Monday, June 19, 2017

Joining the dots on affordability

This week is Budget Week for New South Wales. There's still time for the Berejiklian Government to announce the forgotten part of their housing affordability package - the one that tackles Sydney's high rents. So far they've covered tweaking taxes and grants in favour of first home buyers over investors, and fast-tracking supply. But they've left off any policy that would directly affect the rent.

As we've noted before, the shift of incentives from investors to first home buyers is designed to have the strongest impact in the market for newly built properties. We've also previously noted that while the majority of investors do not purchase newly built properties, there has been a significant increase in investor driven demand lately for off-the-plan units. It is worth considering how this change will impact demand for new dwellings over the next few years.

Understanding your standard first home buyer is no easy task. We can go back to the ABS Feature Article from 2012, First Home Buyers in Australia, which tells us that just prior to the height of Australia's post-GFC first home buyer boom there were about 430,000 of them over the three years to 2010. Driven by stamp duty concessions and the Rudd Government's First Home Owner Boost that put either $14,000 and $21,000 into their hands depending on whether they bought an established or new home, slightly less than one-fifth of them bought a newly built property during that time. In the three years prior to that, when the grants were not quite so generous, there were around 320,00 of them with less than one-tenth buying off-the-plan.

This tells us that first home buyers do seem to respond to stamp duty concessions and direct grants, but just like their investor counterparts they are much more inclined to buy established properties than newly built ones. Of course, this is based on how they behaved in the bad old days when property prices were merely exorbitant, but the latest Digital Finance Analytics' Property Imperative Survey suggests these numbers remain in the ballpark - they've identified 330,000 first time buyers in their March report, noting that 80% are buying or intending to buy an established dwelling. But we must note here that an increasing proportion of these first timers identified by Digital Finance Analytics are investors, so they are buying another person's home rather than their own.

Now that prices are scandalous, it remains to be seen if anything much will change after the tweaking of stamp duties and grants. It is possible that 100% of Sydney's first time buyers will rush to the new apartment market to see what they can afford, since the houses they'd evidently prefer to buy are still likely to cost too much. But it's just as likely many will continue to rent the homes they want (or can afford) to live in. Either way, the removal of incentives for investors to buy off-the-plan is likely to see them withdraw from the new apartment market, and this wont be completely offset by any increased demand from first home buyers. Construction activity may well start to fall away in response. If that happens, no amount of rezoning to fast-track supply will save us from the plague of rising rents - assuming it ever could.

This brings us back to the forgotten part of the NSW Government's housing affordability package. Given the recent Federal Budget foreshadows a new Affordable Housing and Homelessness Agreement requiring the states to consider affordable housing targets, along with an Affordable Housing Finance and Investment Corporation that will provide a funding mechanism for the supply of new sub-market dwellings, the Berejiklian Government would do well to adopt planning and zoning reforms along similar lines to those announced by the NSW Opposition a couple of weeks ago. In the face of their own affordability package that might otherwise reduce demand for their services, this could be just the tonic our developers will need - to say nothing of our neighbourhoods and communities who are already crying out for some downward pressure on rents.

Tuesday, June 6, 2017

It was like leaving my family: Postscript

(Thanks to Eva Bee and Design Juices)
You will recall our earlier blog called 'It was like leaving my family'.

Professor Alan Morris has written a second article about Millers Point, this time in Urban Policy and Research. It was published online on 2 June 2017 and is called 'The Removal of Millers Point Public Housing Tenants in Inner-Sydney by the New South Wales Government: Narratives of Government and Tenants'.

Professor Morris's article draws on government media material and in-depth interviews with tenants. He examines the removal process and contrasts the government’s narrative with that of the tenants. He argues that, when instrumental rationality is dominant in policy-making, then little or no attention is paid to the human cost, so long as the policy is viewed as effective. He concludes that, with the ascendency of an instrumental rationality , the mass displacement of other public housing tenants to areas not of their choosing is an ever-present possibility.

Read the full article here.

Well, the pressure is very intense on the remaining residents of Millers Point ... with more residents before the NSW Civil and Administrative Tribunal facing imminent eviction.

The Attorney-General, Senator the Hon George Brandis QC, announced an Inquiry for the Australian Law Reform Commission on 'Protecting the Rights of Older Australians from Abuse' on 24 February 2016. It released an Issues Paper in June 2016 and a Discussion Paper in December 2016. It is required to report by May 2017 … watch this space! Here are two submissions on the Discussion Paper. They both argue that the actions of the NSW Government in Millers Point constitute systemic elder abuse. Check them out: The Millers Point Community Working Party (221) and Tenants Union of NSW (238).

It's worth checking out Luke Foley's speech at the NSW Heritage Act 40th Anniversary. Top of the list of his current threats is the fight to save the Sirius Building. He talks of an area where we have working class people being cleansed from the city. That is consistent with Professor Morris's articles and it certainly fits with what tenants and former tenants of Millers Point are saying.

Friday, June 2, 2017

NSW Government's affordability pledge

Hot on the heels of the NSW Opposition's announcement, Premier Berejiklian has brought forward the Government's own plan to improve housing affordability.

Announced yesterday, the policy has three different components: incentives for first home buyers/disincentives for foreign investors; fast-tracking development at higher densities; and building more infrastructure to support communities. Careful observers will note that tenants continue to be the real forgotten people, as rental affordability doesn't even rate a mention.

Tenants who are well-off enough to be pursuing a first home purchase will be pleased, as stamp duty exemptions will apply to all first home purchases up to $650,000 from July this year. That's a big change from the current scheme, which sees exemptions apply only to newly built homes up to $550,000, or land up to $350,000. Further concessions will apply all the way to $800,000, rather than the current $650,000. Additionally, a first home owner grant of $10,000 will apply to the purchase of a newly built dwelling up to $750,000, or an existing dwelling up to $600,000. That's a change from the current scheme that only offers a grant for first timers if they buy a new dwelling.

So, depending on what you're buying, first timers' up-front costs could be reduced by around $30,000. Of course, you'll still have to come up with a substantial deposit before you can borrow the balance, so you'd better keep up with your savings plan just to be on the safe side... and cross your fingers that the market has peaked, so that prices don't go up by another 50 or 60 grand before you can take advantage of those extra incentives. Then again, if you're already that close to buying into this market perhaps a correction, and protracted negative equity, is the last thing you want to contemplate right now... To which we say not to worry, with an army of reanimated first home buyers ready to let loose upon the market - each with a $30,000 spring in their step - it shouldn't take long for prices to start climbing again.

First home buyer incentives are only half the story, as changes to taxes and grants will also impact upon investors. Foreign investors will bear the brunt of it as they'll have to pay an increased surcharge on their stamp duty - doubling from 4% to 8% - as well as an increased surcharge on land taxes - increasing from 0.75% to 2%. But all investors will lose the New Home Grant, which was introduced in 2012 to encourage investors to increase supply by purchasing off-the-plan instead of established dwellings. And investors will no longer be able to defer their stamp duty liabilities when purchasing off-the-plan. The new policy could be an attempt to shift domestic investors back to trading in second hand stock - or perhaps it simply acknowledges that this is really what they're most interested in after all - while trying to keep new supply up by encouraging first timers to jump in off-the-plan. We'll need to keep on eye on the impact of this.

As for new supply, we'll take a look at the second and third aspects of the Government's housing affordability plan - fast-tracking supply and delivering more infrastructure - as soon as we can.

Wednesday, May 31, 2017

National Reconciliation Week

This post written by our Legal Officer - Aboriginal Support, Jessica Hall. Along with an Aboriginal Paralegal, Jessica works to support the Aboriginal Tenants' Advice and Advocacy Services and conduct litigation to advance legal rights of Aboriginal and Torres Strait Islander tenants in NSW.

This week is National Reconciliation Week, recognised each year between May 27th-June 3rd and placed during this time due to two significant milestones in Australia’s journey to reconciliation: the 1967 Referendum (May 27th) and the historic 1992 Mabo decision (June 3rd).

This year in particular, marks important anniversaries of both these events – 50 years since the referendum that amended the Australian Constitution to legally recognise Aboriginal and Torres Strait Islander peoples, and 25 years since the landmark Mabo decision which legally recognised native title rights in Australia for the first time.
Here at the Tenant’s Union, we marked this week with a successful morning tea yesterday organised by our Aboriginal Paralegal John in collaboration with Community Legal Centres NSW, National Association of Community Legal Centres and Justice Connect, to host friends and colleagues in the spirit of reconciliation.

As we commemorate these two milestones with NRW events around the country, we ask that all Australians join together in a unified front to be a part of the journey to reconciliation, mutual respect and a better future for our first Australians.
The motto for this year’s NRW is ‘let’s take the next steps’, reflecting that we are all responsible collectively for the future of reconciliation in Australia. The Uluru Statement from the Heart speaks to the next steps to come, and the long journey to be taken together as Australian people for a better future.

Tuesday, May 30, 2017

NSW Opposition's affordability pledge

NSW Labor announced a housing affordability package over the weekend. It's worth a look.

As reported in the SMH, the Oz, and ABC Online, the headline is that under a NSW Labor Government 25% of government owned land that is earmarked for residential development would be set aside for Affordable Housing. Additionally, 15% of new dwellings or floor space on "privately developed" land would be designated as Affordable Housing, "available for rental or sale to low- to moderate-income households."

As reported in the SMH and ABC Online, with comments attributed to NSW Planning Minister Anthony Roberts, the plan lacks detail. It is unclear just what is meant by "Affordable Housing", although the term does have a meaning in modern housing policy parlance. It generally refers to rental housing that is let at around 80% of the going market rate, and it is usually managed by a registered Community Housing landlord. It is not clear how Affordable Housing "for sale" would be determined, though we note the policy states Labor would "work closely with industry experts, including Community Housing Providers, to formulate the rules around this policy". That's good, but they could include tenants and prospective home buyers in that list of experts as well.

For his part, Minister Roberts says the plan is "totally flawed", and that the NSW Government has already created affordable housing. In comments to the ABC, he is reported to have said:
We are doing it incredibly successfully without destroying the value of peoples' properties, without actually going into the marketplace and providing a level of Government intervention that is no good for anyone.
Presumably he was referring to the Social and Affordable Housing Fund, under which the construction of 2,200 new properties was announced in early March. He might also be referring to the Communities Plus initiative, under which land owned by the Land and Housing Corporation - that's the public housing landlord in New South Wales - is to be "recycled". For the uninitiated, that means knocking down established communities in places like Redfern, Waterloo, Macquarie Park, Telopea and Riverwood, and replacing them with new, higher density neighbourhoods that will include both Social and Affordable Housing. But they'll include more dwellings for sale into the private market than anything else, because that's how this "recycling" model gets funded.

Ignoring the significant upheaval this causes tenants and residents within those communities, Minister Roberts might be right - that is one way to deliver Affordable Housing in parts of Sydney without destroying the city's property values. In fact, it seems designed to encourage further growth in the value of property, while carving out small tracts of affordability for a lucky few. To be clear, that is affordability relative to our extremely unaffordable housing market, as opposed to affordability by any real objective measure. That's good for property owners, but on its own it's not so good for tenants and would be home-buyers struggling to find something they can afford in the places they'd like to live. And it's really not good for the public housing tenants who value their properties in an entirely different way - by making homes and neighourhoods in the communities that are about to be destroyed.

In any event, the scale of Sydney's affordable housing crisis is such that a few thousand extra dwellings here and there won't really put much of a dent in it, even if we do rent some of them out a little more cheaply than the rest. What is needed is a clear and meaningful target for affordable housing to be included in new residential developments right across the city, if not across the state. We need a sustained effort to get more and more of it built with every new development that gets off the ground. On this note we'll give the NSW Labor policy a big thumbs up.

We'll be surprised and disappointed if the NSW Government comes out with a substantially different policy when it announces its own housing affordability package, as it has promised to do in the coming State Budget. Given the recent Federal Budget's focus on delivering Affordable Housing through the proposed National Housing Finance and Investment Scheme, and the reference to aggregate supply targets (including targets for social and affordable housing), residential land planning and zoning reforms, and inclusionary zoning arrangements in the proposed National Housing and Homelessness Agreement, the only real difference we're hoping to see in the Government's plan is a little more attention to detail.

Time will tell.

Friday, May 26, 2017

It was like leaving your family

Dancing with Bluey at Christmas

In September 2016, Shelter NSW published a report by Professor Alan Morris of the University of Technology Sydney called 'A contemporary forced urban removal: The displacement of public housing residents from Millers Point, Dawes Point and the Sirius Building by the New South Wales Government'.

In an article in The Australian Journal of Social Issues, hot off the press, Professor Morris places the events at Millers Point in a broader context. His article is called '"It was like leaving your family": Gentrification and the impacts of displacement on public housing tenants in inner-Sydney'.

Professor Morris uncovers an early media release from then NSW Finance Minister who announced that the government was considering selling off much of the public housing in Millers Point, because 'the government needs to consider it in the context of all of the surrounding areas, including the Barangaroo redevelopment area.' [my emphasis]. Previously we wrote: 'Ponder ... the real agenda at Millers Point is to free up housing stock around Barangaroo for gentrification and to create a Paris Quarter ... a touch of Montmartre.'

Professor Morris argues that 'place' attachment of most of those interviewed was profound and the removal announcement and the actual move were devastating. Interviewees spoke of deep sadness and anxiety at the thought of leaving. Residents who had moved told of their isolation and melancholy at having lost their social network. He concludes:
The critical theorist warned of the implications of only utilising "instrumental reason" in the formulation of policy, arguing that you need to always take account of the human cost of any policy implementation. ... As illustrated, in the case of Millers Point and the Sirius Building, the focus primarily on the revenue that the sale of public housing stock will generate has resulted in enormous suffering. ... The move will exacerbate the already deep and growing spatial divide between rich and poor in Sydney and the social mix that was a feature of Millers Point will be obliterated along with its rich history. A major concern is that in this age of deepening neo-liberalism, the Millers Point / Sirius Building could be the start of a major state government offensive against public housing tenants in other sought after gentrifying / gentrified areas.
And this is all at a time of a billion dollar windfall in revenue from stamp duty to the NSW Government.

Back in March of this year, we reflected on the third anniversary of the announcement to sell all public housing properties in Millers Point. Here, we posed the question: if portfolios such as health and education are not funded by cannibalising themselves, then why must social housing be funded this way?

We update the sad statistics from a ravaged community.

At 25 May 2017, 151 properties have been sold for $400.89M, with a median sale price of $2.44M and sales in the range $1.47M and $12.30M. This represents 138 sales, with the top price being for a block of 12 one-bedroom apartments covering 7 properties sold in one line. Based upon sales to date, an estimate of funds to be received from these sales is $686.81M. On top of this figure, stamp duty has netted an additional $21.08M, bringing expected total revenue from the sales to more than $700 million! This is far in excess of the Government's target of $500 million.

Yes, as of March 2017, the NSW Government has built or has under construction 764 new social housing dwellings across New South Wales from the proceeds of the sales. But at what cost?

At the beginning of the process 579 tenant and household members (in 399 tenancies) were to be relocated. At 25 May 2017, 555 tenant and household members (in 383 tenancies) have either vacated or are committed to moving, with a further 24 (in 16 tenancies) still uncommitted to moving.

So, Professor Morris's article is timely because the New South Wales Government is ramping up the pressure and evicting the last remaining public housing residents who have refused to move.

Sally Parslow and her dogs off to Court

On 20 April 2017, the New South Wales Supreme Court placed a stay on the first application to the New South Wales Civil and Administrative Tribunal by Family and Community Services Housing NSW seeking a possession order on the grounds that the tenant has refused offers to move to alternative premises. Read the story of Sally's last-ditch fight.

At 6.30am on Thursday, 10 May 2017, the Sheriff enforced a warrant of possession against Peter Muller, a tenant who was no longer eligible for social housing, despite being a public housing tenant for seven years and having lived in the area for two decades. This received some media coverage.

Indeed, they have also placed a Cyclone fence around the four remaining residents of the Sirius Building, one of whom is 90 year old Myra. The NSW Land and Environment Court shortly will deliver its judgement on action brought by local residents following the then Minister for Heritage's refusal to place a heritage order on the Sirius Building, despite a unanimous recommendation that he do so from his own Heritage Council. Read the latest here.

And some of the fighters amongst the residents reluctantly have agreed to move to other premises that the previous Minister for Social Housing set aside for them ...rather than risk homelessness. Here, Barney Gardiner (thanks, Barney) is seen taking down the posters that plastered the front wall of his home, where he has lived for the past 27 years. Others have moved away (go well, Patricia Corowa ... Yes, you have fought the good fight).

Barney moving up the road

As Millers Point becomes an enclave of the wealthy, let's not forget what has been lost. ABC's 'Open Drum' published the story of a daughter of Millers Point. She's the young girl dancing with Bluey, one of her mum's boarders in the photo at the top of this blog. John Blay is a writer, naturalist and walker. He has written extensively about the bush and its people in poetry, drama and prose. But back in 2012, John was a resident of Millers Point. He was forced out when the previous New South Wales Labor Government commenced the process of selling off public housing. Well, here's John Blay's recollections of living at Millers Point for more than 34 years:
I’ve now had numerous books published, mostly history and natural history that arose from my researches in State Archives and at the Mitchell Library, whilst based at my home nearby in Millers Point. But also I’ve written poetry and numerous plays. One, a bicentenary commission from the ABC called The Fleet, was focused on The Rocks / Millers Point district. The cultural side of the area has always been important, its raffishness, its bohemian, artistic atmosphere that passed down through Norman Lindsay, the Parker Galleries and the various art schools, not to mention the Rocks Markets. The richness of the district has always been an inspiration, the world heritage quality of the architecture along with a community that had been in place since settlement. Millers Point has in my view always been relatively crime free as a result of the close community relations. The stability of our tenancies, especially during the Maritime Services Board helped the sense of belonging. We believed we were there for life. Community leaders like Shirley Ball and Sally Parslow helped create the sense of solidarity and peacefulness. ... It nearly broke my heart when I was forced to leave Millers Point.
Read all of what John says here. You can read other residents' stories here.

In the NSW Parliament, Alex Greenwich, the local MP for Sydney, again has asked the NSW Government to let the remaining residents of Millers Point stay. He says that a compassionate approach can achieve the government’s aims while protecting vulnerable, long term tenants. Like in all our previous blogs, we also say it is not too late for the NSW Government to review the situation and allow the remaining residents to stay, especially the older folk who should be able to age-in-place. People like Sally and Myra. People like Chris and Christina, Ian, Barbara and others not mentioned in this blog.

But, NSW Government, time is fast running out. Very much so. A smithering of justice would be welcome.

National Sorry Day 2017

Today marks 20 years since the Bringing Them Home report was tabled in parliament. Most Australians know where they come from and where they can be at home, for the Stolen Generations this connection was often shattered. Language, connections to ancestral country and families were lost for many. New relationships had to be established, and old pain still needs to be healed.
National Sorry Day is the first step on the path to reconciliation and tomorrow we start National Reconciliation Week 2017.
Today, we say sorry. We say sorry to all those affected by the Stolen Generations policies, and other historic and current Australian policies which have resulted in significant disadvantage being placed on Aboriginal and Torres Strait Islander communities across New South Wales and the entire country.
Saying sorry doesn’t mean a lot if you don’t also work to address the wrong. For the Tenants’ Union we work with Aboriginal networks such as the Aboriginal Tenants Advice and Advocacy Services, both to address individual tenancy disputes, and systemic issues such as the quality, funding and management of Aboriginal housing in New South Wales.
This artwork was created by Pauline Coxon, former tenancy advocate and Biripi artist living on Ngarigo country. Entitled Making Tracks to your Tenancy, Coming Home. Today it speaks to us of the the value of knowing where your home is, as we work towards ensuring all people can create spaces in which they can feel at home.
See Pauline’s work for the Tenants’ Union here: