Western Australia could save $6.6 billion over the next 30 years through greater investment in public and social housing, a new economic study has found.
Housing All Australians, a charity that works with the private sector to deliver affordable housing, explored the cost benefit of investing in affordable housing for all the states and territories.
The report projected the $6.6 billion cost saving to WA’s bottom line through savings in health, mental health and domestic violence services, reduced anti-social behaviour, and improved educational opportunities and business productivity.
The charity, chaired in WA by MinterEllison partner and property lawyer Lee Rossetto, found all states and territories, aside from the ACT, had a strong cost benefit ratio that would justify further investment in social and affordable housing.
Victoria would stand to save the most from an investment in affordable housing, at $7.8 billion, followed by WA at $6.6 billion and Queensland at $5.4 billion.
The modelling by SGS Economics and Planning, showed the cost to taxpayers nation wide would hit $25 billion by 2051 if investment in affordable, social and public housing continued on its current trajectory.
The study shows decades of underinvestment by governments in non-market led housing has seen social housing numbers fall to a record low of 4 per cent of national housing stock, compared with 6 per cent in 1996.
In the same period, the nation’s population has risen 25 per cent, which added stress to an already stretched housing market.
HAA founder and director Robert Pradolin called on businesses to lead a national discussion around addressing chronic shortage affordable housing shortages.
“This isn’t just an issue for low-income households, this is also an issue for business in attracting key workers close to where they serve society,” he said.
“It is in everyone’s interest to make this a national priority; this will take 30 to 40 years to fix so we need to address the issue now.”
Mr Pradolin added that the group had already heard about businesses struggling to survive because of rising rental prices pushing staff to areas beyond reasonable commuting range.
“And there are examples of business having to invest in affordable housing to provide cheap accommodation to attract staff, particularly in regional and coastal areas that have experienced significant population shifts,” he said.
“The Australian business community needs to ensure that there is well-located affordable housing for workers, and in doing so, restore hope and confidence in the home-ownership aspirations of our younger generations.
“The time for waiting is over.”
State Housing Minister John Carey recently said developers resistant to social and affordable housing needed to change their mindset.
He said the state government allocated $875 million to social housing in its latest budget and $2.1 billion during this term, and more than 60 organisations registered an interest in the government’s housing diversity pipeline.
In addition, the state government announced land tax concessions for build-to-rent developments, in a bid to boost housing supply.
