Housing crisis

The Affordable Housing Crisis and a Case for Changing Mixed Tenure

“The real housing crisis is the lack of affordable rental housing, not the true cost of buying a home,” says Michele Adair, CEO of Housing Trust, one of the largest community housing providers of New South Wales and Chairman of Peak Community Housing Industry Association (CHIA) NSW.

Australia is in the midst of a serious housing crisis, with issues such as housing insecurity and homelessness demanding real and quick solutions. Mixed-occupancy developments are the way to go, says Adair, citing the example of the upcoming North Sea development in the coastal town of Wollongong. Northsea will have a mix of private residences and community housing, making way for affordable and social housing within an architecturally designed, premium residential development.

The current huge shortage of affordable rental housing can only be filled if one in five new units is reserved for affordable rental. Integrated housing also serves another purpose, that of creating rich, diverse and inclusive communities.

At the Northsea development, 10 apartments are dedicated to social housing while six apartments will be available for affordable housing. Social housing tenants, many of whom work casual jobs, have their rent set at just 25% of their income. For affordable housing tenants, rents start at 75% of market with no more than 30% of their household income.

Would Northsea tenants have the assurance that rent will be locked in for the long term? The legislation would ensure that, says Adair, adding that “…when we provide housing, we provide housing to people for life as long as they continue to be eligible, if there are government rules about eligibility to income, and, of course, as long as tenants continue to do the right thing, take care of their property and pay their rent on time”.

To be able to tap into under construction or vacant supply, the government should expand subsidies and support, incentivizing developers to commit to affordable housing. Adair estimates that at least 20% of new buildings should be dedicated to affordable housing. However, even Landcom, the land and property development arm of the NSW government, only commits to providing 5% affordable rental or social housing in their projects.

Whether it’s Landcom’s redevelopment of the former Bulli Hospital site or the Cokeworks development in Corrimal, Wollongong, affordable housing is capped at 5% which is simply not enough, says Adair. To reach 20%, governments must care about renters the same way they have always cared about first-time home buyers.

“And we achieve that by holding them accountable to do something about it. It doesn’t matter to a builder whether he builds a house that will be rented out at an affordable price or it is sold at a huge profit.

Elaborating on the benefits of partnering with non-profit community housing providers such as Housing Trust, Adair explains that they enjoy tax advantages and concessions not available to government or private companies, and that they have a proven track record of regulatory compliance.

Although there are 12-15 sites that Housing Trust currently manages for the NSW Land and Housing Corporation (LHC) that would be best demolished and redeveloped for increased return, policy reforms are needed for this to happen. CHIA will continue to press for fair, reasonable and sustainable reforms within the LHC policy agenda to address this issue.

This article is a synopsis of Talking Architecture & Design Episode 104 where Michele Adair, CEO of Housing Trust and Chair of CHIA, explains why Australia needs more projects such as the Northsea development in Wollongong to fill the gap in affordable housing.

Learn more about this project on our recent podcast with Michele Adair here

Image: YouTube