Social Housing in NSW Submission February 2015 AGED & COMMUNITY SERVICES NSW & ACT PO Box 3124 Rhodes NSW 2138 (02) 8754 0400 mail@acs.asn.au www.acs.asn.au ABN 13 737 853 254 ACN 124 322 916
ABOUT ACS Aged & Community Services NSW & ACT (ACS) is the leading peak body supporting church, charitable and not for profit providers of retirement living, community and residential care services for older people. ACS is a member of the national peak Aged & Community Services Australia. ACS represents 300 organisations managing 2,000 services to more than 100,000 people. Our members range from large multisite, multiservice organisations to the small metropolitan, rural and regional organisations across NSW and the ACT. ACS established and supports a network of 12 regional and 9 advisory committees. Relying solely on member fees and receiving no government funding, we are well positioned to be a strong and independent advocate for the sector. From time to time ACS may deliver government funded projects of benefit to the sector. INTRODUCTION ACS appreciates the invitation to contribute input and comment on the future of the NSW social housing system as put forward in Social Housing in NSW: A discussion paper for input and comment, November 2014. We understand some of the challenges that the social housing system is facing and we support a review towards delivering better outcomes for people in need. We believe that the supply and demand of social housing is impacted by the supply and delivery of housing across the broader community. Although the issues of social housing may seem separate, it is obviously connected to the broader housing economy and its related planning and policies. ACS and its members are concerned with the provision of affordable and appropriate housing for seniors. In this document we put forward recommendations which would directly or indirectly affect the supply and delivery of affordable housing for seniors which in turn impacts on the demand for social housing. THE AGEING COHORT The ageing of the Australian population in the coming decades will be accompanied by a steady decline in outright home ownership. This shift will increase demand for affordable age-friendly housing options as older renters and mortgage holders on low incomes seek to reduce their housing costs. It also has significant implications for policies designed to ACS NSW Social Housing submission 2015.doc Page 2
support older Australians as increasingly current arrangements assume, and even rely on, housing stability and home ownership as the norm. Although older Australians have higher rates of home ownership than all other age groups, recent data shows that almost a quarter of people aged over 65 are either renting or still paying off a mortgage. According to the Australian Bureau of Statistics, 7.5 per cent of Australians aged 65 and over were paying off a mortgage, while 13.5 per cent were renting. This trend is reflected in several studies which show that the number of people still paying off mortgages as they approach and enter retirement has been steadily increasing since the 1990s. In the 21st century, the number of older people in non-stable housing situations has been increasing at a faster rate than population ageing. From 2001 to 2026, AHURI predicted that: The number of renters aged 65 and over in low-income households would increase by 115 per cent from 195,000 to 419,000; Low-income, sole-person households were projected to grow by 120 per cent over the same period from 110,800 to 243,600, approximately two-thirds of which will be made up of older women; and The demand for housing suited to older, low-income couples would increase by 117 per cent from 32,200 to 69,900 (by 2026). Bridge,C et al (2011). Age-specific housing and care for low to moderate income older people, AHURI Report No. 174 DECLINING HOUSING AFFORDABILITY At the same time as the demand for affordable and appropriate housing for older people grows, it is becoming increasingly difficult to develop and purchase housing in a manner that is accessible and affordable. This trend has been characterised by a combination of limited supply and strong demand. Excessive regulatory burdens on organisations providing housing have simultaneously limited the supply and inflated the cost of housing. Planning and infrastructure costs from state and local governments increase the cost of land and therefore housing. These costs include development application fees, the cost of planning delays, stamp duty, council rates and augmentation costs for utilities. In addition, governments have shifted much of the cost of public infrastructure, such as roads, lighting, footpaths, to organisations that are building housing solutions. This all adds to the price of land, making housing less affordable. Further upward pressure on housing prices is coming from current tax arrangements, such as the capital gains tax, negative gearing, capital works deductions and depreciation provisions. As well as impacting on housing prices, the current tax arrangements are also inefficient. For this reason, the Henry Tax Review called for a broadly based land tax that would apply equally to all land uses, but could have a threshold and different rates based on ACS NSW Social Housing submission 2015.doc Page 3
the value per square metre of land. Over time, this new land tax would replace existing state taxes. RECOMMENDATIONS 1. Universal housing design We support the mainstream adoption of liveable housing design principles in all new houses built in Australia. This means designing and building a house for everyone, including the very young, elderly or disabled. This would reduce the need for retrofits and allow older Australians to remain comfortably in their homes for longer. 2. Integrated housing strategy We support the development of a joint national affordable housing strategy by all three levels of government to increase the supply of affordable and accessible housing by streamlining planning processes, reforming tax arrangements that inflate house prices, and providing incentives for incorporating elements of universal design. Specifically government could: Grant density concessions for purpose-built housing for older Australians Reform current tax arrangements that serve to drive house prices upwards Release adequate supplies of reasonably priced land for affordable housing developments Provide affordable and accessible public transport Provide accessible outdoor environments Harmonise housing, planning and retirement village legislation throughout Australia Streamline planning approval mechanisms and minimise regulation red tape for building construction Provide incentives to include universal and accessible design features in new housing developments 3. Zero interest loans We support the provision of zero interest loans and/or innovative funding available to upgrade and expand targeted housing solutions for older Australians. This capital assistance would prioritise upgrades to dated Independent Living Unit stock and projects that include accessible design, integrated care services, opportunities for community engagement and support for low income, low asset residents. 4. Equity release schemes We support allowing income poor home owners to access the equity in their home to enable greater choice. Such schemes could be used to contribute to care costs, improve or modify the home to make it more suitable for older residents or to help improve quality of life. In its landmark report, the Productivity Commission recommended the introduction of a government-backed home equity release scheme that would enable older home owners to draw down small, regular amounts of money. Guidelines would have to set out amounts that ACS NSW Social Housing submission 2015.doc Page 4
could be drawn down and for what purposes. The impact on means testing would need to be determined. Equity release schemes could also apply to superannuation assets. 5. Appoint NSW Housing Minister We support the NSW State Government appointing a dedicated Minister for Housing tasked with a portfolio to increase the supply of affordable housing and improve housing affordability. The Minister would set and work with affordable housing targets on the state and regional levels. 6. Age pensioners saving account scheme We support the introduction of an age pensioners saving account scheme in which older Australians could invest the surplus from the sale of their home. The money in this account scheme would be dedicated to future care and living costs and would be exempt from the asset and income test for the age pension. This would remove one of the barriers to those wishing to downsize or right size to more appropriate accommodation. 7. Reinstate National Rental Affordability Scheme (NRAS) As at June 2014, NRAS had delivered 21,000 affordable dwellings with a further 16,000 under development. The fifth round of NRAS was cancelled by the federal government in the 2014/15 Budget. This scheme was taken on by a few aged care providers delivering age appropriate and affordable rental arrangements. We support the reinstatement of any such scheme. ACS NSW Social Housing submission 2015.doc Page 5