Housing affordability fell between 2006 and 2010: COAG

Another day, another report on our growing housing supply crisis.

Today the COAG Reform Council, headed by Paul McClintock, released its third annual report on performance against COAG's 2009 National Affordable Housing Agreement, covering 2010-11.

The report's conclusions are disheartening. It finds that rental affordability got worse between 2007 and 2010: more than 40% of low-income households are now in "rental stress" (defined as rent higher than 30% of gross household income), up from 37% in 2007. Some 60% of people in the lowest 10% of incomes face rental stress, up from just under 50%. And the problem is worst in NSW, which has been identified in other reports by the National Housing Supply Council and from the census as the worst state for housing supply.

The Reform Council's report also concluded that housing had become less affordable through the period, though primarily as a consequence of interest rate rises. The problem was particularly acute in capital cities, and Queensland was the worst state for affordable housing for low-income earners. But the overall level of mortgage stress for low income households remained the same over the period.

The report also concluded that the gap between the level of housing supply and demand had more than doubled to nearly 187,000 since 2008. The numbers are a little more conservative than the most recent National Housing Supply Council update, which revised its estimates of the dwelling gap to 200,000 in 2010. Both reports agree, however, the NSW was the worst state, with a dwelling gap of about 73,000-74,000, but Queensland was getting worse.

The COAG report is separate from the process initiated in April 2010 -- Kevin Rudd's last COAG meeting -- where COAG agreed "a housing supply and affordability reform agenda" with a tight timeframe for a comprehensive series of reports and reviews examining housing supply and government policies that acted as impediments to the delivery of more housing stock. All of the activity associated with the agenda was scheduled to be completed by the end of 2010, except for one project that was given until mid-2011.

Since then the agenda has disappeared without trace, as if it was all a figment of Rudd's imagination. According to the National Housing Supply Council, from the time COAG announced the agenda to the end of 2011, the dwelling gap blew out by another 28,000 to 228,000.

The COAG report noted that it was having difficulty reporting on the relevant partnerships between state and Commonwealth governments that contribute to the housing agreement, because it "cannot link the activity reported to the outcomes and objectives in the National Agreement. Reports on national partnerships generally provide information on activity without evidence of the effect the activity has on outcomes ... We cannot clearly mark progress against commitments or analyse them comparatively."

That is, the states are good at saying what they're doing but not so good at saying whether they're meeting outcomes or making progress in a way that enables the council to compare across states.

We're thus left with only a limited number of indicators, and chiefly that ever-growing dwelling gap, to illustrate government failure.

As the history of the COAG housing agenda shows, this was briefly a priority for federal Labor, but the Gillard government appears to have lost interest in it. Low-income earners across Australia will continue to suffer the consequences.

This article originally appeared on Crikey.