A study by the NSW Auditor General recently concluded that the limited resources available to the NSW social housing system mean that it is only capable of meeting 44% of actual need.

By Warren Gardiner

Th is finding is clearly consistent with the daily experience of the NGO sector across the state, as evidenced by feedback to NCOSS and other peaks and the findings of the ACOSS Australian Community Sector Survey.

The Auditor General’s report Making the Best Use of Public Housing was particularly pessimistic about the state of, and prospects for, the public housing component of the social housing system. It found that:

• the shortfall between supply and demand was increasing;
• public housing stock is ageing and increasingly not fit for purpose;
• insufficient funding is available for necessary maintenance;
• houses are being sold to meet recurrent funding shortfalls.

It concluded that these trends were not financially sustainable, and if they continue, the stock of public housing would decline in terms of both the number of dwellings and their standard.

Just as importantly, the report noted that NSW lacks an integrated plan to address the underlying systemic and structural issues to ensure sufficient supply and a viable social housing system, notwithstanding measures taken to tighten eligibility, increase rents, sell stock and transfer business to the community housing sector. In response, the NSW Government has undertaken to develop a social housing strategy to address the Auditor General’s recommendations and to outline the Government’s reform priorities.

A key factor underlying all these problems is that Commonwealth housing funding, apart from the temporary Stimulus Package, has been in long term decline.

The report notes that the overall social housing system in NSW currently comprises some 151,000 dwellings, of which 119,000 or 79% is public housing, 27,000 or 18% is community housing and 5,000 or 3% is Aboriginal housing. All public housing properties and most community housing properties are owned by the Land and Housing Corporation (LAHC), with just under 3,000 dwellings having been transferred to the ownership (as opposed to the management) of community housing providers and a further 3,000 title transfers in train.

A particular focus of the report was on the public housing system’s capacity to meet changing needs and specifically the how well Housing NSW acts to relocate tenants when a household’s needs or circumstances change and how well the LAHC plans to ensure that its asset base reflects the requirements of tenants and applicants.

The headline finding was that there is a significant disparity between the type of public housing stock provided and the needs of tenants, creating simultaneously both an under occupancy problem and an overcrowding problem. Growing numbers of tenants are single person households, tenants with significant disabilities and elderly tenants. Around 30% of three or more bedroom cottages are occupied by a couple or single person. The mismatch between household composition and housing size is increasing as ‘priority housing’ households are often placed in properties larger than their standard entitlement, because of the shortage of smaller properties, and as households declining in size remain in their existing dwelling.

Space does not allow all of the pressures identified in the audit report to be outlined in detail. In brief these are:

• 25% of LAHC properties are over 40 years old and spending on essential maintenance and upgrade is consistently falling below what is required. It would require an extra $330m to maintain current properties at a reasonable standard.
• The number of new tenants housed each year is falling, even after adjusting for properties transferred to community housing.
• 56% of new allocations in 2011-12 were to ‘priority housing cases’ with waiting times for ‘wait turn’ housing increasing as a result. In over 20% of allocation zones applicants for ‘wait turn’ housing can now expect to wait more than 10 years.
• The LAHC expects its rental operations to be in deficit by $490m in 2012-13, even after reducing its maintenance expenditure to substantially less than required. As well there is no long term funding agreement in place that would allow the LAHC to plan its ongoing activities.
• Without increased funding the LAHC expects to dispose of more than double the number of properties that it will build over the next four years.

In the immediate aftermath of the audit report, the Premier decided to transfer the LAHC back to the FACS cluster, from the Finance and Services cluster where it was moved immediately after the 2011 state election. This means that all three housing agencies (the LAHC, Housing NSW and the Aboriginal Housing Office) now report to the one Minister and the one Director General. This has been generally welcomed by the sector.

At a policy level the Government has promised to develop a Social Housing Strategy to address the recommendations in the report and to outline “how housing assistance can break disadvantage by increasing clients’ personal responsibility, better integrating services and working more effectively with our non-Government partners”. At this stage there are few details available about the proposed Strategy or on further work on the LAHC property portfolio or a promised Estates Strategy.

NCOSS will be seeking to constructively engage with these processes, whilst reminding governments that only a substantial injection of additional funds will stop the system from declining further and enable it to grow to better respond to the housing needs of low to moderate income households. Meeting 44% of the identified need is just not good enough. n

This article by Warren Gardiner, Senior Policy Officer NCOSS, first appeared in the Sept 2013 NCOSS News and is reprinted with permission.

Published in Inner Sydney Voice Issue 118 Summer 2013-14