Melbourne's housing crisis

Melbourne's housing crisis

In the absence of a movement on the question of housing, despite the fact that a third or more households in Melbourne are experiencing housing stress, Socialist Alliance needs to have a clear and prominent position on housing as well as actively demanding action when opportunities arise, especially through the Moreland Council position.

Across Australia, including Victoria, a massive collapse in home ownership has occurred. Fifty years ago (1966) 71% of the Australian population owned their home, this has reduced down to 51.7% in 2016. The decline started more than two decades ago and was already down to 57% in 2002. In Victoria the figures are 74% in 2001 down to 66% in 2016. This decline in home ownership has a direct impact on the rental housing situation as more people are competing for rental properties. Once affluent or at least financially comfortable households were purchasing their homes but find this no longer affordable. It is likely that this trend will continue given that for instance in Moreland in 2011, 32.3% of all households repaying mortgages were experiencing housing stress.

Housing stress refers to payments for housing (mortgage repayments or rents) exceeding 30% of the household income. An annual snapshot survey on the affordability of the private rental market conducted by Anglicare Victoria found that on 2/3 April 2016 21,478 private rental properties were available for rent. Of these zero were affordable (rent equating less than 30% of income) for people receiving income support payments from Centrelink. Even for two-income Centrelink recipient households, 77% of these properties were not affordable. The report outlined housing outcomes resulting from this listing examples such as people paying $175 for a bunk bed in a two-bedroom house, shared by 8 people; $100 per week to sleep on a blow-up bed or a couch, sharing with 6 other people and sleeping in a corridor of a house for $140 a week. These examples highlight the desperation people are experiencing. The shortage of affordable housing on the private rental market in Victoria was estimated at 42,000 properties back in 2006.

Furthermore, VCAT (Victorian Civil and Administrative Tribunal) data for 2011 show a high level of forced evictions with 23,200 applications alone made for rent arrears that year. Apart from the question of affordability with regards to rental housing, there is also the immediate impact of a low level or non-existing security of tenure on the private rental market. Increased risk of evictions and repetitive instances of moving house disrupt all other essential needs including education, work and health. This is further exacerbated since affordable housing is being pushed to outer metropolitan suburbs with reduced access to jobs and public transport. The extreme outcome of the housing crisis is homelessness.

Homelessness has increased significantly over the past decade. In Victoria, homelessness increase by 20% between 2006 and 2011. The acuteness of homelessness is obvious to anyone visiting the CBD in Melbourne with a prominent high level of homeless people camping out under awnings and in doorways. During the first week of June 2016, 247 homeless people were identified sheltering in the CBD, an increase of 74% over 2 years. While young people remain the highest proportion of the homeless population (25% in Victoria, 22,800 young people in 2011), it is older people, in particular older women, who are the growing group of people experiencing homelessness. The reasons are obvious, young people are receiving the lowest level of any group of people in receipt of Centrelink income support payments and older women either find themselves in poorly paid part-time or casualised work, with little superannuation once unemployed. Family and domestic violence here is the compounding factor. Given the unaffordability of the private rental market and the increased risk of homelessness, public housing is the last hope for an ever growing number of people.

Public housing however has been undermined for decades and in decline for the past 15-20 years or so. Without going into a detailed historical analysis of public housing, it has been well documented that since the post-war period public housing, i.e. state owned and managed housing, which was designed as low-cost housing for working people, has been turned (‘restructured’) into housing for the most vulnerable people of society. In other words, poverty alone is no longer sufficient to qualify for public housing or may at best get you a spot on the waiting list without priority allocation. There were 34,464 people on the waiting list in Victoria, in June 2016. The decline in public housing has been brought about by a lack of growth in properties, negligence in maintenance of properties and the transfer of public housing to community housing, the latter which represents the privatisation of public housing.

Public housing has been administered by the states and territories and largely funded by the federal government via COAG (Council of Australian Government) agreements. The most recent of these agreements is the National Affordable Housing Agreement 2009 which specified the goal of growing the community housing sector to 35% of the total social housing stock and for 75% of all new social housing properties to go to the community housing sector. ‘Social housing’ has been the term used for two decades to disguise the process of privatising public housing. It refers to all types of subsidised housing, including public housing, community housing and supported housing.

Since the 1980s the advent of community housing, initially small scale housing projects financed by the state and managed by not-for-profit organisations, the sector has grown rapidly. To characterise the community housing sector nowadays as not-for-profit may technically be correct but hides the fact that the large housing associations operate a market-driven agenda that first and foremost is motivated by generating maximum income. While providing housing for low-income households may be the objective, the way to do so is based on competitive market strategies which by default means minimising financial risks. This ultimately means being selective about who of the eligible people will be housed and who won’t, something that is not the case with public housing.

There are key differences between public and community housing. Renting a public housing property means a security with regards to rent, generally 25% of the household’s income. If the household income increases during periods of employment, the rent is adjusted but capped at market rent. In addition, security of tenure without the fear of needing to move ensures a continuity of community and access to services and structures. This security has been well documented to be a prerequisite for addressing other needs such as health, education and employment. Last but not least, public housing tenants have the option to take matters up with government departments and Ministers. In 2015, there were 64,404 public housing properties in Victoria.

Community housing when established mirrored the conditions of public housing especially as long as the title of properties was still held by the Department of Housing. However, successive Commonwealth-state agreements since the 1990s have increasingly deregulated conditions for community housing, paving the way for the kind of large scale, market-driven housing associations we see today. This trend has undermined all the positive aspects of public housing. Rental security is compromised with rents now largely charged at 30% of the household’s income. The justification here is that tenants can apply for Centrelink rent assistance, whereas public housing tenants cannot. This is one of the means to increase revenue for community housing providers, albeit from another arm of government (i.e. Centrelink). Security of tenure and the positive spin offs in terms of impacts is no longer guaranteed with mainly limited termed leases. In 2015, there were 12,689 community housing properties in Victoria.    

The undermining of public housing in favour of community housing is reflected in the overall annual spending on social housing (figures to separate out public housing and community housing could not be found). In 2010/2011 Victoria spent $1,394.4 million on social housing compared to $909.9 million in 2014/2015. Not only equates this to a drop of $484.5 million, instructive also is the fact that capital expenditure as part of this budget item reduced from $595.6 to $149.2 over the same period. In other words, the drop in funding almost exclusively came from spending on capital expenditure ($446.4 million). It can then be suggested that this lesser spending was based on less maintenance of public housing properties on the one hand, and transfer of housing stock to community housing on the other – thus the community housing provider becomes responsible for maintenance expenditure.

Privatisation of public housing occurs in two ways. There is the outright sale of individual properties, however this does not occur extensively, then there is the transfer of housing to the community housing sector. The latter again occurs in two forms, either management and maintenance is transferred with or without title. A transfer without title means that the Department of Housing is still the owner of the property.  A transfer with title means that the community housing provider becomes the new owner of the property. Between 1995 and 2012 in Victoria 2,006 properties were transferred from public housing to community housing, of these 575 (29%) were with title. Given that the stated goal of the National Affordable Housing Agreement 2009 was to grow the community housing stock to 35% of social housing properties by 2014, it is clear that there is a certain urgency for the Department of Housing to transfer anything from 10-12,000 properties to community housing in Victoria in the short term.  

Unfortunately, all the stakeholders involved in the debate on this issue, for instance nationally National Shelter and AHURI (Australian Housing and Urban Research Institute) and in Victoria VCOSS (Victorian Council of Social Services), Council to Homeless Persons and Tenants Union of Victoria among many others, have long given up on fighting for public housing. They have wholly internalised the objective of privatising public housing via the community housing sector. The notable exception in Victoria is Friends of Public Housing, a small grassroots group of housing activists. Most recently, the Greens via Ellen Sandell (State MP for Melbourne) spoke in defence and for an increase of public housing in Parliament.

Therefore, the housing crisis combined with the impending large scale privatisation of public housing demands a clear position and public statements from Socialist Alliance in defence of existing public housing and a call for more public housing to address the housing shortage and growing homelessness. Where opportunities arise the demands need to be highlighted and linked with our campaigning work. United work with activists should be explored, public meetings could be organised and our demands need to be prominent. In Moreland, with Sue Bolton as Councillor additional opportunities exist to make Council act on its own goals, specifically the Moreland Affordable Housing Strategy 2014-2018, which identifies goals to increase public housing stock and tenants in the area. We need to be the ones demanding accountability on these goals and action.

[This contribution is based on a talk presented to a November 2016 Melbourne SA branch meeting.]