Former Nightingale development manager-turned City of Melbourne policy manager Jen Kulas travelled to six European cities to study their housing policies after winning the Churchill Fellowship. She discovered that city councils recognised the value of their land as a “non-renewable resource” and were keeping large tracts in public ownership to ensure enough housing stock.
Jen Kulas would like nothing more than to shake up the housing market.
After touring Europe last year, Kulas believes we need to rethink how we tackle affordable housing.
Kulas previously worked as a development manager for Nightingale, a not-for-profit organisation building sustainable apartments and traveled to Europe on a Churchill Fellowship. Fellowships provide funding for people to travel overseas for six to eight weeks to study a topic they are passionate about.
Kulas was inspired to apply after meeting a recently returned recipient who had been looking at housing and construction, and she submitted a proposal to explore innovative housing models for women and women-headed households.
Kulas says she was motivated by the growing problem of homelessness for women and women living in poverty.
“I think we’ve kind of come a long way in a relatively short time talking on that issue more broadly outside the built environment, just in the general media and speaks to the severity of the problem,” Kulas says.
“The proposal was kind of digging into it a little bit further in an Australian context.”
As part of the fellowship, Kulas visited housing models in Helsinki, London, Vienna, Zurich, Amsterdam and Paris and found each city was tackling submarket housing in their own way.
“One of the key learnings was that in every single country I visited cities were feeling housing affordability pressures uniquely,” Kulas says.
“Most of the innovation was happening at a city level, not a national level, and … there was more spending and more conversation and more innovation happening in those places.”
In her report, Kulas described cities as the “engine room” for change.
Kulas says it was “pretty sobering” to find how out of step Australia was.
“[All cities] all had a very different response to housing although there were some consistencies, but in all instances they had a higher level of sub-market, non-speculative housing, so social and affordable housing that is below the market rate and didn’t seek to purely extract profit as in Australia,” Kulas says.
She says in all the cities she visited, there was a general reluctance to sell land, and in some cities, the relevant government owned a large percentage of land.
Government holds onto the land
“Every place is recognising that land is a special resource, it’s non-renewable and not only are they seeking to hold on to the public land they have, but in the case of Zurich and Vienna, they are actually building a corpus of money to buy more land so that there’s more land held in public ownership,” she said.
“Another big learning was the understanding that municipalities and other levels of government don’t have the capacity to deliver social and affordable housing at the scale that is needed because the market is growing so much, but they are really embracing the role of other stakeholders, such as the equivalent of a registered housing association or housing provider, or another type of body known as a limited profit housing association.
“A lot of these countries provide for a capped profit – usually 3.5-4 per cent return on investment – that’s given to a developer to recognize their expertise and allow them to gain a nominal profit from this project but asking them to redeliver it into future housing projects, rather than it being extracted by individuals.”
Kulas found six key common points in the cities she visited:
- A stated target to either increase or maintain a percentage of overall housing stock as nonprofit housing rented at below-market rates;
- A slowing or cessation of selling public land to private actors, instead choosing to retain public ownership and use land assets, such as via long-term ground leases, for nonprofit housing;
- Implementation of a broad-base housing policy with a focus on addressing the housing needs of very low- to moderate-income households;
- Cities benefit from both ‘subject’ and ‘object’ subsidies from at least one level of government, and often multiple;
- Mandatory inclusionary zoning as part of the planning scheme that requires private multi-residential developments to include a percentage of housing offered to eligible households at below-market rate; and
- Nonprofit housing providers in every city are regulated to ensure that subsidised housing continues to operate as submarket nonprofit housing in the long term.
“The thrust of spending in Australia is still on that dream of ownership and another foundational accepted truth in all these places is that rental housing has to be the delivery model and I think if we were meaningfully trying to address the needs of very low to moderate income it has to be through a rental model not through ownership,” Kulas says.
“That’s the reality and writing on the wall.
“Governments need to redirect funding from those tax concessions that are advantageous to homeowners and investor owners and directing that to rental reform to strengthen the rights of renters firstly and invest it into housing stock.
Demand and supply-side subsidies
“In Australia at a federal level we spend almost 80 per cent of federal funding on what’s called subject subsidy, so demand-side subsidy which is Commonwealth rent assistance so it’s something that’s paid to a person so they can access housing, and increases the affordability for them.
“But there is a general reluctance to spend on object subsidies, so supply-side subsidies, which is to create more buildings.
“It’s not a sustainable investment practice because we are just throwing money from the public sector into investor/owners’ hands.
“We are creating a more vulnerable policy that’s subject to political change and political wind because there’s no fixed asset that comes out of it at the end.”
While Kulas’ Churchill proposal was to examine affordable housing for women, she realised that we need more affordable housing altogether, and by developing that sector it would ‘capture’ more housing for women.
“We can’t really seek to have a specialised housing response for women when we don’t have a general one.
The agency dilemma
“In every place I visited, municipal housing or public housing – where the state was delivering the asset or managing the housing – it’s not being sold off or management agreements being put in place at the same rate it’s happening here in Australia.
“It is very popular now in Australia to get registered housing agencies to take on the management of public housing.
“For example, in Flemington, [Melbourne] there’s a renewal happening and 198 public homes are being demolished and are being replaced with 218 social homes.
“It sounds really great, but we’ve actually lost 200 homes that the state once owned.
“The key difference is that they are much better regulated in these other countries and they are given consistent funding.
“So the funding means they can strategise and they can plan and I think the inconsistent funding … in Australia has kind of pulled them into this feast or famine dynamic that’s truly difficult for them to strategically forward plan.”
Kulas now works as a senior policy adviser for the City of Melbourne, and as her bio says is “Putting the dots together” between all levels of government and the built environment sector to increase the supply of submarket housing in the City of Melbourne.
The City of Melbourne has drafted 10-year affordable housing strategy which Kulas is eager to apply her learnings from her fellowship.
“One of the key learnings through the fellowship was that whether they have the vested responsibility, legislation or constitution or whatever the legal mechanism might be, cities are doing the most innovative work.
“So I am really keen to get in on the ground floor, and hopefully show them what other cities are doing and how they are pushing up to