AFFORDABLE HOUSING - COMMUNITY CONSULTATION WITH LINK JANUARY 2019

Noosa continues to face significant challenges around housing affordability, including associated impacts such as homelessness. The Federal Government data from the Smart Cities Plan issued in December 2017 compares data from the Sunshine Coast and Noosa with the 21 other areas of highest population in Australia. This shows we have the highest dwelling price to income ratio of all the areas – median house prices are over 9 times the average household income level, substantially higher than Sydney, Melbourne and Brisbane. 14.3 % of households are in rental stress, 6.4 % in mortgage stress both significantly above the average for the 22 city areas.

The proportion of houses in the rental market at 27.8% is well below the average of 30.3%. The number of dwelling units per 100,000 population in the public and community housing sector, is second lowest and almost half of the average from all the 22 city areas. This demonstrates a long-standing chronic under-investment in community housing and a failure of housing policy here across the whole of South East Queensland, and in many other locations across Australia.
This failure of the market, public and planning policy to bring supply and demand into balance has created a crisis brought about by a ‘perfect storm ‘of prevailing conditions. This conclusion was recently highlighted in the Grattan Institute Report – Housing Affordability: re-imagining the Australian dream. The crisis is so acute that the issue is impacting heavily upon ordinary working families and key workers. These failures go beyond a social policy issue. They push to the limit, the ability to sustain a healthy and prosperous economy in the region and in Noosa.

The inability to provide affordable housing contributes to social, economic and environmental issues, impacts on physical and mental well-being. It is also connected to increased drug and alcohol abuse, and domestic violence. It leads to our pillar industry staff – as an example those in hospitality, aged and disability care, that are trying to deliver services whilst under financial duress, with many paying up to 80% of their income on rent or mortgage.

A lack of affordable, social and community housing and a loss of traditional affordable accommodations (Boarding Houses, Demountable Parks, Caravan Parks and the impacts of short term letting trends) has contributed to a ‘jam’ in the system. With our vulnerable in need of social housing that are residing long-term in emergency housing, this then creates a lack of urgent short-term accommodation, therefore leading to increasing the numbers of homeless.

A recently published report from The Australian Housing and Urban Research Institute provided a prompt for greater leadership at a State Government level, combined with a long-term investment in affordable housing that is delivered through the community housing providers. There are six case studies of developments that have mixed tenure and mixed income, where market sales, market rentals, affordable sales and affordable rentals support the broader economic and social policy outcomes. There is an example of this in Brisbane, delivered by the Brisbane Housing Company, as well Project4Change that could be replicated across all areas of south-east Queensland with other regionally based providers.

The Housing Needs Assessment for Noosa Shire 2017 highlights the key issues and areas in which Local Government plays a pivotal role in addressing our crisis. The 39 points in the Conclusions and Opportunities for Council (in pages 7-10) cover succinctly how Noosa through its Planning Scheme can address with the exception that there is:

a) No definition of what ‘affordable’ is,
b) No mention of how to retain affordable options through community management

Before we head further, let’s tackle the lack of understanding in the labelling of affordable housing, community housing and social housing.
Affordable housing is one that can be hard to define. Affordable to who, and where? For Noosa, I have taken as an example workers in our key industries who average a take home wage of $600pw. For a bank mortgage, or within governmental guidelines, 30% of your income is classified as ‘acceptable’ to pay in rent or mortgage. That means $200 per week. Is this possible? Not for a family. However 50% could be. That means we would need to deliver for our families accommodations around $300 per week, which is a home/unit for around the $300,000 mark.

Community housing is for low income owners or renters, and can be built by community owned not for profits such as our local Coast2Bay. Mixed model developments are innovative as they can be ideated to what we wish to create, along with the flexibility of public/private partnerships. An example is the current townhouse projects by Project4Change. They sell a percentage on the open market and then retain the balance in a ‘community pool’ which remain affordable, as market prices and capitalisation do not affect them. Can we do this? Yes.

Social Housing is owned by State Government. It can be managed by either State Government or community housing organisations and is provided and subsidised for the benefit recipients. Noosa has social housing and units scattered throughout the electorate with long waiting lists, mainly for the over 55’s with a disability. Some have been on this list for 10 years. Can we do anymore? Currently there has been no successful bids in this realm as part of the Jobs Construction Program which the QLD Housing Strategy commits to the construction of 243 social houses on the Sunshine Coast. However, should Noosa develop affordable housing, there is the opportunity for those in social housing to transition into home ownership, freeing up both the social and ultimately, emergency housing.
Social and community housing are eligible for subsidies through various Government initiatives, and each State will have their own as exampled further in this paper. What has been done so far?

Researching the contributing factors on the crisis locally in order to identify potential solutions, it has been observed that some combinations are beyond the scope of this discussion, except in summary form below, included input from Facebook users, networks and frontline community organisations. Representatives from Coast2Bay, United Synergies and the Futures Housing Task Force joined a ‘round table’ meeting in 2017 to discuss and collate possible solutions with the draft Noosa Plan manager Raul Weychardt, on what was currently allowable under Noosa’s planning scheme. Only two concepts were considered for further investigation and a summary of this collation can be found at the end of this article.

Since becoming an MP, I have concentrated on what can be done at a State level to assist in areas that Noosa Council is unable to. This has included identifying what our community housing organisations such as Coast2Bay require to develop demonstrated successful mixed models. I have also submitted two Questions on Notice (QONS) as part of this to the Minister for Housing which can be read here & here.

As Coast2Bay had been unsuccessful in securing funding through the State Governments Jobs Construction Plan, my representation has since resulted in a response for our community housing providers to submit their concepts directly to the Minister. This is a good starting point as what the key element community not for profits need, is either partnerships with land owners, seed funds, interest-free bridging loans or impact investors for projects, as they do not have capacity to land bank in readiness for government initiatives when they are released.

Over the last month I have had a number of meetings that have included;

a) The Noosa Community Reference group to give an update on the affordable housing progress and to gather any further information that may be utilised in addressing their particular sectors including youth.
b) Sundale Creating Communities on their current projects including the cabin builds at Woombye Caravan Park
c) Better Together Housing (launched June 1) is being piloted initially with the emerging high-risk sector of women over 55. The platform is based on women that have a home and would like to share with those in need.

Of concern, not only for women, is any person currently in the Federal Government funded NRAS who will have no capacity to pay their rents once their 10 year subsidies finish, with our first residents to exit in the next 36 months. This discussion is not to rehash contributors including the underpinning nature of capitalisation but to acknowledge those that constrain efforts to resolve, so that we can move forward and deliver a solution.

CONTRIBUTING FACTORS TO ‘IN-AFFORDABILITY’

Price of Land – We cannot change the price of land, as we exist in a free market where supply and demand regulates.

Trends – Many of our older, small cottages have left the affordable rental pool when demolished to make way for owners constructions, or renovated to attract higher returns.

Property Prices – Favoured locations such as Noosa see the supply/demand realm, push up property prices. This cannot be contained as the nature of capitalism, is to capitalise.

Short Term Lets – Anecdotally, trends to make higher returns of investment has seen houses and units in favoured locations, leaving the ‘permanent’ pool to enter the short-term ‘on and off line’ pool for visitors. Especially in times of tourism booms these are directly impacted by the exchange rate of the Aussie dollar. Even though Deloitte Access Economics has Noosa positioned at #5 for the short term lets destinations in 2015/2016, there is no mention of how many properties are offered in Noosa. Noosa Council has provided the table below of a recent BNBGuard data scrape: (excludes Castaways, Peregian Beach, all of hinterland etc) presented to the Sustainable Tourism Reference Group meeting of June 6 2018. So, how many short-term on-line properties are there in Noosa Shire?
There is no doubt that if houses are being purchased for short-term lets and granny flats also used on the short term let market, then this would diminish the amount of permanent and often affordable rentals on the market. This situation can create upward pressure on rental prices and housing affordability due to higher returns on investment.

Construction Costs – Labour and material costs continue to increase, especially in ‘boom’ times.

Planning Schemes – Designed to ensure that we do not exceed our ‘carrying’ capacity and that there is the appropriate mix of uses, in the appropriate locations. Affordable options need to be located within walking/cycling distance to town to ensure social inclusion, access to services and transport. However, residential land suitable for affordable housing is too expensive to deliver under an ‘affordable’ tag.

Land Zoning – Residential and multi-dwelling land pushes affordable housing out of reach. Currently only Rural Residential or Rural zoned land within walking/cycling distance provides the ability to develop affordable housing mixed models.

Valuations – Currently there is an issue surrounding the valuation for loans due to the cautious nature of the banking sector that is impacting the community housing models.

Codes – Developed to ensure that all housing/units/accommodations comply with current standards, which are much higher than when our parents built their houses, adding to the infrastructure costs including car parks/paths etc. In some Councils solutions have been enabled through conditioning redevelopments as ‘carless’.

Change of Government Policy – Subsidisation for social housing comes from the Government, including the Federal scheme NRAS. When these come to an end (which they do for some), the crisis can escalate.

Expectations – The increase in buyer expectation has led to higher specification/larger homes being built that are now out of reach for purchase by Government or community organisations as they are no longer in the viable and affordable range.

Culture – We have moved from an inter-generational sharing housing model, to one of ‘independence’. Sharing a house is more economical, however for many this is not a feasible option for a number of factors including personal preference.

There are many other contributors that have created the ‘unaffordable’ tag, and to homelessness, however let’s now move to solutions.

SOLUTIONS TO AFFORDABILITY – An Overview

Many offered solutions come with challenges that increase the cost of the solution including codes, legislation and supporting infrastructure which has been driven by all of us to ensure safety, amenity and liveability. Retrofitting buildings and re-purposing shipping containers all have varying degrees of difficulties and at times, can be more expensive than a new build cottage, as well as not fitting into our Noosa design principles.

Components of affordability

Size – Small is considered the new big. Tiny houses and units come in many designs and price ranges including reimagined 3D printed structures. To offset construction costs, smaller dwellings including studio apartments with clever design of space are being utilised. Dual-key townhouses have been successful as well as the old ‘Fonzie’, which was the apartment above a garage. However, many FB shares are often not code, environmental or people compliant! So what has been going on elsewhere at this point in time?

Tiny Houses – A tiny house village has essentially the same zoning and compliances (costs) as a caravan park.
Here are examples from other states:

Tiny House Village
Blue Sapphire Village

Recently a family in NSW won the right to have accommodations on their property – read the article here.

Reconfigurations of Large Homes – Investors and community organisations are purchasing large homes suitable to reconfigure as ‘micro units’, an updated version of boarding houses, which provide an affordable alternative to singles and couples back in history. Currently this sector has been lobbying to change coding constraints from ‘Impact’ to ‘Self Assessable’ to decrease costs – check out Small is the new Big.

Secondary Dwellings (Rural) – For many years, rural residential and rural property owners have lobbied to build a second dwelling on their property instead of a granny flat (maximum 65sqm and connected by at least a 25 metre walkway) to accommodate relatives or renters, as well as provide an income to undertake maintenance on the property as the owners age and are no longer able to do so. This has not been achieved so far.

Secondary Dwellings (Urban) – The Noosa Plan allows for secondary dwellings of 65sqm size to be built in suitable urban blocks. Benefits include increase affordable stock, however with no mechanism in place to retain affordability, these dwellings without conditioning, could be used for short term rentals such as Stayz, AirBnB etc by owners looking to maximise their returns.

Property Shares – Many houses are being built to accommodate two families or more – some legally, (as they have obtained an MCU for attached dwelling) others do not that retrofit the original design after completion. These are usually under a ‘tenant’s in common’ legal arrangement to allow. Increasingly at a grassroots level, is the discussion surrounding ‘Bali’ style compounds where up to four couples share a property.

Village Developments – Currently a number of affordable living developments exist in Noosa where transportable homes are owned or rented with a body corporate management structure. Examples include Riverlands, Bougainvillea and Ashmond Villas in Cooroy which were all developed by the private sector for the Over 50’s. So far we have not been able to ascertain why a similar development has not been designed for the Under 50’s?

The New Transportable Realm – Transportable buildings have become ‘on trend’ with eco tags and often price tags to match! There are many examples that can be utilised for a range of uses as time and circumstances require, allowing mobility and flexibility to address individual, communities and societies transitional circumstances. Examples include:

Tiny House Company
Tiny Homes Foundation
Cabin Life

Community Housing – As discussed earlier, community housing providers are not-for-profit organisations that manage private and social housing in a very effective way, encompassing multiple models which include the purchase of existing dwellings, the reconfiguring of existing dwellings, or ‘Greenfields’ developments where a % is sold to the open market with the balance retained in a community pool that is not impacted by market forces. Moreover, the not-for-profit sector are eligible for Federal Funding – the Commonwealth RET Agreement subsidy of up to $70 per house per week, whereas public housing managed by the State is not. These houses are for low income households, for workers in our low pay categories including the care industries of disability and aged. Homes and units managed by community housing providers such as Coast2Bay are made affordable, as those on pensions would pay 25% of their income and for low income earners, it would be 75% of the market price. The benefits of community managed developments is that the community decides what format, what buildings and the parameters of ownership.

Shared Housing Initiatives – Facebook has private groups for women to identify share houses and the recently launched Better Together Housing as a pilot is for women over 55 years old. We have not been able to source any initiatives for men and this needs to be addressed.

FUNDING OPTIONS

Funding (seed and otherwise) is a major constraint for communities, and individuals, to resolve affordable housing issues. Refer to the Noosa 360 Document Library section on the SandyBolton website to read some of the innovative ways in which progress is being made by current Government and NGO initiatives plus the programs and projects that includes Social Bonds and Impact Investing.