'Underoccupancy' in public housing

There's an interesting article in today's Daily Telegraph about the 'underoccupancy' of public housing – though the article is rather let down by the insulting heading 'What a waste of space'. (Insulting, and ironic, considering how much of the Tele's cybernetic real estate is devoted to photos of the Duchess of Cambridge's sister and losing contestants on Dancing with the Stars.)

Reports the Tele:

NEARLY 50,000 NSW Housing dwellings are under-occupied, with almost 11,000 people living on their own in houses with more than three bedrooms.

An investigation by The Daily Telegraph can reveal that while 43,335 people are stuck on waiting lists, thousands of NSW Housing tenants are living in homes too big for them.

Of all tenants living on their own, 25 per cent have a house with more than one bedroom, with 20,215 the sole occupant in a house with more than two bedrooms, 10,881 with more than three bedrooms and 914 with more than four bedrooms.

Making the top five suburbs of empty bedrooms are the Sydney CBD as well as Waterloo, Redfern, Maroubra and Glebe.

'Luxury'! Actually, it's interesting because it helps us consider a couple of perspectives on current housing policy issues – quite apart from the Tele's perspective of faux-outrage.

An historian of public housing might say: well, yes, this reflects the remarkable changes in public housing eligibility and, hence, demographics, over the last two or three decades. This is the point made in the article by the Housing NSW spokesperson:

"Housing NSW does not currently have enough one and two bedroom properties (into which) to move tenants who are under-occupying," she said.

"In the early 1970s, over 70 per cent of housing applicants were couples with children, and only 12 per cent elderly singles. Today, 40 per cent of applicants are single, another 30 per cent are single parents and only 8 per cent are couples with children."

In fact, in the early 1970s single persons (other than Age Pensioners) weren't even eligible for public housing! (They've been eligible only since the early 1980s.) The population housed in public housing has changed a great deal since then – faster than the stock of houses in which they are housed has changed.

An economist might say of these figures: well, yes, these tenants are evincing economically rational behaviour. Because of public housing's income-related rents, tenants maximise their utility by staying as long as they can in the roomiest properties in the most desirable locations. If there was some utility in taking less roomy or less desirably located properties – in particular, cheaper rent – more tenants might available themselves of that benefit, rather than rooms or location.

And a student of inter-tenurial comparisons might say: well, so what? When you look at all households in Australia, the large majority of lone-person households live in properties with two or more bedrooms – in fact, 86 per cent do, compared to public housing's 25 per cent. Most of these underoccupiers would be owner-occupiers – are they wasting space too, or are they instead kindly, family-minded folk who like to have spare room for when the kids and grandkids come round?