06.07.2022Urgent investment in non-market housing needed to avoid $25 billion annual cost to taxpayers by 2051
Committee for Melbourne (the Committee) welcomes the study, Give Me Shelter , that shows the cost-benefit analysis of underinvestment in social and affordable housing. Compiled for Housing All Australians, by SGS Economics and Planning, the report shows that there is a significant cost to Australian taxpayers of underinvestment in social and affordable housing.
Decades of underinvestment by successive governments in “non-market” housing has led to public and social housing numbers falling to record lows – just 4 per cent of national housing stock, compared with 6 per cent in 1996.
The report shows that costs to taxpayers will reach $25 billion annually by 2051 (in 2021 dollars) if nothing is done to address this chronic shortage of affordable, public and social housing in Australia.
The extra costs will result from an increase in physical and mental health costs, domestic violence services, policing, justice, compromised educational opportunities and anti-social behaviour. There are also significant productivity losses for services and businesses, with staff unable to source affordable accommodation sufficiently close to where the business needs their services.
The benefits of investment are significant, with a strong underlying business case justifying a significant investment in additional “non-market” housing. With a benefit-cost ratio of 2:1 for investment in social and affordable housing, this is greater than the benefit-cost ratios used to justify many current Australian infrastructure projects.
This study comes at a time when the Committee’s recent Benchmarking Melbourne report shows that house prices have skyrocketed and now Melbourne is the 6th most expensive housing market in the world. At the same time COVID-19 has devastated many people’s job and financial security pushing them further into risk of homelessness.
Housing All Australians is a business-led initiative dedicated to the pursuit of practical solutions to help address Australia’s chronic shortage of low-income affordable housing. There are many solutions to the problem, and they must come from a collective effort across government, business and the community.
In the Committee’s submission to the Victorian Government’s development of a 10-yr social and affordable housing strategy, Delivering Affordable Housing, the committee made a number of recommendations including the need for community awareness campaigns, data collection, target setting and development of policies that will increase the supply of much needed housing such as an affordable housing levy.
The Committee has raised the possibility of a broad-based levy for attention, given the immediate need to generate significant and ongoing funding to deliver affordable housing at scale. Of course, the Victorian Government’s commitment to the Big Housing Build, with around $5.3 billion dedicated to the construction of around 12,000 social and affordable homes over four years, is a welcome step. But that investment does not come close to delivering the estimated hundreds of thousands of social and affordable homes that are needed. More than just direct investment by governments will be required to fill the supply gap.
Therefore, it will need action from business as well. Businesses can stand to benefit from thinking about the housing solutions, especially at a time where there is a huge skills shortage across the country in most sectors of the economy. There are for example, businesses struggling to keep their doors open because the rising rental prices for housing are pushing their staff beyond a reasonable commuting range.
We need to act collectively and fast if we are to avoid the huge impending costs from underinvestment. The conversation about how we can address the issue must begin now. Housing All Australians aims to bring Australian business together for a national conversation on the importance of investing in social and affordable housing, and the Committee looks forward to providing its support in the conversation.
To begin the conversation, a webinar to unpack the Give Me Shelter report hosted by Committee for Melbourne and Housing All Australians, will be held on 2 August.
The report Give Me Shelter can be viewed here
The Housing All Australians’ Synopsis of Give Me Shelter can be viewed here
Register for the webinar to unpack the Give Me Shelter report here
The media coverage of the report can be viewed here
The Committee’s submission to the Victorian Government’s consultation on a 10-year social and affordable housing strategy can be viewed here
Please contact Leanne Edwards, email@example.com for further information.