Prominent American housing expert, Dr. David Rosen, has 6 lessons for Australia to learn when it comes to addressing housing affordability problems.
Dr Rosen believes one of Australia’s major housing affordability mistakes is that we are not hearing the voices of real estate economists and other important groups, such as community housing developers when it comes to discussing the issue of affordable housing at a national level.
“We need to bring real estate economics into planning if we’re going to conduct land value policy in a thoughtful and market-savvy way,” he said.
Dr Rosen’s 6 Housing Affordability Tips
1. Devise a national consensus on what constitute affordable housing.
You cannot begin to even discuss affordable housing if you cannot agree on its definition.
In North America for example, the affordable rental housing standard is when your rent, electric, gas & water contribute to 30%, or below of your gross house-hold income.
“Until or unless we define what we mean quantitatively by affordable housing we don’t and can’t have a policy. My observation in Australia is that you’re not there yet. That’s an important starting point,” stated Dr Rosen.
Mr Rosen describes this as basically a “housing trust fund”.
Sources should come from a variety of areas, through tax subsidies including deductions and credits, and through appropriations such as development impact fees, use of publicly owned land & bonds and so on.
3. Be smart and think long-term by creating public-private partnerships for finance, development and management of affordable housing.
Entice private sector partners such as banks, insurance companies and superannuation funds by establishing a foundation of capital from local, state and federal sources.
“If we are to treat rental housing as key community infrastructure, we’re going to need to build up institutions here in Australia that we don’t currently have and build upon the capacities of those we do [have]. That includes for-profit developers, community housing developers, housing authorities, lenders and supers,” he pointed out.
Dr Rosen points to land value capture policies which have worked in the US:
Australia needs to treat the issue of affordable housing as integral to future community infrastructure creation and not simply sweep it to the side. Dr Rosen says an industry supply chain which is especially set-up to protect existing affordable housing properties, and develop new affordable housing projects is the way to go.
“For rental housing, if we’re to treat it as key infrastructure, we need to create an industry supply chain that can deliver it, own it, operate and manage it, hopefully in perpetuity. And not to have limited affordability restrictions where the housing then converts to market rate so low-income families are evicted with no place to go,” he explained.
Dr Rosen is an esteemed authority with over 33 years of leadership in fields including affordable housing finance, redevelopment, inclusionary housing, real estate economics, as well as green energy.
The firm he runs, DRA Principals, has advised on over $9 billion in development finance and he has represented both private and public sector clients in over 220 US state jurisdictions. He is a published author and speaks on affordable housing, and energy finance policy & practice topics at national conferences and events frequently across North America.