AUSTRALIA is falling back into bad habits of neglect of regional social and affordable housing, while blurred roles between layers of government, shortages of land for development and construction workforce shortages will drag on the delivery of much-needed supply – and there is no quick fix, according to a new report.
The Australian Housing and Urban Research Institute (AHURI)’s new Disruption in regional housing: Policy responses for more resilient markets report found national cabinet’s Housing Australia Future Fund (HAFF) was seen as an important avenue for “unfreezing” regional housing supply, which has suffered from decades of neglect from various governments.
The HAFF officially kicked off at the start of this month, with the aim of delivering 20,000 social and 10,000 affordable homes over five years. Running concurrently is the National Housing Accord, which is targeting 1.2 million “well-located” homes, and the National Housing Accord Facility, aim to deliver a further 10,000 affordable homes.
An investigative panel that was a key component of the new AHURI project made a strong case for further support for community housing providers (CHPs) to invest, and be active in, regional housing markets.
“It is clear that the greatest impediments to new housing supply outside the metropolitan regions are shortages of land for development and, most especially, workforce shortages,” the report said.
AHURI managing director Michael Fotheringham told Australian Property Journal, “It’s not a uniform pattern in every place all the time, but one of the things that is pretty consistent is underinvestment in public housing or social housing has been a pattern across the country for decades and regions have been particularly impacted by that.”
“That’s compounded by the fact that there’s a lack of workforce in the regions to really work on those builds.
“More recently, a number of state governments and territorial governments have really started to address this properly – the Big Housing Build in Victoria and Homes for Queenslanders are the leading state housing strategies that have emphasised the need for social housing right across the state in each case.
“But that’s a new thing. We haven’t had that in the previous three or four decades.”
Workforce shortage an “acute challenge”
The report found that shortages in building materials and supplies are no longer evident in regional housing markets, but increased prices for these goods has remained.
“At the same time, more fundamental structural disruption in regional housing markets has continued, impacting housing availability, cost and accessibility.
“The shortage of an appropriate workforce is an especially acute challenge. This shortage, in combination with other factors, has added to rising prices for home purchase and rental dwellings,” the report said.
Fotheringham told Australian Property Journal workforce challenge is “really difficult”.
“The regions suffer more because there’s less workforce. So there’s less competition for jobs, in terms of builders competing with each other.
“The pandemic actually saw quite a bit of our housing construction workforce head back overseas to their countries of origin. And now many of them coming back here are hearing a lot of negative talk about migration that makes them feel pretty unwelcome.
“So, there’s a lot to work through in trying to rebuild a workforce. The two main ways you can do that are through training and apprenticeship programs and you may draw people in – school leavers and so on – or through migration programs that are targeted to specific skill sets. We haven’t been strong enough in targeting housing construction trades in our migration program, but it’s not actually simple to do because the qualifications aren’t easy to map to other jurisdictions.
“Developing a skilled workforce through traineeships and so on takes time. So there’s no quick fix for that one.”
Back to bad habits
Fortheringham said one of the interesting things that the research shows is that “we’ve in many ways returned to pre-pandemic patterns”, and that fixing issues in the regions would take longer than the five-year horizon of the HAFF.
“The challenges that we’re looking at today are echoes of things we’ve been dealing with for quite some time. And while the pandemic created a whole lot of disruption, it’s really part of an ongoing pattern of difficulty in regions.
“We need to act with urgency. But even if you just think about an individual site (for housing) – that needs to be released for residential use, needs to be developed, planning approval, needs to have the construction process and so on. At minimum, you’re talking a couple of years, two to three years for any individual site.
“Before that, there’s all the financing and the approval and the purchase and so on. So you’re looking at three or four or five years for an undeveloped piece of land to reach fruition. We need to be realistic that we’re not going to solve the entire problem at that time frame on all of those sites simultaneously
“We’re talking about decades of underinvestment, we’re not turning that around in five years. We need to change the momentum and move in the right direction and stem the bleeding, as it were. But, you know, actually, we need to take our housing challenges seriously, not just for the next five years, but for the next 20 or 25.”
HAFF requires a regional focus
Among the policy development options found by the report was for regional housing providers to take advantage of the HAFF to build additional dwellings, which would be added to existing demand to create a more secure pipeline of work for builders and their workforce.
“Attracting HAFF investment into the regions would require considerable local leadership, with local governments, state and territory government agents or not-for-profit housing providers putting forward proposals to the Australian government for funding. These proposals would then need to enter a competitive allocation process, with no guarantee of an outcome,” the report said. The HAFF could potentially have a regional allocation.
“I think the government is quite attuned to the fact that this is the funding round that is currently being assessed for the Housing Australia Future Fund is the first run of this. And there’ll be a lot of learnings from that process,” Fotheringham said.
“I would be confident that there will be some genuine reflection on how the process has been run, what are the things that haven’t worked well, what are the shortcomings in the distribution of funds through it and where they’ve ended up and what does that tell us about the system and how it’s operated.”
