Many essential workers can't afford to live near their jobs – costing the national economy $64 billion, a new study reports
The critical shortage of rental accommodation in Australia is having a detrimental impact on essential workers, who are unable to live near their places of employment. This crisis is estimated to cost the national economy a staggering $64 billion, which could have been generated if these workers had the opportunity to reside closer to their jobs, according to a recent study.
Recognizing the urgency of the situation, major superannuation funds and property developers are taking steps to address the housing shortage by constructing more affordable housing across the country, according to a report by The Australian. However, they are calling for additional concessions to jumpstart the sector and make a substantial impact.
This push to provide more affordable housing comes at a time when rental prices in key city locations are expected to rise further, exacerbating the problem, The Australian reported. Furthermore, the need for additional accommodation to accommodate an anticipated surge in immigration adds to the urgency of the situation.
The shortage of affordable rental housing primarily affects the 1.4 million essential workers living in Australia's capital cities. According to PropTrack, rental prices for inner-city apartments have been increasing at a faster pace than those for houses in the capital cities, intensifying the squeeze on essential workers.
A recent independent study conducted by financial services firm EY, commissioned by Aware Super, sheds light on the consequences of the lack of affordable housing near essential workplaces. It reveals that the failure to provide affordable housing within close proximity to where nurses, teachers, and police officers work is resulting in a potential loss of $64 billion in associated individual, employer, and community benefits, according to The Australian.
Aware Super, which has been actively working on an essential worker housing program focused on properties along the east coast, commissioned the study. The research found that by participating in the program, essential workers were able to live, on average, nine kilometres closer to their workplaces, reducing commuting time. This proximity resulted in additional benefits amounting to $45,500 for employers, communities, and tenants.
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The Aware program aims to provide essential workers with access to quality rental housing near essential and social infrastructure, offering rates that are below market value while generating favourable risk-adjusted returns, The Australian reported.
Deanne Stewart, chief executive of Aware Super, emphasised the need for an innovative approach to address the chronic housing shortage in the nation. Aware Super has already committed $1.5 billion over the next five years to facilitate the development of more than 2,000 apartments, including affordable housing for essential workers.
While recognising the efforts made by state and federal governments to address the housing issue, Stewart told The Australian that more could be done. She is calling for policy changes at all levels of government to reduce the cost of building essential and affordable housing developments and make it easier for institutional investors to participate.
Stewart suggested that allowing investors in affordable housing to receive the same Goods and Services Tax (GST) treatment as community housing providers would significantly reduce development costs. Additionally, she urged states to offer relief in terms of land tax and stamp duty, which would result in substantial savings in the development and maintenance of affordable housing. She also highlighted the importance of land releases and zoning that consider the tax applied to developments.
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