Auditor-General reports on public housing

The NSW Audit Office has today released the Auditor-General's report 'Making the best use of public housing'.

(Auditor-General Peter Achterstraat)

There's a lot in the report – more than we can cover this afternoon – but its essential message to the State Government is something low-income households and the people who work with them have known for years: there's just not enough social housing, particularly public housing. As the Auditor-General puts it:

The constraints in the current portfolio and funding arrangements do not enable HNSW [Housing NSW] and LAHC [Land and Housing Corporation] to meet the changing public housing need. 

Public housing is ageing and increasingly not fit for purpose. It is declining as a proportion of overall New South Wales housing. 

There is an increasing shortfall between the supply of and demand for public housing.

This is the essential problem from which so many other problems in public housing follow – and compound that essential problem. Not enough public housing means targeting allocations to the most poor and crisis-afflicted applicants. This in turn means higher costs to Housing NSW, and less rental revenue. This in turn means yet fewer funds for new stock, and for maintenance. This means greater resort to asset sales, to avoid maintenance liabilities of the stock that's sold, and to pay for some maintenance on the stock that's left. This means fewer dwellings, and a further increase in the shortfall between supply or and demand for public housing. It's a vicious circle, and it's unsustainable.

Appropriately, the Auditor-General locates the problem of 'under-occupancy' of public housing within this context. To the extent to which it is a problem – and as we've previously noted, under-occupancy is less common in public housing than private rental or owner-occupation, where it is not seen as a problem at all – under-occupancy happens largely because the old public housing stock profile does not match the new public housing clientele profile, and Housing NSW's ability to do anything about it is constrained by the pressures of not enough dwellings and too many poor and crisis-afflicted applicants.

It would be a mistake, and a serious injustice to all the households whose needs are not being met by our diminished public housing system, if the State Government was to merely tweak Housing NSW's policies around the allocation of bedrooms and transfers, and not face up to the essential challenge of growing public housing. Tweaking allocations and transfers really is just shifting the deckchairs.

That's not to say that there are no changes that can be made at the operational policy level to address the vicious circle of public housing's decline. Housing NSW could change now its wretched policy of offering fixed term tenancies and reviewing eligibility to remain in public housing. According to the Auditor-General, this policy has 'had little impact on people moving on from public housing'. We'd go further: we suspect it has induced tenants to stay sick and stay poor in order to stay housed, where otherwise they might have taken work opportunities that lead, eventually, to their moving on from public housing. The declining number of exits from public housing, illustrated in the report, is consistent with our view. 

Likewise Housing NSW's 'moderate income' rents policy, under which Housing NSW takes 50 cents in each additional dollar earned by tenants foolhardy enough to get a job that pays a 'moderate income' – with the Centrelink and the Tax Office getting most or all of the other 50 cents. Scrap this policy and see if the increased incentive to work doesn't eventually free up some space in public housing too.

The Auditor-General makes a number of recommendations for higher-level work by Housing NSW and the Land and Housing Corporation, in terms of strategy and planning. But these mustn't be strategies or plans merely for managing the decline of the social housing sector. Social housing must grow to meet community needs.