Search:

10 Responses

1. Rebecca says at May 17th, 2007 at 11:31 am

   Bristowea you have raised an issue that should be a main concern of government and planners in the long run.

   In answer to your question:

   Is the goal of affordable housing in the Melbourne 2030 strategy achievable and realistic?

   Affordable housing is never really economically feasible for the government. By providing affordable housing, such as public housing, the government isn’t really getting anything inside its pockets. This could be a reason why maybe the Government is not as much interested in implementing this direction however, this is only what I believe.

   The government even though there maybe no economic benefits, still needs to address the issue of affordable housing otherwise we would see the increasing social differences between the ‘haves and haves not’. Melbourne would be a city divided in two parts, the affluent and the not so affluent.

   In response to the issue you have raised about affordable housing in Docklands. Affordable housing in Docklands is not practical because the constructions costs are really high. Since the site in Docklands was contaminated (due to the site being used previously for industrial activities), an environmental study needed to be carry out in each precincts by the private developers that specified whether particular developments were feasible or not. The money that was spent (buying the precinct, carrying out the environmental study and providing appropriate infrastructure) therefore did not and does not make it feasible for the provision of affordable housing in Docklands. It is better of providing affordable housing in areas where the constructions costs are not so high. However despite saying this, I have been to Vicurban and I too have noticed that in a board they have got the “Bringing affordability in Docklands” written in big words which is contradictory to the reality. Maybe instead of selling all of the land to private developers, if the Government had some land, would provision of affordable housing be feasible then? (Since it is their own land, the government only need to pay for carrying out the environmental study and providing for appropriate infrastructure) Or
   propose a levy on developers in Docklands to provide for affordable housing in Docklands? What do you think?

   Meanwhile I have found a great article in the age that relates to Melbourne becoming a city split in two, with residents on the city’s fringes forced to spend thousands on petrol while the wealthy move into areas with the best public transport. The article suggests that although housing are cheap in the fringes, they are not quite so cheap as fringe dwellers pay more for petrol than those living in the inner suburbs. Although this article may not relate directly to the issue of affordable housing, it suggests that housing anywhere in Melbourne is not quite so cheap because either way you are paying more for petrol or more for housing!

   Lucas, C. 2007, “It’s tale of two cities as fringe dwellers pay the petrol price”, The Age, http://www.theage.com.au/articles/2007/05/13/1178994996414.html

2. Flick says at May 18th, 2007 at 12:05 pm

   Bristowea, you raise a really interesting and challenging issue – one which we will have to face up to in our lifetime both professionally and personally. HIA argues in their policy response document; “Restoring Housing Affordability – The Housing Industry’s Perspective” that the housing affordability predicament we are now in is a result of two factors:

   • Artificial shortages of land for development, and;
   • State and local government taxes and charges imposed under the guise of funding urban infrastructure.

   Check link out for full document - http://hia.com.au/upload/hia/documents/policysubmissions/housing_affordability_july03.pdf

   It’s such an incredibly complex issue, but I don’t think it’s simply a matter of releasing more land for development, or completely de-regulating the planning process. Look at how widespread criticism of ‘urban sprawl’ is within the planning profession – shoving people into suburbia with low service provision and poor transport facilities doesn’t seem like a desirable outcome. This would most likely be the outcome of further land release. I am definitely of the view that Government needs to take a leadership role in addressing this issue and my feeling is that in order to get a meaningful response from private developers, incentives will need to be involved.

   Rebecca – had a look at that article, very interesting read indeed - I find it ironic that Mr Cox can argue that unmanaged sprawl results in affordable housing, when as Dr Newman pointed out “…those cities as the biggest guzzlers of fuel, with over 20 per cent of household expenditure on transport compared to about 8 per cent in Melbourne.” I view housing affordability foremost as an equity issue, and as such requiring a much broader definition than the cost of ‘house’. If people living out in fringe communities need to contribute significant amounts of income into paying for petrol, have poor access to services and need to commute long distances to get to work, than what have we really achieved? I would certainly not call that ‘affordable housing’.

3. Barney says at May 18th, 2007 at 12:36 pm

   It is pretty scary when they are aiming to create “A Fairer City” and yet this division between affordable and expensive housing is increasingly widening (DSE, 2007). Although I tend to agree with Rebecca, in that the construction of the housing in the Docklands would result in a great expense, thus the pricing of the housing would be increased to compensate, and I too, doubt the Government would subsidise to establish affordable housing. Also, the land, in such close proximity to the city, is highly regarded and this would also affect the pricing.

   I was about to say that the affordable housing will be located on the fringes of the city, and in accordance with Rebecca, this cheaper housing will be affected due to the pricing of petrol, and lesser access to public transport and facilities, will eventually defeat the low price of housing.

   I think the Government SHOULD intervene the housing market to make affordable housing available, but whether the Government will is entirely different. It vaguely reminds of the increasing social inequalities in the USA, as the affluent and not becoming increasing polarised. I feel that the affordable housing on the fringes will continue, and here then I think the Government should enhance the public transport in these areas, in the first attempt to aid affordable housing.

   Department of Sustainability and Environment (DSE) (2001) ‘Melbourne 2030: Planning for Sustainable Growth.’ [accessed 18th May 2007].
   http://www.dse.vic.gov.au/melbourne2030online/content/policies_initiatives/06_fairer.html

4. sarahmerat says at May 19th, 2007 at 9:37 pm

   I think what is really interesting about the provision of ‘affordable housing’ is that it can only be a government led and run initiative, however it will never be profitable, it will never be a vote winner and as such will never be a priority for any government. If inexpensive housing stock was made available and sold off in the inner city land values will ensure that if the property was released for sale for a second time, it would no longer be in the affordable housing bracket. However, as Rebecca pointed out, the trend of pushing low income earners into the outer suburbs for affordable housing is just as unaffordable in the long run. To properly implement long term, inner city, affordable housing the government would have to introduce a leasehold system that controlled on selling of the property. This is a method used in the UK to ensure cheaper housing is available in all areas long term.

   I think Rebecca inadvertently pointed out the problem with establishing this system by dismissing the viability of the use of Docklands for affordable housing. It is unlikely that such a large inner city land parcel will ever become available any time soon, and as such the Docklands area was an opportune area to establish affordable housing stock. Had the government chosen to follow through on the ‘vision’ of providing affordable housing, the site could have been decontaminated (something the government has always been happy to do for private developers at no cost in the past, al la Beacon Cove) and low cost housing with leasehold agreements could have been rolled out. Such a scheme will never be profitable and as such no matter where it is placed, inner suburb, outer suburb, it can only be established without concern for profit. By the instant dismissal of the potential for low cost housing in Docklands Rebecca has proven that the market will always be considered before the provision of low cost housing and as such it is unlikely that any affordable housing scheme will take off in Victoria any time soon.

5. Chloe2 says at May 21st, 2007 at 2:23 am

   There are numerous reasons housing prices are becoming unaffordable. Restricted land release, ironically just as that promoted by Melbourne 2030’s urban growth boundary, has widely been identified as one of the main drivers. That is, according to John Howard anyway.

   However, along with the planning and environmental implications, increasing land release would push current home owner into negative equity, which, in the current context is practically political suicide so that’s not going to happen any time soon. This is ultimately a State and Local government decision, hence the federal complacency to attribute it to this.

   But there are other contributing influences which are interesting to consider. One is that of the ‘cashed up baby boomers’ are currently having on the property market. They’re over investing in the property due partly to easy credit and low interest rates, creating heavy competition, pushing up prices and snapping up the housing stock which would have supplemented some of the affordable housing demand. At current prices most of our generation is facing the possibility of not being able to own a home unless they get help from their parents, which is not an option for most. Struggling with massive loans coupled with rising interest rates and HECS repayments isn’t my idea of fun and games, not to mention increasing social polarisation for those permanently trapped out of the housing market paying rising rents or forced homeless.

   But the current market should change with the demographics, the boomers will, let’s say move on and pass us on their wealth. (we hope!) and as our generation gains a political influence, policy will adjust to attract our votes, and affordable housing will be, for the majority of us, a major concern.

   In the mean time, there are a number of initiatives which government can take to address the problem, these include:

   •Stamp duty reforms (such as the NSW governments scrapping stamp duty of homes less then $500, 000)

   •Shared equity scheme involving the federal government, similar that adopted in Western Australia, designed to help low-income-earners buy low-cost housing

   •The Frederal Government should appoint a housing minister

   •Negotiating a National Affordable Housing Agreement with three
   tiers of government to allow better cooperation and ‘end the blame games.’

   •Better targeting of existing initiatives such as the First Home Owners grant

   •Actively seeking new policies which provide ways to leverage private investment in low-income housing

   Check out:

   Moran, A (2006)”The Tragedy of Planning: Losing the Great Australian Dream” available on the Australian Institute of public affairs website: http://www.ipa.org.au/about.asp

   http://www.onlineopinion.com.au/view.asp?article=5544

   http://www.tanyaplibersek.com/media_releases.htm

6. Rebecca says at May 24th, 2007 at 10:37 am

   Sarahmerat you make me sound like I am anti affordable housing :(. I am not. Along with most of the Victorians I would be very much happy if affordable housing was provided in Docklands since I believe the development of Docklands should be a “fairer city”, a city for everyone to live and enjoy. Infact this is the topic I am focuing on for my thesis whether it is feasible to provide affordable housing in Docklands. By mentioning why it is not feasible to provide affordable housing, I was just portraying the opinions that I was told and wanted to see what others thought of this opinion.

7. Chloe says at June 9th, 2007 at 12:35 pm

   The provision of affordable housing is an extremely complex issue.

   A number of investigations such as that conducted by the Brotherhood of St Laurence in 2004 and 2007 and Stocks and Wood in 2005 (as provided by Bristowea), conclude that there is a critical shortage of affordable housing.

   The discussion in regards to the lack of affordable housing in the Docklands and the provision of affordable housing in the outer suburbs where the housing is cheaper but the related expenses are higher, demonstrates that this is a compounding problem.

   In a free market economy it is therefore vital that the government intervene to ensure the supply of affordable housing. Chloe2 has put forward several suggestions as to how this could be done.

   I would like to take the discussion a step back and comment on policy, in particular Melbourne 2030 Direction 6.1.7, “base the policy on new socially responsible criteria”, and ask: What is the philosophical thinking behind this Direction? Why should Australians care?

   The consequence of not having an equitable and compassionate social policy is the polarisation and isolation of different groups. We should aim to have an integrated social fabric whereby everyone benefits from diversity. Knowing your neighbour leads to understanding and tolerance, not knowing your neighbour leads to supposition and fear. The intrigue and attraction of Brunswick, Lygon and Smith Streets is the rich mix of people – the different cultures and ways of life that anyone and everyone can enjoy.

   Ultimately, everyone loses if planning does not accommodate the needs of all of its citizens.

8. Len says at June 9th, 2007 at 10:50 pm

   Chloe introduces an interesting point to this discussion and it is one which has come up through my various research projects regarding the process of gentrification in inner suburbs and the way in which increasing housing prices are leading to the homogenisation of what were once culturally diverse areas. The very things drawing people to areas such as diversity, acceptance and a good cultural and social fabric, is at the same time the very thing destroying it.

   Given that the prices of housing within the inner city ring were once so low, those who once visited the streets have taken up the opportunity to enter the real estate market there, increasing the suburbs popularity among those looking for a quick commute to work and the services and facilities within the city (read; young professionals). As a direct result of this, housing prices and rents have increased triple fold, pricing the colourful and culturally diverse existing residents out of the property market, pushing them further out into the suburbs.

   The way in which this process works has highlighted to many within the social policy realm that the directions within Melbourne 2030, and the push for affordable housing, quite simply isn’t strong enough. Respondents to a recent interview I undertook which included Cr. Michelle MacDonald from Maribyrnong City Council, all noted that there were some major deficiencies in strategic planning policies across the board, and that there was not a strong enough commitment from Local Council’s to protect the availability of affordable housing through the planning mechanisms they maintain. Further, they all noted that without a strong and meaningful social policy, areas such as Footscray would face loosing all of their cultural diversity, and would also face the disintegration of social and community networks which are so important for newly arrived migrants.

   It is the job of Governments at both the State and Local level to ensure that residents within each municipality retain good access to affordable housing. To some extent this can be resolved through asking developers to provide a percentage of affordable housing within new apartment buildings or subdivisions (a la Kensington Banks), but it is something which needs to pushed through real planning legislation and not the glossy pretty pages of Melbourne 2030 and its associated documents.

9. James says at June 13th, 2007 at 11:28 am

   Melbourne 2030 – Affordable Housing (Bristowea)

   Bristowea’s question, ‘Why has Key Direction 6: A fairer City, failed to be implemented in municipal strategic planning with the same success as other directions?’ highlights the numerous issues associated with affordable housing but also raises a number of highly contemporary and complex issues relating to government intervention in the open market.

   Housing affordability is determined by the free market and providing affordable housing in a unaffordable market is in essence a form of welfare. For this reason, affordable housing is the responsibility of government, not private enterprise unless other incentive has been provided. Flick stated that HIA argues in their policy response document; “Restoring Housing Affordability – The Housing Industry’s Perspective” that the housing affordability predicament we are now in is a result of two factors:
   • Artificial shortages of land for development, and;
   • State and local government taxes and charges imposed under the guise of funding urban infrastructure.
   While this may have some influence, I agree with Flick that it’s not “simply a matter of releasing more land for development, or completely de-regulating the planning process”.

   Development costs are determined by a number of different variables including intial site purchase price, labour prices, materials and a number of other factors. Underlying all development must be a reasonable level of confidence that the project at hand will return a reasonable profit. In short, property will generally not be developed unless it is seen to be profitable. VicUrban is the State Governments attempt to develop residential property with the intention of providing affordable housing. This is done by assuming a higher level of risk in a development or by reducing the amount of profit that a normal developer would expect.

   As Rebecca states VicUrban has largely been unable to provide affordable housing in its major projects. Instead producing high quality but expensive residential properties.

   Housing development can only take place sustainably if it is profitable. Rather than intervening in the open market or trying to emulate development companies, State Government would be more effective by addressing wide spread assumptions surrounding home ownership. If government develops property with the intention of it being affordable then sells it into the open market it is immediately subject to market fluctuations. A better alternative would be for government to retain properties they have developed or purchase property from existing developers and make housing more affordable by renting properties at below market rates.

10. Carol O'Donnell says at November 17th, 2007 at 1:27 pm

    Dear Shelter and others

    As I said briefly yesterday, at the Shelter Conference on Climate Change: How does it involve low-income households?, I will take upon myself the writing of a first draft of an Australian affordable and sustainable model housing project, in consultation with Mr Scott Elsom, Managing Director of Sala Homes and anybody else who wants to participate at any level. I will need plenty of help as I know very little indeed about mortgages, land and related housing construction policy, practice, costs and finance. All I know is that Wollongong and its related coastal areas seem fertile ground and that many problems will need to be sorted out along the way. (I attach some related discussion.)

    I first assume that an affordable and sustainable model housing project will need to meet the requirements of the NSW Treasury project managers who wrote the following workbooks for which I have written away, in order to follow them, as necessary. These Gateway Review Workbooks are the:
    Strategic Review Workbook
    Business Case Review Workbook
    Pre-Tender Review Workbook
    Tender Evaluation Review Workbook
    Pre-Commissioning Review Workbook
    Post Implementation Review Workbook

    In recent months I feel that Shelter and the Australian Housing and Urban Research Institute (AHURI) have played a vitally important role in quickly providing the community with extremely useful information for the development of affordable and sustainable housing policy prior to the development of an emissions trading scheme.
    I am thinking first about being introduced to the views of Ms Fiona Ryan-Clark of Lend Lease and of other participants at the Shelter conference immediately before this one.

    I was also very grateful to have attended the valuable discussion by all participants at the Affordable Housing Local Government Course AHURI organized. In particular, I was struck by the apparent practicality of the housing needs identification and planning work undertaken recently for the Kiamma Council and community by Ms Judith Stubbs. At yesterday’s Shelter Conference, I found Dr Nicole Gurran’s overheads on ‘Climate Change and Environmental Planning: Where Do We Build Houses?’ was like a related answer to a maiden’s prayer in providing a comparatively objective grid to guide planning and construction partnerships between communities, government and the private sector. (A lot of money is to be spent, and superannuation must be well invested.)

    It seems clear that people from the NSW Department of Housing and the Department of Environment and Conservation are very open to advice and consultation with all of us.
    Whilst it is true that the housing for affordable and sustainable development issues are hard, we need to organize so that incentives are provided to everybody in the Australian community to work towards more affordable and sustainable housing. We can do that!

    Cheers, Carol O’Donnell, 10/11 Rosebank St., Glebe, Sydney. Ph. 96608716
    THE WORD ‘OUTCOMES’ AND ITS MANAGEMENT IMPORTANCE

    Dear Craig

    I refer to our discussion at Sheridan Dudley’s talk for the Institute of Public Administration of Australia (IPAA) last night, entitled ‘Stools, bicycles, frogs and pigs – a tale of improving performance’. Specifically, I strongly objected to Ms Dudley’s statement that the specified management ‘outcome’ of particular activities could possibly be the return of a platypus to a river, before the actual project activities to make this possible had taken place. I said that initially, the return of a platypus to a river could only be the project’s aim, and the project outcome could only be established later. Logically, one has a project aim. Strategies to achieve the aim are then undertaken. The outcome of the project might be the return of a platypus to a river, or the failure of this to occur.
    I argued that mine is clearly the way people speak, and to call an aim or goal an outcome, as Ms Dudley did, does extremely confusing violence to the normal English language.

    To be sure, one may have an expected project outcome (an hypothesis?) and an actual project outcome. However, to forget the words ‘expected’ and ‘actual’ in any related discussion about management risks one being taken for a blithering idiot, in my opinion. I learned my corporate planning perspective in the NSW public service, under the Greiner, Liberal government. The approach seemed very good to me and also consistent with the writings of Peter Wilenski, who worked under the earlier Labor administration. God knows what has gone on in government the meantime, if you are now seeing Ms Dudley’s management approach as legitimate rather than wrong and confusing.

    Taking consistent approaches to management at the Commonwealth and State level is vital for clarity, transparency, good operation and all related cost-effectiveness. For example, the book, ‘Better Health Outcomes for Australians: National Goals, Targets, and Strategies for Better Health Outcomes into the Next Century’, provides a national health promotion and related project management approach which dovetails with the one I was taught and used in the NSW Department of Industrial Relations and the WorkCover Authority, during the 1980s. This is a good beginning for sustainable development. However, I am now very worried that Ms Dudley’s approach to outcomes is widespread.

    As a result of our discussion, you and I agreed to consult dictionaries about the meaning of the word ‘outcome’. I report on the results of this below. I regard this as a very important matter because if I am correct in my argument below, then I now also find that the ‘Outcomes and Outputs Framework Guidance Document’ provided by the Commonwealth Department of Finance and Administration is confusing and wrong in its approach. Related Google entries indicate that people appear to be finding the term ‘outcome’ confusing at best. Under the circumstances, I would be the last to blame them.

    In a related management connexion I attach a paper which refers to the discussion paper by the ALP Advisory Group on Federal-State Reform, entitled ‘A Framework to Guide the Future Development of Specific Purpose Payments (SPPs)’. I also draw your attention again to the apparent differences between the approach taken to risk management by the Australian Greenhouse Office on one hand and by the NSW OHS Act and all Australian governments engaged in health promotion on the other. If any platypuses are to be returned to any rivers in future, it is vital for government to get its ideas on management straight, in my opinion. We cannot go on in a muddle like this.

    SOME DICTIONARY DEFINITIONS OF ‘OUTCOME’

    The pocket Collins dictionary I first consulted did not contain the word ‘outcome’, which surprised me greatly. I Googled the Cambridge dictionary, which stated that an ‘outcome’ is – a result or effect of an action or situation’. It gave the usage example, ‘It’s too early to predict the outcome of the meeting’. The Webster Dictionary states that an ‘outcome’ is ‘something that results’ or ‘a phenomenon that follows and is caused by a previous phenomenon’. This is the perspective on the word with which I am familiar.

    On the other hand, the MSN Encarta dictionary definition of ‘outcome’ in my view reflects the same confusion as Ms Dudley’s management approach. It states that an outcome means:

    Result: the way that something turns out in the end (a satisfactory outcome)
    Prospect: An expected or final state, achievement or result (poorer health outcomes)

    My guess is that this latter confusing view, that an outcome may be defined both as something comparatively objective AND as something highly speculative, is a product of the American marketplace and related research strategies. I have previously discussed this problem many times while working at Sydney University. Americans often support questionnaire based research of a kind which confuses apparent perception with reality. Put crudely, from this research perspective, if enough people believe a bridge is safe, this may be taken to be the case. For the purposes of this common kind of research, the civil engineering expert is merely one of many equally valuable questionnaire respondents. The psychologist or health practitioner is often in charge. Please note that this is not the Australian government health approach, as indicated in the National Goals, Targets and Strategies for Better Health Outcomes book referred to earlier. Nevertheless, one is constantly fighting excessive US relativism in Australian universities, and it seems to have been adopted by Ms Dudley in children’s services and also by the Commonwealth Department of Finance and Administration. In my view the Departmental view is wrong and dangerous. Whether I am right or not, such management matters need to be sorted out for clear, transparent program and project administration prior to development of emissions trading and all earlier approaches to sustainable development and affordable housing, on which I am now working in other arenas. Don’t worry. I’ll keep you posted.

    Cheers
    Carol

Leave a Comment

Name

Mail (will not be published)

Website

Please note: Comment moderation is enabled and may delay your comment. There is no need to resubmit your comment.