S&amp;S Projects is boosting its investment at Rainbow Bay to more than $1 billion after the prolific Gold Coast developer acquired a new site for $20.25 million and immediately laid plans for a new luxury apartment project in the sought-after precinct.

The site, which is the company’s fifth acquisition at Rainbow Bay in the past four years, will be home to the company’s largest project to date after delivering 3 sold-out projects and construction progresses on Radia worth a combined $215m. 
S&amp;S Projects is currently finalising plans for its latest strategic acquisition, a 1,518 sqm site located 209-213 Boundary Street in Coolangatta, with a development application expected to be lodged within weeks.

The luxury residential development will build on the company’s highly successful projects at Rainbow Bay, comprising Flow, Awaken, Esprit and Radia, with Radia currently under construction by Hutchinson Builders.

“We have been unflinching in our commitment to Rainbow Bay and the transformation we have helped drive in this incredible part of the Gold Coast, which is among the city’s most desirable residential locations,” said S&amp;S Projects founder and director Paul Gedoun.

“Our fifth project will reflect the best of what we have done so far to create a lifestyle precinct that is second to none.”

The latest development, which has yet to be named, is proposed to accommodate 88 luxury apartments in a design that will immerse residents in a unique wellness lifestyle that expands on the legacy of S&amp;S Project’s earlier developments at Rainbow Bay.

The development will feature an expansive rooftop garden and wellness centre with a resort- style pool, among a host of lifestyle amenities planned for residents.

“Rainbow Bay, with its beautiful, protected beach and alongside one of the world’s best surf breaks at Snapper Rocks, is the natural wellness heartland of the Gold Coast,” said Gedoun.

“We are taking every advantage to create a truly unique rooftop wellness experience with a natural feel for residents, offering stone features throughout and an underlying theme that emulates a botanical garden.”

The latest acquisition comes as S&amp;S Projects is at the completion of Esprit and construction continues on Radia, which are part of their significant portfolio undertaken by the company at Rainbow Bay since 2022.

The $215 million Radia, which comprises 38 apartments, is currently the flagship development by S&amp;S Projects at Rainbow Bay which is expected to be completed in 2027.

Jayde Pezet, of Pezet Matheson, which has managed sales and marketing for S&amp;S Projects across their Gold Coast portfolio, emphasised the developer’s commitment to continuous improvement and excellence.

“S&amp;S Projects continue to elevate the benchmark of luxury with each development," Pezet said.

“We have worked with S&amp;amp;S on their 4 other projects in Rainbow Bay and their approach reflects a team that is constantly learning, refining, and pushing the standard higher.

“Their hyper-local knowledge and deep expertise within the luxury property sector are what truly set them apart, allowing them to deliver projects that feel both globally sophisticated and authentically connected to their coastal environment”

S&amp;S Projects plans to officially launch its latest project at Rainbow Bay in the second half of this year.

“As we embark on our largest project yet, we have pulled out all stops to create another landmark development that truly reflects the relaxed southern Gold Coast lifestyle,” Gedoun added.

Joel Robinson

S&S buys $20m Rainbow Bay site for fifth beachside apartment project

Japandi, an emerging design trend that combines Scandinavian functionality with Japanese rustic minimalism, remains relatively untested in Australia’s residential development market.

As developers look to differentiate their projects and offer something distinct to buyers, Brisbane-based developer Lantona has embraced the hybrid style for its recently launched Toowong apartment project, <a href="https://www.apartments.com.au/new-apartments/koya-residences-6-josling-street-toowong-qld-4066">Koya Residences</a>, with early response to the design proving positive.

Lantona entrusted Red Door Architecture and interiors practice Luma Design Co with delivering the Japandi brief. The approach blends Japanese minimalism with Scandinavian functionality, emphasising warm, restrained interiors, natural materials and clean lines. Drawing on the Japanese concept of wabi-sabi (beauty in imperfection) and the Scandinavian principle of hygge (comfort and cosiness), it creates serene, uncluttered and sustainable living environments.

These design principles are expressed throughout the Josling Street development, both in its exterior form and across the 40 one-, two- and three-bedroom residences within.

[smartcode_project:default project_id=150787 project_image_fid=366229]

Koya reflects a deliberately scaled approach, with the five-storey form designed to align with the surrounding residential streetscape rather than dominate it.

“Koya is conceived as a building that sits comfortably within its surroundings. Every decision, from material selection to spatial planning, has been guided by long-term liveability and enduring relevance,” the developer said.

[smartcode_project:default project_id=150787 project_image_fid=366243]

Positioned within an established inner-west neighbourhood, the development sits near riverfront parklands and the Bicentennial Bikeway, while remaining within walking distance of Toowong Village and multiple public transport options connecting to the CBD, St Lucia and West End.

Lantona said the location was central to the project’s conception, pointing to Toowong’s balance of green space, transport access and proximity to major education institutions.

“<a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> combines river access, walkability, immediate CBD connection and a strong educational presence. That balance made it the obvious setting for Koya.”

[smartcode_project:default project_id=150787 project_image_fid=366230]

Communal amenity is concentrated on the rooftop, where a shared retreat will include a pool, dining areas and outdoor spaces oriented towards neighbourhood and city views. The design allows for both private use and small gatherings, extending the living environment beyond individual apartments.

Koya enters the market at a time when smaller-scale developments are becoming less common in established suburbs, with many recent projects in the suburb shooting for the sky.

In a nod of confidence,&nbsp;<a href="https://www.apartments.com.au/builders/brisbane-builders">Brisbane Builders</a>&nbsp;has already commenced construction on the building, which is slated for completion in early 2027. Keenan &amp; Byrne is marketing Koya.

[smartcode_project_cta:default project_id=150787]

Japandi-inspired Koya Residences launch in Toowong

<section data-scroll-anchor="false" data-testid="conversation-turn-6" data-turn="assistant" data-turn-id="request-WEB:ca872054-bfe3-4cc5-a2c8-b373d4dfeafb-2" dir="auto">
A completed Castle Hill apartment development is returning to market with an uncommon level of financial backing, positioning it as one of the more secure options for buyers in Sydney’s north-west.

Skyview in Castle Hill, originally developed by Top Place and now overseen by capital partner <a href="https://www.apartments.com.au/developers/equitifund-group">Equitifund</a>, is being relaunched following a full remediation process. Central to its repositioning is a substantial financial reserve designed to provide ongoing protection and reduce uncertainty for incoming purchasers.

At the core of this offering is an $11 million bond secured during the project’s remediation phase, negotiated by former NSW Building Commissioner David Chandler. With less than $4 million required to complete the works, approximately $7.2 million remains in reserve, with around 15 years left on the term.

[smartcode_project:default project_id=147685 project_image_fid=359134]

Rather than a typical insurance-backed structure, the remaining funds are held as cash, creating a readily accessible financial buffer should any future building issues arise. The structure is intended to provide buyers with an added layer of certainty, differentiating the development from more conventional apartment offerings.

Equitifund Executive Chairman Greg Huxley said the structure provides a level of security not typically seen in apartment developments.

“The $11 million bond established for the Skyview Castle Hill development represents exceptional value, providing genuine financial security for purchasers,” Huxley said.

“Unlike a standard insurance policy, this bond consists of real funds held in trust for the Owners Corporation, offering a tangible layer of protection and added peace of mind.”

[smartcode_project:default project_id=147685 project_image_fid=359135]

The remediation process has now been completed in full, with no active rectification orders or outstanding directives linked to the project on NSW Government registers. This outcome reflects the broader tightening of building oversight across the state, while also highlighting the project’s transition into a completed, compliant asset.

In a market where many buyers remain cautious about apartment quality, initiatives like this are designed to restore confidence, giving purchasers greater certainty and a stronger sense of security in their investment.

Equitifund has since acquired the remaining apartments and is managing their reintroduction to the market. With the works finalised and a significant financial reserve in place, the project now presents with a markedly different risk profile compared to its initial release.

[smartcode_project:default project_id=147685 project_image_fid=359137]

Beyond the added security, the development is positioned in one of Castle Hill’s more established pockets. The Gay Street address places it within close proximity to Castle Towers, one of the country’s largest retail centres, as well as Castle Hill Metro Station, which now connects directly to the broader Sydney Metro network.

Equitifund National Sales Director Ben Hamblett said buyer demand in the area continues to be driven by access to transport and amenity.

“Interest from both owner-occupiers and investors in Castle Hill remains exceptionally strong, with buyers consistently prioritising developments in close proximity to the Metro station and Castle Towers Shopping Centre,” Hamblett said.

“There is a clear trend in the market, with purchasers seeking convenient access to transport and lifestyle amenities that support a seamless, low-maintenance way of living.”

[smartcode_project:default project_id=147685 project_image_fid=359145]

The apartments also enter the market at a relatively accessible price point for the area, with two-bedroom configurations starting from $995,000 and rental demand for similar stock reaching around $900 per week. This combination of pricing, connectivity, and completed status is expected to appeal to both owner-occupiers and investors seeking lower-risk entry into the Hills District apartment market.

For eligible buyers, a limited 3.50 per cent p.a. two-year fixed interest rate is currently available through Equitifund’s lending partners, providing an additional layer of affordability.

EquitiCredit Pty Ltd ACN 676 363 769 holds ACL 559289 and provides credit assistance. Finance is arranged through EquitiCredit and funded by its lending partners. Interest rates are subject to change and eligibility criteria apply. Terms, conditions, fees and charges may apply. This is not financial advice and should not be relied upon as such. Prospective buyers should seek independent financial advice.

[smartcode_project_cta:default project_id=147685]
</section>

Castle Hill apartments offering unmatched buyer protection through dedicated fund

A State-Assessed Rezoning Proposal for the Kurnell Peninsula is now on public exhibition, setting out a plan to deliver up to 4,300 homes alongside new retail, tourism and public open space on a 210-hectare coastal site.

The proposal, backed by the Minns Labor Government, would transform a former sand mining area along Captain Cook Drive into a mixed-use precinct delivered over approximately 20 years.

In addition to housing, the plan includes more than 7,000 sqm of retail and commercial space, new community facilities and approximately 116 hectares of open space, equating to more than half the site.

<img alt="Kurnell" data-entity-type="file" data-entity-uuid="ce1c6567-1df0-4de0-9fe5-a76be0367834" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-13%20at%209.11.51%E2%80%AFAM_0.png?VersionId=dbbTmYaJvROA5fkQbgaxis8cmFwtpB5_" />

<hr data-end="849" data-start="846" />
<h2 data-end="902" data-section-id="ony3l3" data-start="851">Rezoning framework enables mixed-use development</h2>

The rezoning application seeks to amend planning controls under the State Environmental Planning Policy (Precincts—Central River City) and the Sutherland Shire Local Environmental Plan 2015.

Its primary objective is to enable a broader range of land uses across the site, including residential, employment, tourism and community uses, while also formalising environmental protections and land management outcomes .

The proposal has progressed through the state-led rezoning pathway after being identified as a project of regional significance, supported by several years of technical studies and agency consultation .

Development would occur in stages, aligned with the progressive closure and remediation of the existing sand mine.

<hr data-end="1718" data-start="1715" />
<h2 data-end="1768" data-section-id="krwii9" data-start="1720">Master plan structured around three precincts</h2>

The accompanying urban design report outlines an indicative master plan that divides the site into three primary precincts, anchored by a town centre in the western portion of the site.

The town centre is planned as the first stage of development, located on land that has already been remediated. It is intended to accommodate higher-density housing, retail, and community uses.

<img alt="Kurnell" data-entity-type="file" data-entity-uuid="4bfd5873-4847-4105-b220-0a30c96f5573" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-13%20at%209.20.09%E2%80%AFAM.png?VersionId=7aVaSsZLAc6mElSH4g6Ct5bGsNxZcnPL" />

Additional precincts extend toward Bate Bay and Boat Harbour, with built form responding to environmental conditions and proximity to the coastline.

The design framework identifies distinct local character areas, with the master plan structured to reflect “unique natural qualities” across the site.

<hr data-end="2495" data-start="2492" />
<h2 data-end="2544" data-section-id="1vitwqn" data-start="2497">Open space forms core of the design approach</h2>

A key component of the proposal is the allocation of approximately 116 hectares to open space and ecological land.

This includes:

<ul data-end="2846" data-start="2678">
	<li data-end="2702" data-section-id="d96caj" data-start="2678">Three district parks</li>
	<li data-end="2723" data-section-id="17y6uz6" data-start="2703">Nine local parks</li>
	<li data-end="2741" data-section-id="14hui00" data-start="2724">Sports fields</li>
	<li data-end="2778" data-section-id="ts7psx" data-start="2742">Coastal and ecological corridors</li>
	<li data-end="2846" data-section-id="agduax" data-start="2779">Two kilometres of publicly accessible beachfront along Bate Bay</li>
</ul>

The urban design report positions this open space network as central to the structure of the development, rather than ancillary to it.

It is intended to support ecological regeneration, provide recreational amenity and create a connected network across the peninsula.

The plan includes north–south ecological corridors, expanded wetland systems and pedestrian and cycling links designed to connect residential areas to the coastline and open space areas .

<hr data-end="3347" data-start="3344" />
<h2 data-end="3381" data-section-id="ql66rt" data-start="3349">Housing mix and affordability</h2>

The proposal includes approximately 4,300 dwellings across a range of housing types.

This includes high-density apartments, medium-density housing, townhouses and seniors housing.

Affordable housing provision is identified at approximately 240 dwellings, alongside a smaller component of social housing.

The master plan emphasises housing diversity, with the intent of accommodating a range of household types and age groups within the development.

<img alt="Kurnell" data-entity-type="file" data-entity-uuid="d4baba4d-b5b0-4a86-bcad-5d319b036184" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-13%20at%209.11.59%E2%80%AFAM.png?VersionId=udYFz0q8tjEPR3pmKLHRSFRJN4dKakPO" />

<hr data-end="3877" data-start="3874" />
<h2 data-end="3919" data-section-id="rgckdv" data-start="3879">Built form controls and height limits</h2>

Proposed building heights across the site range from three to 12 storeys.

These controls are set out within the rezoning application and are intended to manage visual impact, maintain view corridors and ensure compatibility with the coastal landscape.

Floor space ratios and height limits are applied across different parts of the site to reflect varying environmental conditions and proximity to open space and the coastline .

Higher density is generally concentrated within the town centre, with lower-scale development toward the coastal edge and environmentally sensitive areas.

<hr data-end="4548" data-start="4545" />
<h2 data-end="4588" data-section-id="1minlda" data-start="4550">Retail, tourism and employment uses</h2>

In addition to residential development, the proposal includes retail, commercial and tourism uses.

This includes:

<ul data-end="4896" data-start="4706">
	<li data-end="4775" data-section-id="1jrun76" data-start="4706">Approximately 7,000–9,800sqm of retail and commercial floor space</li>
	<li data-end="4803" data-section-id="10kyifw" data-start="4776">A full-line supermarket</li>
	<li data-end="4830" data-section-id="fz1hdg" data-start="4804">Food and beverage uses</li>
	<li data-end="4896" data-section-id="1aqg2fj" data-start="4831">Tourism accommodation, including hotel and short-stay options</li>
</ul>

The proposal also identifies employment outcomes, with the development expected to support jobs both during construction and in ongoing operations.

These uses are concentrated within the town centre and key activity areas across the site.

<hr data-end="5142" data-start="5139" />
<h2 data-end="5172" data-section-id="162x2kt" data-start="5144">Infrastructure and access</h2>

The proposal includes upgrades to Captain Cook Drive, which provides the primary access to the peninsula.

These upgrades are intended to improve traffic flow and support emergency access.

The transport strategy also incorporates:

<ul data-end="5529" data-start="5407">
	<li data-end="5433" data-section-id="fanquy" data-start="5407">Internal road networks</li>
	<li data-end="5469" data-section-id="o6y80y" data-start="5434">Walking and cycling connections</li>
	<li data-end="5529" data-section-id="jgraft" data-start="5470">Proposed public transport routes and bus stop locations</li>
</ul>

The rezoning report includes detailed analysis of transport, flooding, and infrastructure requirements to support the staged development of the site .

<hr data-end="5723" data-start="5720" />
<h2 data-end="5769" data-section-id="14urh3" data-start="5725">Environmental and cultural considerations</h2>

The site is identified as having environmental and cultural significance, including areas of ecological value and Aboriginal archaeological sensitivity.

The proposal includes measures to protect and enhance these areas, including:

<ul data-end="6230" data-start="6004">
	<li data-end="6056" data-section-id="1pzyouo" data-start="6004">Retention and regeneration of coastal vegetation</li>
	<li data-end="6100" data-section-id="bjn2vz" data-start="6057">Strengthening of biodiversity corridors</li>
	<li data-end="6148" data-section-id="1bpeyoj" data-start="6101">Protection of riparian systems and wetlands</li>
	<li data-end="6230" data-section-id="lg0cka" data-start="6149">Integration of cultural interpretation and recognition of Indigenous heritage</li>
</ul>

The urban design report also outlines opportunities for incorporating Indigenous cultural elements into public spaces and landscape design.

<hr data-end="6893" data-start="6890" />
<h2 data-end="6908" data-section-id="w7rk5f" data-start="6895">Next steps</h2>

The proposal is currently on public exhibition, with submissions open to the community. Feedback received during this period will inform the Department of Planning’s assessment of the rezoning.

If approved, the rezoning would establish the planning framework for future development applications across the site.

<hr data-end="6893" data-start="6890" />
<h2 data-end="6908" data-section-id="w7rk5f" data-start="6895">What the NSW Government says</h2>

Minister for Planning and Public Spaces Paul Scully said the planned closure of the sand mine and remediation of the Kurnell Peninsula presents an exciting opportunity to transform the area.

“This proposal envisions a vibrant new beachfront community with thousands of new homes, jobs and great open space in the Sutherland Shire. I encourage the community to have their say during the public exhibition period. Feedback from the community will play an important role in the assessment of the proposal.”

Sydney's newest beachfront city: NSW Gov to unlock 4,300 new homes on Kurnell peninsula

A long-awaited transformation of a former industrial site in Holroyd has been given the green light, with the NSW Government approving the $1.2 billion Crescent Parklands masterplan that will deliver more than 1,200 new homes just south of Parramatta.

The State Significant Development approval clears the way for a large-scale mixed-use precinct at <a href="https://www.apartments.com.au/new-apartments/1-crescent-street-holroyd-nsw-2142">1 Crescent Street</a>, replacing an underutilised site with a coordinated residential community anchored by new open space, retail, and commercial uses.

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> for WA-based developer Tiberius, the approved scheme comprises seven buildings arranged across two precincts. In total, the development will deliver 1,227 apartments, including 201 allocated as affordable housing, alongside approximately 2,500 sqm of retail and 5,000 sqm of commercial space within a mixed-use podium.

<img alt="Tiberius’ Crescent Parklands to deliver 1,200+ homes in major Holroyd transformation" data-entity-type="file" data-entity-uuid="1cc82dd2-8184-4b86-8665-90653147820d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Crescent%20buildings.png?VersionId=2ZmVDc_Rfc4AzQ6ShzZJlvdZnACLerVM" />

The project is structured as a masterplanned precinct rather than a standalone tower. Buildings 1 to 4 will rise from a shared podium with shop-top housing, while Buildings 5 to 7 are positioned closer to the northern park interface as residential flat buildings. The built form has been carefully modulated to balance density with amenity, with the design resolving building separation, solar access, and wind impacts at a precinct scale.

A significant focus of the design is the activation of Crescent Street and the integration of public domain. The submission notes that “individual townhouses [were] removed for community based functions to Crescent Street to increase activation and surveillance,” reinforcing a more urban and publicly engaged street edge. Retail, commercial tenancies, and resident amenity spaces are concentrated along this frontage and within the podium to support day-to-day activity.

The landscape strategy underpins the project’s identity, with a network of pedestrian connections, landscaped corridors, and open spaces linking the site internally and to its surroundings. The design prioritises permeability, delivering “increased uninterrupted flow between spaces for pedestrian access” and improved connections through to the adjoining parklands.

<img alt="Tiberius’ Crescent Parklands to deliver 1,200+ homes in major Holroyd transformation" data-entity-type="file" data-entity-uuid="19282454-ab2f-4e2c-866f-4b35cf4283d4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Crescent%20masterplan.png?VersionId=JQdWGYI5B5R1lzmK4omYOp_8KLPkT4Bv" />

Buildings within the western precinct are oriented toward the park, shaping a residential offering defined by proximity to open space. The design describes this approach as creating apartments “immersed in nature with apartments facing the park,” positioning the landscape as a central organising element of the masterplan.

The broader architectural response addresses both infrastructure and context, with taller elements capturing long-range views toward Parramatta while setbacks and separation distances mitigate impacts on surrounding residential areas. Sustainability initiatives, including solar optimisation, cross-ventilation, and integrated landscape systems, are embedded across the scheme.

Located approximately one kilometre south of Parramatta CBD, the 3.6-hectare site is bounded by Crescent Street, Woodville Road, and Holroyd Sportsground. It benefits from strong access to public transport, including nearby bus routes and train stations, and sits within a rapidly evolving corridor earmarked for increased residential density. The design also strengthens connections between surrounding green spaces, including Holroyd Sportsground and Parramatta Parklands.

The approval follows several years of planning, including a rezoning process that enabled significant uplift in height and density across the site. With determination now secured, Crescent Parklands is positioned to play a major role in delivering new housing supply within Greater Parramatta’s growth area.

Tiberius’ Crescent Parklands to deliver over 1,200 homes in major Holroyd transformation

Housing Policy

The Commonwealth&rsquo;s expansionary budget is the right approach for the times.

The Commonwealth has led the way with support for new home buyers through its &ldquo;First Home-owners Deposit Scheme&rdquo; which effectively under-writes housing loans for first home buyers with only a 5% deposit. &nbsp;However, this, along with record low interest rates and the relaxation of APRA controls has seen a spike in housing demand

The Budget expands this scheme and creates a new category of beneficiaries with the new Family Home Guarantee which will provide single custodial parents with a step up towards home ownership. There&rsquo;s also more flexibility for older Australians (over 60) who sell their house (generally to down-size after children have moved out) allowing them to deposit up to $300,000 per person into Superannuation.

The Budget also includes the expansion of the &ldquo;First Home Super Saver Scheme&rdquo; which increases the funds that can be withdrawn from Super accounts from $30,000 to $50,000. &nbsp;This, on top of HomeBuilder grants all adds to demand for new homes. But without a big boost in housing supply, borrowing from Super just pumps up the price further.

So Treasurer Josh Frydenberg has a conundrum. &nbsp;Stimulate the economy &ndash; but risk new home prices going up and a backlash from those locked out of the housing market. &nbsp;All of the worthy Commonwealth measures announced in the Budget face particular problem in NSW.&nbsp;

The NSW Planning System dropped the ball and slowed housing approvals down to a crawl just before COVID &ndash; then they failed to use COVID-19 as a chance to catch up. &nbsp;Now there is a massive shortage in supply of land sub-divisions and re-zonings for new homes across Greater Sydney. There is a plan for reform of planning in NSW &ndash; but it won&rsquo;t deliver for years to come. The same bold approach which has driven the Commonwealth is urgently needed in NSW.

What that means is all the extra funding for home buyers just pumps up the price of the existing stock of housing, ironically making home ownership less affordable.&nbsp;

<h2>The real issue for NSW is the supply of new housing.</h2>

The Department of Planning&rsquo;s own forecasts predict 150,000 new homes over the next 4 years in Greater Sydney &ndash; but even this bold prediction, unlikely to be achieved given the Government&rsquo;s refusal to take on NIMBY Councils, falls short of meeting the NSW Government&rsquo;s own Housing Strategy &ldquo;Housing 2041&rdquo; targets which call for 50,000 new dwellings (on average) each year from now till 2041.

The big problem for first home buyers and for the Commonwealth Budget is the NSW planning system.

The Commonwealth needs to get tough with NSW and drive planning reform to increase housing supply. &nbsp;While ever we wait for reform in NSW you can expect that new home prices will continue to rise.

The Commonwealth&rsquo;s increased investment public health, the vaccine roll out, mental health and women&rsquo;s support services is all very welcome indeed.

The Commonwealth investment in in city Infrastructure is also supported &ndash; though one short-coming was the absence of funding to support local infrastructure surrounding the new Western Sydney Airport because the success of this precinct will drive the economy of the nation. With a massive levy of 6.5% (on top of all the other fees and charges) to be applied to the development of employment centres around the airport, the feasibility of development of employment land is called into question and NSW risks missing out on the predicted jobs boom without some support from the Commonwealth.

All up, this is a budget for all Australians. It is very welcome and is strongly supported by the Urban Taskforce.

However, all of the worthy Commonwealth measures announced in the Budget face particular problem in NSW

The Commonwealth’s expansionary budget is the right approach for the times: Tom Forrest

There was one surprise for the housing sector in tonight's federal budget, and three foreshadowed housing measures were made official.

The federal treasurer Josh Frydenberg advised the parliament in his budget speech that new house starts were now at the highest level in 20 years. 

"New loans to first home buyers reached their highest level in nearly 12 years.

"HomeBuilder has been a huge success and our $2 billion investment in affordable housing is bringing on more supply," he said.

"Our housing measures go even further," he added.

"Helping another 10,000 first home buyers build a new home with a 5 per cent deposit.

"Supporting 10,000 single parents to purchase a home with a 2 per cent deposit. 

"Increasing the amount that can be released under the First Home Super Saver Scheme from $30,000 to $50,000.

"Under the Coalition, home ownership will always be supported," he noted.

The budget effectively continued the First Home Low Deposit Scheme for new homes and off the plan acquistions, and tweaked the First Home Super Saver Scheme, and introduced a new scheme for single parents.

The 10,000 Family Home Guarantees will be made available for single parents over the next four financial years.

The Family Home Guarantee will be available regardless of whether that single parent is a first home buyer or previous owner-occupier. 

Applicants have an annual taxable income of no more than $125,000. 

A fact sheet with further information on eligibility criteria will be available on the NHFIC’s website next week.

The surprise announcement was the government will lower the minimum age for the downsizer super contribution from 65 to 60.

“This will allow Australians nearing retirement to make a one-off post-tax contribution of up to $300,000 per person (or $600,000 per couple) when they sell their family home,” the budget documents advised.

“This improves the flexibility for Australians to contribute to their superannuation savings, and may encourage people to downsize sooner and increase the supply of family homes.”

The budgetary measure will be argued as positive for first home buyers and next home buyers by freeing up established housing stock for younger property buyers.

There was a warning after the budget announcement from the Property Council on the long-term economic consequences of idling population growth.
 
"Budget assumptions anticipate that Australia’s population growth will be limited to only 0.2 per cent over in the next financial year. Net overseas migration is forecast at -77,000 in 2021/22, with a return to normal levels of migration not expected until 2024/25," the PCA noted.
 
“The Budget has revealed that our restricted border is the biggest constraint on our economy.
 
“Our lack of growth is going to catch up with us with economic and employment growth expectations slowing over the forward estimates.
 
“Population growth is not an optional extra for Australia’s economy," the PCA said.

The budget also made $15 billion in additional infrastructure commitments including for:

a) the North‑South Corridor in South Australia
b) the Great Western Highway and Newcastle airport in New South Wales
c) the new Melbourne Intermodal Terminal in Victoria 
d) the Bruce Highway in Queensland
e) METRONET in Western Australia
f) highway upgrades in the Northern Territory
g) Light Rail Stage 2A in the Australian Capital Territory and
h) Midland Highway upgrades in Tasmania.

Josh Frydenberg noted that "when construction work began to dry up, HomeBuilder came to the rescue."



jchancellor

Federal Budget formalises three mooted housing measures

<html><body>
Expert Observer


Economists like to talk about “optimal policy instruments” — essentially, policies that achieve their objectives more effectively or efficiently than the alternatives, and have minimal unintended consequences.

Judged by those criteria, the New Zealand government’s recently announced package of <a href="https://www.stuff.co.nz/business/300259522/housing-policy-what-the-changes-mean-for-homeowners-investors-firsthome-buyers-renters-and-bach-owners">housing policy instruments</a> is a long way from optimal. You might even call it a shambles.

How so? To the uninformed, the package’s main elements may seem to address the housing affordability crisis by doing several things:

<ul>
<li>
	removing tax deductibility of interest on loans for residential property investments
	</li>
	<li>
	extending the <a href="https://www.ird.govt.nz/property/buying-and-selling-residential-property/the-brightline-property-rule">bright-line test</a> — the period after which the property sale attracts a capital gains tax (CGT) liability — from five to ten years
	</li>
	<li>
	favouring new builds in these tax changes
	</li>
	<li>
	introducing a “changes of use” rule that effectively makes family homes liable to CGT if sold within ten years and rented out for more than one year
	</li>
	<li>
	and raising income and house price caps for the government’s <a href="https://kaingaora.govt.nz/home-ownership/first-home-grant/">First Home Grant</a> scheme.
	</li>
</ul>
If we examine the package in light of the three optimal policy requirements, however, we can see the problems.

<figure class="align-center "><img alt="Jacinda Ardern and Grant Robertson at press conference" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" src="https://images.theconversation.com/files/394390/original/file-20210411-23-15frx4f.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" srcset="https://images.theconversation.com/files/394390/original/file-20210411-23-15frx4f.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=600&amp;h=400&amp;fit=crop&amp;dpr=1 600w, https://images.theconversation.com/files/394390/original/file-20210411-23-15frx4f.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=600&amp;h=400&amp;fit=crop&amp;dpr=2 1200w, https://images.theconversation.com/files/394390/original/file-20210411-23-15frx4f.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=600&amp;h=400&amp;fit=crop&amp;dpr=3 1800w, https://images.theconversation.com/files/394390/original/file-20210411-23-15frx4f.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;h=503&amp;fit=crop&amp;dpr=1 754w, https://images.theconversation.com/files/394390/original/file-20210411-23-15frx4f.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=754&amp;h=503&amp;fit=crop&amp;dpr=2 1508w, https://images.theconversation.com/files/394390/original/file-20210411-23-15frx4f.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=754&amp;h=503&amp;fit=crop&amp;dpr=3 2262w"><figcaption>Prime Minister Jacinda Ardern and Finance Minister Grant Robertson announce the Labour government’s housing policy changes. GettyImages</figcaption></figure><h2>Achieving the policy’s objective</h2>

Economists have a policy “rule” that to achieve various policy objectives, you need at least as many policy instruments. The housing package is a hodgepodge of inter-related measures, but it has several explicit objectives:

<ul>
<li>
	stabilising house prices
	</li>
	<li>
	facilitating home ownership
	</li>
	<li>
	discouraging (ill-defined) speculative investment
	</li>
	<li>
	increasing the housing stock with mainly (undefined) “affordable homes”
	</li>
	<li>
	closing what the government claims is a housing “tax loophole”.
	</li>
</ul>
To these, add implicit objectives of tackling perceived income and wealth inequalities between tenants, landlords and homeowners.

Overall, this is quite a task, and it would be remarkable if any set of housing policies could achieve such wide-ranging objectives.

Arguably, the primary target of this policy package is stopping the <a href="https://www.stuff.co.nz/life-style/homed/real-estate/124692627/national-house-price-up-by-more-than-100000-since-early-2020">inexorable upward march</a> of (mainly Auckland) house prices. Failing to achieve that would simply put it among a long line of attempts by previous governments (National and Labour) over the past 20 years at least.

In all cases, the biggest problem has been insufficient political commitment to boosting housing supply.

<h2>Unintended consequences</h2>

All taxes cause “distortions”, mostly unintended, which need to be mitigated. Furthermore, policies that have conflicting objectives are “incoherent” and typically among the most distorting. This applies to the housing package’s removal of interest deductibility.

Previously, in New Zealand and almost every other country, interest on business loans is treated as a legitimate expense and therefore tax deductible, regardless of the nature of that business.

With that coherent principle now not applying to housing, then, what about other types of business loans the government thinks it should favour or disfavour? No doubt arguments could be made for such policies, but the result is an ad hoc tax system that generates multiple undesirable distortions and perverse incentives.

It could be argued the “new build” aspect of the housing package gets some incentives right by directing rental housing investment toward increasing the housing stock.

But with already existing constraints on new house building — such as planning regulations and availability of suitable land — the policy is likely to have little impact. It will simply shift housing investors from competing with first-time buyers for existing properties to competing with them for new properties.

Over time the rental housing stock becomes a patchwork of homes that do or don’t qualify for tax exemptions. Exploiting these new loopholes and assorted distortions to property prices will likely provide plenty of employment for tax accountants.

<blockquote class="twitter-tweet">
'Free money' for landlords: Rent controls needed to protect vulnerable people from rent increases, say advocates <a href="https://t.co/lJ4XvaAjBH">https://t.co/lJ4XvaAjBH</a> <a href="https://t.co/UTQVOWegpW">pic.twitter.com/UTQVOWegpW</a>
— Stuff (@NZStuff) <a href="https://www.propertyobserver.com.au/https://twitter.com/NZStuff/status/1379480197972430848?ref_src=twsrc%5Etfw">April 6, 2021</a>
</blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script><h2>A back door capital gains tax</h2>

It would be rare to find a liability based on transactions and timing among the principles of a good tax policy. But the bright-line test manages both — it incentivises delaying property sales to avoid the tax even when selling would otherwise be in the taxpayer’s best interest.

It was originally introduced in 2010 with a two year threshold, without supporting evidence, supposedly to stop so-called speculators from flipping properties for quick profits. A ten year threshold cannot be branded an anti-speculation policy, it is simply a back-door CGT.

As with most back-door policies, this CGT is inevitably less transparent and coherent than a policy designed to tackle the problem head-on would be.

Consider the hypothetical case of an Auckland homeowner relocating to Sydney to work for two years. It wouldn’t be sensible to sell the Auckland house due to high transaction costs and the risk of slipping on the property ladder when trying to buy back later. Much better to rent in Sydney while also renting out the Auckland home.

But this would now generate a potentially substantial tax bill on the family home. Indeed, <a href="https://www.stuff.co.nz/national/politics/300260832/how-the-government-is-changing-rules-for-renting-out-your-main-home-and-the-brightline-test?rm=a">one calculation</a> showed just such a plausible scenario could generate a CGT liability of almost a year’s salary — simply to move to a similarly priced house.

<h2>Alternative policy instruments</h2>

If there are better alternatives, they do not lie in even more ad hoc fiddling with a coherent tax regime.

Instead, like the famous real estate mantra of “location, location, location”, the mantra for New Zealand housing policy should be “supply, supply, supply”. Specifically, supply in Auckland.

Successive governments have aimed policies nationwide when rapid house price inflation is almost exclusively urban and essentially an Auckland phenomenon.

Without policies that reform construction sector regulations and open up more land for urban housing, there is little prospect of Auckland house prices stabilising while current demand-driven trends persist. To make matters worse, the government’s first-home buyer schemes will merely raise demand without incentivising supply.

With too many objectives and the probability of numerous unintended consequences, the government’s housing policies risk being seriously incoherent.<img alt="The Conversation" height="1" src="https://counter.theconversation.com/content/158768/count.gif?distributor=republish-lightbox-basic" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important" width="1">

 

This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/new-zealands-new-housing-policy-is-really-just-a-new-tax-package-and-its-a-shambles-158768">original article</a>.

 

Related Projects:

[smartcode_project:default project_id=7275]

[smartcode_project:default project_id=95292]
</body></html>

Without making housing supply the priority, the government's tax-based policies create more objectives than they can reasonably achieve

max.kwok_55688

New Zealand’s new housing policy is really just a new tax package — and it’s a shambles

<html><body>
GUEST OBSERVATION
What began as a global health crisis in the form of COVID-19 is now also an economic crisis of <a href="https://www.theaustralian.com.au/business/economics/coronavirus-worst-year-since-great-depression-says-imf/news-story/0e9976bdbd46ebae16d19f8190241467">historic proportions</a>. Much of the housing policy focus during the pandemic has rightly centred on the plight of people who are <a href="https://theconversation.com/homelessness-and-overcrowding-expose-us-all-to-coronavirus-heres-what-we-can-do-to-stop-the-spread-134378">insecurely housed or homeless</a>. Another strand of commentary has focused on a likely <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-04-01/national-house-prices-march-coronavirus-property-corelogic/12109434">fall in property values</a>.
But what does the pandemic mean for housing market inequalities in Australia? And what are the policy implications?
The renter-owner gap will widen
Despite concerns about house prices plummeting, the spread of COVID-19 is exposing a widening gap in housing markets between those who own zero housing wealth (renters) and those with substantial housing wealth (owners).
Australians with little to no housing wealth were already experiencing at least three key types of vulnerabilities before the pandemic in the form of work insecurity, financial stress and ill-health.
The charts below show the comparisons between renters and home owners in these three categories of vulnerability, using data from the <a href="https://melbourneinstitute.unimelb.edu.au/hilda">HILDA Survey</a>. Owners are ranked in quintiles by housing equity, from the bottom 20% (Q1) to the top 20% (Q5).
Renters were much more likely to be unemployed or in casual jobs than people with high housing wealth.
<a href="https://images.theconversation.com/files/328282/original/file-20200416-140719-139mm6a.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/328282/original/file-20200416-140719-139mm6a.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Note: Sample includes all persons aged 25+ no longer living in their parents’ homes. Housing equity is defined as family home value minus mortgage debt. Population weights have been applied. Author's calculations from 2017 Household, Income and Labour Dynamics Survey data, Author provided
Both renters and owners with low housing equity were more likely to have difficulty paying their rent, mortgage and utility bills on time. They were less likely to be able to raise emergency funds when needed.
<a href="https://images.theconversation.com/files/328285/original/file-20200416-140706-q8u8wo.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/328285/original/file-20200416-140706-q8u8wo.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Note: Sample includes all persons aged 25+ who are no longer living in their parents’ homes. Housing equity is defined as family home value minus mortgage debt. Population weights have been applied. Author's calculations from 2017 Household, Income and Labour Dynamics Survey data, Author provided
Renters were also more likely to report poorer physical and mental health.
<a href="https://images.theconversation.com/files/328286/original/file-20200416-140697-1nqojfc.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/328286/original/file-20200416-140697-1nqojfc.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Note: Sample includes all persons aged 25+ who are no longer living in their parents’ homes. Housing equity is defined as family home value minus mortgage debt. Population weights have been applied. Author's calculations from 2017 Household, Income and Labour Dynamics Survey data, Author provided
The spread of coronavirus has added to these existing vulnerabilities. Casual workers have been <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-03-26/coronavirus-centrelink-unemployment-canberra-jobseeker-casuals/12089532">particularly vulnerable to job loss</a>.
The <a href="https://www.who.int/social_determinants/thecommission/finalreport/key_concepts/en/">social gradient in health</a> is well-known. People on the bottom rungs of the socioeconomic ladder tend to be in poorer health. They are then more likely to develop serious <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/triplej/programs/hack/coronavirus-is-exposing-whats-broken-in-australia/12081812">health problems from the coronavirus</a>.
Post-pandemic markets will add to inequalities
COVID-19 is making existing economic inequalities worse. And even in a post-pandemic world it can be expected to slow down wealth accumulation among renters.
<a href="https://www.propertyobserver.com.au/https://www.rba.gov.au/publications/bulletin/2014/sep/2">Hysteresis</a> is a term used to describe an economic event that persists into the future, after the factors that led to the event have disappeared. In labour markets, the long-term unemployed also suffer long-term damage to their job prospects as their skills deteriorate and they are regarded as less employable.
This hysteresis effect will likely spill over into housing markets. Any crisis-driven falls in house prices may be short-term as <a href="https://www.domain.com.au/advice/is-property-still-safe-as-houses-947518/?utm_campaign=strap-masthead&amp;utm_source=the-age&amp;utm_medium=link&amp;utm_content=pos5&amp;ref=pos1">housing values remain relatively insulated</a> by record low interest rates. People who are exposed to job loss, insecure work or ill-health during the crisis will face a greater struggle to regain their economic footing after the pandemic than those from more affluent backgrounds.
This means the wealth-accumulating capacity of people with little to no housing equity is further compromised during and after the pandemic. In short, renters could fall further behind in their ability to buy a home. The gap between the haves and have-nots will grow.
3 principles for post-pandemic policy
An even more unequal housing future for Australia is undesirable. The post-crisis housing debate will need to be conducted with three key elements in mind: equity, solidarity and security.
Equity in access to housing opportunities must not slide off policymakers’ radar. It is not a debatable fact that governments have long provided <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2018-05-10/budget-2018-housing-affordability-first-home-owners-millennials/9745672">generous concessions</a> for property buyers. These measures include <a href="https://theconversation.com/why-politicians-hate-the-idea-of-taxing-the-homes-of-the-rich-52973">capital gains tax discounts</a>, family home exemptions from <a href="https://theconversation.com/a-land-value-tax-could-fix-australasias-housing-crisis-49997">land tax</a> and <a href="https://www.propertyobserver.com.au/https://www.servicesaustralia.gov.au/individuals/topics/assets/30621">income support means tests</a>, and <a href="https://theconversation.com/the-game-of-homes-how-the-vested-interests-lie-about-negative-gearing-112222">negative gearing for investors</a>.
These preferential tax treatments have <a href="https://melbourneinstitute.unimelb.edu.au/assets/documents/hilda-bibliography/other-publications/pre2010/Wood_Stewart_and_Ong_Housing_Taxation.pdf">far exceeded government spending on renters</a>. Notwithstanding the <a href="https://www.propertyobserver.com.au/https://www.tandfonline.com/doi/abs/10.1080/14036090120617">benefits commonly associated with home ownership</a>, restoring some balance in the distribution of subsidies between owners and renters is essential to narrow the widening chasm between them.
Solidarity between generations will be more crucial than ever before to preserve Australia’s social and economic fabric. The <a href="https://theconversation.com/vital-signs-scott-morrison-is-steering-in-the-right-direction-but-were-going-to-need-a-bigger-boat-135209">surge in national debt</a> created in response to the crisis will likely be a multi-generational burden.
Some might be tempted to return to pitting the young against the old in housing debates. Policy thinking that encourages solidarity, rather than stoking tensions between generations, will be increasingly important. For instance, <a href="https://www.ceda.com.au/CEDA/media/General/Publication/PDFs/HousingAustraliaFinal_Flipsnack.pdf">abolishing stamp duty together with levying land tax on all land</a> will remove a key financial barrier to home purchases for both young first-time buyers and older downsizers.
The formation of the national cabinet to oversee the response to COVID-19 also provides a post-pandemic forum to forge federal-state cooperation on the required reforms. Federal support will be needed to help cover state revenue shortfalls in a <a href="https://www.taxinstitute.com.au/australian-tax-forum/stamp-duties-land-tax-and-housing-affordability-the-case-for-reform">gradual transition to land tax</a>. On the other hand, the release of housing equity by older downsizers should ease <a href="https://theconversation.com/fall-in-ageing-australians-home-ownership-rates-looms-as-seismic-shock-for-housing-policy-120651">pressures on the federal retirement incomes system</a>.
Finally, it is time to reprioritise <a href="https://www.ohchr.org/documents/publications/fs21_rev_1_housing_en.pdf">housing security as a foundation for fostering good health and economic participation</a>. Critical public health measures to avoid the spread of disease, such as social distancing and staying at home, are inherently shelter-related. These measures are rarely achievable for <a href="https://theconversation.com/homelessness-and-overcrowding-expose-us-all-to-coronavirus-heres-what-we-can-do-to-stop-the-spread-134378">people who are homeless or in overcrowded housing</a>.<img src="https://counter.theconversation.com/content/135808/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/rachel-ong-viforj-113482">Rachel Ong ViforJ</a>, Professor of Economics, School of Economics, Finance and Property, <a href="https://theconversation.com/institutions/curtin-university-873">Curtin University</a>
This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/as-coronavirus-widens-the-renter-owner-divide-housing-policies-will-have-to-change-135808">original article</a>.
</body></html>

j.ballantyne1990-6AQqhLzZaK

As coronavirus widens the renter-owner divide, housing policies will have to change

<html><body>
GUEST OBSERVATION
In the year since the Australian government created the National Housing Finance and Investment Corporation (NHFIC), its bond aggregator, AHBA, has raised funds for affordable housing providers, allowing them to refinance loans under better conditions. Its first, A$315 million bond issue was in March. The second A$315 million bond issue this week offers providers 2.07% for 10-year interest-only loans.
The NHFIC has released its first <a href="https://www.nhfic.gov.au/our-organisation/reporting-and-disclosures/" target="_blank">annual report</a>. So what progress has been made? And what could be done better?
Providers get better loans
<a href="https://communityhousing.org.au/about_us/what-is-community-housing/" target="_blank">Community housing providers</a> are certainly getting finance through the NHFIC on much better terms than their previous short-term bank loans. An example is <a href="https://bluechp.com.au/" target="_blank">BlueCHP’s</a> $A70 million 10-year loan.
Borrowers’ terms should improve further as the market for quality, government-guaranteed bonds grows. This has been the experience of Swiss government-backed intermediary <a href="http://www.egw-ccl.ch/fileadmin/files/pdf/dokumente/globalkostenabrechnung/EGW_Globalkostenabrechnung_62_d.pdf" target="_blank">EGW</a>. This month, its 62nd bond issue of CHF195 million (A$289 million) had all-in borrowing costs of 0.32% per annum (only slightly more than the government bond) over 20 years.
A good time to invest directly in new housing
To be even more effective the NHFIC needs to go beyond refinancing loans to support long-term investment in building much-needed affordable and green housing. With <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Latestproducts/8731.0Main%20Features2Sep%202019?opendocument&amp;tabname=Summary&amp;prodno=8731.0&amp;issue=Sep%202019&amp;num=&amp;view=" target="_blank">construction in the doldrums</a>, <a href="/news">experts</a> <a href="/news">are</a> <a href="https://blog.grattan.edu.au/2019/09/learning-from-past-mistakes-lessons-from-the-national-rental-affordability-scheme/" target="_blank">calling</a> for a second <a href="https://www.dss.gov.au/sites/default/files/documents/11_2013/social_housing_initiative_fact_sheet.pdf.docx" target="_blank">Social Housing Initiative</a> to meet critical housing needs and <a href="https://providencehousing.org/wp-content/uploads/2014/03/Housing-and-Economic-Development-Report-2011.pdf" target="_blank">provide jobs</a>. The first initiative <a href="http://www.nwhn.net.au/admin/file/content101/c6/social_housing_initiative_review.pdf" target="_blank">stimulated the construction sector and the wider economy</a>, secured 14,000 skilled jobs and inspired innovative design.
With <a href="https://qz.com/1683976/why-are-interest-rates-low-and-how-long-will-it-last/" target="_blank">interest rates for government borrowing near zero</a>, the NHFIC’s impact could be maximised if coupled with long-term public investment – tied to performance targets – as exemplified by <a href="https://www.parliament.scot/parliamentarybusiness/CurrentCommittees/105204.aspx" target="_blank">Scotland</a>.
<a href="https://images.theconversation.com/files/302597/original/file-20191120-515-l80qn4.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/302597/original/file-20191120-515-l80qn4.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Government bond yields – effectively the rates at which governments can borrow money – are close to zero. Data: Federal Reserve Bank of St Louis
Many countries – including Finland, the UK, Austria and France – have long-term programs that bridge the funding gap to make green <a href="https://www.housing.vic.gov.au/social-housing" target="_blank">social housing</a> a reality. Clear guidelines and responsible oversight guide direct equity investment.
AHURI has helped develop the <a href="/news">Affordable Housing Assessment Tool</a> to estimate the <a href="/news">number and location of dwellings required</a>, as well as the most effective ways of funding affordable housing.
The approach taken by the <a href="https://www.ara.fi/en-us/About_ARA" target="_blank">Housing Finance and Development Centre of Finland</a> is widely considered <a href="http://www.housingeurope.eu/resource-1024/why-housing-policy-in-finland-is-a-success-story" target="_blank">Europe’s most effective</a>. It’s an “expert partner, developer and moderniser of housing and promotes ecologically sustainable, high-quality and reasonably priced housing”.
Finland has a clear national strategy in response to well-researched market challenges. The <a href="https://www.ara.fi/en-us/" target="_blank">Finnish model</a> provides tailored grants and interest rate subsidies and selectively applies a government guarantee to drive long-term investment in affordable housing. This ranges from homelessness prevention, student housing and shared ownership for young starters to affordable home ownership and supported accommodation for the aged.
Not all social landlords qualify
Only registered not-for-profit providers that comply with the <a href="https://www.nrsch.gov.au/" target="_blank">National Regulatory System for Community Housing</a> can get a loan through the NHFIC. A <a href="https://www.facs.nsw.gov.au/about/reforms/NRSCH/review-of-the-national-regulatory-system-for-community-housing/" target="_blank">review</a> of the system is under way.
In Europe, social bonds are open to providers that satisfy basic criteria: be not-for-profit and for a social purpose, meet local needs, promote social inclusion and apply affordable rent-to-income ratios.
Despite the obvious need in Australia, NHFIC funding excludes public housing, which is also constrained by caps on public investment.
In the UK, public investment has been lifted after decades of constraint. This has generated a flurry of social house building, particularly in <a href="https://www.gov.scot/policies/more-homes/housing-infrastructure-fund" target="_blank">Scotland</a>.
Good regulation is vital
Scotland, Finland, Switzerland and Austria are particularly careful to ensure only not-for-profit organisations with a social purpose can use special purpose funds. Australia’s regulatory system also needs to ensure social bonds serve a social purpose. For instance, the Water Bank <a href="https://www.nwbbank.com/sustainable-bond-sdg-housing-bond-3" target="_blank">Affordable Housing Bond</a> has very specific guidelines on the type of provider, rent regime, household eligibility and income allocation.
Most importantly, regulation protects funds from extraction by shareholders – public or private.
Revolving funds are the lifeblood of well-maintained and growing social housing. Operating surpluses (such as savings from NHIFC refinancing or sales of social dwellings) are used for maintaining and renovating housing, or building more of it, as in Scotland and the Netherlands. They also ensure rent increases are manageable for tenants following renovations and improvements, as in Denmark and Austria.
Governments can also revolve public loan repayments to sustain supply programs, as in Austria and Finland. Even in Slovakia, the scene of mass housing privatisation in the 1990s, far-sighted policymakers established a revolving fund to ensure owners and tenants live in the best-maintained former Soviet housing today.
Board expertise matters too
The <a href="https://treasury.gov.au/publication/p2019-fsrc-final-report/" target="_blank">Hayne Royal Commission</a> stressed the vital role of boards in ensuring the good conduct of their organisations and quality outcomes for stakeholders. In the case of the NHFIC, its board <a href="http://ministers.treasury.gov.au/ministers/stuart-robert-2018/media-releases/morrison-government-strengthens-nhfic/" target="_blank">must</a> have a range of relevant skills.
Land development, infrastructure and real estate experts dominate the relatively small NHFIC board. It lacks capabilities in the corporation’s core tasks of banking (credit risk assessment), treasury management, housing policy, not-for-profit regulation and development finance. The term of the only member experienced in social housing expires in 2021.
The boards of similar bodies overseas, such as <a href="http://www.egw-ccl.ch/de/portrait/" target="_blank">Switzerland</a>, <a href="https://www.hfa.ie/hfa/Live/Release/WebSite/HomePage/index" target="_blank">Ireland</a> and <a href="https://www.thfcorp.com/_uploads/downloads/254649THFCweb.pdf/" target="_blank">the UK</a>, have capabilities in affordable housing policy, not-for-profit housing provision, public banking and treasury management.
Most boards also include representatives of governments and regulators. Both are missing from the NHFIC board.
Missing pieces of the puzzle
AHURI and the <a href="https://treasury.gov.au/sites/default/files/2019-03/170921-AHWG-final-for-publication.pdf" target="_blank">Affordable Housing Working Group</a> have long argued that, beyond efficient financing, social housing requires other key conditions for growth. The working group recommended: "The Commonwealth and State and Territory governments progress initiatives aimed at closing the funding gap, including through examining the levels of direct subsidy needed for affordable low-income rental housing, along with the use of affordable housing targets, planning mechanisms, tax settings, value-adding contributions from affordable housing providers and innovative developments to create and retain stock."
AHURI <a href="https://www.propertyobserver.com.au/https://www.ahuri.edu.au/research/final-reports/293" target="_blank">research</a> has found the most effective policy levers are pro-social land policy (involving purposeful land banking and regulatory planning), needs-based direct equity investment (nuanced to match needs, land and construction costs), efficient revolving loans and not-for-profit management.
Without these features, the government will miss its <a href="https://www.pc.gov.au/research/ongoing/report-on-government-services/2019/housing-and-homelessness/housing" target="_blank">own targets</a> and underinvest in this <a href="/news">much-needed social infrastructure</a>. Both the precariously housed and productivity growth in the wider economy will suffer.
Three recommendations
We suggest the following:
<ol>
<li>
Develop key indicators focused on the number of additional affordable dwellings and the discount to market rents achieved across different submarkets. Targets should be derived from a national housing strategy to guide the NHFIC, its corporate plan and the board’s KPIs.
</li>
<li>
Design a nuanced capital investment program to drive construction of green, social housing together with NHFIC loans that deliver more than refinancing.
</li>
<li>
Benchmark NHFIC performance against similar guaranteed bond issues, all-in loan costs and intermediary running costs and governance expertise. This would reassure government and the affordable housing sector about its cost-effectiveness.
</li>
</ol>
The NHFIC is an innovative and promising initiative. It is one bright light in an otherwise bleak policy landscape. It could shine even more brightly when combined with complementary funding and land policies to end homelessness and ensure access to affordable housing for all.<img src="https://counter.theconversation.com/content/126922/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Julie Lawson, Honorary Associate Professor, Centre for Urban Research, RMIT University.
Mike Berry, Emeritus Professor, RMIT University.
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/how-1-bright-light-in-a-bleak-social-housing-policy-landscape-could-shine-more-brightly-126922" target="_blank">original article</a>.
</body></html>

How one bright light in a bleak social housing policy landscape could shine more brightly

<html><body>
GUEST OBSERVATION
Australians need greater housing diversity to meet their current and future housing needs. Yet increasing diversity, and meeting the need for more smaller dwellings in particular, has proved surprisingly difficult to achieve. Vested interests – both the big end of town and traditionalists seeking to preserve Australians’ suburban way of life – have come together in a rare alliance to argue against policies to deliver more diverse housing.
There are strong demographic drivers of the need for a more diverse range of housing in our cities. Not all current and future households want single standalone houses or multi-storey apartments.
Indeed, <a href="https://grattan.edu.au/wp-content/uploads/2014/04/090_cities_report_housing_market.pdf" target="_blank">three</a> <a href="https://www.propertyobserver.com.au/https://www.mdpi.com/2071-1050/9/10/1718" target="_blank">recent</a> <a href="https://www.sydney.org.au/terraces-before-towers-sydneysiders-want-more-medium-density-housing/" target="_blank">surveys</a> showed city dwellers are looking for housing diversity, particularly smaller houses such as terraces and semi-detached dwellings, in inner and middle suburbs. This demand <a href="https://theconversation.com/lack-of-housing-choice-frustrates-would-be-downsizers-60512" target="_blank">comes from downsizers</a> as well as families. We are seeing a clear <a href="https://www.domain.com.au/advice/the-block-2019-why-owner-occupiers-investors-and-developers-are-embracing-medium-density-%20housing-865240/" target="_blank">recognition of the shortage of this stock</a>.
There is strong community support for providing more housing choice in the areas where people already live. People as they approach retirement overwhelmingly want to stay in the same neighbourhood.
Housing hasn’t kept up with changing needs
From about the 1980s, cities began to respond to the economic, social and environmental consequences of sprawl by <a href="https://theconversation.com/becoming-more-urban-attitudes-to-medium-density-living-are-changing-in-sydney-and-melbourne-84693" target="_blank">promoting more compact urban forms and concentrating high-density housing in selected urban centres</a>. However, new housing in Australian cities has typically been dominated by two categories: freestanding homes and apartments.
Attempts to introduce more diverse housing have <a href="https://www.smh.com.au/national/nsw/terraces-before-towers-sydneysiders-want-more-medium-density-housing-20190118-%20p50s8q" target="_blank">met</a> with <a href="https://architectureau.com/articles/election-promise-to-end-medium-density-housing-code-a-backward-step-institute/" target="_blank">fierce resistance</a> from <a href="/news">home owners in existing low-density suburbs</a>. As a result, cities in Australia have some of the <a href="https://cur.org.au/cms/wp-content/uploads/2018/10/housing-policy-brief.pdf" target="_blank">largest houses and lowest densities</a> in the world.
And just on the horizon is a huge <a href="https://2qean3b1jjd1s87812ool5ji-wpengine.netdna-ssl.com/wp-content/uploads/2018/04/Australia-Population-Map-Generational-Profile_Infographic_McCrindle.pdf" target="_blank">demographic bubble of older Australians</a>, many living in these large detached houses. This means much of our housing stock is likely to be under-used.
Furthermore, lifestyles are changing, including greater workforce participation by women and <a href="http://theconversation.com/australian-city-workers-average-commute-has-blown-out-to-66-minutes-a-day-how-does-yours-compare-120598" target="_blank">ever-increasing commute times</a>. These changes have made smaller, lower-maintenance houses in inner and middle suburbs, with good public transport, very desirable places to live.
The ‘missing middle’ of housing supply
Despite these trends, our bigger cities offer limited variation in housing types. Australians mostly have a choice between single detached houses or high-density apartment living.
Take Sydney as an example. More than half of new homes built in the city are high-rise apartments. In 2018, <a href="https://www.smh.com.au/national/nsw/apartment-oversupply-puts-squeeze-on-rents-20190705-p524cp" target="_blank">30,880 apartments were completed</a> in Sydney, with another <a href="http://www.udiansw.com.au/uploads/docs/Policy_Agenda_2019_20_low_res.pdf" target="_blank">194,000 in the pipeline</a>.
Housing that is neither a freestanding house nor an apartment accounts for only 14% of housing approvals in Sydney. Only 5,390 such homes were approved in 2015-16. This is despite current council zoning and planning controls offering the potential for almost 280,000 of these dwellings.
Dwelling supply from high-density apartments and from greenfield land releases will continue to provide the most significant proportion of future housing requirements.
However, there is a compelling case for an increase in different housing types in established urban areas, especially in middle suburbs developed in post war years.
Between 1919 and 1962, fewer terrace houses were built as they fell out of favour. Homes on quarter-acre blocks were built across Australian cities, aided by the construction of train lines and then the arrival of cars and motorways. Later, when strata title laws were introduced, apartments were increasingly developed.
But this housing legacy no longer meets the needs of large sections of our population, both old and young. The variety of housing supply has not kept pace with changing household needs, particularly as household sizes have shrunk and housing costs have soared.
Singles and couple-only households are increasing, accounting for more than 50% of all household types in some cities. <a href="https://aifs.gov.au/facts-and-figures/households-australia/households-australia-source-data" target="_blank">Average household size has fallen</a> below 2.5 people from more than 3 at the start of the 1990s.
These trends are partly linked to an ageing population. By 2036 the number of the Australian population aged over 60 will have <a href="https://aifs.gov.au/facts-and-figures/households-australia/households-australia-source-data" target="_blank">increased by 56%</a>. More than <a href="https://aifs.gov.au/facts-and-figures/households-australia/households-australia-source-data" target="_blank">one in seven people will be over 65</a>.
The other fast-growing age segment in Australian cities is young people and young families. But, as house prices rise, <a href="https://aifs.gov.au/facts-and-figures/households-australia/households-australia-source-data" target="_blank">home ownership levels for people in the 20-35 age group are falling</a>.
Governments need to challenge vested interests
Housing stock other than multistorey apartments or larger suburban homes will provide more affordable homes for smaller households. Compact, well-designed houses on smaller land parcels are <a href="/news">around 25% more affordable</a> than detached houses (for newer or more recent stock) in the same neighbourhoods.
Yet providing this sort of housing stock still presents considerable challenges. Existing <a href="https://www.thefifthestate.com.au/urbanism/planning/posh-sydney-says-no-to-density-its-a-thing/" target="_blank">owners in middle-ring suburbs are concerned about change and loss of character</a>. Councils face stiff opposition when they try to increase densities and introduce new housing stock.
The opposition often comes from people who have lived in these suburbs for a long time. This opposition is sometimes <a href="https://www.smh.com.au/national/nsw/limited-high-rise-can-halt-sprawl-and-preserve-our-suburbs-character-20190524-p51qzp?btis" target="_blank">supported by the property sector</a>, which perhaps fears this kind of stock <a href="https://www.smh.com.au/national/nsw/how-to-eliminate-nimbys-let-householders-unite-as-developers-20190227-p510kh" target="_blank">could undermine demand for new high-rise apartments</a>.
There are no powerful interest groups advocating for housing diversity because this market, in infill suburbs, is widely dispersed among individual householders.
Oregon has become the first US state to comprehensively bar local governments from imposing exclusive single-family residential zoning, and to open up almost all residential zones to low-density housing stock. The <a href="http://cityobservatory.org/in-oregon-the-middle-isnt-missing-any-more/" target="_blank">Oregon experience</a> shows that, after many years of trying alternative approaches, state government action was required to achieve housing diversity against the arguments of local councils, residents and the property industry. Neighbourhoods with this diversity of housing are now among the state’s most desirable.<img src="https://counter.theconversation.com/content/122390/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
Roberta Ryan, Professor, UTS Institute for Public Policy and Governance and UTS Centre for Local Government, University of Technology Sydney.
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/people-want-and-need-more-housing-choice-its-about-time-governments-stood-up-to-deliver-it-122390" target="_blank">original article</a>.
</body></html>

People want and need more housing choice. It’s about time governments stood up to deliver it

<html><body>
The national level of homelessness increased by 14% from 2011 to 2016, with the increase most pronounced in NSW, up 37% to 37,715 persons. 
In 2008, the Federal government committed to an ambitious strategy to halve national homelessness by 2020.
But as successive governments regrettably abandoned the 2008 strategy and commitment, homelessness in Australia has been on the rise.
There are several levels of homelessness, but concerningly the numbers sleeping rough have been growing even faster.
This, the most visible and distressing form of homelessness, grew nationally by 20% between the 2011-2016 Census periods.
Academics point to policy failures within these trends. These include social security system changes, such as shifting welfare benefit recipients onto lower payments with more conditions of eligibility.
This week the Daily Telegraph reported one in 10 homeless people sleeping rough in NSW is a military veteran who has failed to get help from the Department of Veterans’ Affairs.
These and other policy failures have been critical in a housing market where, by international standards, subsidised social housing provision is minimal.
The geographical pattern of the homeless surge confirms the housing market is in part driving these changes.
An Australian Housing and Urban Research Institute (AHURI) report found increases in homelessness have generally been much more rapid in capital cities. Non-metropolitan areas have recorded much lower growth rates, or even reductions.
So, overall numbers were up by 53% in inner Sydney suburbs (2011-2016), but rose by a more modest 21% in Hobart, and fell in remote South Australia and Western Australia.
The vast majority of Australia’s lower-income population depend on an increasingly stressed private rental sector where the stock of low-cost homes is dwindling.
ABS statistics show the proportion of low-income tenants in rental stress has risen from over the past decade in New South Wales from 43% to 51%. 
Despite these stark trends, recent Australian governments, while footing the bill for homelessness services, have presided over cuts in social and affordable housing. An increasingly underfunded social and affordable housing system leads to a burgeoning cost of emergency services for those lacking homes. On its current path, the cost is set to exceed $1 billion by 2020.
Of course, mental health and homelessness are strongly associated. Some 30% of Specialist Homelessness Services (SHS) consumers had a current mental health issue, according the Australian Institute of Health and Welfare in 2018.
Academics noted this is significantly higher than the rate of mental illness among the general population of 16%. Mental ill-health captures issues, including schizophrenia, bipolar disorder, major depression, post-traumatic stress disorder, and obsessive compulsive disorder.
The interplay between mental health and housing pathways is the subject of a current national study being undertaken by Mind Australia and the AHURI.
It aims to identify failure points in the housing and mental health systems—failure points represent missed opportunities for early intervention and are potential key points for system improvement. A 2016 study found the significant share of rough sleepers with a mental health issue are not receiving any treatment, and their homelessness perpetuates their mental health issues.
The long term structural trends in the Australian housing system - falling rates of home ownership, an increase in private rental, declining stocks of social housing and lack of affordable housing for low-income households—combine as the backdrop in the housing issues facing the homeless.
This article first appeared in The Daily Telegraph. 
</body></html>

jchancellor-FAypfDUnLy

Homelessness: Australia's policy complacency continues

<html><body>
GUEST OBSERVATION
Labor’s bold <a href="https://www.alp.org.au/negativegearing" target="_blank">stance on housing tax reform and investment</a> makes this one of the likely policy flashpoints in the coming election campaign. How does the Coalition government’s housing record stand up to scrutiny? What would be in prospect in a third Liberal-National term? And exactly what is Labor’s alternative pitch?
The Coalition record
Under the Abbott-Turnbull-Morrison governments we’ve seen a housing market featuring both rampant inflation and damaging volatility. Despite recent falls in some cities, late 2018 prices remained <a href="https://www.abs.gov.au/ausstats/meisubs.nsf/log?openagent&amp;641601.xls&amp;6416.0&amp;Time%20Series%20Spreadsheet&amp;1D907630FB3718CACA2583C1000F691C&amp;0&amp;Dec%202018&amp;19.03.2019&amp;Latest" target="_blank">29% up on 2013</a> across the country – 42% in Sydney.
While first home buyer numbers <a href="https://www.abs.gov.au/ausstats/meisubs.nsf/log?openagent&amp;560112.xls&amp;5601.0&amp;Time%20Series%20Spreadsheet&amp;55292123715E3E73CA2583B90076B373&amp;0&amp;Jan%202019&amp;12.03.2019&amp;Latest" target="_blank">grew in 2018</a>, the total remained well below 2007 (pre-GFC) levels. Unless this changes the <a href="https://grattan.edu.au/wp-content/uploads/2018/03/901-Housing-affordability.pdf" target="_blank">rate of young adult home ownership</a> is likely to drift still lower.
During this term of government, official action to moderate housing market instability has been left almost entirely to the Reserve Bank of Australia and the Australian Prudential Regulation Authority, through their influence on the cost and accessibility of housing finance.
The government has mostly turned a blind eye to more far-reaching reforms that could squarely address Australia’s boom-and-bust housing dynamic. The prime source of recent volatility has been the erratic behaviour of landlord investors, as the chart below shows. They are responsible for <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/5601.0Jan%202019?OpenDocument" target="_blank">around 35% of residential transactions</a> across the country.
<a href="https://images.theconversation.com/files/268262/original/file-20190409-2912-o4xj7z.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/268262/original/file-20190409-2912-o4xj7z.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
<a class="source" href="https://www.propertyobserver.com.au/http://www.abs.gov.au/ausstats/abs@.nsf/mf/5601.0" target="_blank">ABS Cat 5601.0</a>, Author provided
Australia’s unusually favourable tax settings on negative gearing and capital gains tax discount compound investors’ speculative instincts. Calls for reform have been growing, from sources as diverse as a <a href="https://www.smh.com.au/national/nsw/nsw-planning-minister-rob-stokes-lashes-out-at-negative-gearing-20161124-gswtrz" target="_blank">Liberal state government minister</a> and the <a href="http://www.rba.gov.au/publications/submissions/housing-and-housing-finance/inquiry-into-home-ownership/pdf/inquiry-into-home-ownership.pdf" target="_blank">Reserve Bank</a>. And the annual cost to the public purse has been rising – most recently estimated at <a href="https://grattan.edu.au/report/hot-property/" target="_blank">A$11.7 billion</a>. Despite this, federal Coalition ministers have resisted any paring back of these concessions.
The Labor alternative
The ALP enters this election campaign restating its 2016 policy to restrict current negative gearing to newly built properties and to halve the CGT discount for all newly purchased rental homes.
While sectional interests have echoed government claims of <a href="https://www.news.com.au/finance/real-estate/buying/inviting-a-crash-pm-issues-ominous-warning-as-he-defends-governments-housing-policies/news-story/4c7005bf1208054b4569eabecc78dfe2" target="_blank">damaging market impacts</a>, mainstream economists view the policy as <a href="https://www.theage.com.au/politics/federal/negative-gearing-changes-will-affect-us-all-mostly-for-the-better-20190208-p50wjn" target="_blank">a necessary structural reform</a> that will slightly moderate house price inflation over the longer term. However, with all existing investments exempt from proposed changes, the budgetary pay-off would be modest at first.
Labor also advocates rebalancing the <a href="https://www.alp.org.au/media/1657/190328_factsheet_housing.pdf" target="_blank">tax treatment of large-scale institutional investment</a> in rental housing. According to industry proponents, resulting “build to rent” development could help <a href="http://blogs.unsw.edu.au/cityfutures/blog/2017/05/can-institutional-funding-be-channelled-into-rental-housing/" target="_blank">to diversify the housing market and provide a better quality tenancy offer</a>. It would also have the benefit of introducing a counter-cyclical component to residential construction.
Housing stress on the rise
The Coalition government has also presided over intensifying stress at the lower end of the housing market since 2013. Homelessness has been <a href="https://www.launchhousing.org.au/site/wp-content/uploads/2018/05/LaunchHousing_AHM2018_Report.pdf" target="_blank">increasing by 2.8% a year</a>. The proportion of low-income tenants facing unaffordable rents <a href="https://www.abs.gov.au/AUSSTATS/SUBSCRIBER.NSF/log?openagent&amp;41300_table22_2015-16.xls&amp;4130.0&amp;Data%20Cubes&amp;A58C0970758A300FCA2581B700185D9E&amp;0&amp;2015-16&amp;13.10.2017&amp;Latest" target="_blank">rose by four percentage points</a> in the four years to 2015-16.
At least in part, these trends reflect Coalition government disinterest. While slightly moderated under the Turnbull-Morrison administrations, the die was cast with the incoming government’s 2013 decision to abolish the post of housing minister and by the Abbott inclination to re-emphasise <a href="https://www.propertyobserver.com.au/https://apo.org.au/node/56122" target="_blank">a minimalist vision of Federal government responsibilities</a>. The new government was quick to abandon <a href="https://www.propertyobserver.com.au/http://www.abc.net.au/radionational/programs/breakfast/homelessness/4764790" target="_blank">Kevin Rudd’s 2008 commitment to halve homelessness by 2020</a>.
To the credit of the Turnbull-Morrison governments, a project begun in 2016, when Morrison was treasurer, has created a <a href="https://theconversation.com/government-guarantee-opens-investment-highway-to-affordable-housing-88549" target="_blank">new institution</a> to open up access to cheaper, longer-term finance for community housing providers.
Through <a href="https://www.ahuri.edu.au/news-and-media/news/national-housing-finance-and-investment-corporation-issues-first-bond-to-community-housing-providers" target="_blank">its first bond, issued only last month</a>, the National Housing Finance and Investment Corporation (NHFIC) has enabled six of these providers to secure debt finance on much-improved terms. This will boost recipient organisations’ financial “headroom”. A worthwhile – but modest and one-time-only – addition to affordable housing stock may result.
Subsidies needed to restore supply
Importantly, though, the cheaper debt finance made available through the NHFIC only narrows – rather than bridges – the gap between the cost of delivering social housing and the rents that low-income Australians can afford.
A major social housing investment program will require <a href="https://www.propertyobserver.com.au/https://www.ahuri.edu.au/research/final-reports/306" target="_blank">a complementary government subsidy</a>. The treasurer’s own <a href="https://treasury.gov.au/sites/default/files/2019-03/C2016-050_Final_report.pdf" target="_blank">advisory working group has unambiguously stated the need</a> for such provision.
Curiously, the government has yet to give any sign it intends to finish what it started here. Without the necessary gap-filling subsidy, there must be a danger that – perhaps after exhausting the potential for refinancing community housing providers – the NHFIC could become a white elephant.
Indeed, the Coalition’s most significant action on affordable rental housing supply was its 2014 cancellation of the Rudd government’s National Rental Affordability Scheme. Mainly targeted at low-income workers, the NRAS generated 38,000 discount-to-market rental units (against an original target of 50,000).
The ALP is now promising to re-establish a large-scale supply program. As well as restricting landlord investor tax concessions to new-build properties, Labor’s 2019 pitch includes <a href="http://blogs.unsw.edu.au/cityfutures/blog/2018/12/shorten-places-housing-at-the-centre-of-the-2019-election/" target="_blank">a program similar to NRAS</a> with the aim of generating 250,000 new affordable rental homes over a decade. A shorter-term target of 20,000 dwellings during the next term of government would equal the Rudd government’s 2009-12 social housing stimulus, which helped to stave off the GFC.
Supported through subsidy in the form of annual investor incentive payments of $8,500 for 15 years, the program would be mainly targeted at <a href="https://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=4&amp;ved=2ahUKEwjKh4HTiaPhAhUs0oMKHVmNCh0QFjADegQIAhAC&amp;url=https%3A%2F%2Fwww.alp.org.au%2Fmedia%2F1506%2F181216_affordable_housing_for_renters_fact_sheet.pdf&amp;usg=AOvVaw0VTUS5Phui2MZch0wiSeK6" target="_blank">“key workers” and “lower-income families”</a>. Tenants would pay rents of 20-25% below market levels. Beyond this, the program could help more disadvantaged Australians, but only with matching financial assistance or other subsidies from states and territories, which would enable rents to be even lower.
The Coalition’s current offer
Other than its push-back on Labor proposals, the Coalition has – as yet – said little about its election policy on housing. Last week’s budget offered nothing to suggest that, beyond a defence of the policy status quo, housing initiatives are front of mind for the Treasurer or Prime Minister.
The government will maintain the NHFIC, one of its really positive recent moves. The complementary – and overdue – <a href="http://www.nrsch.gov.au/news_and_events/nrsch-review-discussion-paper" target="_blank">review of social housing regulation</a> will also continue. We can probably expect more City Deals, which may even, as in the recent <a href="https://minister.infrastructure.gov.au/tudge/releases/2019/february/at016_2019.aspx" target="_blank">Hobart announcement</a>, include some provision for affordable housing.
The budget’s infrastructure program, including fast urban rail, might have implications for housing accessibility and affordability. But, if so, these aspects don’t feature prominently in the announcements.
But beyond continuing existing policy directions, nothing much seems likely to be added to the Coalition’s 2019-22 offer on housing. It isn’t proposing any action on the imbalanced tax settings that fuel housing market volatility, let alone any policy to boost affordable housing supply directly. Neither is there any sign of support for the build-to-rent sector, which promises much but appears as yet still-born.
It seems fear of change continues to dominate Coalition thinking on housing. The overriding priority remains to support existing property values, rather than to act on unaffordability – a Boomer protection racket par excellence! Recent ministerial statements offer little indication that a re-elected Coalition government would make a serious effort to fix Australia’s increasingly under-performing housing system.<img src="https://counter.theconversation.com/content/113556/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Hal Pawson, Associate Director - City Futures - Urban Policy and Strategy, City Futures Research Centre, Housing Policy and Practice, UNSW and Bill Randolph, Director, City Futures Research Centre, Faculty of the Built Environment, UNSW
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/on-housing-theres-clear-blue-water-between-the-main-parties-113556" target="_blank">original article</a>.
This article has been updated to clarify Labor’s policy on negative gearing and capital gains tax and to correct the number of community housing providers financed by the NHFIC.
</body></html>

On housing, there’s clear blue water between the main parties: Hal Pawson

<html><body>
GUEST OBSERVATION
Federal and state elections in coming weeks provide a timely moment for Australians to reflect on the increasingly obvious failure of governments to manage the triple crises of inflated property prices, lack of <a href="https://www.facs.nsw.gov.au/providers/housing/affordable/about/chapters/what-is-affordable-housing" target="_blank">affordable housing</a> for people on low to moderate incomes, and property market volatility. The likely <a href="http://blogs.unsw.edu.au/cityfutures/blog/2018/12/shorten-places-housing-at-the-centre-of-the-2019-election/" target="_blank">prominence of housing in the federal poll</a> at least, if not in New South Wales, perhaps signals welcome political recognition that decades of complacency and inaction are to blame for housing system under-performance. And it’s <a href="https://cityfutures.be.unsw.edu.au/research/projects/strengthening-economic-cases-housing-productivity-gains-better-housing-outcomes/" target="_blank">costing the country dearly</a>.
There’s a growing sense that core aspects of the governmental mindset that have underpinned housing policy since the 1980s are long overdue for a rethink. And not just in Australia. Our recent <a href="https://shapingfutures.gla.ac.uk/" target="_blank">knowledge exchange project</a>, involving academics, policymakers and professionals in Australia, Britain and Canada (the “ABC countries”), <a href="https://cityfutures.be.unsw.edu.au/research/projects/shaping-futures-changing-housing-story/" target="_blank">tapped into these debates</a>.
A misplaced faith in markets
Our <a href="https://cityfutures.be.unsw.edu.au/research/projects/shaping-futures-changing-housing-story/" target="_blank">Shaping Futures report</a> identifies important common housing features across the ABC countries. These include their overarching “liberal market” approach (for example, relatively light regulation of private rental housing) and the challenges of managing population-driven growth in cities.
In all three countries, a similar set of foundational beliefs has dominated housing policy for decades. One is an increasingly misplaced faith that housing markets are well-functioning systems. Another is that issues of poor housing and high housing costs are seen purely in terms of redistributive welfare. The impacts on growth and productivity are largely ignored.
Governments of the ABC countries have increasingly delegated responsibilities for coping with national and global pressures on housing. At the same time, they have provided little more autonomy and limited resources for cities and regions to respond to these pressures.
All three nations have seen falling home ownership rates for young adults and long-term declines in home ownership affordability – <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/1467-8462.12174" target="_blank">among the most severe in the OECD</a>. Household debt rates are <a href="https://data.oecd.org/hha/household-debt.htm" target="_blank">close to the highest in the OECD</a>.
Inflated demand is increasing stress in private rental markets. It’s coming from growing numbers of frustrated middle-income aspirant homebuyers and from low-income tenants denied access to social housing by a proportionately smaller supply.
<a href="https://cityfutures.be.unsw.edu.au/research/projects/strengthening-economic-cases-housing-productivity-gains-better-housing-outcomes/" target="_blank">In Sydney in 2017</a>, moderate-earning and low-earning tenants paid, on average, more than A$6,000 a year in rent over and above 30% of their incomes. And that still didn’t spare them the growing costs and lost productivity of commutes commonly exceeding 90 minutes.
Research in <a href="https://cityfutures.be.unsw.edu.au" target="_blank">Sydney</a>, <a href="https://council.vancouver.ca/20171128/documents/rr1.pdf" target="_blank">Vancouver</a> and <a href="https://data.london.gov.uk/dataset/housing-london" target="_blank">London</a> demonstrates that to quantify the real burdens of city housing shortages we need integrated analysis of housing and transport outcomes.
Housing failures have broader consequences
Housing outcomes, including quality, price and location, have significant impacts on the “big goals” of governments.
Regressive subsidies (such as tax concessions for property owners) have worsened rather than offset the effects of rising rents and house prices on income inequality and wealth distribution. In all three countries inequality indices have increased over the last two decades. And in the UK, at least, <a href="https://www.parliament.uk/business/publications/research/key-issues-for-the-new-parliament/social-reform/social-mobility/" target="_blank">social mobility is lower than in other developed countries</a>. Housing systems have been at the heart of these changes.
We should aim to boost economic productivity by enhancing human capital – that is, maximising people’s opportunities and capabilities. Instead, there is an emerging sense that growth dividends have been sunk into raising housing and land prices, through investor speculation. This rentier-driven, rather than entrepreneur-led, economic growth has reduced the housing market’s resilience to cyclical instability.
Piecemeal policies aren’t enough
At least until very recently, longstanding systemic housing problems have generally failed to evoke major policy responses. When interventions have been considered necessary, these have tended to be restricted to homelessness and to helping marginal homebuyers. This has often been done in ways that have proved counterproductive by pumping up demand.
With the possible exception of the UK devolved nations, government housing policymaking capacity has been largely emasculated across all three ABC countries over the past 10-20 years. Housing ministries and agencies have been abolished or “integrated” into human services departments.
Likewise, Shaping Futures stakeholders were unimpressed with recycled policy proposals. One example is suggestions that <a href="https://www.pc.gov.au/inquiries/completed/human-services/reforms/report" target="_blank">income allowances for individuals should replace direct supports for housing supply</a>. Another is that planning is the prime cause of supply-side “stickiness” that holds up the delivery of new housing.
One response would be to join some of our academic colleagues in attributing such shortcomings to a misguided faith in managed markets. We might even echo calls to restore pre-1980s housing policy instruments such as big public housing, deep rent controls, tied subsidies and the like.
However, the reality is that markets are likely to remain a preferred basis for our housing systems. The above diagnoses and prescriptions also overlook the possibility that some post-1980s innovations have produced significant policy progress. The emergence – particularly in the UK – of regulated not-for-profit organisational models is an important case in point.
Nevertheless, minor tinkering will resolve none of the major housing system problems that have become all too apparent in the ABC countries since the turn of the century, and especially since the GFC.
Key features of a solution
As well as a commitment to housing as a higher priority for government spending, a new understanding of how housing systems operate and what housing outcomes achieve is urgently needed. In particular:
<ul>
<li>
The housing sector needs to make <a href="https://cityfutures.be.unsw.edu.au/research/projects/strengthening-economic-cases-housing-productivity-gains-better-housing-outcomes/" target="_blank">stronger economic cases for support</a>, while treasury and finance ministries must improve their comprehension of housing markets. Advocates need to voice the productivity case for housing; policymakers need to take it seriously.
</li>
<li>
As failed economic thinking for housing policies has generated unstable and expensive housing outcomes, the conventional wisdom finds easy scapegoats in the regulatory planning system. Yes, unduly tight regulation will hinder supply, but no more so than failure to invest adequately in infrastructure and, indeed, shortages of construction labour and materials. Again, the challenge for treasuries is to resist the simplistic “economics 101” analysis that fails to recognise <a href="https://www.marsdens.net.au/assets/pdf/Peter-Phibbs-LE-2018.pdf" target="_blank">the special qualities of housing and land markets</a>.
</li>
</ul>
<ul>
<li>
Far from further downgrading its influence, planning needs to be cast in a more central role to extract infrastructure-and-planning-induced gains. Critical here is the recognition that “<a href="https://theconversation.com/england-expects-40-of-new-housing-developments-will-be-affordable-why-cant-australia-94581" target="_blank">inclusionary zoning</a>” essentially taxes “scarcity rents”. And – unlike tax-funded housing expenditure – it creates no drag on growth and productivity.
</li>
<li>
Governments in Australia and Canada need to fully recognise <a href="http://blogs.unsw.edu.au/cityfutures/blog/2017/04/ready-for-growth-has-australias-affordable-housing-industry-got-what-it-takes/" target="_blank">the potential of non-profits</a> to deliver not just low-income housing but mixes of renting, owning and shared ownership. This creates opportunities for younger households as well as better neighbourhoods.
</li>
<li>
Governments must reshape young adult routes into home ownership. At the same time, they must avoid over-reliance on crudely designed central bank policies on deposit limits and lending ratios uniformly applied across diverse local housing markets.
</li>
</ul>
Reforms to ensure better housing outcomes in the ABC countries are possible. Significant modernisation of private rental regulation in <a href="https://theconversation.com/an-open-letter-on-rental-housing-reform-103825" target="_blank">Scotland, Victoria</a> and <a href="https://engage.gov.bc.ca/app/uploads/sites/381/2018/12/RHTF-Recommendations-and-WWH-Report_Dec2018_FINAL.pdf" target="_blank">British Columbia</a> provides recent cases in point.
Most such steps will depend, however, on governments providing additional or redirected resources. Even more, they require housing systems to be administered at regional and local level with evidence-based understanding and commitment.
Many of the housing problems that distress urban communities across the ABC countries stem from “a veil of ignorance”. There’s an official disregard for evidence and mistaken adherence to simplistic narratives that play down significant market failures.
Households, communities and cities deserve better futures. <a href="https://cityfutures.be.unsw.edu.au/research/projects/shaping-futures-changing-housing-story/" target="_blank">Shaping them is feasible</a>.
A convincing pitch to do so could well prove critical in swinging young voters’ allegiance and, as a result, the results of Australia’s imminent elections.
Duncan Maclennan, Professorial Research Fellow in Urban Economics, UNSW; Professor of Strategic Urban Management and Finance, University of St Andrews; Professor in Public Policy, University of Glasgow
Hal Pawson, Associate Director - City Futures - Urban Policy and Strategy, City Futures Research Centre, Housing Policy and Practice, UNSW
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/housing-policy-reset-is-overdue-and-not-only-in-australia-112835" target="_blank">original article</a>.
</body></html>

Housing policy reset is overdue, and not only in Australia

<html><body>
Housing affordability supposedly ranks as a top-three Federal election issue, after the cost of living and healthcare and ageing, according to a survey by the Housing Industry Association.
Affordability ranked ahead of immigration and the environment, concluded the JWS Research survey of 1500 people.
"The importance of home ownership to Australians couldn't be clearer. Now more than ever, home ownership matters," the Housing Industry Association chief economist Tim Reardon noted.
It comes as first home buyers have been more active in the market with Sydney housing around 10% more affordable than this time last year.
A typical Sydney dwelling now costs $789,000, below the $884,000 it was early last year, according to CoreLogic. The biggest Sydney declines have been in the municipalities of Ryde and Canterbury-Bankstown.
Of course, it is not just those aspiring to first home ownership that worry about affordability, as separate polling research in Tony Abbott's seat of Warringah on Sydney's Northern beaches indicated.
The concerns of Warringah voters focused around infrastructure, especially roads and traffic congestion, population growth, environmental concerns, but also housing affordability for their children.
The focus groups, sponsored by the University of Canberra’s Democracy 2025 project and conducted by Landscape Research, suggested older Warringah voters were more engaged, more readily able to discuss issues in federal politics, while younger voters have largely tuned out, feeling powerless.
Reardon said the Australian dream of owning a home was "still embedded in the psyche of Australians". He adds with a federal election imminent, it was important to recognise that 71% of people believe governments have an important role in helping Australians achieve their dream.
Interestingly, the HIA research found that home ownership was viewed as especially important to achieving financial stability in retirement.
This comes as there's continuing debate about whether first home buyers should be allowed to access their superannuation.
It flared again recently after a key recommendation from Kenneth Hayne's Financial Services Inquiry.
Hayne says superannuation should be solely to look after Australians in retirement, not first home purchases.
Any incoming Federal Labor Government will accordingly phase out the Coalition government's First Home Super Saver Scheme that allows first timers to access their super accounts.
The scheme, which enables first time buyers to access extra savings put into their superannuation account, was introduced in the 2017 budget by then treasurer Scott Morrison. He argued it would help young people accelerate their savings to buy into markets.
Between the start of the program on July 1 last year and February this year, around 2400 people have made requests to access their super top-up.
That equated to around 4% of the first home buyers who'd secured a home loan over the period.
They have sought the release equating to a helpful $12,000 per person.
Labor voted against the scheme when it was created, but assures current users of the scheme they will not be affected by their policy. 
It is one of many housing schemes ditched by governments in recent times as they come and go.
We have seen off the National Rental Affordability Scheme and the First Home Saver Account schemes too.
I'd suggest one reason for the young voter feeling powerless was this constant changing tides with policy.
Navigating the housing market with confidence, for any age, requires policy consistency from our federal leaders.
This article first appeared in The Daily Telegraph. 
</body></html>

Housing Policy

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Housing Policy

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News