the government made election promises to provide more subsidised public transport to outlying areas and to consider widening the highways to Sorell and Kingston, potentially increasing demand for living in these outlying areas.
Bob Graham concludes that:
“Existing planning policies and statutory controls, together with Government incentives are driving cities and towns across Tasmania to favour forms of housing and associated land development which result in urban sprawl, larger sized dwellings, continued low density fringe development, greater reliance on private vehicle transport and increasing costs of providing physical and social infrastructure. These development forms add further to the living costs of home owners and renters as they try to overcome the additional financial burdens of living in poorly serviced areas long distances from employment and services. ”
The government has been releasing Crown land for housing for the last four years and yet the affordable housing problem has just gotten worse. It intends to release more land with no evidence that this will have a significant benefit, let alone that it will be in appropriate areas. It is also introducing legislation that will fast track the process of making this land available for housing, making it harder for environmental issues to be addressed.
The Federal Government has taken no significant action to address the main causes of the affordability problem, i.e. low wage growth and increasing house prices, including through changing tax policies that benefit investors and superannuation rules which serve as a disincentive for older people to downsize to smaller houses. One proposal that needs consideration is to maintain tax benefits that specifically target investors interested in building new houses which are affordable and sustainable.
Can we expect the government to do more on housing affordability and the environment?
There is massive market failure in the housing market but the state government will not intervene. The state government wants to be seen to doing something for those who are most in need while not committing to actually reducing the queues or addressing the causes.
The Australian government just ignores the issue but the state government has cleverly done just enough to avoid the issue blowing up at the election. So unless we have a change of government, we may have to look at private enterprise for inspiration (see Nightingale Housing article page 14-15).
Article by Peter McGlone - TCT Director
Photo by Heather Cassidy
References:
‘Will Building More Houses Help Housing Affordability?’, by Bob Graham, Planning Institute of Australian (Tasmania), May 2018.
‘Tasmanian Housing Summit Directions Paper’, University of Tasmania Institute for the Study of Social Change, March 2018.