Clean-up could lead to shortage

Naomi Davidson from the Newcastle Morning Herald commented on the rent market on Monday 31 January 2011.

She reported two social service providers have warned that housing availability in the Hunter would deteriorate after the federal government announced $364 million in affordable housing schemes would be redirected to pay for the Queensland flood clean-up.

Affordable housing provider Compass Housing said the move to cap both the National Affordability Scheme and Building Better Cities programs was taking urgently needed funds from one area to solve the needs of another.

The rental scheme was put in place to assist low-to-middle income earners find housing in the competitive and often unobtainable rental market.

Compass Housing chief executive officer Greg Budworth said in a statement yesterday the move would cut the rental scheme funding by 30 percent, reducing the number of housings available to low and middle-income earners below market rent from 50,000 to 35,000, and halve the $200 million allocated to the better cities program.

Mr Budworth said a Housing Industry Association report found the housing shortage in Australia would reach 466,000 homes in 2020, while a SGS Economics and Planning report showed social housing was short 260,000 houses.

“Australia already has the least affordable housing of any developed country, a problem that will be exacerbated by the recent floods,” he said.

“As the provision of affordable housing is at crisis point in our region and many other parts of Australia, these programs should not have been cut in this way.”

Mr Budworth said the funding had allowed Compass Housing to construct 26 houses, buy another 43 and manage 90 more in the region.

Samaritans chief executive Cec Shevels said he agreed with the federal government’s flood levy as it would only affect those already working who may be able to afford the extra tax and did not affect low-income earners.

But he said cuts to funding for the rental scheme would hit those doing it the hardest.