T HE B ATTLE FOR R EGULATORY S PACE Conflicting Drivers of Australian Community Housing Regulation Dr Tony Gilmour Australasian Housing Researchers’ Conference Auckland: November 2010

Presentation Overview Regulation background: theory and recent changes in Australia Research project and preliminary findings Conclusion: conflicting drivers of regulatory change

Regulation Background

Why Regulate Community Housing? Rapid growth of not-for-profit community housing providers Regulation driven by sometimes conflicting economic and social motives (Cave, 2007; Gilmour & Pawson, 2010): Economic:  Protection of public investment  Need to attract and protect private finance Social:  Consumer protection, due to tenants’ limited bargaining power with shortage of affordable housing. Seen as captive service users  Affordable housing as a ‘public good’ Diverging trends between England and Australia

Recent Developments Shift from contract based regulation to appointment of state and territory Registrars from mid 2000s Lack of uniformity between jurisdictions JurisdictionOverviewTiersOrgsIndependence from government New South Wales Registrar appointed 2008 to cover a wide range of service providers 4380Registrar reports to Minister, not the bureaucracy. Funding separate VictoriaRegistrar appointed 2006 with strong intervention powers 240Registrar and funding within state government. QueenslandSystem established 2008 to cover a wide range of service providers 2350Run within state government. No registrar Western Australia System established Under review in Run within state government. No registrar South AustraliaSystem established 2008 for growth providers 2120Run within state government. No registrar TasmaniaContractual regulation only. Under review n/a50n/a Australian Capital Territory Registrar appointed Registrar is a role within state government. Northern Territory Contractual regulation onlyn/a1

Debate driven by need for private finance and belief in promoting national housing providers Move from growth providers with social and economic focus (2008) to growth providers or harmonisation (2009) to 5 options but economic focus (2010) Proposed National Regulation ApproachDescriptionAdvantagesDisadvantages 1 Commonwealth accredit all providers on governance and finance. States regulate on asset management and tenant rights Universal accreditation to give confidence to investors Complex split between Commonwealth and State powers 2 Commonwealth regulates large growth providers. States regulate other providers Quick to implement and clear investors Two-tier industry structure with a complex transition 3 Commonwealth regulates all Australian community housing organisations Complete consistency. Clarity for investors Complex, and likely to be opposed by states 4 Harmonised regulation across all states and mutual recognition across borders Capacity already exists at state level Slow and complex to achieve harmonisation 5 One state’s regulator acts as the ‘host’ and performs the Commonwealth’s role Builds on existing state capacity Likely to be opposed by most states

Theory provides a lens through which to view changes/debates Interest groups:  Regulatory change ‘an exercise among groups and between groups and the state’ (Francis, 1993: p.8)  Work of Mullins (1997), Mullins & Sacranie (2008)  Issues of power, and need to identify stakeholder groups Regulatory space:  Metaphor describing a non-hierarchical policy arena (Hancher & Moran, 1989; McDermont, 2010)  Network theory – need to delineate both geographic and organisational boundaries Regulatory Theory

Research Findings

Documentary analysis of 63 submissions to consultation on move to national regulation earlier in 2010 Statistical analysis plus review of motives and discourse Triangulation with qualitative research:  Doctoral research interviews  AHURI project  Comparative project with Professor Hal Pawson Based on proven application of method to English regulatory change in by Mullins and Sacranie (2008) Allows a broader assessment of the community housing sector, not just the regulation debate Research Method

Submissions Summary CategoryNo.Regulation approach 3 National regulation of all providers 2 Growth providers only 4 Harmonise between states 1 or 5Unstated Housing providers by size Small 9 67%---33% Medium 8 63%25%--12% Large 5 -80%--20% Housing providers by type Mainstream 10 30%50%--20% Specialised 12 67%8%--25% Total providers 22 50%27%--23% Service providers, including banks 6 33%--17%50% Housing peak bodies 10 90%--10%- Government and agencies %-33% Other submissions 16 19%-6%-75% Total 60 40%10%8%5%37%

Larger providers want national regulation of ‘growth providers’, others want Commonwealth to regulate all providers Smaller providers feel they are becoming marginalised Issues between ‘mainstream’ and ‘specialised’ (older people, disability support etc.) providers.  ‘Specialised’ are making claim for sector presence  Strong divide between ‘mainstream’ supporting growth provider regulation, ‘specialised’ wanting all to be regulated Too few responses to differentiate between ‘national’ and ‘local’ providers, though several smaller providers operate cross-state such as Salvation Army, Uniting Church Interest Groups I: Housing providers

Bankers were less uniformly supportive of move to national regulation of growth providers than might have been expected. Main issue was call for government support of risks Peak bodies generally favoured Commonwealth regulation of all providers, despite being largely state-based.  Although fragmented compared to England, CHFA effectively used ‘network power’ to influence outcomes Governments and agencies favoured harmonisation which was said to be underway through Regulatory Practice Forum Tenants’ rights muted compared to debate in England Indigenous and co-op groups marginalised from debate in terms of submissions and boundary to rest of sector Interest Groups II: Other Stakeholders

Commonwealth’s push over economic drivers for regulation was contested by many groups making submissions Noticeable lack of shared outlook and values across the sector – i.e. contestation a strong feature of many submissions Mainly larger providers supporting ‘economic’ drivers Wide variety of submissions backed ‘social’ drivers, especially peak bodies and ‘specialised’ providers Some counter-intuative outcomes such as Australian Bankers Association more ‘social’ than ‘economic’! Widespread belief that the Commonwealth’s ‘economic’ aims were unrealistic – both building capacity and raising private finance Conflicting Drivers I: Social vs. Economic

The discussion paper’s ‘de-problemitised’ approach to the sector was challenged by many submissions:  Independence from the public sector raised as an issue, and separation of regulation from funding (especially Victoria)  Calls for regulation to include both state housing authorities and for-profit subsidised housing providers Contention over role of Indigenous housing providers, co-ops and the broader social service providers Continuing evidence of a wide range of views of what the sector is, and what is should become … who is within the boundaries Conflicting Drivers II: Sector Boundaries

Conclusions: Conflicting Drivers

As a consultation process:  Good response: 63 submissions, 480 pages (England: 115 submissions, 767 pages on a sector 37 times as large  Lack of consensus: no single option favoured across a range of different stakeholders. CHFA option gained traction  Likely outcome is harmonisation which was not a popular option. Results of consultation process not released  Normative process has led to most stakeholders now accepting that there will be a move to some form of national regulation The two theories (interest groups, regulatory space) proved a useful lens through which to study regulatory change Process and Theory

Process reveals the low level of institutionalisation of the sector (DiMaggio & Powell, 1983), though regulation will change this Unanticipated finding was difference in conceptualisation of the sector, i.e. where are sector boundaries (traditional vs. ‘big tent’) Importance of the ‘battle’ for regulatory space Battle for Regulatory Space Traditional community housing groups Small community housing groups Co-ops Indigenous housing groups Specialised housing groups State housing authorities Private sector NRAS recipients England vs. Australia? NSW vs. Victoria? Regulate growth providers or all providers?