Given the costs involved in complying with these regulations , landowners tend to hold out until the shortage becomes so acute that prices inflate to a point where subdivision is financially viable . This only serves to accentuate a lack of housing affordability . These dynamics are confirmed in the Rural Housing Victoria Blueprint report , which found :
• Rural areas are characterised by smaller developers who have no incentive to innovate .
• Land withholding is a widespread issue , with owners inclined to drip feed local markets to keep profit margins up .
• Relatively few locations in rural areas can support small scale multi-unit development .
The housing situation in regional , rural and remote Australia is a classic case of ’ market failure ’ in that supply does not align with demand . New housing often caters for only one sub-market – the fully employed household with an aboveaverage income . Sub-markets that are not adequately catered for include :
• Households with a below-average income .
• Downsizers including those looking for a ‘ sea-change ’ / ‘ tree-change ’ or existing residents wanting to age in place .
• Single person households .
• Renters .
• Transitory and seasonal workers .
While housing in regional areas is generally more affordable relative to the capitals in terms of ‘ price to income ratios ’ ( Regional Australia Institute , December 2021 ), generally incomes in the regions are lower . Overall , 24.2 % of households in Australia ’ s capital cities earn a high income and 16.3 % are low-income households , compared with 14.5 % and 21.4 % respectively for regional Australia ( source : profile . id . com . au / Australia ). This affects the ability to buy and to rent . Nationally , rental vacancy rates are at all-time lows , below 3 %.
TOWARDS A SOLUTION While there are many reports on the regional housing situation ( e . g . Regional Australia Institute , December 2021 and Rural Councils Victoria , December 2021 ), the solutions offered on the diversity of housing supply issue invariably gravitate towards encouraging medium density units and apartments . This of course is necessary but not sufficient , in that the cost of producing such housing in the regions is the same if not more than in the capital cities .
One example of an attempt to provide more affordable housing cited by the Regional Australia Institute is the Osprey Village in Port Hedland in Western Australia , which provides 293 affordable rental homes and community facilities for key workers through a partnership between the WA Government and a construction company . However , a government enquiry ( Government of Western Australia , 2018 , Osprey Village Report ) found “ The rushed nature of this project resulted in a number of key decisions being made prior to the setting of any formal governance structure . All up , the project cost the Government $ 95 million more than expected ”. It was noted that no proper business case had been prepared . This highlights the potential risks involved in embarking upon ‘ innovative ’ solutions without proper planning .
It is well documented ( AHURI , May 2022 and Rural Councils Victoria , December 2021 ) that housing shortages are a major factor in the inability of our regions to attract the workers that are needed to run and expand the economy . These workers are required across all sectors at all skill levels – to bring in the harvest as well as to provide professional services to the population .
A pointer towards a viable solution lies in the Regional Australia Institute report ( December 2021 ) where it advocates “ an additional policy consideration is the role of state and local regulations and zoning to make temporary and relocatable housing more readily available to quickly respond to sudden increases / shocks ”. In considering this approach , the first step is to accept the reality that rural housing standards are a legacy of the past , and the prevailing housing standards in many towns are ‘ basic ’ at best . Many houses are quite small and are constructed of timber or asbestos cement sheet . It is common for services to be commensurately basic with :
• Gravel or single lane bitumen roads with no kerbs and channels or footpaths .
• Swale drains .
• Overhead power supply .
• Septic tanks in lieu of piped sewer .
Housing in these situations remains eminently habitable and provides adequate levels of comfort , health and safety . There is no good reason to deny households access to housing of this type if that ’ s all they can afford . Of course , it can be argued that some rural housing is ‘ sub-standard ’ in terms of energy efficiency and related matters , and this should not be replicated .
The solution lies in developing housing outcomes that align with the diversity in housing needs . These needs range from affordable ‘ backpacker ’ accommodation , through ‘ holiday park ’ style dwellings to ‘ modular ’ family homes . There are servicing solutions that offer significant savings when compared to what might arguably be termed ‘ gold plated ’ subdivisions .
It is clear that the traditional modes of housing supply are not working to address regional housing shortfalls . Dwellings on individual titles , whether they are separate houses , medium density units or apartments , are over specified in terms of building standards and infrastructure . Addressing the lack of affordability and diversity must consider alternative models and pointers to these may be found in examples of alternative development forms .
There are in fact several alternative housing models that provide affordable housing to suit particular circumstances . These include retirement villages , resorts , caravan / holiday parks , contractor ’ s camps and residential parks . The common theme in these models is that they are based on common property with various tenure arrangements for residents . All are subject to state government legislation and guidelines to protect resident interests .
Of these options , the residential park model applies to a broader client group and appears to offer a viable solution to the problem at hand .
ECONOMIC DEVELOPMENT JOURNAL VOL 15 NO 2 2022 29