Is the Stimulus boost to National Affordable Housing Agreement (NAHA) the light streaming through the crack in everything?

On the day the stimulus package was announced I received a call from the Minister, the Hon. Tanya Plibersek telling me to get in front of a T.V. or turn on my radio as the P.M. was going to announce something I would like. I could hear her beaming at me through the phone as she let slip the amount of $6.4 billion directed to “public housing”i].

The rest of that day passed with an incredible lightness of being[ii]  and even though I knew it may not have happened without the Global Financial Crisis, I was pleased that public housing had made a comeback.

That evening I attended, like many others, the Leonard Cohen concert at the Brisbane Entertainment Centre and one stanza of Cohen’s exquisite poetry became stuck, like one of Dr. Oliver Sacks’ ear worms[iii], on a loop in my head. It is appropriate to share it and explain the meaning I borrowed from it.

Ring the bells that still can ring,
Forget your perfect offering,
There’s a crack, a crack in everything,
That’s where the light get’s in.

In public housing terms, we have far fewer bells to ring than we once had, just look at South Australia, still selling off 8000 units of previously public stock to fund maintenance and overheads on the remainder.

Too many for too long have been developing their perfect offering in housing terms. Only model X will work and must contain exactly these characteristics! The point of much of my and others’ work over the past 5 years has been to move away from specific models to a framework in which all models may have a place and all can be supported.

The crack in this particular everything is the Global Financial Crisis and the light streaming in is the stimulus package and the NAHA.

I recently introduced Tanya Plibersek to a conference and said that for me she will always represent the light streaming through the crack in everything, I think she blushed and pointed out that it was always pleasing to go beyond the expectations of others.S

So how perfect do I think this offering is, now I have come down from the incredible lightness of being to our still heavy reality?

In previous articles[iv] I have expressed disappointment that the National Affordable Housing Agreement did not have sufficient resources to tackle the problem in a comprehensive way, does the stimulus package fix the problem?

In terms of capital outlays the stimulus to public housing is “The largest single expenditure on public housing since the program began post WW2,”[v] and will provide 20,000 new dwellings and reverse the decline in public stocks we have been seeing since 1996.

Two qualifications need to be added to see the proper context. Firstly, 75% of the program is expected to be delivered by the end of 2010 and secondly it is only a 2 year measure.

It is understood that the approach is two pronged, firstly to create work in the building industry quickly and secondly to address the decline in stock. Both these are laudable goals but could also lead to strange outcomes in the short term.

In the best of worlds we would have delivered the stimulus over a longer period to allow a more planned approach to delivering 20,000 properties. As it is, every state and territory is bringing forward projects already on their books, which is no bad thing. They are also inviting developers to submit projects, some of which would not normally be brought into public or community housing stock. It may lead to stock additions which don’t have the best locations, may be deemed as too dense, too flash, poorly distributed and so on.

We also need a long term strategy to address the long term decline in affordable housing. The NAHA provides some of this through the National Rental Affordability scheme which should add 50,000 homes over 15 years[vi]  and potentially another 50,000 after that, giving NRAS a lifespan of at least 25 years. However these homes may not be dedicated to the same purpose as the stimulus package, which is fully subsidised housing targeted at the highest need on a potentially permanent basis, where NRAS is targeted at low to moderate income households with no or low attendant support needs.

So we also require an outline of what the Commonwealth will do to add to fully subsidised stock beyond 2010. In addition we need to understand how housing targeted to high needs will also provide the support required by high need households. We will only get one chance at resolving these issues and there is currently insufficient attention paid to support needs.

We should also be examining rent policy across all types of affordable housing so we do not get perverse outcomes, for example, concentrating high need low income households in public housing which has no or little support attached. The idea that public housing can only charge 25% of Income for low and fixed income households may have to give in a system wide reform.

The other major area of reform since the NAHA was announced is the expectation by the Commonwealth that up to 75% of the stimulus package should end up, with title, in the community housing sector so that an additional outcome of the stimulus is to deliver a robust and sophisticated community housing sector.

This may play out differently by state and or territory as some states have a more advanced trajectory for their community housing sector. Some caution also needs to be added as this has not been written into agreements between the commonwealth and states and may not be the most efficient means of delivering outcomes quickly. The goal however is a laudable one but the NAHA also needs to address the ongoing financial viability issues created by excessive targeting to low incomes strangling the income available to housing people on 25% of very low incomes.

This could be done through the creation of an operational subsidy for State owned and operated housing equivalent to Commonwealth Rent Assistance.

One solution to many of these issues is to promote, what Julian Disney calls, a portfolio approach to the distribution of the stimulus money and NRAS. In this approach affordable housing portfolios could be bid for to include a mix of stimulus housing, NRAS, State owned and managed housing and discounted market rental housing. It would be bulked together and distributed in large portfolios to achieve a mix of outcomes for all income levels and which would use NRAS with stimulus or existing capital to house people on very low incomes as well as across a range of income groups or households with other characteristics (disability, seniors, young people, previously homeless etc.).

This approach would provide longer term security, potentially deliver more housing, achieve a better social mix and a scaled up community housing sector. There is a tendency by governments to consider each program as a mutually exclusive program, when better outcomes could be achieved by a mix and match approach across all areas of the National Affordable Housing Agreement.

In other aspects of the NAHA we are starting to see the developments proposed by states for the homelessness initiatives. Implementation plans I have been confidentially briefed, on look like positive steps forward and again I would encourage homeless services, government agencies and policy developers to think creatively about utilising all elements of the NAHA to achieve the desired outcomes. It seems the idea that solving homelessness requires housing people securely and addressing support needs consecutively has now taken hold. SAAP was never resourced adequately to achieve this. As a program it has always measured well, but it has not ever been resourced properly or developed sufficiently to address the scale of the homelessness problem it encountered.

At the Prime Minister’s briefing about the stimulus package I asked the P.M. if he would encourage governments to apply maximum flexibility to utilising these funds and he responded stating that was his intention. He indicated he would be seriously watching progress and was a dab hand at Google Earth.

The NAHA is the best development in affordable housing since the introduction of the old Commonwealth State and Territories Housing Agreement, it is not a perfect offering but it is a potential solution if it is used flexibly, provides for longer term certainty and utilises a portfolio approach to maximise its outcomes.

Without the stimulus boost it was a good plan, now it has the opportunity to illuminate and transform our approach to affordable housing and begin the ending of intractable homelssness.

Adrian PisarskiChairperson, National Shelter.

[i] We need to be cautious in using the term public housing as the Commonwealth has created an expectation that most of the stimulus housing will end up in the community sector. The term also lends itself to stigma being associated with large estates and concentrations of disadvantage. The new money will also be used to reform affordable housing programs across the board and should be seen in the broader context of affordable housing.

[ii] Apologies to Milan Kundera

[iii] Dr Oliver Sacks in an essay on musicophilia describes the phenomenon of people experiencing a constant musical phrase playing inside their heads which sounds like it is in the same room but is actually neurologically generated.

[iv] See Adrian’s blogs at www.qshelter.asn.au

[v] Tanya Plibersek, Minister for Housing and the Status for Women, Queensland Shelter conference, Feb 27 2009.

[vi]  NRAS began in 2008, but will take at least five years to gear up and allocate its incentives, the last of which will only be allocated in 2017 and then will last for 10 years beyond that. At the same time incentives allocated in the first 5 years will expire after 10. Kevin Rudd announced that if successful NRAS will be continued for a further period and an additional 50,000 properties.