Norma Wannell never imagined she would be homeless.
It was more than a decade ago when Ms Wannell, now 71, had been working in a hospital in community welfare but, after an accident, was forced to go onto the disability pension.
She had been renting a home in Sydney for almost 16 years but had to move out when the landlord decided to sell the property.
Without a job or any savings, and very little saved in superannuation, she was forced to live out of her car for months.
"[It was] so depressing and degrading," she says.
"I had visions of working up into my 70s, and then … I had nothing," Ms Wannell says.
"It was just so disheartening. I thought, 'I can't possibly go down any further.'"
With some help from welfare groups, Ms Wannell temporarily lived in run-down motels and out of an old aquarium that had been loosely repurposed into housing — a site she refers to as "the fishbowl" — and it wasn’t until years later that she found suitable social housing.
On Friday, Prime Minister Anthony Albanese flagged a plan to solve Australia's affordability crisis would be developed within the next six months and considered by national cabinet later this year.
He said state and territory housing ministers would come up with a plan to strengthen renters' rights. The Greens are hoping for a two-year freeze on rents in every jurisdiction, but the government is yet to move to coordinate the states to commit to it.
The focus on housing affordability, politically, comes amid a new report from PowerHousing Australia, based on CoreLogic data, suggesting national median rents climbed from $440 per week in January 2020 to $577 per week in April 2023.
And, with the Reserve Bank of Australia lifting its benchmark interest rate from 0.1 per cent in May last year to 3.6 per cent over 10 consecutive moves — and some economists predicting another 0.25 per cent rise will be delivered on Tuesday — more Australians could fall into housing stress.
The federal budget, due to be handed down next week, aims to alleviate some pressure.
Its signature items include greater tax concessions for property developers, which the government says will encourage them to build more affordable housing.
This, again, is at odds with the Greens, who want direct investments in community housing rather than incentives for developers.
The Greens also want the phasing out of tax breaks, such as negative gearing and the capital gains tax concession, for property investors who have more than one rental property.
Parliamentary Budget Office (PBO) costings show that ending interest deductibility, a key component of negative gearing, and the capital gains tax concession and would raise $74 billion, while the Greens' proposal to double rent assistance and provide more affordable housing would cost more than $69 billion.
The PBO notes that, because the proposal would "greatly reduce the return on investment for landlords", it's likely that "many would be unlikely to invest without either a significant fall in prices or a significant increase in rents".
However, without tackling lucrative tax breaks and incentives — and just focusing on increasing housing supply — can the government fix the housing crisis?
Social housing can help renters become home owners
Susan Mwito — a single mother of 13 children, with nine still living at home — hopes commitments to build more social housing can be met.
The 46-year-old came to Australia on a humanitarian refugee visa and has struggled with housing costs.
Upon her arrival, she was supported through AnglicareSA's humanitarian settlement program with short-term accommodation, before being provided with a long-term housing trust home in Adelaide's northern suburbs.
Through the support of AnglicareSA Housing — which has rebranded as Believe Housing Australia — she has been able to become a first-time home owner.
After years of renting the community housing property she had lived in for the past 12 years, she purchased it.
"My dream was to see my kids grow up in a very good country where there [are] no wars, where there is no hunger," she tells ABC News.
"I started the saving from the little money I was getting from the government. And I had to cut off some little things which were really unnecessary. I couldn't waste my money."
By penny pinching, she saved a deposit and now is paying a mortgage of almost $720 a fortnight, only slightly more than what she had previously paid in rent.
While the home was not discounted, she believes buying it off-market, via a community housing provider, meant it was cheaper, so she saved in that way.
"I wish the government can support the people who don't work to buy houses," she says.
She also wants the government to build more housing for low-income people like herself.
"Many people [are] still in need," she says.
"And more people are coming to Australia … they need to build more houses."
The National Housing Finance and Investment Corporation NHFIC was established in 2018 by the then assistant treasurer and minister for housing Michael Sukkar to "improve housing outcomes for Australians".
NHFIC predicts a faster-than-expected rise in borrowing costs will reduce the net supply of new houses to 138,100 homes annually over the three years to 2025, down from the 180,000 it predicted a year earlier.
The downturn in supply — at a time when there’s population growth — has widened the predicted housing shortfall from 62,900 to 106,300 by 2027, it says.
NHFIC also estimates that 331,000 households are in rental stress — typically spending more than 30 per cent of their household income on rent — and 46,500 households are experiencing homelessness.
The UNSW's City Futures Research Centre says there are now 640,000 Australian households in housing stress.
Its findings, based on the latest census data from 2021, defines those in housing stress as households with no home, or living in overcrowded or expensive rentals costing more than 30 per cent of income.
PowerHousing Australia manages affordable housing across Australia. Its chief executive Nicholas Proud says housing affordability now is so out of reach for many that more innovative solutions are required.
He notes some other countries have used the concept of shared equity, where governments or the private sector take on some of the equity in a home that someone purchases, to enable that person to pull together a smaller deposit and own a portion of their own home over time.
"Australians … up to this point, have thought about having 100 per cent of a home and then retiring with that home in the future," he says.
"Potentially they have 40 per cent, and the other 60 per cent [gets] taken by an investment vehicle or an investment fund. And super funds could be investing into this space.
"That's an opportunity to at least have an asset and grow something into retirement that otherwise today isn't there."
Can budget plans to address housing affordability fix the crisis?
To solve the housing affordability crisis, many economists and analysts advocate both measures to increase supply, while also tackling policies that have added to demand and caused house prices to shoot up.
The federal government held a cabinet meeting in Brisbane on Friday and unveiled some measures to be delivered in next week’s budget.
At this stage, the government's measures seem to be solely focused on increasing supply, and there is no guarantee previous budget targets for "1 million new homes over five years from 2024" or "30,000 new social and affordable rental homes" will be met.
Housing Minister Julie Collins, who will on Wednesday meet with state and territory counterparts to nut out further details on a housing strategy, says both previously announced measures and upcoming budget measures are aimed at improving the supply of rental housing. She says this includes more social and affordable rental housing.
"These commitments will help more Australians secure a safe and affordable place to call home," Ms Collins says.
One of the government's measures aimed at increasing the supply of housing is lifting the depreciation rate from 2.5 per cent to 4 per cent per year for eligible new build-to-rent projects where construction commences after May 9.
Build-to-rent housing is when a property is held in single ownership and professionally managed. The developer builds it, and instead of selling off the units individually, keeps the property to rent out.
The government will also reduce the withholding tax rate for eligible fund payments from managed investment trusts to foreign residents on income from newly constructed residential build-to-rent properties after July 1, 2024, from 30 to 15 per cent.
A report commissioned by the Property Council of Australia says levelling the withholding tax rate may create an extra 150,000 homes over the next decade.
The government also says it "will support an additional $2 billion for more social and affordable rental housing in next month's budget" by increasing The National Housing Finance and Investment Corporation's liability cap from $5.5 billion to $7.5 billion from 1 July 2023.
This additional financing, Ms Collins says, will enable NHFIC to support more social and affordable rental homes by providing lower-cost and longer-term finance to community housing providers.
"The national cabinet agreement is a significant step forward in making sure renters have certainty about their tenancy so they can create a home," Ms Collins says.
Will 30,000 social housing dwellings be delivered?
To help with longer-term solutions, a new National Housing Supply and Affordability Council (NHSAC) will also be established to advise the government.
Mirvac's former chief executive, Susan Lloyd-Hurwitz, is chair of the interim NHSAC, and has long spoken about the need for all levels of government to work together to ensure commitments to increase housing supply are met.
However, as consensus around what to do next is being built, there's still a heated debate between the federal government and the Greens which centres around the key plank of the government's housing affordability plan announced in last October's budget.
In that budget, Treasurer Jim Chalmers pledged the government planned to build 1 million new homes over the next five years from 2024 to 2029.
It's a figure that’s based on about 200,000 dwellings a year being built, but it’s unclear whether — after higher migration, fewer private dwelling approvals and more builders collapsing — that will be possible.
Then there’s the government’s commitment to build community housing, via the Housing Australia Future Fund (HAFF).
This is a $10 billion, off-balance-sheet investment. It counts on income coming from the Future Fund — up to $500 million a year — to be used to help fund 30,000 homes for the disadvantaged.
Ms Collins says returns from the Future Fund will help deliver the government's commitment of 30,000 new social and affordable rental homes in the fund's first five years.
"This includes 4,000 homes for women and children impacted by family and domestic violence, or older women at risk of homelessness," she says, adding that this is on top of the Housing Accord, which includes federal funding to deliver 10,000 affordable rental homes over five years from 2024.
However, the Coalition and the Greens oppose the measure, saying that money, dependent on Future Fund investment growth in a volatile market, cannot be guaranteed.
Last year, the fund's return was negative, adding to the government's debt, although now returns are looking like they are trending upward again.
PowerHousing Australia’s Nicholas Proud hopes there's room for negotiation between the government and the Greens.
"We see that 30,000 homes is the start of the first shot in the war on affordability," he says.
"But there's many more bullets that need to be fired to solve this crisis unfolding today."
Greens call for $5b-a-year funding, rent freeze, phasing out of property tax breaks
The Greens want direct funding for community housing out of the federal budget and a concrete plan to "stop rent increases and give renters real relief".
Greens' housing spokesman, Max Chandler-Mather, says his party wants $5 billion, indexed to inflation, to be committed by the government every year to increase the supply of social and affordable housing.
The Greens are also calling for a two-year national freeze on rent increases to ensure that more people aren't evicted.
"What the government has proposed is to get $10 billion of public money and gamble it on the stock market via the government's Future Fund, which last year lost 1.2 per cent," he says.
"So, their gamble would have lost $120 million last year, and they don't actually guarantee a single cent will be spent on housing."
He says the Greens are "willing to negotiate in good faith to produce a plan that actually starts to tackle the crisis" but refuse to "wave through a plan that, in any given year, cannot spend a cent on housing, in the same budget that they're handing $254 billion in tax cuts for politicians, billionaires and millionaires".
Mr Chandler-Mather thinks the plan to give greater incentives to developers to build more rental housing is a bad one.
"There's already massive tax concessions for property investors and property developers, so introducing new tax concessions for them [in the federal budget] is not going to tackle the problem," he says.
PBO warns phasing out negative gearing, CGT discount could cause 'economic shock'
The Greens are also calling on the government to abolish interest deductibility for people with two or more investment properties and abolish capital gains tax discounts on assets held for more than 12 months.
Treasury tax statements in 2019-2020 found three-quarters of the tax deductions claimed using negative gearing went to the top 10 per cent of earners.
While that may be the case, the PBO warns that changing the status quo could see some property owners "pushed into negative equity, making it detrimental to sell the property and, potentially, creating risks for the banking system, possibly leading to more defaults".
"A sudden decline in house prices, and higher rents, may also trigger a significant economic shock, and resulting negative fiscal consequences, partly or fully offsetting the additional revenue. For example, lower-than-anticipated capital gains and corresponding tax," the PBO says.
"If the price of the investment property has grown more than twice as fast as CPI over the period of ownership, as has likely been the case over the past few years, then the investor would have a high incentive to sell."
However, Max Chandler-Mather says "the government keeps tinkering around the edges" on housing policy and, over time, the budgetary impact will be beneficial.
"If we do not tackle the scourge of massive tax concessions for property investors — negative gearing, capital gains tax — then we are going to see another generation of people locked out of buying their first home," he says.
"I think what the government needs to realise is that they're here to represent every Australian, not just those who currently make billions of dollars off the property system."
Mr Proud says the suggestion to scale back tax breaks on negative gearing and CGT and instead channel the money into affordable housing is a good one.
"Whether the tax settings need to be providing advantage and incentivising people — at the seventh to 10th to the 25th property by [using] negative gearing — is up for questioning," he says.
Solutions to housing affordability should consider the most disadvantaged
Ms Wannell also hopes the federal government will make greater investments in community housing to help the most disadvantaged in society.
Today, Ms Wannell lives out of more amenable conditions provided by community housing provider Evolve Housing.
The villa in Sydney is discounted. Market rent is usually $420 per week but she pays $390 a fortnight, plus Commonwealth rent assistance.
"I feel quite at home, comfortable," Ms Wannell says, but adds that, with as the cost of living grows, she's struggling to pay the bills.
"The rent and all the bills are paid first, and whatever's leftover, my animals have to be fed," she says, adding that she takes screenshots of supermarket catalogues to compare the latest weekly deals and budgets in order to survive.
Her bank account was recently hacked and, while that gets sorted out, she cannot afford to pay her upcoming car registration bill.
"You are just limited because of the [welfare] funds that that you get … It's just not enough," she says.
She says politicians need to "step back and take a look at the people [who] have worked, and worked hard, all their lives" but are now struggling to find a home to rent, let alone buy.
"There are so many people I know [who] are trying to find somewhere … struggling to find property to rent," she says.
"[The federal and state governments] need to pick up their game and build lots and lots and lots more rental housing … and community housing."
She jokes that, if they don't: "We might pack our bags and move into parliament house. They've got more room than what we've got."
