HOUSING AFFORDABILITY: WHAT IS TO BE DONE? – LINDA SCOTT

In 2023, housing affordability surfaced as the issue of the moment – baby boomers knew nothing like it. The question seemed to have become whether Australians were locked in an unbreakable cycle with no workable answers. Linda Scott, a Labor councillor on the Sydney City Council, oversees an area with the some of the highest property prices in Australia. Joe Gersh AM is Executive Chairman of Gersh Investment Partners Limited, a specialist real estate investment firm based in Melbourne. They are both close to housing problems and finding solutions. On Tuesday 14 November 2023, Joe Gersh and Linda Scott addressed The Sydney Institute to provide perspectives on Australia’s housing dilemma. The paper which follows is an edited transcript of Linda Scott’s remarks.

HOUSING AFFORDABILITY: WHAT IS TO BE DONE?

LINDA SCOTT

I’d like to begin by acknowledging that we meet tonight on the land of the Gadigal people of the Eora Nation and pay my respects to their elders past and present. And also to say thanks to Anne and Gerard for the wonderful invitation. I’m so grateful to be here with you all tonight. And thanks to Joe, for those very wise words.

Just down the road here, as the City of Sydney Council, we are governing a huge number of planning decisions, although less, many less, than when I began as a councillor here eleven years ago. A bit further down the road, in Pyrmont, at the last election I was door knocking, as one does, and knocked on the door of a wonderful woman. When she opened the door and I introduced myself as a Labor councillor, she said, “Oh, come in. This is Anthony Albanese’s childhood home, come and have a look around.” It’s still in its original form, a beautiful public housing unit, very close to here, where our prime minister grew up in a council-owned home with his single mother.

It was beautiful to see it in its original form, although it really was in need of some maintenance, much like our public housing around the state of New South Wales. But this was also a stark reminder that, up until quite recently, local governments really did invest, own, run, manage and maintain quite a large asset base of public and affordable housing. Indeed, the City of Sydney still owns quite a few properties. Sadly, many of them have been vacant for many years due to needing maintenance. This is extraordinary when we have $100 million surplus in our budget.

Nevertheless, that former prime minister’s home is a reminder of how all levels of government have played a really significant role in providing housing for Australians that need it most. And that’s where I’d like to focus my comments tonight.

It is of course the case, as Joe has rightly outlined, that to get the supply of affordable housing correct, we have to focus on all the levers that we can together. It is also the case that every level of government has a very important role to play in that. This is why on behalf of local governments across Australia, all 537 of them, as President of the Australian Local Government Association (ALGA), we were proud recently to sign up to the National Housing Accord, because it is really critical that local governments have a say.

It is also critical that we are part of the joint decision making with all first ministers across the states and territories. And, of course, with the Commonwealth government to deliver on the kinds of housing supply that we need to resolve Australia’s housing crisis. Of course, local governments have an important role to play in this. We are the level of government that people turn to in times of crisis. And we are also the level of government that people turn to every day. I did an radio interview on the ABC this week. I spoke about the fact that as a local government councillor, many of my constituents know where I live, indeed, many of them, knock on my door, mornings, evenings, weekends and speak to me about their concerns. Many people contacted me after that interview and said, “You must be joking – that doesn’t actually happen to you?” Yes, it does happen all the time. But it shows you just how very grassroots we are at the local level.

But what does that mean? It means that we have those community interests very much at the forefront of what we’re thinking about when we consider the kinds of planning decisions we still have power to do influence. It also means that we need to consider the communities who are not yet in homes. I meet many of those people and have done so on a very regular basis in the course of my term at the City of Sydney Council. We need to consider both of those constituencies – people who are lucky enough to own or live in a home and the many who are not. There are 50,000 here in New South Wales on the public housing waiting list. We need to consider all those people in our housing decisions and reforms.

Let me say two things very clearly upfront. We do have a national housing crisis. I think it is important to say that very transparently; it’s important to acknowledge that we have a very significant problem. And let me say, as a second important point, I’m a self-confessed, YIMBY (Yes in My Backyard) not a NIMBY, and have been for some time. Since my first term on the City of Sydney Council, I’ve proudly moved motion after motion about the need for the City of Sydney to play a bigger role in addressing housing affordability. From calling out this state government to try and better plan around vacancies to many, many more actions that the City of Sydney could take. It’s important that all local governments should be actively thinking and planning and supporting the homes that we need for the future. And that’s certainly something that I try to bring every day to my role in the peak body for local government.

We need to do better though, and we hope that the Housing Accord is a very important first step. It is also important, though, to call out that local governments can’t do this alone, and we certainly can’t do it without funding. Nationally, councils raised 3.3 per cent of total taxation through rates. But our infrastructure responsibilities are immense – local roads, bridges, pedestrian and cycle networks, local water utilities and sewerage, stormwater, water management buildings, facilities, regional airports and aerodromes, parks, cultural and recreational centres, family and community support facilities, aged care, childcare, the list goes on endlessly.

Local councils provide the infrastructure and services that are vital to ensure that our communities can live, can exist, can continue to have a wonderful life in their regions. Today I was at a local government conference in New South Wales with our state’s 128 local governments and spent some time with the mayor of Kiama who spoke to me at length and with great passion, about his council’s difficult financial challenge of running aged care in Kiama. Something that if it closes will mean that many, many families will not be able either to continue to live where they live, or continue to live within a reasonable distance from the person that they love in aged care. Yet, the financial sustainability of that council, because of that aged care service, is absolutely under threat. It is a very difficult challenge that they face.

Local governments do seek to collect infrastructure contributions as part of the development process. We do that proudly and transparently in order to ensure that we can provide liveable communities built around the housing that we allow to be built. We recently negotiated on behalf of Australia’s local governments for the federal government to establish a $500 million Infrastructure Fund. We hope that that will open for local and state applications either late this year or early next year. It will allow local governments to, for the first time in a very long time, have a federal funding stream to ensure that we can start to think about other mechanisms for funding that infrastructure. We can all, in this room, debate the taxation and revenue generation mechanisms that we need for this local infrastructure. Indeed, when Minister Catherine King announces her infrastructure reforms tomorrow, I’m confident that I’ll be debating with her about a number of matters. We can all debate how best these taxation structures work, but it is a very welcome development for local governments to have this $500 million fund. We hope it will become an annual fund to allow us to invest in and attract funding for the infrastructure that we need to build these houses.

These infrastructure developments are important and it’s important that we talk about these upfront as part of any housing reforms, because without them communities are unliveable. I have endless stories of homes without access to transport, and people already struggling to access employment as they live in places that don’t allow them a sustainable access to employment. I’ve seen homes approved, particularly in regional New South Wales, with poor sustainability conditions, meaning that residents moving into these homes have to pay astronomical energy bills while living in an unsustainable home. Such matters can all be prevented upfront by good planning. I’ve also seen poorly considered approvals for housing, such as the case of Mascot Towers here in Sydney, or in a series of apartments built in Moree where the soil is very fertile and soft. I’ve seen people invest in housing and lose their life savings because dwellings were of incredibly poor condition.

So, my message to you tonight, if I leave you with nothing else, is that planning, in the supply of affordable housing, is as important to consider as the economic factors. And Joe has outlined them most articulately. This is why local governments must continue to have a role to play in the planning and approval processes. There are different laws and conditions and regulations around the nation.

When I first started at the City of Sydney Council, we were considering both zoning and development applications. Now we have a planning panel to do development applications we still make from time to time when not delegated zoning decisions. For Northern Territory local governments, they’ve not had planning powers for many years, and they don’t seek them. The Territory government takes care of those matters for them.

For all these differences, generally, when there are local governments involved, you do get better quality outcomes, to create an outcome, to create the supply, to create the delivery of quality housing. And that is really critical. Without that step, it tends to be overlooked. This is not to say there are not barriers. It’s not to say that local governments can’t significantly improve.

We recently conducted a workforce survey of local governments with funding and support from the former federal government. The top skill shortages will not surprise you. Local governments are having significant difficulty recruiting planners and engineers. There are many examples of councils exploring innovative mechanisms, sharing staff resources across regions, traineeships and with support from state planning departments. Councils now have been able to achieve planning as being on the skills shortage list. A 2023 report by the Planning Institute of Australia found that 232 local governments, out of a total of 537, in Australia had no planners on staff. That’s 43 per cent of our local governments unable to attract or retain planning staff.

So, we were very pleased to see the National Planning Reform blueprint, endorsed by national cabinet in August 2023, committing to adequately resourcing building environment professionals, including planners in local government. It’s no secret that when we announce our budget priorities for the federal government for when they consider their federal budget next year, workforce shortages, funding and support for local governments to help with this will be very high up the priority list. We welcome the opportunity to work with all levels of government and welcome again the new funding that the federal government, and we hope around the nation that states and territories begin to more readily support the delivery of more housing and more affordable housing through the Housing Accord.

We know in general that there will be a push, as there is consistently, to strip powers from local governments. In New South Wales, the premier has not yet done that, but he continues to threaten it – as have many premiers in New South Wales. Local governments continue to do all we can to work through these political discussions and to train and attract planners. But such threats make it even more difficult for us to attract and retain the planners and the skilled workforce that we need to deliver the outcomes that everybody wants to see.

It is certainly the case that when I speak to the Prime Minister, I remind him of his beautiful public home owned formerly by the City of Sydney Council just up the road, and the importance of delivering enough housing for him and his mother, just as councils are trying to do across the nation.

The planning system here in New South Wales is complex. The planning system across the nation is unbelievably complex; it is truly one of the most complex policy issues that our nation faces. And yet, we all have to remember the importance of wading through that complexity, trying to find a better way forward, and not sacrificing quality. Nevertheless, finding a better way forward, whether delivering homelessness services, community housing or supporting affordable social or public housing through the planning processes, local governments really do consider people under housing stress, and do consider people at risk of, or experiencing, homelessness.

These people should be front of minds when we’re considering planning proposals. But we need to also ensure that when people can move into these dwellings, that they’re liveable. That they’re living in a place where they can access appropriate infrastructure and support services, to ensure that it remains a liveable place for them and their pet or their family into the future.

We have a great deal of work to do, and an extraordinary national challenge. Local governments are certainly very much up for the challenge to work with states and territories and the Commonwealth. And with financers and many others involved in this industry. All of this to find a workforce that can help us to deliver the outcomes we need as a critical and urgent priority.