Repairing Social Housing – A Big Job That Can’t Wait

As NSW Minister for Family and Community Services, The Hon Gabrielle Upton, a lawyer, and former investment banker and company director, is using her outside experience to drive new approaches to affordable social housing more then ever needed in her state.  NSW has the largest social housing system in Australia, with 140,000 dwellings supporting 295,000 people. A further 30,000 households are supported through private rental assistance. To discuss the challenge of providing ongoing adequate and sustainable public housing, Gabrielle Upton addressed The Sydney Institute on Thursday, 12 March 2015.

REPAIRING SOCIAL HOUSING – A BIG JOB THAT CAN’T WAIT

GABRIELLE UPTON

Thank you to Gerard and Anne for the opportunity to speak tonight. They are the moving force behind The Sydney Institute – those who above all, recognise the importance of pluralist debate and discussion.

It is a great honour to be here tonight and to talk to you about one of the biggest challenges every state government has to wrestle with – social housing.

To say it is a critical job to find a stable home for the most vulnerable members of our community is an understatement – people’s lives are on the line. So I tackle this role with a major sense of responsibility.

As I look around the room today, I see plenty of people who have had a big influence in social policy. I don’t need to tell you that social housing needs major and sustainable reform, so that it can deliver better outcomes for tenants, people on the housing waiting list and the taxpayer.

In NSW, repairing social housing is a long overdue renovation – even the reality TV builders would have trouble fixing it up by the next episode. However, just because it is a tough and complex reform and not easily packaged up for prime time TV, doesn’t mean the job should be ignored.

Over the last four years, you have seen the NSW Liberal and National government tackling tough reform issues. We have rolled our sleeves up getting the NSW budget and economy back on track, fixing the public transport system and building the infrastructure this city has been crying out for.

There is more work to do – social housing reform is the next cab off the rank. We need to create better, stronger and more cohesive social housing communities and we need to do it in a caring way.

Ultimately a social housing system should not be judged on the age and quality of the dwellings but the quality of life and opportunities that are provided to residents. It needs to provide a pathway to opportunity and independence, not be the ultimate destination in disadvantage.

It is worth remembering that since 2011 we have made housing waiting lists transparent to allow people make better decisions. We have cracked down on rorters, including one millionaire businessman who owes taxpayers more than $250,000 in back rent. This man paid less than $97 a week on a waterfront public housing property in The Rocks. He is now out of public housing and has to pay off his debt to the community.

I became Minister for Family and Community Services in late April 2014. It became clear to me a couple of months in that reform of social housing was overdue and imperative. A conversation about fundamental reform had not been had for a decade, so I wanted to begin it at a high level simply by identifying the pillars that should frame reform: fairness, sustainability and opportunity.

Last November I released “Social Housing in NSW: A discussion paper for input and comment” to guide reform. Tonight, I want to speak about what a Baird Government will do for social housing during a second term.

Last week the Premier and I announced a re-elected Baird Government will crack down on anti-social behaviour in public housing. We will introduce a One Strike policy for those tenants who commit serious criminal offences including: drug dealing, harbouring illegal firearms and serious assaults.

We will also introduce a Three Strikes policy to remove people who breach their tenancy agreement three times in a 12-month period. Those breaches include deliberate destruction of property and noise complaints.

Let me be clear, this is not about a populist policy to get talkback radio announcers and A Current Affair journalists applauding. This is about making life better for the law-abiding tenants who live beside the perpetrators, who have been putting up with their criminal and destructive behaviour for years.

It’s about evicting tenants who misuse a public asset – a privilege – so more deserving people can use it. There are 60,000 people on the public housing waiting list. Let’s put that number into context: it is enough people to fill Allianz Stadium and the Sydney Entertainment Centre together and you would still have 2,000 people lined up outside.

If you are one of those 60,000 people, it is hard to stomach the idea of a drug dealer using public housing to ply their trade – especially when you have been on a 10 year queue for housing.

For too long, good people have had to put up with the poor behaviour of a minority. Each year, my Department takes cases of anti-social and illegal behaviour to the NSW Civil & Administrative Tribunal. The Tribunal has declined to terminate the tenancies in a number of these cases even where the tenant has been charged or convicted of a serious criminal offence.

One case that resonated with me is of a twice-convicted drug dealer who is still in public housing. The mind boggles that the Tribunal ruled in his favour because he told them he was a good neighbour despite the fact his drug dealing, by his own admission, was being conducted from his government subsidised dwelling.

Decisions like this are way out of step with community expectations. They don’t pass the Family Barbeque Test: they leave people shaking their heads in dismay. So we will introduce confidential Neighbour Impact Statements so that our good tenants have an anonymous voice in the Tribunal, so they can explain the impact of their criminal neighbours on their community without recrimination.

This would have been particularly useful in the case of the inner city drug dealer. His elderly neighbours told FACS they were too afraid to testify against him. Their life had been made into a living hell by drug seeking customers visiting their community around the clock.

Queensland and Western Australia both have a 3 strikes policy for bad tenant behaviour. What is really interesting is that the 1st strike has clearly been a very effective wake-up call for those tenants. In Western Australia, they have had more than 1300 First Strikes, but that figure dropped to 460 Second Strikes and 155 Third Strikes. In other words, you put 1,300 people on notice for their behaviour, 90 per cent of them straighten up their behaviour, while eviction action is taken against 10 per cent of them.

It’s a simple, smart policy to deter the bad behaviour by making it clear that their house is a privilege not a right. This is a compassionate policy that gives hope and voice to the vast majority of good public housing tenants who need our help.

My Department surveyed 780 public housing tenants last year: three-quarters think antisocial behaviour in public housing is a problem, more than half said they had experienced it; two-thirds felt illegal behaviour is a problem in public housing, one third have experienced or witnessed serious crime and not surprisingly, more than 80 per cent of public housing tenants think a “three strikes” policy would make a difference to fellow tenants’ behaviour.

Needless to say, bad behaviour pulls resources away from building more homes and doing much-needed repairs. In the last twelve months, unnecessary repairs to our properties cost more than $14 million: a whopping 75 per cent rise in just three years. Public housing estates haven’t always been the easiest places to doorknock but with this policy we are getting a lot of support.

Last week, the premier and I also announced plans to invest more money in local infrastructure to help create stronger communities. The Social Housing Community Improvement Fund will provide $20 million to improve the liveability and quality of life in social housing communities.

The fund will enable local community groups, local councils, private sector organisations or a combination of these to deliver projects that communities want and need. It’s about improving safety, enhancing open spaces, better access for the elderly or people with a disability.

Small projects, like creating a garden or improving a community centre, can make a big difference to communities. It is a simple and practical way of enhancing social housing communities at a local level. And because we are looking to get the greatest impact for taxpayer dollar investment, priority will be given to projects that bring additional dollars or services from sporting or community organisations or local councils

The same thinking is behind the sale of state government owned dwellings at Millers Point. Nowhere else in Sydney can harbourside properties worth more than $2 million be rented for as little as $77 per week.

That is a great deal if you can get it but the consequences are clear for the overall public housing system: far less money available for new homes and maintenance. Just consider how much public housing can be bought from the $3.95 million from the sale of one 5 bedroom town house with sparkling views of the world’s most glorious harbour.

One family lived there but it’s easy to see 5 or 6 families and a few singles gaining a roof over their head as a result of the sale. Due to the age and nature of the Millers Point properties, they often cost four times as much to maintain as the average public housing property. And that cost has to be balanced against the needs of those currently in social housing and those on the waiting list.

Despite the hypocritical hysterics of Labor, Millers Point tenants are receiving personalised attention. The members of the Millers Point Relocation Team have and will continue to work hard for every tenant. Tenants have a wide choice about where they can move to. Some have stayed close to the city, others have moved closer to family and friends including at Coffs Harbour on the North Coast and Dubbo in the Central West.

The Relocation Team are showing sensitivity and compassion as they work with tenants to determine their housing needs and assist them during the relocation process. To date, the sale of 10 government-owned properties has raised more than $23 million that has gone back into the social housing system to build more and better homes.

This is a smart and compassionate policy, because it is all about doing everything we can to look after 60,000 people on the waiting list. There is a wider context that must be considered as well – the NSW government inherited a social housing system that was not delivering for tenants or taxpayers alike.

For 16 years, we watched as Labor oversaw the reduction of more than 5,000 dwellings. Furthermore, they left a backlog of public housing maintenance of more than $300 million per annum.

Labor’s legacy was a social housing system that was unfair and unsustainable. Ultimately, people, both those in social housing and those on the waiting list, paid the price. Millers Point reflects the NSW government’s resolve to put the social housing system back on solid financial ground.

As we know, there is no magic pudding when it comes to government finances. Choices have to be made, and you can’t just hope for a windfall. As Treasurer, Mike Baird got our financials back on track. He controlled the spiral that was government spending, the mark of a responsible government.

If you govern with your head you can then govern with your heart. The Millers Point sales program is the right decision, it is the fair decision. The sales proceeds will help the greatest number of people possible.

That brings me to the Social Housing Discussion Paper.

Submissions have now closed and we already reviewing the hundreds of submissions from the public. The Baird Government is determined to make social housing fair, sustainable and provide opportunity and pathways for client independence.

Let me describe why we have to change.

NSW is Australia’s largest social housing system with around 150,000 dwellings, accounting for about 5 per cent of all NSW housing stock. The system is challenged by limited growth in income, constrained government funding, ageing and inappropriate dwellings, and rising operating costs.

It may come as a shock to learn that only recently a proper audit was done on each and every property. For the first time informed decisions can be made about the portfolio of assets. About 290,000 people live in social housing in NSW (or 140,000 households), with a further 70,000 people (or 30,000 households) receiving other social housing products and services, such as private rental assistance or temporary accommodation.

The tenant profile has changed significantly over the years to one dominated by lone singles and people dependent on income support rather than families. Centrelink benefits are now the main source of income for 94 per cent of subsidised public housing tenants, with wages being the main source of income for 5 per cent of tenants.

This is almost a complete reversal of the 1960s where wages were the primary income source for 85 per cent of public housing tenants. Aboriginal households account for 12 per cent of total social housing households in NSW. About 19 per cent of people living in social housing have a severe mental illness, compared with about 8 per cent in the general NSW population.

So a system exclusively designed around the needs of working families does not meet contemporary needs. The average stay of clients in social housing is lengthening, while exit rates are dropping. A system that was designed as a medium-term solution for vulnerable people in need of housing has morphed into a long-term, even intergenerational one.

We must accept that, despite the best of intentions, the current system fails tenants by unwittingly contributing to an environment of social housing dependency. I believe that public housing should not be a destination for all. It is a safety net that should offer opportunities and pathways for independence, where that is a desirable outcome.

Let me turn to the Social Housing Discussion Paper specifically. It outlines the government’s vision for a new social housing system that provides a safety net for vulnerable people, within the constraint of government funding, built around three pillars: a social housing system that provides opportunity and pathways for client independence, a social housing system that is fair and a social housing system that is sustainable.

The Paper is clear that this objective cannot be delivered by government alone. It requires a strong partnership between government, the NGO sector, the private sector and our clients.

Opportunity and pathways to client independence

The government believes the social housing system can have a more positive impact on people’s lives, especially for young people and those of working age. While some people use housing assistance to regain their independence, many remain reliant on the social housing system.

This may be entirely appropriate and fair for some people especially the elderly, frail and people with disabilities. But assistance can be delivered in a way that contributes to better education, health and employment outcomes, especially for people of working age, children and young people.

Short term assistance may be appropriate to help some stabilise their lives before assisting with their transition into private rental market. For others, needing longer term support, social housing could still be delivered but in more innovative ways.

NSW is already supporting these opportunities for people in social housing.  In the Hunter, Tamworth and New England, we are running a pilot that provides private rental subsidy to people in educational and vocational opportunities. The pilot has been taken up mostly by young women: half are single parents, many with children and almost half are Aboriginal.

Another example is the Youth Scholarship Program which provides a one-off payment of $2,000 to students in social housing or crisis accommodation to assist in the purchase of educational items, with the objective of increasing the number of students in this group who attain the Higher School Certificate (HSC).

The Start Safely program is another form of assistance that provides crucial support to people in their time of need, but also encourages them to get back on their own two feet. It provides victims who are escaping domestic violence with rental subsidies for up to two years, in combination with other support services.

An independent evaluation last year found that 70 per cent of program participants are able to subsequently support themselves without further housing assistance.

Fairness

A fair social housing system is one that supports people by prioritising those who need it most. We need to be fair to people in the social housing system and those on the waiting list by being transparent about the prioritisation and allocation processes for housing.

We want to explore how the system can better align with the private rental market experience, so that people are better equipped to navigate the private rental market, if and when, they are ready to leave social housing.

We want to explore how we can design rent models which ensure social housing is both affordable (to tenants and taxpayers) while providing incentives to people to take up opportunities to gain greater independence.

We need to better deliver wrap around services to those that need it when they need it. The NSW government operates Housing and Accommodation Support Initiative (HASI) a partnership between NSW Health, FACS and the NGO sector.

HASI provides these vulnerable people with mental health issues with access to stable housing linked to clinical and rehabilitation services. It provides them with support so they can maintain successful tenancies and participate in their communities.

In short, a fair social housing system can help us prioritise those in need and deliver better services.

Sustainability

A sustainable system provides housing assistance to vulnerable people now and into future.

Underpinning this objective is the requirement that the system also be financially viable. This means a system in which the stock of housing: meets demand, is adequately maintained over time and efficiently managed within the government’s existing funding envelope. We need to draw more on expertise & resources of non-government and private sectors where better outcomes for clients and greater value for money can be delivered.

We aim to increase the role of Community Housing Providers in the management of tenants and dwellings. We know CHPs are able to leverage their balance sheet and generate additional revenue streams to cross-subsidise their housing services, from affordable housing rent for example.

Many CHPs are also registered as not-for-profit organisation giving them access to cost savings such as exemption from payroll tax, concessions for GST and exemption from Fringe Benefits Tax. With stronger partnerships with the NGO sector, like CHPs, we should be able to better link social housing products and services with pathways to education, training and employment.

The government has also released a Request for Expressions of Interest for the Social Housing component of the Premier’s Innovation Initiative. The Premier’s Innovation Initiative seeks to uncover the best, cutting-edge ideas from the wider community to target some of the key issues facing NSW. We have already seen this approach work in places like the UK, where the London Ventures program delivered eight projects that improved public services.

We are eager to get fresh, new ideas about how to add to the social housing supply and help break the cycle of disadvantage. I encourage you to lend your wisdom and experience to this reform. We’re looking for creative ideas to: improve the supply of social housing assets. Ideas could include alternative financing approaches or asset development models or innovative ways to refresh existing assets.

To improve the way in which the service system operates, which could include new or alternative models of tenancy or asset management; and improve social outcomes for clients of social housing, including ideas which propose effective pathways out of disadvantage and improved education or employment outcomes. As a government we have made it clear that, if elected, we will inject $20 billion into important and long overdue infrastructure such as transport, roads and sport.

But I am here today to tell you that we are not just focussed on hard infrastructure. We are also focused on infrastructure with a social purpose. I am proud that I serve in a Liberal government that makes decisions with both our heads and our hearts.

We have worked hard over the last four years to get this state’s finances back in order, because when you are running huge deficits and racking up debt, you forfeit the ability to put your hand in your pocket and help the vulnerable. Reforming social housing is a big and complex job, but we are up for it. They say the best way to eat an elephant is one bite at a time.

It is pretty clear the previous government couldn’t stomach the idea, and simply pushed it around the plate until it got cold. But I am hungry for reform, because there are tens of thousands of people in our state who, through circumstance and disadvantage, desperately need better help.

We started this big job in our first term of government, but it is unfinished business. There is more to be done and I look forward to the opportunity to get the job done for the people of NSW.