Parramatta Community Forum   WE ALL NEED A HOME   Ensuring secure and affordable housing for all.

Parramatta Speaks 2018

Ask audience to stand up if they think that the lack of affordable rental housing in WS is a concern to them.. .answer from our survey on next slide

Ask audience to stand up if they think that everyone has a right to rental housing that’s affordable and secure.. .answer from our survey on next slide

Ask audience to stand up if disagree that landlords should be able to evict tenants without giving a good reason.. .answer from our survey on next slide

Ask audience to stand up if they disagree that in Western Sydney it’s easy for people on lower incomes to find affordable rental housing.. .answer from our survey on next slide

Ask audience to stand up if they think that new housing developments in WS should include units that people on lower incomes can afford to rent .. .answer from our survey on next slide

Ask audience to stand up if they agree that the state government is doing enough to make housing more affordable (and if you don’t know, put your hands on your head)

And in the sheets on your chairs are some of the many stories we heard from people about how this issue affects them and their families

Parramatta Community Forum   WE ALL NEED A HOME   Ensuring secure and affordable housing for all.

NSW now – basic statistics Sydney median house price $1-1.2m depending on data Average income $93,550 Deposit gap, occupancy costs Rest of state impacted by increased commuter distances, sea- and tree-changers, retirees In Sydney, housing price growth outstripping wage growth Rents are high and tenancies unstable

NSW now – impacts Delayed purchase amongst younger cohorts Mismatch between need and supply Family housing not getting built as part of affordable housing Older households not downsizing – speculation about an apartment glut Pressure on private rentals, community housing, social housing – bottleneck; pressure through the system Impacts on mobility, health, education, employment, environment

Terminology Housing stress = lowest 40% of income levels paying more than 30% of gross household income on rent or mortgage. Blunt, but widely used and understood Public housing = housing owned and managed by the state; rents set at 25% of household income Community housing = housing managed by a community housing provider; rents usually set at 30% income or at 25% income + Commonwealth Rent Assistance Social housing = public housing + community housing. 10+ year wait Affordable housing = rents set at 75-80% of market rent. Might not actually be “affordable” Housing affordability = nebulous; housing that is <30%?

Welfare Rights Centre and Shelter NSW (2014) The impact of rent assistance on housing affordability for low-income renters: New South Wales. http://bit.ly/1M7Vg0U

Welfare Rights Centre and Shelter NSW (2014) The impact of rent assistance on housing affordability for low-income renters: New South Wales. http://bit.ly/1M7Vg0U

This is statewide, so masks the discrepancy between cities, regional centres, and elsewhere. Shelter NSW factsheet. http://www.shelternsw.org.au/publications-new/factsheets-new/227-nsw-housing-factsheet/file

Parramatta: median house price ~$1.2m Median unit price ~$645,000 Shelter NSW factsheet. https://shelternsw.org.au/sites/shelternsw.org.au/files/public/documents/Shelter%20NSW%20Housing%20Fact%20Sheet%20April%202018.pdf

Implications On current trajectories: Will see persistent delays to buying first home – staying at home longer (if they can) Ongoing pressure on social and community housing including boarding houses and shelters Increasing concentration of ownership amongst families that already own Mismatch between need and supply Impacts of expensive, crowded, poor quality, and/or unstable housing: families unable to leave violence; tenants too scared to report issues As well as the social impacts, emergence of economic and environmental inefficiency at city level as workers move further from jobs

Key points of debate Supply – market rate housing “Let the market fix it” – when the market hasn’t fixed it yet? Argument is that more homes = more affordability Developers do not bring housing to market with the aim of making a loss Investors can out-bid owner occupiers, especially first home owners Much easier to require affordability up front than after or during development – need for targets, set % of affordable housing

Key points of debate Supply – affordable housing Mix of very low, low, and moderate income households Social and affordable rentals as per the above; also increasingly seeing calls for affordable ownership options such as shared equity Can be delivered as a set percentage of a private development, managed by CHP Has to be set before land has been purchased or at time of rezoning If developer has paid top dollar expecting maximum return, they cannot deliver lower prices

Link Housing CENSW

Myth busting Supply will fix it! …only if it’s social and affordable housing Otherwise, to correct to an affordable level, supply would have to be so high that the market effectively collapses

Key points of debate Demand – Investors are competing with owner occupiers Incentivised by federal tax settings – negative gearing, historically low interest rates Growing expectation that housing will act as superannuation, erosion of old age pension Responses such as first home owner’s grants often just further inflate the market Growing scrutiny of lenders whose investment housing lending is growing too quickly – having some impact

Myth busting Chinese investors are driving prices up! …no, they’re not Recent research shows overseas investors made up about 2 per cent of all real estate transactions. It’s local investors

Possible policy responses Federal Addressing negative gearing – big, politically scary, needs cross-party commitment across electoral cycles to grandfather current system Increase funding to States and Territories to support social and community housing Reinstate National Rental Affordability Scheme (NRAS) Reinstate matched deposit saving scheme? Extend first home owner’s grants? Target the last two to affordable stock?

Possible policy responses State Mandate percentages of social housing and affordable home ownership (resale restricted) via inclusionary zoning Allow local government to set affordable housing requirements Utilise State assets for affordable housing, set requirements in any development on State land Stamp duty concessions? Match NRAS contribution FHOG contribution, extend FHOG to shared equity schemes

Possible policy responses Local Are currently unable to set AH requirements Lack of State direction makes it difficult – case by case negotiations are slow and inefficient Can push for Voluntary Planning Agreements, offer concessions such as increased density in return for dedication of affordable housing units Some innovate and provide AH through land and/or airspace contributions

Parramatta Community Forum   WE ALL NEED A HOME   Ensuring secure and affordable housing for all.