Australia’s local government sector had a critical role in helping to address the nation’s housing crisis, but was locked out of the planning process and its housing efforts were underfunded.
These were two of the key messages in a report on Australia’s housing crisis commissioned by the Australian Local Government Association (ALGA) and delivered by consulting firm Equity Economics.
The report, titled Addressing the Housing Crisis: Unlocking Local Government’s Contribution notes that Australia has a target of increasing the number of houses by 40% each year over the next five years.
“If achieved, the boost in housing supply will increase economic activity by around $30 billion per year, or 1% of GDP, a major boost to our national economy and critical investment in our local communities,” the report says.
This target was unlikely to be achieved, however, without immediate action as housing construction had been in decline since 2016 “with little evidence that reforms, including those that have removed powers from local government, have increased housing construction to increase supply.”
The report looks at the steps and stakeholders involved in housing development, and says that the blame levelled at local government for its approval processes ignores the range of challenges that must be addressed if the trend decline in housing construction is to be reversed.
Local government, according to the report, “is rarely at the policy and planning table” but needs a voice in the development of housing policy and land management plans.
“The National Agreement on Social Housing and Homelessness fails to even mention local government let alone include it as a party,” the report said.
“State and local government planning frameworks often don’t align and need better collaboration to support long-term planning.”
Local infrastructure funding was also essential but local governments were already financially constrained, making it difficult to invest in new infrastructure related to housing.
“No institution or organisation can be expected to increase output by 40% without increased resources,” the report says.
In compiling the report, Equity Economics surveyed 130 respondents from the local government sector and peak bodies across states and territories. The survey found that Insufficient infrastructure funding was the highest ranked challenge in delivering increased housing supply. This was followed by the lack of control over market decisions such as where, when and how developers want to invest.
The survey also found that 80% of respondents from local government said their organisations could not cover trunk infrastructure expenses, while 40% said their organisation had cut back on new infrastructure developments because of inadequate funding.
A further 32% identified infrastructure maintenance as another area that had funding diverted.
