Repairing social housing to repair the economy



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Dr Tim Williams is a Principal at the global advisory firm Arup and is head of cities for its Australasian region. Before joining Arup in 2018 Tim was the CEO of the Committee for Sydney from 2011 when it became an influential policy forum and think tank. Tim’s work helped shape public policy and infrastructure planning both in NSW and across Australia as he became a trusted adviser to governments at all levels. Before coming to Australia in 2010 Tim had been a special adviser on urban planning to 5 consecutive UK ministers and from 1997-2003 he was the CEO of the Thames Gateway London Partnership which played a key role in developing the East Side of London, in attracting major transport projects such as Crossrail and the Channel Tunnel Rail Link through Stratford and in making the case for the Olympics to come to the East side of the capital. He is an adjunt professor at Western Sydney University.

Arup Principal and Australasian Cities Leader, Dr Tim Williams, presents a costed proposal for a major new program of investment in repairing and upgrading Australia's ageing social housing stock. Drawing on his experience as a key housing adviser to the UK government during the 2008 Global Financial Crisis, Dr Williams says this proposal could improve living standards, support the environment and provide a massive, targeted boost to the economy. 

Necessity is indeed the mother of invention and yes, one should never waste a crisis. So, while COVID-19 is leading to innovation by governments, the private sector and indeed communities, we must not forget (as we eat our home delivered food and download the latest hit series to binge watch) that many are suffering not from the virus but the lockdown, and badly.
 
We know hundreds of thousands have lost their jobs – many may never return – and that the dire economic and health consequences of this crisis will affect individuals, companies and communities for years ahead. Although we are ‘all in this together’ we are not all suffering to the same degree.
 
Remember: almost half of Australia’s workers are not knowledge workers and cannot work from home. The real victims of the COVID-19 war and its after-effects come from this ‘other half’.
 
When conceiving innovative stimulus packages, which many good minds are doing across government and the private sector, this core fact needs to be uppermost. It informs my own proposal as does a key learning from my experience as both a management consultant and a key housing adviser to the UK Government in the 2008 crash: make sure your proposal, while getting money into the hands of the right people as quickly as possible (that is, low income renters, blue collar workers and small business), also does the right thing strategically. So-called ‘shovel ready’ projects approved hastily can be both the wrong things to do and are seldom that ready, often taking years from approval to the starting line. We need to do both the right thing – and the thing right – now.
 
My proposal, which has been guided by those knowledgeable in the built environment, community housing providers, investors and policy experts, is for a national program of investment in the repair and upgrade of public and social housing. I welcome the importance that others are placing on this opportune way of improving living standards.
 
The program is costed and will benefit not just the renters of the nation’s 300,000+ public and social homes – there are 130,000 in NSW alone – but also thousands of small companies or sole traders involved in building services and construction across the country, in big and small cities and towns, in suburbs and in the bush.
 
It also offers the opportunity to upgrade homes with a view to making them more energy-efficient and thus provide new momentum towards reducing greenhouse gas emissions. This approach addresses significant socio-economic needs and will rapidly mobilise trades and supply chains right across the industry while giving them new skills and business around environmental sustainability.
 
Governments are seeking to identify how they can legitimately and effectively use their resources to maximise public benefits and release new private sector activity and investment. They want to do all of this in a speedy and efficient manner, focusing on catalysing sectors that are crucial to the national economy that optimise economic multiplier effects.
 
My proposal does all this by:
 

  • improving the safety, quality and amenity of the homes of hundreds of thousands of Australians and the health and well-being of people in them through the process of repurposing stock to meet today’s needs;
  • improving the efficiency and cost-effectiveness of energy and water infrastructure systems in each home where possible to reduce costs, waste and emissions, strengthen resilience and contribute to reducing carbon emissions;
  • providing immediate opportunities to SMEs and sole traders with the skills and capacities to undertake the wide program of activities envisaged;
  • providing these opportunities locally through deployment of skills in communities where SME and sole traders live as far as practicable;
  • providing immediate and longer-term benefits to SMEs, local communities and economies across the state, social and public housing tenants, housing stock and assets already in community/public ownership;
  • applying innovative ways of maximising the impact of public investment through collaborations and co-investments with the not-for-profit and private sectors;
  • delivering an immediate boost to GDP at national and regional levels by sustaining employment and creating new job opportunities for SMEs and indeed tenants;
  • enabling key sectors and skills to be retained and developed, avoiding the consequences often associated with crises in demand in the property sector – that companies go out of business and skills are lost with a significant proportion of both not returning to the market afterwards, thus damaging the delivery capacity and economic contribution of such sectors.
 
This program, which will also provide new markets for providers of products and services in the emerging ‘green economy’, is timely and can be implemented speedily through existing channels without the significant procurement, program design or legislative delays that usually apply to new programs.
 

How much investment, where from and for what?

 
The average age of the nation’s social housing stock is 40 years, meaning there is much wear and tear and many will not have had much investment for decades. Those houses that have had recent investment might be initially excluded from our program. We make an assumption that each home to which the program applied would benefit from an average upgrade of $50,000 per unit. Repairs and upgrades might typically include:
 
  • kitchens/bathrooms;
  • some structural works/repairs;
  • painting and aesthetic works;
  • some common area upgrades including lighting, power, security;
  • upgrading home features to improve environmental efficiency and performance, particularly in energy and water use.  
 
$50k a home adds up. That might look like $3-4 billion a year for three years for a national program. But remember: the lockdown is costing the nation $4 billion a week. Also, there are multiple funding options which would enable contributions from both the Federal Government and state governments to be matched by private sector sources and bank borrowing by Community Housing Providers (CHPs).
 
The repairs program could also form part of a broader program of building new public and private sector homes on public land of the kind we have seen being promoted by innovative public housing providers such as the NSW Government working with CHPs and local developers/investors. It’s not all public money, but the return on investment – the bang for the public buck – in terms of the multiplier impacts, will compare with the best of stimulus programs governments will be asked to back. And it’s jam today not tomorrow – and for those who really need it.
 


Comments
Ken Fong
Really interesting article Dr. Williams. I'm curious if there is a possibility of improving the stock to have active wellbeing measures (Air, Water, Movement, etc...) which will return a greater social benefit and economic return compared to savings from energy/sustainability measures alone.
27/05/2020 2:12:43 PM

Connie Kirk
Great idea, let's hope it will be funded.
20/05/2020 9:41:56 AM

arthur smart
The proposition is a significant opportunity to connect short term stimulus to long term social and environmental benefits. Alongside much needed improvements to building services and building fabric, the proposal, with the right engagement, can create local economic opportunities, support innovation in housing delivery models and reinforce 'pride in place' - all key to the health and resilience of communities.
19/05/2020 9:54:27 AM

Sean Macken
This is a good idea.
19/05/2020 8:46:52 AM

Ken Marchingo AM
Excellent start and analysis.
19/05/2020 5:11:58 AM

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