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SELECT COMMITTEE ON HOUSING AFFORDABILITY IN AUSTRALIA
Barriers to homeownership in Australia
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SELECT COMMITTEE ON HOUSING AFFORDABILITY IN AUSTRALIA
Barriers to homeownership in Australia
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SELECT COMMITTEE ON HOUSING AFFORDABILITY IN AUSTRALIA
(Senate-Monday, 5 May 2008)
ABERNETHY, Mr Ian
BUSHBY, Mr Peter Maxwell
PHILLIPS, Mr John Brendon
HABIBIS, Dr Daphne
FLANAGAN, Ms Kathleen Mary
- ABERNETHY, Mr Ian
Content WindowSELECT COMMITTEE ON HOUSING AFFORDABILITY IN AUSTRALIA - 05/05/2008 - Barriers to homeownership in Australia
CHAIR —Welcome. Do you have any comment to make on the capacity in which you appear?
Dr Habibis —I am a senior lecturer at the School of Sociology and Social Work at the University of Tasmania.
CHAIR —Thank you. We have a submission from your director. I invite you to make an opening statement and we will go to questions after that.
Dr Habibis —The main point we wish to make is the centrality of housing to welfare overall within Australia. It has always been the bedrock of society in that sense. The crisis of housing affordability really undermines that source of stability and wellbeing within the nation. We would have preferred it if the scope of the inquiry had been widened to include housing affordability in terms of not only homeownership but also rental issues and the social housing sector, because the two are intimately connected. When people cannot afford to buy their own homes then they fall into the rental sector and with that comes much greater vulnerability across the whole of one’s lifespan but particularly in the later years.
For many Australians, the great Australian dream has become the great Australian nightmare as the absence of affordable rental property has made finding appropriate and secure housing increasingly problematic. We have seen that with the rise in homelessness that has occurred in Tasmania and elsewhere. Many children are affected by this, and this has an intergenerational effect.
As far as the rate of release of land is concerned, in the submission prepared by Professor Atkinson the main point that he wanted to make was the need to ensure that any release of land is appropriately planned and that it does not automatically mean land release on the edges of the city. There should be creative ways of considering release of land in the inner city through, for example, land reclamation, because of the problems that can be caused by inadequately planned urban development in the suburbs.
For the existing subsidies the position of HACRU is that some consideration should be given to eliminating the universal payment of the first home buyers grant because of its contribution to putting greater pressure on housing prices and because some of the money that has been spent on it would have been more effectively spent on greater investment in social housing. That would have had an overall effect of bringing down housing prices and therefore would have been better spent.
That leads more broadly into the role of governments in facilitating homeownership. Over the last decades we have seen public housing funding gradually declining, and that has led to the residualisation of public housing, an increasing cause of social division in our urban landscapes. As housing becomes more residualised, you begin to get the early signs of ghettoisation. A greater investment in public and community housing would contribute to the destigmatisation of that form of housing and create much more inclusive communities.
Regarding the contribution to retirement incomes, I think there is a very important intergenerational effect that needs to be brought out in relation to the current crisis in housing affordability. With the growing trend of parents having to mortgage their homes in order to assist their offspring, there are detrimental effects on their ability to fund their retirement in later years. That can become a double whammy for their offspring if the inheritance they would have received in the past largely from their parental home is no longer passed on. That further widens social division within the community, as only the wealthier sections of society are able to pass on significant wealth to their children.
Our argument is that the housing affordability crisis has very significant inequality effects and contributes to growing social division within the nation, and that governments have a very big role in contributing to making housing more affordable. We would argue that should largely be through contributing more to social housing.
CHAIR —Thank you very much. The comments that you and Professor Atkinson make about our terms of reference are reflective of the capacity we have to do various amounts of work at a time. The evidence the committee has been taking since February of this year, since the inquiry was adopted, has given us significant insights into the sorts of issues that both you and Professor Atkinson have referred to, so I do not think that we are at any risk of not learning about those things.
Dr Habibis —It adds to the weight of that.
CHAIR —I understand some of the research being done by HACRU also relates to evidence we have received about public housing and the profile of public housing tenants—particularly the change over the last 15 years. I think the first time we received evidence on that was at our hearing in Sydney. We had very compelling evidence about the change in profile from the traditional low-income family who were in public housing with a view to purchase down the road, even if it was some distance, to extremely marginalised members of the community. They are, in the main, deinstitutionalised individuals or heads of families and—in New South Wales this was given to us in particular—very, very marginalised elderly who have no capacity to afford alternative housing and then a cohort of young people who also seem to fall into that category. Is that the sort of reflection that you see?
Dr Habibis —And there is a high level of mental illness, not always diagnosed. So we are talking about the most vulnerable groups in society. As you would know, the pressure on public housing is enormous. Only category 1 people are getting housed, so the people that are housed have very high-level needs. In order to maintain stability, to maintain housing tenure, they often need levels of support. At the very minimum they need some sort of housing security to prevent homelessness. The best option for them is public or community housing, where the systems are available to enable them to have stable, secure and affordable accommodation.
These people right now are completely excluded from the private market. The squeeze on rental properties is so great partly because people are investing in buying homes but they are investing at the top end and not making rental homes available at a level that many ordinary people can afford, and those who are disadvantaged certainly cannot afford. You cannot look at homeownership without also looking at the nexus between homeownership and the rental market. The two have to be looked at together.
CHAIR —The submission from HACRU refers to high repossession rates—growing strongly now but from a very low base line. Interestingly, the evidence that we have received from a number of the financial institutions, and even from Tassie Home Loans this morning in response to a question from Senator Moore, is that that is not reflected in their business experience. So whilst the newspapers are most certainly speaking at very significant newspaper volume about this, we are not getting the same evidence back. That is interesting for us.
Dr Habibis —We could send you any material that we have which does provide that evidence. I will undertake to do that.
CHAIR —Thank you very much. If you take that on notice I would be grateful.
Senator COLBECK —I would like to follow on from that. I note there is a news story in the media today about four to five cases every week for the last six weeks in the courts, and that might very well be the case. But, if you do have that information available, something over a longer term might be of much more use to the committee rather than what is probably true evidence in the media today that there may well have been four or five repossessions a week over the last six weeks. If that is the long-term average then it does not really demonstrate an increase. To get a sense of what the trends might be, longer term information would be of value, so that we can match it up with some of the longer term evidence we are getting from the banking sector and the mortgage originators. Everyone is denying—we have the banks saying that they have most of the loans but hardly any repossession; we have the building societies or people like Bendigo Bank saying that they do not have many; and Tassie Home Loans are saying that they have a process where they work with their people to manage them through, and they do not have a high rate. We are really starting to wonder where all these figures are coming from. So any information you have would be very helpful.
Coming back to that management issue, Bendigo Bank made a big deal of their process, and Mr Phillips from Tassie Home Loans talked about the process that they had, particularly with those people that were on their HOAP scheme. Do you find, as he was indicating, a differential in the way that people are managing or being managed, and that has a difference in their success rate in staying in their homes?
Dr Habibis —I do not have any evidence or knowledge of that. I could only make an educated guess.
Senator COLBECK —In your submission you talk about the increased use of inner-city brownfields-type sites rather than the greenfields edge-of-suburbia-type expansion programs. We have heard in our evidence that in respect of affordability and affordable housing, it is much more expensive to redevelop those brownfield sites for a range of reasons—redevelopment of buried infrastructure or things you might find on some of those sites. How do you see that that process could be made more affordable? Have you done any work on what policies might be put in place to assist the affordability of those sites?
Dr Habibis —I have not. Professor Atkinson perhaps has but I am not aware of what work he has done in that area. What can be pointed out is the ongoing costs to the economy as a whole associated with locating people at a distance from their employment, and the difficulties they then have in accessing work, and then the costs of that to the transport system and also to greenhouse gas emissions. So if you are looking at costs they need to be looked at more broadly than the cost to the individual developer. That might again be where governments have a role, perhaps through partnerships with developers in recognition of the longer term benefit to the nation. As far as imaginative ways as to how those development costs could be reduced, I am not in a position to comment.
Senator COLBECK —There is no question that the cost of transport and other things is a significant factor in housing affordability, not just the cost of the house or the rental. Obviously, that is something we could look at. You mention also the inevitable chestnut of various state housing debts to the Commonwealth. Do you have any thoughts on how that might be dealt with? Some states have paid off their housing debt. Tasmania, I think, have something like a $200 million debt to the Commonwealth, on which they pay a significant chunk of interest on an annual basis. Do you have any thoughts on how that might be dealt with, or can you expand on what you have in your submission?
Dr Habibis —I think I could only say what is in the actual submission. It is not an area I have been working in so I do not have anything immediately to say.
Senator MOORE —We have had evidence from a number of very impressive community housing people, in a number of states. I have not been to all of the states, so I hope this came up in other places as well. It seems that there is quite a strong community housing industry across many states. Have you worked with those groups, and do you have any suggestions as to how we could encourage that to continue?
Dr Habibis —There is an enormous amount of good work being done that does a great deal to prevent homelessness and to help people who lack housing skills. My main research has been in the area of housing sustainability from the point of view of individuals able to manage their tenure commitments in the rental sector. A great deal can be done to not only enable people to stay in their own homes and prevent homelessness but also get them to a stage where they might have enough stability to hold down a job and perhaps even buy their own home. If we can look at the housing system as a sort of step-up system from crisis accommodation to the rental sector to homeownership, I think they are absolutely essential to pick up people who have fallen through the net so they can begin to make the steps to towards getting back into the mainstream.
Senator MOORE —Is the community housing sector strong in Tasmania?
Dr Habibis —Yes, I think it is very strong. We have some excellent services like Anglicare. I think they are doing some fantastic work.
Senator MOORE —They are coming in this afternoon. In Dr Atkinson’s paper he says:
Our group is to spearhead a national initiative on the re-branding and destigmatisation of public housing ...
Can you tell me anything about that process?
Dr Habibis —That is very much about getting a much greater social mix in housing—mixing up different types of housing and different priced housing to ensure that people are not isolated in enclaves and that there is some association between different groups so that the process of ‘othering’ that can take place is reduced within our communities—if you understand what I mean.
Senator MOORE —Is that specifically Tasmanian based?
Dr Habibis —I think that is across the board. I think it would apply to our big cities in particular but also in Tasmania.
Senator MOORE —The other question I have been asking academics who have come before us in different states is this: has there been an increase in interest in your area as a result of the discussions that have been going on about the importance of housing? It is in terms of people choosing to study what you are doing and doing research topics. Has that increased?
Dr Habibis —I think so. I think there is greater understanding of the spatial dimensions of social life and that urban sociology from that perspective is a very important area and can make a big contribution both theoretically and in a practical sense.
Senator MOORE —I think the only place where they said no was WA. WA said it had not. Everybody else said it had. Thank you, Dr Habibis.
Senator BARNETT —I refer to the media, in particular today’s Mercury, and some of those views that have been put forward. I know Senator Colbeck touched on those. Do you have a response to the view that every week in Tasmania four or five people are losing their homes through the courts?
Dr Habibis —Not in any academic sense; only in the sense that we know homelessness is on the rise and that there is an enormous bottleneck in terms of housing and housing arrangements.
Senator BARNETT —So would those figures seem unusual, or inconsistent or is it the case that you cannot really verify one way or the other whether they are accurate? They are obviously based on research and they are a result of mortgage stress. That was at least the view that was put in today’s Mercury.
Dr Habibis —I would have thought that question would be well put to some of the NGOs because they would probably be seeing the effects of that in terms of increased clients coming for financial assistance or as a result of some sort of housing crisis. As an academic I really have not had any exposure to it.
Senator BARNETT —One of the other angles that was put is the concern that is raised by people in nursing homes. St Ann’s rest home in Hobart, of which I am a former board member, is one where there is this person who has a disability and simply cannot afford a home but is able to stay and live at St Ann’s. Is that surprising to you or is that not inconsistent with some of the evidence and research that you have done?
Dr Habibis —That is very consistent with it.
Senator BARNETT —Do you have a particular interest in mental illness concerns?
Dr Habibis —Yes, absolutely.
Senator BARNETT —Would you want to elaborate on those concerns as they affect affordable housing and access to it?
Dr Habibis —I think the critical thing is to do with providing these groups with the support they need so that there is an integrated system of housing accommodation and support to enable people to stay in their homes, because otherwise they become vulnerable to losing their home. For example, if they go into hospital nobody may know, they may not pay their rent and they may come out to find there is no home. That has certainly been documented as occurring. It is about something as simple as that—to have systems that notify.
Senator BARNETT —That is very disturbing evidence to hear. Have you got any sort of evidence to back that up? Is that anecdotal evidence? Is that research?
Dr Habibis —It is research where that has been found in interviews. I am not quite sure of the exact nature of that research, but it is definitely accepted as occurring. That would be just one example. Obviously, they are a particularly vulnerable group. We know that we have a sort of cycle of homelessness whereby the connection between homelessness and mental illness operates in both directions so we exacerbate problems rather than resolve them insofar as we do not provide adequate support.
Senator BARNETT —Would you be able to let us know any further information you can obtain on that matter?
Dr Habibis —Sure.
Senator BARNETT —On notice would that be possible?
Dr Habibis —Yes, of course.
Senator BARNETT —That would be of interest. The Legislative Council Select Committee on Housing Affordability in Tasmania, which I am sure you are very familiar with, recommended that as a goal no person be homeless by 2010. Do you think that is a laudable and achievable goal?
Dr Habibis —It is obviously laudable. I think it is a big ask. By 2010?
Senator BARNETT —Yes. That is what they said.
Dr Habibis —I think it is something that should be strived for. It will require significant public investment. It should be undertaken in recognition of the public investment that it would require, but it would have enormous public benefits.
Senator BARNETT —Do you have a view as to the level of housing stock generally over the last 10 years and whether it has gone up or down?
Dr Habibis —I understand that it has declined, that part of that decline may be that governments are no longer building public housing, and that governments can make a major contribution by either directly building more public housing or going into partnership with industry and building affordable housing for low to moderate income earners.
Senator BARNETT —You mentioned that your research unit is based at the University of Tasmania. Whereabouts is it?
Dr Habibis —My research has been in relation to evictions in Tasmania—that is my research in Tasmania—and also in relation to housing sustainability for people with complex needs. The research has really been about the need for support for people who are vulnerable and about the nexus between eviction and homelessness.
Senator BARNETT —So that is a statewide analysis that you have undertaken?
Dr Habibis —They were both national studies. With one I did the Tasmanian part and with the other one I did the national part in a number of states.
Senator BARNETT —Are you based in Hobart or Launceston?
Dr Habibis —I am based in Launceston.
Senator BARNETT —Thanks for that, Dr Habibis.
CHAIR —I have a question that I want to ask you. We have heard from a number of representatives of AHURI across Australia. How does HACRU fit within AHURI?
Dr Habibis —HACRU is part of the southern research centre with Flinders. It is part of the AHURI syndicate.
CHAIR —We found the evidence that you and your colleagues have been able to provide us with very useful in our inquiry process. We started off with AHURI in Sydney and have been consistent in taking the opportunity to meet with other representatives. We are very grateful for that.
Dr Habibis —Thank you, Chair.
Senator FIFIELD —How do you define homelessness?
Dr Habibis —The definition is usually a very broad one. The classic one, which I am sure you are familiar with, is the one by Chris Chamberlain which identifies primary, secondary and tertiary homelessness. There are even broader ones which take in, for example, Indigenous concepts of home, which would include the sense of having a spiritual home. So it is all to do with the idea that home is more than shelter and it is to do with having the classic terms of being safe, affordable and stable. That may be by a number of different arrangements, ones that ensure people can afford it within their incomes. So, for example, living in a boarding house is generally regarded as a form of homelessness because it is not stable, necessarily safe nor necessarily affordable. I would define it very broadly along the lines defined by Chris Chamberlain. I do not need to repeat those, presumably, because you would be familiar with them. I think any other definition is really problematic because it fails to recognise the reality of unstable living conditions, the significance and centrality of having an appropriate home for long-term wellbeing and the intergenerational effects that has on future generations.
Senator FIFIELD —You mentioned affordability. Is that one of the factors? So you have stability, affordability—
Dr Habibis —Yes, and being safe. You may be in a home but if it is not a home where you are safe—for example, in situations of domestic violence—then it is obviously an inappropriate living arrangement.
Senator FIFIELD —If it were safe and relatively stable but affordability were an issue—
Dr Habibis —Then it is not secure, because you may end up being evicted or you may end up not being able to pay and it may end up being repossessed. If it is impacting on other areas of your life in terms of your ability to care for yourself, that is obviously problematic in a nation that has the level of wealth that we have.
Senator FIFIELD —So ‘homelessness’ can include people who have a roof over their heads? It might be their own home and it might be safe but, because of the likelihood of going into arrears on their mortgage, they might be counted as homeless?
Dr Habibis —The way I understand that definition is that to some degree it is a philosophical position. You might say it is a practical definition in the sense that it is usable. But, from an empirical point of view, you would apply some measure that would be acceptable to the community as to what ‘affordable housing’ actually means. That is usually done in terms of the bottom 40 per cent of the population, and it means ‘no more than one-third of their income’. There is beginning to be work undertaken—for example, by Peter Saunders of the Social Policy Research Centre—around what level of income and expenditure is acceptable to the community. We are beginning to benchmark that. On one hand the definition provides a concept that can operate empirically, but on the other hand it makes a philosophical statement about the importance of what most people take for granted in terms of housing stability and affordability—which is ‘to be able to live a good life’.
Senator FIFIELD —Under the previous federal government, the minister responsible for the Commonwealth-State Housing Agreement was very much pushing the idea that, as the state governments had pretty much failed on delivering sufficient public housing of an adequate quality, they should be bypassed in terms of the future provision of public housing and funding should be directed to housing cooperatives as a means of providing more and better quality housing. What do you think about that idea?
Dr Habibis —I do not think that inadequately funded state governments can be blamed for failing to provide public housing. If the resourcing is not there, how can they provide it?
Senator FIFIELD —So you think the state governments actually do a fantastic job of providing public housing with the dollars that are provided to them?
Dr Habibis —They do an effective job given the limitations of their budgets.
Senator FIFIELD —So in no way, shape or form are the problems of public housing the fault of state governments and their administration? It is entirely a function of the quantum of dollars provided to them by the Commonwealth?
Dr Habibis —Nothing can be as black and white as that.
Senator FIFIELD —It sounded as though that is what you were saying.
Dr Habibis —No. I would not like to be as black and white as that.
Senator FIFIELD —How black and white would you like to be?
Dr Habibis —Obviously the picture is far more complex than that. Sorry, but I do not have sufficient knowledge of that particular area to provide an expert comment. It is better for me to say that than to make a statement when I really do not have the knowledge base. But I do feel confident that the money provided by the federal government over the last decade has not been adequate.
Senator FIFIELD —How much would be adequate?
Dr Habibis —I do not have the expertise to answer that.
Senator FIFIELD —If you are saying that it has not been adequate, it stands to reason that you would have a figure as to what would be adequate—other than simply saying ‘more’.
Dr Habibis —The reality is that the funding has been declining over the years, so how can they be expected to maintain the same level of provision?
Senator FIFIELD —Can you tell us how it has been declining?
Dr Habibis —I do not have the information in my head. I do have it documented here, and I was trying to find the figures earlier on, but I do not want to keep the committee waiting for those figures. Those figures are in the public domain and they are readily accessible.
Senator FIFIELD —If you could provide the committee with your version of the figures, on notice, that would be helpful.
Senator MOORE —I think Shelter Tasmania provided that assessment on page 45 of their submission. It is the community organisation that I am sure Dr Habibis has worked with. That is in your submission pack.
Senator FIFIELD —Thank you. As we have gone around Australia, we have found very few people who actually have something positive to say about state public housing and how the states have managed their public housing stock. I think the state governments will be appreciative of your confidence in their management.
Senator BARNETT —Dr Habibis, I wonder whether you are aware of the GST windfall gains that have been flowing through to the Tasmanian government over the past several years?
Dr Habibis —I am not. I would say that the person who would have had the expertise within HACRU would have been Rowland Atkinson or Professor Jacobs. I do not have the depth of knowledge in these areas to answer some of these questions.
Senator BARNETT —I would just draw that to your attention in terms of your analysis of the funds available to the Tasmanian government for whatever priorities they deem appropriate. Certainly in the last 12 months, the GST windfall gain has been in the order of $117 million, which is over and above what they would have received under the old tax system. Of course that figure has been increasing markedly each year over the last many years and the prognosis is that there will continue to be a very substantial windfall gain each year that the government can use for whatever purpose they deem appropriate.
Dr Habibis —I am aware of that.
CHAIR —Dr Habibis, thank you very much for attending today. I think there were a couple of issues on which you said you could provide us with further information. We would be grateful for that.
Dr Habibis —The issues I have are the evidence for repossession and Senator Barnett asked about housing support for the mentally ill and what work I have in the Tasmanian context.
CHAIR —Thank you. We would appreciate receiving that information. There are no further questions. Thank you very much for your time and thank you for HACRU’s submission. Could you pass on our thanks to Professor Atkinson.
Dr Habibis —I will. Thank you very much.
CHAIR —The committee will suspend for its luncheon meeting with members of the Tasmanian Legislative Council inquiry into housing affordability.
Proceedings suspended from 12.02 pm to 1.28 pm