Alan Kohler and the Housing Mess

Towards the end of last year Quarterly Essay published Alan Kohler’s The Great Divide: Australia’s Housing Mess and How to Fix It. Being a long-standing housing person and also someone who enjoys reading Kohler’s economic analysis, I dived in. Here’s some thoughts.

In his trademark style Kohler has taken a complex and frustrating subject and explained it in a manner that is not only comprehensive enough to be useful, but easy to understand, a pleasure to read and laced with his trademark wit. The picture he paints is not pretty. The combination of tax and transfer policies designed to stimulate housing demand (along with low interest rates) and planning policies designed to limit supply has led to a doubling of house prices relative to incomes over the past quarter of a century. The result is that people who own housing have a steadily appreciating asset and those who don’t own a home already see the prospect of ever doing so receding into the distance.

What’s sad and frustrating about this, as Alan points out, is that he’s not telling us anything we don’t already know. Rumour has it that the Parliamentary Library had to commandeer an extra room to house the reports from the parliamentary inquiries, Productivity Commission investigations, Reserve Bank research and the output of various efforts around the country to find a solution. Ideas for solving our housing mess are not in short supply. What is experiencing a supply crisis is actual willingness to do anything about it.

It wasn’t until I got to Alan’s proposed solutions that I felt that familiar depression. He puts his finger on the obvious reason we have never taken any action to decrease house prices. The majority of us, including the wealthiest and best connected, own housing. We are happy if its value rises and sad if it falls. Furthermore, a sustained fall in prices would risk a repeat of the Global Financial Crisis, and that wouldn’t be good for anyone. This means that while governments might make sympathetic noises about housing affordability, they have little motivation to do anything about it.

This means that he skips past all the things we know we need to do – reform of negative gearing and capital gains tax, scrapping first home owner grants, planning reform to allow more medium density housing – and lands on transport reform. If we build fast train connections between our capital cities and key regional centres like Bendigo, Bathurst and Toowoomba people will be able to live in affordable regional housing and still work in the city courtesy of a fast commute.

I don’t think this is a bad idea. Better public transport is good for all sorts of reasons. But I think it’s unlikely to happen any time soon, and even if it does it is hard to see how it would solve the problem rather than just relocating it.

I think the problem here is that Alan is caught in a dilemma. On the one hand he would like to see house prices gradually fall relative to incomes until they are back where they were in 2000. On the other hand he acknowledges that when governments and oppositions try to do the things that the experts say will get us there they get beaten around the head until they withdraw. Housing reform of the kind he is talking about has become politically impossible.

My immediate thought as I got to the end of his essay was, what if he was trying to solve the wrong problem? Not that I don’t have sympathy with the millennial and Gen Y kids trapped in insecure rental. This is a genuine problem. But the most urgent problem is literally out there in plain sight. Over the past year or two we have seen a steady increase in the number of people living in tents in our urban parks and along our riverbanks, in improvised shelters under bridges and roadways, or huddled in sleeping bags under shop awnings. What was once easy to miss is now slapping us in the face.

These people are just the tip of the iceberg. The 2021 census counted over 120,000 people homeless. Of these, less than 8,000 were sleeping rough. Just under 25,000 were in crisis housing. The rest were crowded in with friends and family, or in temporary lodgings of some sort. A similar number were at risk of homelessness in the near future – living on overcrowded, insecure or unsafe housing.
If reports from the field are anything to go by, this number is almost certainly higher now than it was in 2021. In my 40 years working in homelessness and affordable housing I have never seen things this bad. My colleagues in front-line services are becoming increasingly dispirited as their options have dried up – often the best they can do is a few nights in a motel or caravan park, advice on how to stabilise an unsafe couch-surfing posse, a donated tent, or assistance to join a social housing waiting list that might see the person housed in some distant future. On top of this is the wearying stress of listening to people vent their totally understandable frustrations when homelessness services are unable to help them solve their homelessness.

Homelessness is nothing new. Even at the height of Australia’s post-war housing golden age in the 1960s and 1970s some people were still homeless. It’s just that now we have a lot more of it, and fewer pathways out. As housing affordability has declined across the board, the number of homeless people has steadily climbed. People who work in this field have been trying to draw attention to this for a long time, but it’s been hard to get anyone to listen.

Part of the reason for this is that we have invented various ways to mask the problem. For instance, over the past 20 or 30 years we have increasingly targeted social housing allocations to those deemed most in need. When I started working in homelessness in the 1980s, social housing lists were genuine waiting lists – you filed your application and if you were eligible you would go on a list prioritised in date order. Occasionally people would be housed out of turn if their need was particularly urgent, but these were a minority. This has gradually changed over the past 30 years, and we are now at the point where even those who have nowhere to sleep right now have a long wait. This makes it look like demand for social housing hasn’t increased in 30 years, when it’s actually just more stringent rationing.

Alan Kohler skipped quickly past social housing, but if you want to focus on helping those who are suffering the most from our current housing mess it needs to be front and centre. It is the only realistic source of housing for most of the people who are homeless or at risk of homelessness.

What would it take to revitalise social housing? In November 2022 the City Futures Research Centre at UNSW estimated that there were 640,000 Australian households whose housing needs were not being met and projected that this will increase to 940,000 by 2041 on current trends. These seem like impossibly big numbers, so let’s focus on the people who are homeless or at risk right now. In 2021 these amounted to around 220,000 persons. There are probably more now, so let’s round it up to 250,000. At an average of two persons per household, this equates to 125,000 households.

Let’s assume that to house them we need 125,000 new social housing dwellings. Ideally, we need them right now but realistically let’s consider this within the five-year time horizon of the National Housing Accord. To achieve this, just over 10% of the targeted 1.2 million new homes would need to be social housing. At an average of $500,000 per dwelling (a lot of them would be small units rather than houses) the cost would be $62.5b over five years, or $12.5b per year. Not all this money needs to be in direct government grants – there are a number of ways to leverage private investment, loans and developer contributions to help meet the cost.

How close are we to this number right now? The Commonwealth Government plans to deliver 30,000 homes in this period through the Housing Affordability Future Fund, while the extra $2b negotiated by the Greens as part of their deal to pass the legislation could produce around 4,000 more. This is on top of ongoing programs being run by the various State and Territory governments under the existing National Housing and Homelessness Agreement, where the Commonwealth Government contributes $1.6b per year, matched by the States. It’s hard to get a clear picture of exactly what this delivers in terms of new housing because a lot is spent maintaining and upgrading the existing State property portfolios. However, various State and Territory announcements over the past year or two suggest a figure of 25-30,000 new dwellings wouldn’t be too far from the truth. If all these plans deliver as promised, we will be about halfway there.

Doubling this effort would be challenging, but far from impossible. State and Territory governments and community housing organisations already develop housing, so they have the skills and systems to do it. In 2008-10 in the wake of the Global Financial Crisis, under the Commonwealth’s economic stimulus program the State governments increased their construction from around 4,000 dwellings a year to around 16,000, and the program was delivered on time and under budget. The fact that the system in the various States and territories is already gearing up for growth will make it easier than it was in 2008, although they will face the same challenges as the private development sector with skills and materials shortages.

This wouldn’t necessarily solve Australia’s housing affordability problem, although it would contribute to the solution. It would ensure a substantial government contribution to the supply effort, one that didn’t wax and wane according to market conditions. It would build up the only genuine ‘build to rent’ sector in the Australian housing market. But most importantly, those who are suffering the most from our housing crisis would be the first to get help, rather than waiting and hoping for the market to deliver the promised affordability.

We have an urgent problem. People are homeless right now. We can’t wait for the market to magically provide lots of housing and the effects of this to eventually ‘filter’ to people who are homeless. The only realistic way to solve this problem is to revitalise our social housing sector, starting right now.

Strategic Planning

Strategic Planning Day – births, deaths and marriages?

Some practitioners are announcing the death of strategic planning while many organisations remain wedded to it and hire consultants like us to perform the role of midwife, turn up at the birth with flip chart and survey monkey data and deliver a healthy, well-worded plan. So, should the strategic plan be buried or nurtured?  My observations are that behind any useful strategic plan in the social policy/social services sector are ongoing conversations by board, staff and others that deal with:

  • clarity about the problem the organisation wants to solve or the aspirations it wants to achieve (the what)
  • clarity about the methods for service delivery or the theory of change that dictate how to act (the how)
  • clarity about finance and other resources that reveal the capacity for action (the who, when and where).

Without that clarity, strategic planning day discussions can attempt to gain some of those insights or decisions, but the plan is likely to be part fiction. If the clarity is there already it’s probably a sign that research, future-focused discussions and decision-making is alive and well in the organisation, so the strategic plan is a like mirror that reflects the image of a healthy entity.

I’m inclined to think it is better to schedule these vital discussions as a regular part of governance rather than put too many eggs into the special planning day spectacular.  The organisation’s statements about its vision, values, purpose and so on can be published progressively in web sites, annual reports and all the key communications to stakeholders.  There are not too many people who go searching for stand alone strategic plans. They are not necessarily the best ways to reach those who want to know about the organisation.  What matters are the strategy discussions that foster shared board-staff-member understanding and agreement about the core purposes and directions.  Would facilitation of such discussions be a better way for consultants to contribute? Or are they best done in-house so that capacity for strategy is home-grown?


What Tenants Want

Over the past couple of years we’ve done quite a lot of projects where we consult with social housing tenants.  No matter what the subject, there are some things that come up over and over again.  Here are the four main ones.

They want to be treated with respect.  Often tenants feel that the staff of their housing manager just don’t take them seriously.  They feel that they’re talked down to, their issues not taken seriously.  Often people don’t return their calls, or don’t follow through on things they promise to do.  When they find a staff member who does these things right – listens, takes them seriously and follows through – it makes their lives so much easier.

They want things fixed.  Maintenance is always a hot topic with social housing tenants.  When they report that things are broken, they want it to be fixed in good time, and fixed properly.

They want their neighbourhoods to be safe places.  As the level of disadvantage experienced by social housing applicants increases, so does the amount of neighbourhood disturbance.  Many tenants, particularly older people, report not feeling safe in their homes.  They want decent responses to these issues – support for tenants whose mental health or other issues affects those around them, appropriate police response to incidents of violence, prompt action on the tenancies of serious or repeat offenders.

They want housing providers to work with them.  Many tenants have a wealth of expereince in social housing and in building community.  They have a lot to offer and they would like their housing managers to work with them and involve them in decisions about their housing and their neighbourhoods.  They don’t want to be just a number.

Good tenancy management is not rocket science.  Wouldn’t anybody want these things in their housing?


“I Finally Gave In”

I’ve just spent a few days in Perth at the National Housing Conference 2015.  Props to AHURI and the WA Housing Authority for organising a thought-provoking and fun conference.Stream3door

There were lots of presentations from high powered academics, senior officials and CEOs of well resourced organisations.  There was lots to ponder, some great ideas and some moments of despair at the scale of the task.

However, the presentation that impressed me the most was at a little “think tank” session on the final morning.  Yarra Community Housing presented a short workshop on their approach to tenant participation, and as part of this one of their tenants talked about her experiences.

She was a mature woman who was stably housed and in a long-term relationship before a series of events took all this away from her and left her alone and homeless.  Over the next year or two she slept in her car, couch-surfed with friends and family, lived in a leaky caravan and got entangled in an abusive relationship.  After all this, she said, “I finally gave in and went to community services”.

Why, I wondered, should seeking help through the formal service system be seen as “giving in” rather than something helpful and to which she was entitled?  The rest of her story made the answer perfectly clear.  She found her engagement with the system both humiliating and unhelpful.  She was given the runaround, before finally being placed in a boarding house most of whose residents had serious mental health issues.  In this stressful environment she was still short of money and often had to travel around town in search of free meals.  Once, caught travelling without a ticket as she had no money, she was berated publicly by a police officer for the “crime” of being broke and homeless.

During the closing session of the conference, a Q&A hosted by Tony Jones, one of the audience participants pointed out that the majority of people who ask for help from homelessness services are turned away because the system doesn’t have capacity to cope with demand.  Would this be acceptable in the health sector, she asked?  Would it be OK for hospitals to turn half the ambulances away because they didn’t have enough beds?  Would it be OK for schools to make students wait years for enrolment?  Why do we tolerate this situation in homelessness?  And why is it OK for people like the woman who addressed us to receive a substandard, humiliating response to their plea for help?

Fortunately the woman’s story has a happy ending.  She is now
securely housed by a well-run community housing organisation that values her contribution.  She has completed further education and has gone a long way to rebuilding her life.

She has a lot to offer the community.  So do most of the 100,000 people who are homeless in Australia each night.  Surely we can do better for them than offer them the crumbs off our table.


Three Amalgamation Stories

I recently stepped down after a five year stint as a board member of a small housing organisation here in Brisbane.  This organisation was created out of four very tiny organisations – when the four came together they had a total of about 70 dwellings, an annual income of around three-quarters of a million dollars and the equivalent of less than three full time staff positions.  An amalgamation on that scale should theoretically be simple, but this one turned into a saga of epic proportions that dragged on for about seven years.

There were two reasons for the dsharkselay.  One was that that we had problems with the funding department which slowed us down.  The other was that we had so few resources and so little clout with anyone that we had no way of pushing it along.  With a tenant-participation tradition, most of our key decision-makers were tenants who had never done this before and were working it out as they went, and we couldn’t afford to pay for any serious advice.  We had no choice but to keep plugging away until we eventually dragged ourselves, exhausted and frustrated, over the finishing line.

Recently I got to see how much easier it could have been.  I spent a little bit of time helping two health-related organisations to negotiate a potential amalgamation.  The two partners between them had an annual turnover of over $20m and almost 300 staff.  Working with them was like a dream after my previous experience.  The two CEOs were highly professional and focused.  Their boards were made up of experienced professionals who were quick to grasp the issues and made good, considered decisions.  If they needed professional advice or extra practical help they could afford to pay for it.  We worked quickly to develop a project plan that would see the most important parts of the amalgamation completed within 3-6 months and the whole job done in a year.

After one of the key decision-making meetings I joined the board members and senior managers for dinner and got talking to one of the board members of the larger partner.  I commented on how nice it was to work for two well-resourced and professional organisations.  He smiled wryly and told me his own story.  Until recently he had been the manager of mergers and acquisitions for a major Australian company.  In this role he managed a number of different corporate mergers.  The biggest involved acquiring a company worth $9b.  Yes, that’s billions!  He said the whole thing took three months, start to finish.  The thing was that he had a team of highly paid professionals who did nothing else but make it happen and if a problem came up they could spend whatever it took to fix it.  He said he had to exercise patience in the current situation because his staff were just learning how to do it.

When I told him about the little housing organisation I was part of, he just laughed.

Strategic Planning

Start Soaking Those Beans

boston baked beans I’ve got a fantastic Jill Dupleix recipe for home-made baked beans that starts: “Don’t wake up in the morning and spontaneously decide to have this for breakfast. Instead, wake up yesterday morning and decide to have it for breakfast today.”

This month we’ve been helping some of our favourite clients – and some new ones – prepare really critical tenders. In some cases it’s make or break time. Many of them have talked about what they could or should have done yesterday to prepare for today’s funding environment.

We’ve been suggesting to them that they start thinking today about tomorrow’s breakfast.  When a tender is announced it’s really too late to set up partnership arrangements, put quality systems in place, start collecting meaningful outcomes data or plan an effective service model from scratch.

We know it’s really hard to think ahead when you’re busy doing your organisation’s work. But the bottom line is that every organisation needs to be thinking about the future if it’s going to survive and thrive. So start soaking those beans now!

If you’d like the baked beans recipe, or you want help with thinking about your organisation’s future, give us a call.


The Dream Consultant

Following on from our reflections about The Dream Client, it seemed only fair to consider what the dream consultant looks like. When we first set up 99 Consulting in 2006 we thought hard about what we liked and didn’t like in consultants we had hired in previous jobs. We were pretty clear that we didn’t want to be a consulting operation that sent senior people to tout for the work then task juniors to do it, that failed to listen to what our clients wanted or that handed in shoddy half-formed stuff as if it was the finished product. We also didn’t want to be all glitz and no substance.

We know we’re not perfect, but here are some things we aspire to, and that we suggest our clients look for whether they’re hiring us or someone else:

  • Eyes on the prize! The consultant should share the client’s focus on a valuable and useful end result – avoid those jaded types that seem more interested in the finish line and sending that final invoice.
  • Transparent: The consultant’s people doing the hands on work should be those who were named in the proposal – the client should be confident that the right skills and experience are deployed appropriately.
  • On-side: The client should be confident that the consultant is working for their benefit. A good one should pretty quickly be able to adapt so that the work is a good fit with your language, your culture, your context, while retaining independence and able to offer objective findings.
  • Frank, fearless, fair and well-founded: While a good consultant may not always have good news to report, they should be able to back up any claims with evidence and a rationale. No need to ‘trust the expert’. The good news must be backed with evidence too – or you may find yourself unable to use the results more widely.
  • Communicative: The client needs to be able to contact the consultant easily, know what stage of the work they are up to, and feel respected by the consultant’s communication with them. The client should feel it is easy to prompt more, or less, communication if necessary.
  • On time: Consultants should meet their deadlines, so long as the client hasn’t changed scope of work or delayed timelines with slow approvals etc.
  • Top notch: The client should receive high quality work. We’ve seen clients accept poor work (not from us of course), mainly because the person signing off didn’t have the relevant expertise, so they didn’t know what was flawed in work they were presented with. Sometimes it’s because they’ve given up – they don’t think the consultant can do any better.
  • Ready to say no to work that’s outside their experience – consultants should know their limitations and be prepared to refer clients to someone else for work that’s beyond their expertise.
  • Appropriately challenging – the consultant shouldn’t just put your ideas and words into a report with their name on it – they should make your ideas better or prove that they are true, or alternatively show you why they may not work. Responsive: if you don’t want the consultant’s standard off-the-shelf way of doing something then you shouldn’t accept it. We’ve seen consultants impose their pet methodology, tool or process on clients even when it’s not actually relevant.Dream consultant pic (2)

Even dream clients and consultants sometimes drop the ball. Unintended communication failings, lack of time to progress the consultant’s project, organisational change that swamps the work – all these things and more can derail even the best planned work. The best ways to pick up the pieces are ….the topic of a future blog!




Social Mix and the City

I’ve been working on and off for the past few months on a large literature search on Australian public housing estate renewal projects. Renewal projects are big news in Australian public housing, as they are in other parts of the developed world. They’re driven by two issues: an ageing stock of public housing built in the decades following the second world war and which now needs replacement; and a perception of public housing estates as dysfunctional locations characterised by poverty and crime.

The first problem requires major capital works to upgrade or replace housing, or else its sale and replacement with newer housing. The standard answer to the second problem is to create “social mix” by selling public housing dwellings to owner-occupiers, bringing comparatively higher income working people into communities which were previously dominated by people on pensions and benefits. This is seen to benefit the area as a whole by reducing stigma, attracting better mainstream services (e.g. shops and doctors) because there is more income in the community overall, and reducing crime and anti-social behaviour. These benefits are intended to “rub off” on the most disadvantaged residents through better services, more access to employment and proximity to middle class role models.

The idea of social mix seems to make sense and it is widely accepted by governments and community groups here and around the world. I have argued for it myself in the past. The problem, as I’ve been finding out in my literature search, is that there’s virtually no evidence to support it.

The best introduction to this issue I’ve found is a book by Kathy Arthurson called Social Mix and the City, published by CSIRO Publishing in 2012.  Arthurson is an experienced Adelaide researcher and academic who has been working in the field of estate renewal for over a decade, and this book reveals her learnings over that time.

The origin of Social Mix and the Citythe idea of social mix, she says, is with some of the key social reformers of the 19th century like Joseph Rowntree, George Cadbury, Octavia Hill and Ebenezer Howard.  Confronted by the extreme urban poverty and discontent that followed the industrial revolution, they proposed the creation of communities that drew heavily on the notion of the pre-industrial village community where people of all classes lived close to each other and rubbed shoulders regularly. They believed that if the poor lived close to middle and upper class families they would learn better habits of thrift, hygiene and hard work and hence improve themselves over time.  These ideas grew very much out of the idea of poverty as an individual pathology and led to experiments in urban design such as Cadbury’s Bourneville Village and various new towns based, at least partly, on Howard’s Garden City design.

The idea experienced a resurgence in the post-war years where it was built into some of the earlier public housing developments, although the idea was soon buried in the pragmatic process of developing large scale public housing estates and the increased targeting of public housing to the most disadvantaged that began in the 1970s.  Its current resurgence began in the 1990s as housing authorities started to deal with the legacy of the 1960s and 1970s public housing boom.

What is distinctive about its most recent reincarnation is its almost exclusive focus on public housing estates and reducing concentrations of poverty.  In current policy debate there is little focus on reducing concentrations of wealth or building public housing in middle class communities.  This rather begs the question of where disadvantaged public tenants will live when they have been “de-concentrated” from public housing estates.

Arthurson’s review of the evidence uncovers little to support this policy approach.  There is no evidence to show that public tenants get better access to employment and training, that services improve, or that the health and wellbeing of public housing tenants improves.  The stigma of neighbourhoods may be reduced as a result of the redevelopment but it is not clear if this is because of social mix or because of the physical improvements that go with renewal projects and the intensive marketing that accompanies large-scale sales programs.  In any case, there is some evidence that rather than being removed, stigma is simply transferred to the public housing dwellings within the community.

As for role modelling, Arthurson’s in-depth interviews with residents in redeveloped areas in South Australia found that for the most part, home owners and public tenants don’t form close friendships, although they only occasionally experience active conflict.  This is partly because home owners tend to spend a lot less time in the suburb than public tenants.  They go out each day to work, and they often use recreational and social facilities outside the suburb and send their children to more distant schools.  By contrast, public housing tenants are often less mobile, are less likely to be in the workforce and more likely to depend on public transport.  This can accentuate social divides along class or income lines.  “Social mix” doesn’t necessarily lead to “social mixing”.

Why, when the evidence is so slim, are these policies pursued with such vigour?  Well, I guess it might be partly because the power of received ideas is very strong, and politicians and public servants don’t have a lot of time to read academic research.  However, I also suspect there is another reason.  Public housing authorities around Australia are badly strapped for cash.  They operate on a financial model set up when their job was to house working families, and they are expected to pay for their operations out of their rents.  Now that 90% of their tenants are on benefits and paying highly subsidised rents, they are no longer able to make ends meet.  The only way they can pay for the badly needed replacement of old housing is by selling some of the new housing they build. Whether social mix has benefits for tenants or not, we’re stuck with it for purely financial reasons.

The good news is that there is no evidence that social mix is actually bad for public housing tenants.  However, it does beg the question – where will the new housing come from for the hundreds of thousands of people still on public housing waiting lists?

Tender writing

Winning tenders

We three 99 Consulting partners are working our way towards qualifications in training and assessment. We enjoyed the coursework but are distracted from our assessment by all the real life fun things to do instead: like helping our clients write tenders for example!

My solution: to develop training materials about how to write tenders, so our clients can improve their ability to win those pesky critters.

I’ve added a selection of tender tips (sounds like asparagus!) to the Smart Stuff section of our website, focusing on responding to selection criteria) so have a look if tenders interest you.

Meanwhile we need training victims, so if you’d like to talk about how we can help with training or mentoring of your team (or writing winning tenders) give us a yell so I can finish my assessment!


Transferring Public Housing

The headline direction of Queensland’s new Housing 2020 Strategy is the government’s plan to transfer the management of 90% of its social housing – almost 50,000 dwellings – to non-government organisations.  Why? What are they hoping to achieve through this strategy?

Reasons to TransferImage

There are three reasons for state and territory governments to transfer their housing to community organisations.  1) NGOs can attract more operating income than governments; 2) They may be able to facilitate redevelopment and renewal of housing; and 3) They may manage particular housing (or even all housing) better.  The Housing 2020 Strategy doesn’t explicitly discuss any of these reasons, but let’s look at how the strategy is (or isn’t) set up to address each of them.

Operating Income

Australian social housing providers (government and non-government) have to meet all their operating costs from rents, not counting the initial cost of construction.  Tenants are on low incomes and pay a proportion of their income in rent, which makes it hard for providers to make ends meet.

Tenants of community housing organisations get access to Commonwealth Rent Assistance (CRA) from Centrelink, while government tenants don’t.  CRA can be worth up to $60 per week for a single person and over $80 per week for a family, and  community housing providers can take 100% of whatever amount of CRA their tenants are paid.

If you apply that to the roughly 50,000 dwellings the Queensland Government wants to shift to community management it equates to an extra $150m per year.  On current costs this is enough to shift the operation from a loss-making venture to a break-even one.  With this sort of money on offer, it’s a wonder governments didn’t made the move long ago.


On operating income, shifting to community management seems like a no-brainer.  Redevelopment and estate renewal is definitely needed with lots of housing built in the 1950s and 1960s needing replacement, but this is a trickier proposition.

Community housing organisations can be part of the solution.  Access to CRA gives them a little bit more financial flexibility and this is aided further by charitable tax breaks.  They are also not covered by government borrowing limits, so may be able to borrow money for redevelopment in a way the state government can’t.

However, the possibilities here are definitely limited.  Even in community hands social housing is far from a lucrative business and any borrowed money has to be paid back somehow.  Only a few community housing organisations have the capacity to act as developers in their own right and none do so on the scale needed to renew the public housing portfolio, so they would need to work with the private sector.  The private sector will only get involved if there’s money to be made.

All of this is made harder by the government’s plan to transfer the management of the housing but not the title.  This means that community housing organisations won’t be able to either sell housing to fund redevelopment or borrow against the value of the assets.  Something more than the transfer of management rights will be needed to facilitate redevelopment.

Improved management

There is often a perception in the community that public housing is poorly managed.  This perception is probably exaggerated.  New tenants tend to be glowing about how much better off they are than in private rental.  However, longer term tenants sometimes complain about aspects of State Government management like maintenance, responsiveness and communication.

Well run community housing organisations can improve on some of these management problems by delegating operational decisions to the local level, working with local organisations to address community problems in housing estates/complexes and developing purchasing systems that are less cumbersome than those in the public sector.  Theoretically state housing authorities can do the same, but the scale of the public sector makes reform more difficult.

Will the Queensland reforms achieve these results?  We’ll have to wait and see.  Managing outsourcing on this scale is new for both the State Government and community housing organisations.  Expect teething problems!

Watch this space

It’s early days yet.  Everything in this post could turn out to be wrong.  I can’t wait to see what happens next.