Speech to the Older Persons Affordable Housing Forum
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Thank you Julian Disney.
I would like to take this opportunity to acknowledge Julian’s substantial commitment over the last decade to advancing the housing affordability agenda.
Julian has made a monumental contribution to the housing policy debate through both the Affordable Housing Summit Group and as Chair of Anti-Poverty Week.
I am always grateful for his counsel.
Today I am delighted to have the opportunity to speak to you about the housing needs for older Australians.
It is a timely opportunity for me to talk to you about the Government’s plans to make housing more affordable for older Australians.
Timely because our older Australians – as you would know – are now facing critical challenges in the areas of health care, housing and cost of living expenses.
Timely also because the Government is working hard to deliver on our election commitments in housing policy.
Improving housing affordability is one of the Government’s key priorities.
In the current economic climate – making housing more affordable is not without its challenges.
As you would know – many of the problems are structural and have developed over many, many years.
These problems require structural changes that in some cases will also take several years.
As the recent Senate Report on Housing Affordability found, the expected number of new dwellings, or housing starts, for 2007-08 is just 154,000.
This is well below the 170,000 housing starts recorded in both 2003 and 2004
It is also well below industry estimates of what we need to build, just to keep up with Australia’s housing needs.
Some estimates suggest that we need more than one million more homes in the next five years to keep up with underlying demand.
Even with governments at all levels and industry working hard, I do not expect to see a noticeable increase in housing starts until 2009-10.
Getting more stock on the ground doesn’t happen over night. Obviously it takes time.
The housing undersupply is keeping vacancy rates in the private rental market at below 2 per cent in most capital cities.
This is driving up rents and keeping the price of existing housing stock high, causing stress for both home buyers and renters.
On top of this – the cost of living is rising more rapidly than it has in more than a decade.
The Government has committed to a number of initiatives to increase financial support to older Australians and I know that most of you are aware of these measures.
We are also improving security for older Australians: living on the pension is just that bit easier if you have a safe and secure roof over your head.
Homes which are safe, secure, accessible and of high quality are central to the health, well being and peace of mind of older Australians.
Yet these important housing features are at risk of being eroded by Australia’s current housing affordability problem.
Older Australians are having trouble finding affordable housing; and are using a growing proportion of their income to keep it.
When I became Minister for Housing one of my first requests was to have some modelling undertaken to give me an evidence base on which to roll out the Government’s $2.2 billion housing agenda.
The research undertaken for my Department by NATSEM showed that the number of older Australians in housing stress has doubled since 2004.
Doubled – in just 4 years.
This means that across the country there are 112,000 low income households headed by a person aged over 70 in housing stress.
And when we broke this data down by gender – we found that households headed by older women were much more likely to be in housing stress than households headed by older men.
The AMP NATSEM Income and Wealth Report released in March 2008 showed that twice as many older Australians over 60 are still paying off a mortgage than 10 years ago.
It found that housing stress amongst the over 60s increased by 80% over the last decade.
Like you, I am very worried about the picture that this data paints for older Australians.
I agree with the Council on the Ageing that we could see rates of homelessness amongst older Australians rising if these trends continue.
I receive letters every day from older Australians about the difficulties they are having paying rapidly rising rents; about their fear of eviction – being forced to move away from their neighbourhoods and families where they have support and feel safe.
Last weekend I was in Mackay for the Community Cabinet and a forum on housing affordability.
I heard about some older residents who have had to move away from Mackay – from their friends and families – because they can’t afford to rent in their home town.
Housing stress is not just experienced by older renters. Many older people who own their own home write to me too about their struggles to pay the rates or keep up the maintenance on their homes.
They say their budget doesn’t stretch far enough.
Some tell me that they have had to move out of their homes and stay with friends or family.
Others say to me that they would be happy to downsize now that their kids have left home, but there are no appropriate townhouses or units in their neighbourhood.
Older Australians have important housing aspirations: security and safety must be a focus; housing close to shops, transport and, for some, medical care; as is housing design allowing older people to ‘age in place’.
National Affordable Housing Agreement
The Australian Government has started negotiating a new National Affordable Housing Agreement (NAHA) with States and Territories.
The National Affordable Housing Agreement will replace and streamline existing agreements such as the Commonwealth State Housing Agreement and programs such as Rent Assistance to better deal with Australia’s housing challenge.
Public and community housing is a critical part of the new agreement.
The social housing sector currently provides over half of all rental housing for older people in Australia.
Households headed by people over 65 make up about 30 per cent of all public housing tenancies, and there are also significant numbers of older people living in community housing.
As we talk further about the National Affordable Housing Agreement and the place of public housing, we will need to keep a close eye on these older residents.
As part of the discussions I have had with my States and Territories and local government on the NAHA, we are looking at ways in which all levels of Government can ensure people on low and moderate incomes have access to affordable, safe and sustainable housing.
We can’t lose sight of the fact that older Australians still have housing aspirations: some want to use their superannuation to buy their first home at 60 or swap their family home for a townhouse with a spare room so that their kids and grandkids can still come to stay.
Older people want choices in their housing – whether that be to stay in their own homes, move to somewhere smaller in their own community or live in retirement villages.
Older people want homes that are accessible – both in terms of allowing people to age in place and by being close to transport, health services, shops and community facilities.
In the negotiations on the NAHA, I have received considerable cooperation from my State and Territory colleagues. We are all aware of the historic opportunity afforded to us in this era of cooperative federalism.
The National Affordable Housing Agreement will deliver – at long last – a national housing policy – a national housing policy that, let’s be honest, Julian Disney has himself almost grown old waiting for!
National Rental Affordability Scheme
Another critical part of our housing policy agenda is the Government’s $623 million National Rental Affordability Scheme.
The Scheme aims to create a new asset class for investors in affordable housing.
The National Rental Affordability Scheme will allocate tax incentives to stimulate the supply of new houses for rent at below market rates.
The Scheme will help build 50,000 new affordable rental properties across Australia.
These homes will be available for rent in diverse locations across the country for low and moderate income tenants, including older Australians.
If market demand stays strong, the Government will expand the Scheme to 100,000 properties over the following five years.
The Scheme represents a substantial investment in affordable housing for low and moderate income Australians.
I expect a lot of interest in this Scheme from the organisations represented in this audience.
As some of you know the Prime Minister released a Technical Discussion Paper setting out the key design features and operating conditions of the Scheme.
I was delighted to receive more than 120 responses to the Technical Paper, including from many of the people here today.
Submissions strongly supported the level of flexibility provided by the Scheme.
I know that there are groups across the country working on proposals that will include housing projects targeted at older people – particularly within the community housing sector.
Generally we are looking to develop large scale portfolios of investment in affordable rental property.
We will also be looking for some smaller providers to give specialist organisations a chance to make use of this scheme.
Your submissions demonstrated the importance of requiring universal design principles in the building of dwellings under the Scheme.
As you all know, there are a number of very simple measures that can be put in place to make houses more accessible as people age – easy things such as the width of doorways, extra room in bathrooms for walking frames and wheelchairs, lower light switches on the wall, and building extra weight bearing capacity in the bathroom walls so that grab rails can be supported if they are needed in the future.
Late last week I released publicly the National Mandatory Requirements and Weighted Criteria for the Scheme.
All proposals for rental incentives under the Scheme will be assessed against these Requirements and Criteria.
I will require all proposals to set out how they will enhance accessibility and sustainability outcomes for tenants.
One way of delivering these outcomes is through the use of universal design principles or other low cost measures that would make properties more accessible to people who are ageing.
The Scheme is designed to encourage delivery of a wide variety of housing forms and meet the needs of variety of Australian tenants – including older Australians.
Let me provide you with a practical illustration of how the Scheme might be used by an aged care provider to provide more than publicly funded aged care beds:
An aged care provider is drawing up plans for their next ‘ageing in place’ development. Like many new developments it will include retirement village accommodation, Independent Living Units possibly supported through community care packages, and low and high care aged care beds.
The National Rental Affordability Scheme would provide the opportunity for the provider to reserve a number of the retirement village units as affordable rentals for people on low incomes and would receive an annual grant from the Commonwealth of $6,000 with $2,000 from the State.
This kind of development might make it possible for older people on low incomes to move to age appropriate housing well before they require formal residential aged care.
To spark the imaginations of providers of housing for older Australians – like many of you – and to make doubly sure that you are on the same page as us, the Government is engaging Partnership Facilitators.
The role of these Facilitators will be to promote the opportunities available under the Scheme.
I expect Facilitators will bring potential players together – aged care providers and investors; smaller church based services providing services to older Australians and community housing providers.
The Facilitators will encourage relationships and connections between these many different players which – we hope – will result in applications for incentives to build more new homes for older Australians under the Scheme.
I am pleased to report that I have asked Aged and Community Services Australia to consider being a Partnership Facilitator so that participation of ACSA members in the Scheme can be maximised.
Last Wednesday evening I was privileged to have a one-on-one audience with the very entertaining Dr Hans Becker from the Humanitas Foundation in Netherlands.
I know there is much interest across Australia in this innovative Dutch housing model which allows 95 per cent of older people to live in their own homes until the end of their lives.
No doubt it is an aspiration we would all have for our parents as well as for ourselves.
I look forward to working with you to deliver more appropriate, safe, secure and affordable accommodation for older Australians.