The New South Wales state election is looming, and two experts are calling for the major parties to consider adoption policies to alleviate the housing crisis.
UNSW housing policy experts Professor Hal Pawson and Dr Chris Martin shared five key policy reforms that can help confront the challenges in the housing and rental markets in the state.
1. Regulatory relief and emergency packages
During the height of the pandemic, state and federal governments rolled out immediate short-term regulatory relief to struggling tenants.
However, there are others who are still stuck in the doldrums and are in need of a longer-term relief from the impacts of the tight rental market.
One suggestion is to significantly increase Rent Assistance, which would be a quickly deliverable way to provide relief as longer-term solutions are being developed.
There is also a need to have better regulatory policies on short-term rentals. Prof Pawson said this policy option costs no money to the government to implement.
“In some parts of NSW and the rest of the country, perfectly good long-term rentals are becoming Airbnbs - causing more strain on the housing and rental market,” he said.
2. Broaden the land tax reform
A key reform for improved housing affordability and economic productivity in New South Wales would be a broad-based land tax, including on owner-occupied houses.
Dr Martin said by allowing tax liabilities to be deferred until a property is finally sold or inherited, low-income owner-occupiers would be able to feel some relief.
“Widening land tax would bring more under-utilised land to market, improve housing supply, and discourage speculative hoarding,” he said.
Early this year, the historic First Home Buyer Choice took into effect, allowing first-home buyers to opt for an annual land tax instead of an upfront stamp duty.
3. Improve tenants’ rights
Homeownership remains elusive for many Australians in NSW due to the high property prices, making renting only the viable option.
Dr Martin said a range of law reforms are needed to help them make a rental into a long-term home. The first step is to prohibit landlords from terminating tenancies without grounds.
“No-grounds terminations are unfair, give cover for bad reasons for termination – such as discrimination or retaliation – and undermine tenants’ legal rights to get repairs done and challenge rent increases,” he said.
“Reformed tenancy laws must also ensure that the tribunal has discretion to decline termination, considering the circumstances of the parties and the balance of hardship — termination of a tenancy should never be mandatory.”
4. Boost investment into social housing
In the last 25 years, social housing stock “barely” increased in New South Wales.
A recent City Futures report shows that around 144,000 households around NSW are experiencing unmet need for social housing.
Mr Pawson said there is absence of any pledge to confront the mounting problem of unmet housing need from the parties participating in the election.
“Unlike Victoria and Queensland, NSW resisted calls for a state-funded social housing program as part of post-pandemic economic recovery plans in 2020 and 2021,” he said.
What can be done is to expand the existing Social and Affordable Housing Fund, enabling it to underpin an additional cohort of newly developed homes. This emulates the move in Queensland, which recently doubled its own housing future fund by pledging another $1bn to its stake.
5. Implement mandatory developer contributions to affordable housing
Australia’s planning systems could mandate the routine inclusion of affordable housing within private residential developments.
Mr Pawson cited the City West Affordable Housing scheme, which has operated successfully in Sydney over the past 25 years. He said it is time to consider a Sydney-wide scheme of the same sort where, for instance, it would be required that five to 10% of floorspace of private developments are dedicated to social or affordable housing.
“This was proposed by the Greater Sydney Commission as long ago as 2016, but never actioned,” he said. “Properly implemented, the cost of such a measure will be borne by landowners, not builders or consumers. It’s no substitute for government-funded social housing subsidies.”
"But when you consider that it could enable affordable housing provision to be hard-wired into market housing development at no cost to government, surely this is a no-brainer that has been largely ignored in Australia for far too long”.
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Photo by Tourism Australia on Canva.
