UNSW City Futures Research Fellow Dr Laurence Troy believes there is a serious problem with the current levels of supply in the affordable housing sector.
Speaking to Ben Knight of UNSW Media & Content, Troy said that Government intervention through a policy change was the need of the hour to improve the delivery and increase the supply, thereby relieving housing stress amongst the affected groups.
Both affordable housing and social housing, according to Troy, target specific low income groups, who struggle to pay rent in the private rental market. Social housing particularly targets disadvantaged households with very low incomes.
State housing agencies funded by the Commonwealth are responsible for making available affordable housing in Australia. However, continued lack of investment in social and affordable housing over the last 20-30 years has built up a huge shortfall.
However, the entry of the not-for-profit and private sectors in this space is making a perceptible difference in the delivery of affordable housing, says Troy.
While the housing boom hasn't impacted the supply of affordable housing so much, it has made housing much more unaffordable for many more people, increasing the pressure on the affordable housing space with a lot more people in need today.
The current share of social and affordable housing in Australia is 4 per cent – much below what’s required right now. But would the entry of the private sector improve the supply of affordable housing?
Troy believes that the low incomes of the beneficiary groups won’t be able to support a private sector delivery model. Only a policy intervention from the Government can help with the delivery of affordable and social housing.
It might require some form of government subsidy, and it may need to be delivered through a not-for-profit mechanism.
With the housing boom having made housing increasingly unaffordable to people, Australia is also staring at a looming housing affordability crisis. Troy believes that increasing the supply of affordable housing could address the housing affordability problem as it will get a lot of people out of housing stress, take some pressure off the private rental system, and control rents.
Based on the interview by Ben Knight – UNSW Media & Content with UNSW City Futures Research Fellow Dr Laurence Troy