CONVERT TO RENT
The Greens Convert to Rent Initiative will increase the amount of affordable rental housing, and revitalise local neighbourhoods and economies.
Our initiative provides financial assistance to property owners to help convert vacant or unused space into rental units to provide affordable housing to low income households.
The program was successfully introduced in the City of London, Canada in 2008 and could be readily and cost-effectively implemented in Australia.
In 2011 there were 66,231 unoccupied homes in the Perth metropolitan area alone, equal to almost 10% of the total housing stock. (This is equivalent to almost 40% of the total households renting in Perth).1 There are thousands more vacant commercial buildings across our cities and towns.
This initiative turns them into affordable housing opportunities, benefiting renters and owners.
Convert to Rent will:
• Provide a $21,000 grant to property owners to convert their unused buildings in to long term affordable rental properties
• Provide additional funding of $5000 for buildings modified for people with a disability
• Provide 1.5% of overall funding to the community housing sector to manage the scheme
• Require the State Government to conduct a state-wide audit of vacant residential and commercial properties to determine how much space is going to waste – as a first step
• Examine tax reform and other incentives that currently offer perverse incentives to keep buildings empty.
The Greens have allocated $345 million nationally to fund 15,000 conversions.
This translates to $34.5 million for Western Australia, for 1500 new affordable rental homes.
WA’s rental crisis
WA’s private rental market is extremely unaffordable, and rents have almost tripled since 2000 in Perth. Just in the last year alone rents increased by 12.5% to $450 per week in Perth, and affordability has declined in regional areas. There is a severe shortage of supply and choice, and the long waiting lists for social housing in WA have also increased the pressure on the private rental market. There are about 23,000 applicants on the WA’s waiting lists, or almost 50,000 people. One quarter of all renters in Perth are in rental stress (paying more than 30% of their income on rent) and a household on the minimum wage currently pays about 72% of its income on a media priced rental compared to 35% a decade ago2.
Making use of empty buildings in our towns and city
There is a glut of empty buildings across our city, suburbs and towns. The City of Perth recently did an audit and found 17,000sqm of vacant space in the CBD. Almost 90% of the space above the ground floors in the Hay Street Mall is empty. In 2005 a study in the City of Fremantle found almost 10% of buildings in the city centre were empty or underutilised and had potential for residential conversion. There is currently no formal method for collecting data on empty buildings in Western Australia. This needs to change. When empty commercial buildings such as the thousands of empty offices, warehouses, shops and shop tops, halls and even churches are counted, the vacancy rates are much higher (and usually double) than ‘official’ property industry rates.
The UK Example
An estimated 14 per cent of British high street shops are currently empty or boarded up after the credit crisis ripped through the retail sector. Online retail has also changed the way people shop, signalling the need to change the way we think about the retail mix in traditional high streets. The British Planning Minister has put forward a proposal for traditional high streets by saying empty or boarded-up shops should be turned into housing, and has released a consultation paper that suggests councils throughout England should concentrate their efforts to revitalise shopping to just one or two ''prime streets''. The rest can be converted. The Minister will also allow farmers to convert agricultural buildings such as stables into housing .
The Canadian example
The Government of Canada introduced a national program in 2006 to rehabilitate and convert empty properties to affordable rentals, and it’s been successfully adopted in many provinces and cities across Canada. In 2008 for example the City of London in Canada implemented a Convert to Rent program which in the first two years invested $1.9m to convert 112 new rentals across 13 different sites and house 170 people. The federal government made co-contributions of $7.7 million.
How the Convert to Rent Program works
Convert to Rent offers a $21,000 grant in the form of a fully forgivable loan, which does not have to be repaid provided the owner adheres to the conditions of the program. Conditions include keeping the conversion as an affordable rental for at least 20 years, and rent being set at no more than 75% of the market rent valuation or set at 25% of the tenants’ income.
The program would be open to all owners with properties that are structurally sound and could feasibly be converted to residential accommodation, including private entrepreneurs and not for profit organisations. Conversions encouraged would include a diverse mix of studios and 1-4 bedroom apartments to suit a range of families, older people and younger people. Eligible tenants would be low to moderate income earners including key workers such as teachers and nurses who cannot afford the median rent.
The program, including tenant management, would be administered by the community housing sector and 1.5% of the package has been allocated for this service. This is to ensure the program is as attractive as possible to building owners who might want to put their building to a more productive use but do not want to become (or be suitable as) landlords.
1 ABS Figures cited in ‘Building the housing system we need’ (2013) Community Housing Coalition WA
2 Community Housing Coalition of WA (2013) ‘Building the housing system we need’.
3 The Age, ‘Amid retail decline, the high street may be reborn as housing’. 7 August 2013.
Authorised by Jess McColl & Trish Cowcher, the Greens (WA), Ground Floor 445 Hay St Perth