National housing call for new government housing development minister
Shelter WA recommends the Australian Government to appoint a Minister for Housing and Urban Development with the responsibility of coordinating decision-making across government. In their submission for the Inquiry into Home Ownership, Shelter WA recommended this coordination to be mirrored at the state level.
"Affordable housing is a structural issue, which needs to be addressed at a structural level through tax reform, employment growth and urban and regional development.
"While the affordability crisis in WA is less extreme than in some other areas of the country, housing remains unaffordable for many Western Australians. In WA, six times the median annual income is required to purchase a home at the median price (Bankwest Curtin Economics Centre, 2014).
"This is up from 3.6 times the annual income which was required to purchase a dwelling in WA in 2001. Between 2006 and 2011, mortgage repayments in Perth increased by 54% and rents increased by 78%, while incomes only increased by 34% (Australians for Affordable Housing, 2012).
"The household debt to income ratio has tripled over the past two decades (Bankwest Curtin Economics Centre, 2015). This includes mortgage debt as well as personal loans, credit cards and student loans."
In the submission to the House of Representatives Standing Committee on Economics, Shelter WA also suggested that a study should be conducted on the impact of negative gearing and the capital gains tax discount on home purchase affordability and on the rental market.
Also, utilising the revenue obtained from potential reforms negative gearing and capital gains discounts to improve tax incentives for investment in new affordable rentals.
"Owners are entitled to a fair return on their investment, however government policies should only provide incentives to investors that contribute to affordable rental accommodation.
"The ACT Government is phasing out stamp duties over the next twenty years, noting that this would support their agenda of making taxes ‘fairer, simpler and more efficient’ (ACT Government Treasury, 2014).
"Shelter WA strongly supports the recommendations made in the Henry Review and the final report of the Senate Inquiry into Affordable Housing to abolish stamp duty and introduce a broad-based land tax over a transitional period.
Another recommendation from Shelter WA is that State Governments continually review and reform planning processes to achieve a planning system that facilitates affordable housing.
"Planning laws can encourage or inhibit the supply of new housing, including affordable home ownership. Initiatives to increase affordability include removing zoning and planning regulations, which prohibit smaller dwellings, and providing incentives to developers to provide affordable housing in new developments.
Shelter WA is concerned that the current system is not focused on the delivery of affordable housing.
"Recent changes to Development Assessment Panels (DAPs) made it easy for developers to bypass local government planning, through new opt-in thresholds. While this may streamline approval times, this process may actually be detrimental to achieving better affordable housing outcomes.
"For instance, developers could use DAPs to side step a more stringent local government planning approvals process with affordable housing requirements.
"Shelter WA is encouraged by the WA Department of Housing’s programs, which are aimed at making home ownership more accessible for low and moderate income households. These programs include shared equity schemes and Keystart loans, which report lower default rates than commercial lenders.
"Since its inception, Keystart has assisted 85,000 Western Australians transition into home ownership. Since 2011, 1,029 families purchased a home through the SharedStart program, via co-ownership with the Housing Authority and Keystart home loans.
"[Shelter WA] Support the continued development of shared equity programs, such as those administered by Keystart in WA, and other alternative home loan mechanisms.
After conducting a joined survey with Aboriginal Legal Service of WA (ALSWA) in 2010, Shelter WA was able to identify 92% of respondents agreeing that 'stability and security, being settled' was a benefit of home ownership. The second most popular response was, 'freedom to make decisions about my home and who I live with'.
"Respondents identified several risks to home ownership, with 87% selecting the primary drawback as 'interest rate rises lead to higher mortgage payments that people might not be able to afford'.
"Additional comments included, 'restriction to lifestyle and stress about mortgage', 'Indigenous Business Australia (IBA) loans do not allow for refurbishment or additional loans to do the house up'and 'Process too long and restrictive'.
"Qualitative research indicates that for some Indigenous Australians the positive social attributes of home ownership, such as being able to pass the house down in the family, are more important than the potential short-term financial benefits.
"Intergenerational asset building for future generations and housing security are the primary motivators driving these aspirations.
"For the benefits of home ownership to be fully realised, it is imperative that programs exist to educate Aboriginal peoples about home ownership and the obligations it entails. It is also essential that culturally appropriate support is available to assist Aboriginal peoples meet these obligations where necessary.
"We cautioned against extending credit to people who do not have the means to make the necessary payments. Extending credit to low income people who cannot afford to service a loan of the size necessary to secure appropriate housing, without providing them with the tools and resources they need to repay the loan, sets them up for failure.
"One of the major barriers to private home ownership in remote communities is the legal nature of community-title land. In our submission, Shelter WA and ALSWA did not support transferring community-title land to individual free hold land in order to promote individual home ownership.
"Such transfers would dilute community-title, native title interests and communities’ rights to self- determination, and would remove the strength of land held in perpetuity for the benefit of the local peoples.
"The recent announcement of the cessation of Federal and State funding to some remote communities in WA may have a significant impact on housing outcomes in those communities and surrounding areas.
Shelter WA's final recommendation is that the Commonwealth and State and Territory Governments share joint responsibility for Aboriginal housing.
