NSW urged to build 5,000 new social housing units a year to boost industry and fight homelessness

The community housing sector has urged the NSW government to increase social housing by 5,000 homes a year in the state in a pre-budget appeal, arguing it would stimulate the building industry and tackle homelessness at the same time.

There are more than 50,000 families on the social housing waiting list in NSW, the Community Housing Industry Association says. Some families will be waiting for five to 10 years to be housed.

In the meantime, those families are homeless, often couch surfing, which in pandemic times has added to the risks of an already vulnerable cohort.

A new study by Equity Economics says that based on the OECD average NSW currently has a shortfall of 70,000 social housing units, while previous modelling by the University of NSW has estimated the real shortage is more than 135,000 social housing units.

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Equity Economics forecasts that NSW needs to build on average an additional 5,000 social housing units per year over the next 30 years to meet and maintain the OECD average.

The NSW government announced $812m towards new social housing supply and maintenance in last year’s state budget but this would deliver only 780 new properties over the next two years, Equity Economics says.

By comparison, it says the Victorian government committed to build more than 9,300 social homes and 2,900 affordable and market homes in their last budget.

Throughout the Covid-19 pandemic there has been fierce debate over how best to stimulate the construction sector, which is a key part of the Australian economy.

The federal government has favoured direct grants to home owners to either build new dwellings or renovate existing homes.

But Labor and several economists have argued that Covid-19 presents a unique opportunity to boost the stock of social housing and relieve social problems caused by homelessness.

The Equity Economics report finds that delivering the additional social housing needed through partnerships with community housing providers would generate a return on investment more than 50% higher from the NSW government’s perspective compared to delivery through public housing.

“Based on a model development, this would require approximately $2.2 billion per year in building and land costs if NSW built all this housing through its own Land and Housing Corporation,” the report said.

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“However, the NSW government can, by leveraging the community housing sector’s ability to borrow and receive additional commonwealth funding, deliver these additional 5,000 housing unit per year for less.”

It estimates the government would save $631 m if all the additional homes were built by the community sector and $316 m if delivered 50-50 through community housing and the state’s Land and Housing Corporation.

The community housing sector is hoping the NSW government will make a significant commitment in this week’s state budget, to be delivered on Tuesday.

It argues that spending will create nine jobs for every $1m of housing investment, reduce the number of households who are homeless or at risk, and reduce demand and competition in the private rental market – particularly for lower-cost properties for households on low incomes.

It would also take pressure off crisis accommodation services, the association says.