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Buying or selling? Get the right advice

Federales pony up $11 million for social housing

By johnboy 7 April 2009 24

[First filed: April 06, 2009 @ 14:06]

John Hargreaves has been able to do an exciting joint media release with the his commonwealth parliamentary colleagues Jenny Macklin and Tanya Pliberseck.

The cause of the exhilaration is $11 million for social housing:

    The Australian and ACT Governments have committed to deliver 56 additional social housing dwellings across the Territory by July 2010.

    The Federal Minister for Families, Housing, Community Services and Indigenous Affairs, Jenny Macklin, said the investment was part of Stage one of the $6.4 billion social housing component of the Government’s $42 billion Nation Building – Economic Stimulus Plan. Stage one comprises $692 million nationally.

    “We are determined to do everything we can to support jobs and apprenticeships in the construction industry in these turbulent economic times,” Ms Macklin said.

    “In turn, this will have a positive flow on effect to suppliers, small businesses and local economies.

    “This funding will also make significant progress on the Rudd Government’s plan to halve homelessness in Australia by 2020.

56 dwellings for $11 million sounds like pretty good value.

UPDATED: Zed Seselja’s found a good issue in this:

    “This is another example of a Government Minister who has been forced to by-pass the Government’s own planning system.

    “The $11 million dollars was gifted to the ACT from the Federal Government on the proviso that building of the 56 homes would be completed by July next year.

    “By sidestepping around ACTPLA the Minister is admitting that the planning system is cumbersome and could not cope with such a short turn around.

    “Mr Hargreaves has said that most of the new development would be on greenfields sites and land already owned by the Government, otherwise they would be subject to delays in the planning system.

Zed makes the argument that this shows how slow and useless ACTPLA is. Another question is what development will get lobbed on neighborhoods without notice?


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Federales pony up $11 million for social housing
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luther_bendross 6:52 pm 07 Apr 09

chewy14 said :


That was sort of my point. If you wreck your government provided house now, ACT housing is too forgiving. If you were privately renting and did the same, you would be out on your arse.

Yep. Welcome to life. Clean your crap up.

Hells_Bells74 4:29 pm 07 Apr 09

George said :

Wonderful, more houses and neighbourhoods for the bogans, ferals and junkies to trash!

They are also homes for people like me for the last 15 years and lots of my friends with kids. The people who are never in a position to buy their own homes can give their kids a sense of home without getting shoved to and fro in the private rental market (seems to me someone is always having their rental place put up for sale, with little care given). I’m sorry for the trouble caused by some people’s lack of respect.

George 4:03 pm 07 Apr 09

Wonderful, more houses and neighbourhoods for the bogans, ferals and junkies to trash!

deezagood 3:30 pm 07 Apr 09

I take back my rant then. Skid – why on earth then would Mr Hargreaves state “that most of the new development would be on greenfields sites and land already owned by the Government, otherwise they would be subject to delays in the planning system”. So confusing.

Skidbladnir 3:09 pm 07 Apr 09

Being a suspicious bugger, I think the joint ACT Government\Federal announcement is actually announcing two things.

First part:
The $6.4 million cash to the ACT for repairs to “public and community housing” is actually news from last month (9th March), and is spread out as $3.2 million each year over two financial years (Some now and the extra bit in a few months).
http://www.tanyaplibersek.fahcsia.gov.au/internet/tanyaplibersek.nsf/content/social_housing_repairs_09mar09.htm

Second Part:
“Total social housing stock” isn’t only “public housing” (Government owned) but also includes supply-stimulating but government-assisted (ie: NRAS subsidised) rentals which in order to be eligible are either completely new residences, or housing stock which had previously been rendered uninhabitable but have now been brought back to life (ie: were off market in some way, but have been rehabilitated).
If it is already liveable now, its not welcome under NRAS.
The scheme might drive down rental prices, but probably not in market segments you’re whining about.
http://www.fahcsia.gov.au/internet/facsinternet.nsf/housing/nras.htm

This makes it a hybrid Government/Private scheme, with a subsidy back to the landlord (tax-offset for major entities, cash to charities) attached to a dwelling in exchange for renting eligible homes to eligible families at 20% below market rent.
Once a dwelling is listed under NRAS, it cannot be removed until the end of a mandatory ten-year period without penalties.
The only local participant (funding recipient) in Canberra is coincidentally for 56 homes, and is Community Housing Canberra Ltd.
The location breakdown and scheduled due-for-rental dates are listed on http://www.fahcsia.gov.au/internet/facsinternet.nsf/housing/nras.htm#a5_5
They have a total of 56 ACT dwellings listed under NRAS.

36 of those are eligible for rental by 30/06/09 (twelve weeks away), at the currently posted rates of $8672 (being made of a combined Federal ($6504) & State ($2168) contribution), are attracting the subsidy until FY2018 – 2019 when they can be removed from the Scheme.
The remaining 20 are available to rent from 30/11/2009, sixteen weeks later (IE: so are expected to be active for two thirds of FY2009-2010), so I’m not entirely certain where Mr Seselja is coming from and attacking ACTPLA about rush-building a bunch of houses.
By the looks of things, they could have people living in them by the end of this year.

As a rough guide:
56 homes * $8672 (CPI Scaled) = $4,856,320 (CPI Scaled) in total over 10 years

Number Crunching:

FY08-09:
Social Housing Repairs: $3.2million spent by Federal Government
Total: $3,200,000

FY09-10:
NRAS: $485,632 ($364,224 being Federal contribution, $121,408 being ACT)
Social Housing Repairs: $3.2million, all being Federal contribution to ACT Housing
Total: $3,685,632

FY10-11:
NRAS $485,632 (Scaled to Housing CPI)
Total $485,632

With another $485,632 (scaled to Housing CPI) every year after that until the end of FY2019 – 20.

My maths say 11,256,320 without CPI Increases, but only if you use this years estimates and include ten years of commitment being expensed all at once.
(Hence an $11 million figure being thrown around in their press release, because $1.1 million/year to be paid mostly after the next election isn’t really as exciting)

NRAS Round Two applications only closed last week, so funding arrangements will probably grow further depending on whoever gets approved.
http://www.fahcsia.gov.au/internet/facsinternet.nsf/housing/nras.htm#a2

Final bit:
Expect more wanky press releases whenever Stanhope needs some newspaper column inches to congratulate himself on “his Government’s wonderful\stunning\enviable public housing record”, even though its a) only costing his jurisdiction ~$1,220,000 over ten years currently, and b) not his initiative.

Someone else can polish that up and probably get quoted into tomorrow’s Canberra Times.

chewy14 2:02 pm 07 Apr 09

VYBerlinaV8_the_one_they_all_copy said :

Possibly because no private landlord would want to touch some of the people that would be looking to rent.

Yep. Compounding the problem is the issue that landlord insurance rates will increase to compensate for increased claims being made to recover costs against those who damage property, which will in turn flow to higher rents for all as loandlords seek to recover costs.

Insurance companies won’t be as forgiving as ACT housing when it comes to recovering damage costs.

Alternatively, local govco could rent private dwellings, and place public housing tenants in them, guaranteeing the rent and condition of the properties (much like under the Defence Housing model).

That was sort of my point. If you wreck your government provided house now, ACT housing is too forgiving. If you were privately renting and did the same, you would be out on your arse.

Granny 1:46 pm 07 Apr 09

Which policy doco, Skid? Could you give me some links? I am quite interested in this topic.

Possibly because no private landlord would want to touch some of the people that would be looking to rent.

Yep. Compounding the problem is the issue that landlord insurance rates will increase to compensate for increased claims being made to recover costs against those who damage property, which will in turn flow to higher rents for all as loandlords seek to recover costs.

Insurance companies won’t be as forgiving as ACT housing when it comes to recovering damage costs.

Alternatively, local govco could rent private dwellings, and place public housing tenants in them, guaranteeing the rent and condition of the properties (much like under the Defence Housing model).

Skidbladnir 1:33 pm 07 Apr 09

Again, none of you seem to have read the policy doco. Its all available.

deezagood 1:23 pm 07 Apr 09

There aren’t enough rental properties as it is (friends of mine have literally waited months to find a rental property and agents hold bidding wars!) – issuing rental vouchers probably won’t help needy people to find accommodation.

SheepGroper 12:18 pm 07 Apr 09

chewy14 said :

Why don’t they sell most of the government owned properties (keep a small amount for people in exceptional circumstances) and issue rental assistance vouchers to people who need them?

Possibly because no private landlord would want to touch some of the people that would be looking to rent.

chewy14 12:10 pm 07 Apr 09

deezagood said :

I think the housing concept is wonderful; sidestepping ACTPLA’s planning processes (which apparently exist for good reason) is not-so-wonderful. What is the point of even having a planning authority if major building projects are able to side-step the processes? And if the ACTPLA processes are deemed too long and painful for short-time-frame projects … well, what does that tell you about the said processes???

So – the government will allocate ‘greenfield, government-owned’ land to this project without community consultation, without adhering to ACTPLA process and presumably without conducting an EIS. Those most affected/environmentalists/community groups will complain about the said process and lack of EIS … the building project may be delayed due to those community concerns, all concerned citizens will be branded NIMBYs by an outraged Canberra community and the entire project could potentially be compromised. Why can’t they just do the f(*&ing thing properly in the first place? Surely a job worth doing (and such an important job) is worth doing well?

What like when they did the right thing with the Data Centre and the residents complained the process wasn’t fair?

I don’t understand why the government has any housing stock. Why don’t they sell most of the government owned properties (keep a small amount for people in exceptional circumstances) and issue rental assistance vouchers to people who need them?

deezagood 11:58 am 07 Apr 09

I think the housing concept is wonderful; sidestepping ACTPLA’s planning processes (which apparently exist for good reason) is not-so-wonderful. What is the point of even having a planning authority if major building projects are able to side-step the processes? And if the ACTPLA processes are deemed too long and painful for short-time-frame projects … well, what does that tell you about the said processes???

So – the government will allocate ‘greenfield, government-owned’ land to this project without community consultation, without adhering to ACTPLA process and presumably without conducting an EIS. Those most affected/environmentalists/community groups will complain about the said process and lack of EIS … the building project may be delayed due to those community concerns, all concerned citizens will be branded NIMBYs by an outraged Canberra community and the entire project could potentially be compromised. Why can’t they just do the f(*&ing thing properly in the first place? Surely a job worth doing (and such an important job) is worth doing well?

If local govco are putting up the land, then the money allows a smidge under $200k per dwelling, which is about right for a basic home. No doubt they will build a range of dwellings, including 1,2 and 3 bedroom units, and 3 and 4 bedroom houses.

I wouldn’t have thought that 56 new places would be a reasonable start, but that more would still be needed.

Ralph 9:37 am 07 Apr 09

More slums for the local miscreants to congregate and breed.

Skidbladnir 9:10 am 07 Apr 09

So, how many of you actually read the policy doco?

luther_bendross 9:01 am 07 Apr 09

Oh goody, I hope they put them in my street. I don’t have enough axe-wielding meth-head houso’s at the moment. I would also like to see my dog finding more syringes on my patio.

poptop 8:31 am 07 Apr 09

I think the realisation that $11M from the Australian Government = 56 properties (which is quite a few for the money) makes it obvious how little impact this particular river of gold in dealing with underlying homelessness.

Homelessness is, as Granny says, a lot more than ‘rooflessness’ but getting a place to live is often the first step in addressing all the other stuff.

The ACT Government must, almost inevitably, be kicking in some of the land. In order to hit the timeframe, they are either buying from the market (which isn’t the stimulus the Federales are looking for) or things already well progressed in terms of planning and approvals.

hax 11:30 pm 06 Apr 09

caf said :

The ACT Government must be kicking in something too – maybe the land?

That’s probably where more than half the money is going..

Joker 9:38 pm 06 Apr 09

More social housing?! There goes the neighborhood.

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