Experts argue HAFF falls short of what the nation needs

HAFF bill aims to address housing crisis but faces criticism for funding approach.
RMIT expert argues HAFF may not do enough to meet Australia's social housing needs.
ACA member believes HAFF is a good first step towards improving social housing stock.

The watershed Housing Australia Future Fund (HAFF) officially passed Parliament after the Albanese government struck a deal with the Greens for its support after months of intense negotiation.

With rents soaring, rental vacancies free falling, and house prices swelling, the bills passing is a lifeline for renters and prospective home buyers nationwide.

Australia vacancy rates

The property industry largely warmly received received the news, saying that the fund would go a long way to solving the housing crisis by injecting desperately needed funds into constructing more homes.

However, not everyone was pleased with the bill.

The Renters & Housing Union (RAHU), a member-run union focusing on renter advocacy, panned the government’s decision to use the HAFF to fund social housing rather than commit to public housing.

Likewise, RMIT lecturer in housing and urban planning, Liam Davies, argued that while investment in social housing is welcome, the bill fell short.

“The new Housing Australia Future Fund (HAFF) is unlikely to provide enough support to sufficiently increase supply,” he said.

“The HAFF is a $10 billion fund which will spend its interest earnings on social housing.

“It is like a term deposit for social housing, where the money will not actually be spent, just the investment earnings.”

Indeed, rather than being a direct investment into the building of social housing, the government plans to borrow $10 billion and invest the sum into equity markets under the HAFF, using the returns to subsidise the development of more homes.

So far, the government has pledged to build 30,000 more social and affordable rental homes over five years.

“According to the government, the $10 billion HAFF will support construction of 30,000 dwellings over the next five years. This is an average of 6,000 dwellings per annum,” Davies said.

The RMIT lecturer also remarked that the social housing sector was in dire straits, with its limited stock dwindling in the face of increasing demand.

“The social housing system has not grown at the same rate as the general housing stock for many years,” he said.

“In proportional terms, Australia has almost 69,000 fewer social housing dwellings today than ten years ago. That is an average proportionate decline of 6,900 dwellings per annum.

“Meanwhile, Productivity Commission data shows that the wait list has increased from 140,578 in 2018 to 174,624 in 2022.

“National Cabinet has agreed to a target of 1.2 million new dwellings over the next five years. To maintain current social housing stock of 3.7%, around 45,000 of these dwellings would need to be social.

“This is much more than what the HAFF is promising.

“To get social housing stock back to 2011 levels, we need around 124,000 social housing dwellings over the next five years (69,000 to cover the shortfall and 55,000 to maintain social housing as 4.6% of stock). This is over four times what the HAFF is promising.”

“Evidently the HAFF will not get us close to where we need to be. At best, the HAFF will slow down the decline of social housing in Australia.”

Liam Davies, RMIT Lecturer in housing and urban planning

“Much more investment is required to deliver the amount of social housing Australia needs, and while the HAFF won’t hurt, it won’t come close to solving the problem.

“What would make a real difference would be a commitment to spending the whole $10 billion on housing, not just the interest.”

Registered ACA architect gives response

Association of Consulting Architects Australia (ACA) member and registered architect based in Maldon, Victoria, Brad Hooper, opined that the HAFF was a good first step in continuing funding for social housing.

“Establishing a fund isolated from annual Commonwealth budgets helps to insulate against changes of political will and anti-welfare philosophy,” he said.

“It is not enough and (at least) four times larger would have gone towards future-proofing against exhausting the resource. And, it should be topped up in the annual Commonwealth budget on an annual basis also to future-proof continuity.”

However, Hooper stressed the importance of more initiative in part of the State governments to see through the delivery of new, high-quality social housing, something that States have historically failed to do.

“Whilst HAFF is a Commonwealth initiative, social housing is traditionally the remit of States. How the fund is spent is critical to its success given the reluctance of States to deliver social housing, and when they do, the numbers are diluted by private-public partnerships, many times replacing existing run-down housing stock and not building new. The HAFF should not be used to replace existing stock,” he said.

Additionally, he stated that his hope for the establishment of a National Housing Housing Authority to provide oversight over how funds from HAFF was being spent.

“The HAFF should be supported by a National Housing Authority to ensure the funds are spent to maximum benefit and not whittled away in servicing multiple layers of administration descending through Commonwealth to State to Local Governments and further.”

Brad Hooper, ACA member and registered architect

“The Commonwealth has a record in delivering housing nationwide as seen with Defence Housing. Successful Commonwealth housing delivery is seen historically with housing provision in the Australian Capital Territory, Northern Territory and other territories.

“Having a Minister for Housing is great for policy, augmenting this with a Federal Minister for Building to encompass design and delivery quality would allow a consistent roll-out across Australia.

“This Minister for Building would have clout to control regional price variations, profiteering, have capacity to unify codes and controls, enable fair procurement processes extending beyond merely lowest-price-wins but fairly based on best value management.

“HAFF is funding a big infrastructure project, although in the case of social housing, this will be piecemeal and widely distributed. If this was one stand-alone project, rest assured there would be a Federal Minister across the delivery. The risk here is devolution to vested interests and dilution of the effectiveness.”

Hooper emphasised that for social housing to be successful, architects must be heavily involved in ensuring that the houses delivered meet a reasonable standard.

“It’s not just enough to supply cash, there must be design standards underpinning what is to be paid for. Such design standards also including sustainability, liveability, accessibility, durability and longevity objectives.

“It’s poor value providing hard-won and limited HAFF funding to deliver poorly-designed, high-maintenance, short-lived poorly built dwellings.”

“The architectural profession has a role to play here having a long track-record of delivering high-quality social housing including the aforementioned Commonwealth housing for the Territories.

“The architectural profession also has a role in project and contract management being comprised of agile entities smaller than any government procurement agency, so therefore can respond well to regional and market variations nationwide.

“Leaving the delivery solely to market forces has not worked – there is not enough profit in social housing – indeed the need for a HAFF arguably has arisen because of private market failures.”

While much has been spoken about the importance of delivering social housing, less obvious is the unique role and needs social housing serves in Australia’s property market.

Hooper explained that for less fortunate individuals, the security housing provided was fundamental to their ability to contribute to society.

“Housing as shelter is a fundamental human need, arguably a right. Social housing looks after people who cannot secure their own housing,” said Hooper.

“This includes workers on short-term regional contracts to aged persons to less-abled persons. It’s not necessarily about poverty, but limited incomes or an overheated rental market reduce individual financial ability to secure housing and this is where society steps up.

“The security of social housing enables its residents to then contribute to society through employment, spending pensions in local economies, being healthier and less-stressed.

“Being securely housed allows people to live more fully.

“Social housing delivery, especially in the regions, underpins the design professions, construction industry and supply chain providers. Building one house can feed 100 persons in a country town.

“Social housing is not a cost but an investment in healthy communities and with these we have a healthier economy.”

Davies added that social housing provided a means for the most disadvantaged groups in Australia to secure housing without facing housing stress.

A person is defined as having housing stress when they are in the bottom 40% of income earners and spending 30% of their before-tax income on housing costs like rent or mortgage.

“Social housing is important as it provides housing to low and very low income households in a way which does not cause housing stress,” Davies told The Property Tribune.

“This means that social housing can provide affordable housing in many circumstances where private rental market housing is simply not able to, and creates social mix and diversity in our city.

“The benefits of social housing are felt by the individuals, who are provided with stable and affordable housing, while also ensuring that the society as a whole has a greater diversity of people of different socio-economic standing, through our cities.

“Over the past decades we have seen declining support for social housing, with these resources and efforts largely being redirected towards private rental market housing. There has been a very large growth in expenditure towards Commonwealth Rent Assistance, while taxation revenue has been increasingly diminished by negative gearing and Capital Gains Tax concessions on housing.

“However, this increase in support towards private rental market housing has done little to actually increase affordability for low and very low-income households, especially in inner and middle areas of our major cities.”