“I Finally Gave In”

I’ve just spent a few days in Perth at the National Housing Conference 2015.  Props to AHURI and the WA Housing Authority for organising a thought-provoking and fun conference.Stream3door

There were lots of presentations from high powered academics, senior officials and CEOs of well resourced organisations.  There was lots to ponder, some great ideas and some moments of despair at the scale of the task.

However, the presentation that impressed me the most was at a little “think tank” session on the final morning.  Yarra Community Housing presented a short workshop on their approach to tenant participation, and as part of this one of their tenants talked about her experiences.

She was a mature woman who was stably housed and in a long-term relationship before a series of events took all this away from her and left her alone and homeless.  Over the next year or two she slept in her car, couch-surfed with friends and family, lived in a leaky caravan and got entangled in an abusive relationship.  After all this, she said, “I finally gave in and went to community services”.

Why, I wondered, should seeking help through the formal service system be seen as “giving in” rather than something helpful and to which she was entitled?  The rest of her story made the answer perfectly clear.  She found her engagement with the system both humiliating and unhelpful.  She was given the runaround, before finally being placed in a boarding house most of whose residents had serious mental health issues.  In this stressful environment she was still short of money and often had to travel around town in search of free meals.  Once, caught travelling without a ticket as she had no money, she was berated publicly by a police officer for the “crime” of being broke and homeless.

During the closing session of the conference, a Q&A hosted by Tony Jones, one of the audience participants pointed out that the majority of people who ask for help from homelessness services are turned away because the system doesn’t have capacity to cope with demand.  Would this be acceptable in the health sector, she asked?  Would it be OK for hospitals to turn half the ambulances away because they didn’t have enough beds?  Would it be OK for schools to make students wait years for enrolment?  Why do we tolerate this situation in homelessness?  And why is it OK for people like the woman who addressed us to receive a substandard, humiliating response to their plea for help?

Fortunately the woman’s story has a happy ending.  She is now
securely housed by a well-run community housing organisation that values her contribution.  She has completed further education and has gone a long way to rebuilding her life.

She has a lot to offer the community.  So do most of the 100,000 people who are homeless in Australia each night.  Surely we can do better for them than offer them the crumbs off our table.

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Three Amalgamation Stories

I recently stepped down after a five year stint as a board member of a small housing organisation here in Brisbane.  This organisation was created out of four very tiny organisations – when the four came together they had a total of about 70 dwellings, an annual income of around three-quarters of a million dollars and the equivalent of less than three full time staff positions.  An amalgamation on that scale should theoretically be simple, but this one turned into a saga of epic proportions that dragged on for about seven years.

There were two reasons for the dsharkselay.  One was that that we had problems with the funding department which slowed us down.  The other was that we had so few resources and so little clout with anyone that we had no way of pushing it along.  With a tenant-participation tradition, most of our key decision-makers were tenants who had never done this before and were working it out as they went, and we couldn’t afford to pay for any serious advice.  We had no choice but to keep plugging away until we eventually dragged ourselves, exhausted and frustrated, over the finishing line.

Recently I got to see how much easier it could have been.  I spent a little bit of time helping two health-related organisations to negotiate a potential amalgamation.  The two partners between them had an annual turnover of over $20m and almost 300 staff.  Working with them was like a dream after my previous experience.  The two CEOs were highly professional and focused.  Their boards were made up of experienced professionals who were quick to grasp the issues and made good, considered decisions.  If they needed professional advice or extra practical help they could afford to pay for it.  We worked quickly to develop a project plan that would see the most important parts of the amalgamation completed within 3-6 months and the whole job done in a year.

After one of the key decision-making meetings I joined the board members and senior managers for dinner and got talking to one of the board members of the larger partner.  I commented on how nice it was to work for two well-resourced and professional organisations.  He smiled wryly and told me his own story.  Until recently he had been the manager of mergers and acquisitions for a major Australian company.  In this role he managed a number of different corporate mergers.  The biggest involved acquiring a company worth $9b.  Yes, that’s billions!  He said the whole thing took three months, start to finish.  The thing was that he had a team of highly paid professionals who did nothing else but make it happen and if a problem came up they could spend whatever it took to fix it.  He said he had to exercise patience in the current situation because his staff were just learning how to do it.

When I told him about the little housing organisation I was part of, he just laughed.

Social Mix and the City

I’ve been working on and off for the past few months on a large literature search on Australian public housing estate renewal projects. Renewal projects are big news in Australian public housing, as they are in other parts of the developed world. They’re driven by two issues: an ageing stock of public housing built in the decades following the second world war and which now needs replacement; and a perception of public housing estates as dysfunctional locations characterised by poverty and crime.

The first problem requires major capital works to upgrade or replace housing, or else its sale and replacement with newer housing. The standard answer to the second problem is to create “social mix” by selling public housing dwellings to owner-occupiers, bringing comparatively higher income working people into communities which were previously dominated by people on pensions and benefits. This is seen to benefit the area as a whole by reducing stigma, attracting better mainstream services (e.g. shops and doctors) because there is more income in the community overall, and reducing crime and anti-social behaviour. These benefits are intended to “rub off” on the most disadvantaged residents through better services, more access to employment and proximity to middle class role models.

The idea of social mix seems to make sense and it is widely accepted by governments and community groups here and around the world. I have argued for it myself in the past. The problem, as I’ve been finding out in my literature search, is that there’s virtually no evidence to support it.

The best introduction to this issue I’ve found is a book by Kathy Arthurson called Social Mix and the City, published by CSIRO Publishing in 2012.  Arthurson is an experienced Adelaide researcher and academic who has been working in the field of estate renewal for over a decade, and this book reveals her learnings over that time.

The origin of Social Mix and the Citythe idea of social mix, she says, is with some of the key social reformers of the 19th century like Joseph Rowntree, George Cadbury, Octavia Hill and Ebenezer Howard.  Confronted by the extreme urban poverty and discontent that followed the industrial revolution, they proposed the creation of communities that drew heavily on the notion of the pre-industrial village community where people of all classes lived close to each other and rubbed shoulders regularly. They believed that if the poor lived close to middle and upper class families they would learn better habits of thrift, hygiene and hard work and hence improve themselves over time.  These ideas grew very much out of the idea of poverty as an individual pathology and led to experiments in urban design such as Cadbury’s Bourneville Village and various new towns based, at least partly, on Howard’s Garden City design.

The idea experienced a resurgence in the post-war years where it was built into some of the earlier public housing developments, although the idea was soon buried in the pragmatic process of developing large scale public housing estates and the increased targeting of public housing to the most disadvantaged that began in the 1970s.  Its current resurgence began in the 1990s as housing authorities started to deal with the legacy of the 1960s and 1970s public housing boom.

What is distinctive about its most recent reincarnation is its almost exclusive focus on public housing estates and reducing concentrations of poverty.  In current policy debate there is little focus on reducing concentrations of wealth or building public housing in middle class communities.  This rather begs the question of where disadvantaged public tenants will live when they have been “de-concentrated” from public housing estates.

Arthurson’s review of the evidence uncovers little to support this policy approach.  There is no evidence to show that public tenants get better access to employment and training, that services improve, or that the health and wellbeing of public housing tenants improves.  The stigma of neighbourhoods may be reduced as a result of the redevelopment but it is not clear if this is because of social mix or because of the physical improvements that go with renewal projects and the intensive marketing that accompanies large-scale sales programs.  In any case, there is some evidence that rather than being removed, stigma is simply transferred to the public housing dwellings within the community.

As for role modelling, Arthurson’s in-depth interviews with residents in redeveloped areas in South Australia found that for the most part, home owners and public tenants don’t form close friendships, although they only occasionally experience active conflict.  This is partly because home owners tend to spend a lot less time in the suburb than public tenants.  They go out each day to work, and they often use recreational and social facilities outside the suburb and send their children to more distant schools.  By contrast, public housing tenants are often less mobile, are less likely to be in the workforce and more likely to depend on public transport.  This can accentuate social divides along class or income lines.  “Social mix” doesn’t necessarily lead to “social mixing”.

Why, when the evidence is so slim, are these policies pursued with such vigour?  Well, I guess it might be partly because the power of received ideas is very strong, and politicians and public servants don’t have a lot of time to read academic research.  However, I also suspect there is another reason.  Public housing authorities around Australia are badly strapped for cash.  They operate on a financial model set up when their job was to house working families, and they are expected to pay for their operations out of their rents.  Now that 90% of their tenants are on benefits and paying highly subsidised rents, they are no longer able to make ends meet.  The only way they can pay for the badly needed replacement of old housing is by selling some of the new housing they build. Whether social mix has benefits for tenants or not, we’re stuck with it for purely financial reasons.

The good news is that there is no evidence that social mix is actually bad for public housing tenants.  However, it does beg the question – where will the new housing come from for the hundreds of thousands of people still on public housing waiting lists?

Transferring Public Housing

The headline direction of Queensland’s new Housing 2020 Strategy is the government’s plan to transfer the management of 90% of its social housing – almost 50,000 dwellings – to non-government organisations.  Why? What are they hoping to achieve through this strategy?

Reasons to TransferImage

There are three reasons for state and territory governments to transfer their housing to community organisations.  1) NGOs can attract more operating income than governments; 2) They may be able to facilitate redevelopment and renewal of housing; and 3) They may manage particular housing (or even all housing) better.  The Housing 2020 Strategy doesn’t explicitly discuss any of these reasons, but let’s look at how the strategy is (or isn’t) set up to address each of them.

Operating Income

Australian social housing providers (government and non-government) have to meet all their operating costs from rents, not counting the initial cost of construction.  Tenants are on low incomes and pay a proportion of their income in rent, which makes it hard for providers to make ends meet.

Tenants of community housing organisations get access to Commonwealth Rent Assistance (CRA) from Centrelink, while government tenants don’t.  CRA can be worth up to $60 per week for a single person and over $80 per week for a family, and  community housing providers can take 100% of whatever amount of CRA their tenants are paid.

If you apply that to the roughly 50,000 dwellings the Queensland Government wants to shift to community management it equates to an extra $150m per year.  On current costs this is enough to shift the operation from a loss-making venture to a break-even one.  With this sort of money on offer, it’s a wonder governments didn’t made the move long ago.

Redevelopment

On operating income, shifting to community management seems like a no-brainer.  Redevelopment and estate renewal is definitely needed with lots of housing built in the 1950s and 1960s needing replacement, but this is a trickier proposition.

Community housing organisations can be part of the solution.  Access to CRA gives them a little bit more financial flexibility and this is aided further by charitable tax breaks.  They are also not covered by government borrowing limits, so may be able to borrow money for redevelopment in a way the state government can’t.

However, the possibilities here are definitely limited.  Even in community hands social housing is far from a lucrative business and any borrowed money has to be paid back somehow.  Only a few community housing organisations have the capacity to act as developers in their own right and none do so on the scale needed to renew the public housing portfolio, so they would need to work with the private sector.  The private sector will only get involved if there’s money to be made.

All of this is made harder by the government’s plan to transfer the management of the housing but not the title.  This means that community housing organisations won’t be able to either sell housing to fund redevelopment or borrow against the value of the assets.  Something more than the transfer of management rights will be needed to facilitate redevelopment.

Improved management

There is often a perception in the community that public housing is poorly managed.  This perception is probably exaggerated.  New tenants tend to be glowing about how much better off they are than in private rental.  However, longer term tenants sometimes complain about aspects of State Government management like maintenance, responsiveness and communication.

Well run community housing organisations can improve on some of these management problems by delegating operational decisions to the local level, working with local organisations to address community problems in housing estates/complexes and developing purchasing systems that are less cumbersome than those in the public sector.  Theoretically state housing authorities can do the same, but the scale of the public sector makes reform more difficult.

Will the Queensland reforms achieve these results?  We’ll have to wait and see.  Managing outsourcing on this scale is new for both the State Government and community housing organisations.  Expect teething problems!

Watch this space

It’s early days yet.  Everything in this post could turn out to be wrong.  I can’t wait to see what happens next.

The Reality of Private Renting

Back in July the Queensland Government released its Housing 2020 strategy, setting the direction for the social housing system over the next seven years. The headline action is the transfer of management of 90% of Queensland’s social housing to non-profit providers by 2020, with the creation of eight to ten large-scale non-profit providers.

The bold scope of this change has tended to deflect attention from other aspects of the strategy, but there is something else here that is of crucial importance to tenants. On Page 6 of the strategy there is a table called ‘The Path Forward’ with two columns. The first is headed ‘The old: Features of Queensland’s old social housing system’ while the second is ‘The new: Features of a flexible, efficient and responsive housing assistance system’. The very first item on this table lists the feature of ‘the old’ as ‘a view that social housing is a home for life’ and ‘the new’ as ‘greater emphasis on social housing as a transitional period on the path to private rental or home ownership’.

This is a change that has actually been coming for a while. Since 2005, new Queensland social housing tenants have been signed up on a ‘duration of need’ basis, with most tenants granted four-year leases with a review of eligibility at the end. The incoming government shortened this to three years. However, it is a long time since a government stated this aim so strongly, or referred so clearly to the private rental market as a destination for social housing tenants.

Rationing
This change is all about rationing. More than 20,000 households are waiting for social housing in Queensland, many of them in dire circumstances. It’s understandable that the government would want to do all it can to house them. However, this policy direction also shines a light on the other sectors, and particularly the private rental sector. How well is this sector able to meet the housing needs of low income households?

Affordability
The first issue with private rental is its affordability. The National Housing Supply Council reports that in 2009-10, 60% of low income rental households – over half a million households – were paying over 30% of their income in rent and over 200,000 households were paying over 50%. This doesn’t suggest a lot of hope for those departing social housing for the private sector.

Rental Affordability

Some work we’ve been doing recently for a local client bears this out. They asked us to report on affordable locations in which to settle low income refugees in the Brisbane, Redland and Moreton local government areas. The answer for many households is that there are no affordable locations. For a single person on Newstart allowance, for instance, there are five suburbs in this entire area where the median rent on a one-bedroom unit is less than 40% of their income, and these are outer suburbs where one-bedroom units are rare as hens’ teeth. The only way these clients can afford to rent is by sharing.

Other Issues
However, affordability is only part of the picture. In the July 2013 joint edition of Parity and HousingWorks, Greg Budworth (CEO of Compass Housing Services in NSW) provides an insightful comparison between social housing and private rental. He analyses 24 aspects of housing management under the headings of tenant obligations, tenant rights, landlord powers, landlord duties, application processes and other issues like appeal rights, tenant engagement and quality assurance.

Of the 24 factors he analyses, seven are much the same for both sectors, and on the other 17 tenants are clearly better off in social housing. They have better access (only needing to make one application), more security of tenure, more accountability by their landlord, a greater likelihood that their landlord will work with them to resolve problems and refer them to support services, and much better assurance that their landlord will adhere to good standards of management practice.

We need to do better…
For as long as I can remember, the private rental market has been a backwater of housing policy. Aside from residential tenancies legislation, the market is pretty much left to itself. This works fine for many people, but clearly not for low income households, and particularly not for the highly disadvantaged households who are the main users of the social housing system. If the Queensland Government is serious about the private rental market taking a greater role in housing low income Queenslanders, it might need to take a closer look at how this market is operating.

Tenant Participation and Engagement Seminar

I had a great day last Tuesday, flying to Sydney to present at the Australasian Housing Institute’s Tenant Participation and Engagement professional practice seminar. It featured a great line-up of speakers on an issue that’s often neglected in the rush for corporate efficiency. As a bonus, the amazing Tony Gilmour from the Housing Action Network quoted from our article on the subject in his opening presentation. Thanks Tony, and thanks Donella and co for putting the day together.