Page 225 - Week 02 - Tuesday, 6 March 2007

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The proliferation of similar units may have marginally reduced costs at the top end of the market, but it has made little difference to the supply of affordable housing for those on low incomes. In fact, as Canberra’s older suburbs are redeveloped for townhouses and apartment blocks, more affordable, older, smaller houses are being demolished for the new and expensive units.

Increasing land supply will not solve this problem unless there are real incentives and regulations to ensure that affordable housing is structured into developments. It is also important to ensure that a percentage of this housing remains permanently affordable, either through government or community housing ownership. We are seeing an increasingly divided society. There are those who buy huge and expensive houses as a luxury good, as a statement of social status or as an investment and there are those who cannot even rent adequate housing, let alone purchase it.

From a public policy view, governments must give particular attention to people on low incomes or on income support that are left behind in the housing boom, and this group is increasing in the current market. Government interventions should occur at both local and federal levels. Essential to addressing the shortage of affordable housing is a preparedness by government to mandate affordability objectives, to have a definition of what represents affordable housing using after-housing income levels and to collect evidence to determine need, both current and projected.

Government must be prepared to ensure that affordable housing is structured into all levels of planning, to require private developments to include a percentage of permanently affordable housing, supported by appropriate tax concessions, and to reform the tax system to stimulate investment in affordable housing. All affordable housing initiatives should have an evaluation process structured in from the beginning so that effectiveness can be tested by the government and the community,

The federal government strongly influences the housing market through spending and through taxes. Currently most of this public money goes to the high end of the market. The federal government did not accept the Productivity Commission’s recommendations in 2004 that there be a review into the effect of the current tax system on the housing market and that the first home buyers grant be means tested.

Federal funding of public housing in states and territories has declined significantly in real terms over the last 10 years, leaving housing authorities struggling to survive as they lose revenue-raising capacity through the targeting of public housing to those in highest need. Rent assistance is not keeping up with the reality for renters in Canberra. In 2006, data showed that nearly half of the people in Canberra receiving rent assistance were still in housing stress. Of course, others on medium incomes, not eligible at all, are also experiencing some housing stress.

While it is certainly useful to talk about how people can be assisted to purchase their own home, the contemporary reality is that for many home ownership is not in the realm of the possible. There is a worrying division between those families who are benefiting financially and socially through owning their own home, especially if they have completed their mortgage repayments, and the increasingly disadvantaged families and individuals who do not.


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