1 May 2018

'Lack of transparency and honesty' from Government over affordable housing

| Genevieve Jacobs
Join the conversation
20
Affordable housing

The ACT Government’s decision to call in its loan to the Territory’s major affordable housing provider, Community Housing Canberra, has provoked a scathing response from former chief minister Jon Stanhope, who says the move gives him “great concern over the lack of transparency and honesty from the Government around housing issues” and deep disappointment from former CHC CEO Kim Sinclair.

Set up by the Stanhope Government a decade ago, CHC aimed to provide 1000 units of affordable housing for sale or rental. These were priced 25 per cent below market rates for people whose income exceeded public housing eligibility rates, but were effectively locked out of the soaring Canberra market.

The Government provided ongoing financing of $50 million and guaranteed CHC access to 120 units of land per annum, to deliver housing priced at 25 per cent below the market rate. But it’s now been revealed that rather than rolling over the initial loan and financing, the Government has instead forced the CHC to begin paying back the principal at $2.5 million per annum.

Stanhope says that in recent years, the Government has effectively undermined the CHC program by first withdrawing its commitment to providing land, then removing the ongoing finance facility, and finally amortising the loan.

“Over 80 per cent of Canberrans want a detached house, but this year’s land supply is 82 per cent for apartments,” Mr Stanhope said. “The median price house in Canberra will rise by $50,000 this year because of the deliberate strangling of land supply by the Government. It is nonsense that we’re running out of land. It’s a strategy for justifying densification which is being pursued because of the state of the budget.”

Former CEO Kim Sinclair explains that “CHC was set up to be a hand up not a hand out to our tenants”, adding that there is also an upper limit to CHC eligibility. “We were very clear on identifying the niche for affordable housing as opposed to public or social housing, and the failure of private development and the rental market to meet that need,” she said.

“Our premise was to bridge the gap. You could grow your career and income and then had two years with a roof over your head, where you could solidify your financial foundations before moving out into private rental.

“There is a two-speed economy in ACT. You have very affluent public servants and very wealthy individuals, but what happens with all the service industries, the retail industries, the people who provide essential services, childcare for example? They are being placed under enormous financial stress in one of the highest rental markets in the country”.

Ms Sinclair says that CHC had worked hard to build relationships with the private sector including the Property Council and Master Builders Association, but that the withdrawal of Government financial support was always “a huge risk” and critical to their ongoing viability.

While she says there are other levers the Government can pull, including inclusionary zoning where the Government relaxes restrictions on height or floor space in exchange for affordable housing inclusion, Ms Sinclair remains “incredibly disappointed” that Government appears to have withdrawn critical levers for CHC’s continuing operation.

And from within the industry itself, there is even more criticism. David Shearer is director of project planning at Independent Property Group, and he says the Government is “acting against the interests of affordable housing. Basically, calling in the loan means that CHC becomes an ordinary developer, who will need to make their money by building property at market rates”.

“For a Government that is doing everything in its power to prevent people from achieving affordable housing to also remove that potential from their own affordable housing provider is hard to understand,” he said.

Back to Jon Stanhope for the final word on both the CHC and the Government’s broader intentions for land supply and housing in the ACT. He calls land prices topping $1000 per square metre scandalous when you have a monopoly supplier.

“There are no excuses, no duck-shoving, no pretending that it’s someone else’s fault when the ACT Government is unique in Australia in being completely in control of land release,” he said.

“We are governing for the middle class, for double income public service families. Northbourne is being converted, it’s been socially cleansed and will be replaced by the upwardly mobile in enclaves of privilege. The public housing tenants and the low-income working families will be catching the bus from miles away.”

Have you struggled to afford housing in the ACT?

Join the conversation

20
All Comments
  • All Comments
  • Website Comments
Latest

So the Government set up the company and funded it so it could provide affordable housing, and now it is effectively defunding it? Shows how serious the government is about affordable housing…

I’m assuming the money has already been invested in affordable housing, so I would have thought it would be more sensible for the Government to now forgive the “loan” to give an immediate capital injection to build more affordable housing.. the money obviously isn’t budget dependent.

HiddenDragon5:05 pm 20 Apr 18

The abandonment by ACT Labor of so many of the people it is supposed to represent is shameful, and likewise with the Greens, who like to talk about social justice but never seem to be prepared to use their balance of power status to help these people in a substantial way. The contrast with federal Labor is striking, where there is now much more of a practical focus on the real pressures facing low and middle income Australians.

Modus Operandi for the Barr Government.

It hilarious that the deliberate reduction in land releases started under Stanhope to fund his vanity projects and now he wants to complain about housing affordability.

Laughable.

Ben Phillips. What are the house price increases for Canberra over John Stanhope’s tenure from 2001 to 2011, not just the cherry picked period that included massive house price increases due to GST, cessation of public service cuts and the Canberra bushfires.

Can you also provide the evidence around the increase in new House/land developments being more than the previous new house blocks available through the last decade. Your claim doesn’t match the data I have seen. But happy to be proven wrong.

Daily Digest

Want the best Canberra news delivered daily? Every day we package the most popular Riotact stories and send them straight to your inbox. Sign-up now for trusted local news that will never be behind a paywall.

By submitting your email address you are agreeing to Region Group's terms and conditions and privacy policy.