Australian rental housing standards: institutional shifts to reprioritize the housing–health nexus

ABSTRACT

A large proportion of Australia’s housing stock offered for private rental or socially let is of poor quality, which has implications for residents’ health and well-being. This problem has arisen from historically weak regulation of housing standards and under-investment in public housing services, both features of Australia’s neoliberal housing regime. In this paper, we reviewed the institutional contexts of two policy settings used to address problems of housing quality: the Homes Act 2018 (UK) and the Healthy Homes Guarantee Act 2017 (Aotearoa–New Zealand). From these two case studies, five institutional shifts required to reprioritize the housing–health nexus in Australia were synthesized: (1) policy objectives should explicitly link housing conditions and health outcomes; (2) community awareness and sector advocacy should be harnessed to overcome complex structures of government; (3) policy approaches should foster collective social responsibility; (4) mandatory requirements should be made transparent and objective; and (5) robust protocols for tracking progress should be developed and applied.

KEYWORDS:

• housing standards
• private rental
• social housing
• social determinants of health
• housing policy
• institutional perspective

1. INTRODUCTION

The COVID-19 pandemic has shone a light on entrenched problems within Australia’s housing system, across, for instance, the affordability of rent or mortgage payments, the adequacy of housing to meet diverse needs of the household, and security of tenure – particularly within the private rental market (Rogers & Power, 2021). Research before the pandemic found that over 1 million Australian households were experiencing housing affordability stress in 2017–18 (Health & Welfare, 2021), with a further 1 million households living in substandard housing (Baker et al., 2016). The confluence of current cost of living pressures, rising interest rates and record low vacancy rates within the private rental sector has drastically increased these pre-COVID-19 figures (Bower et al., 2021).

Australia has not always been a nation characterized by unaffordable and poor-quality housing. Immediately after the Second World War, national and state governments invested heavily in the construction of housing for working families (Groenhart & Burke, 2014). In the intervening decades, public investment in housing has substantially diminished (Hayward, 1996; Yates, 2013). Government-provided housing assistance in Australia is now dominated by Commonwealth Rent Assistance (CRA) (Ong ViforJ et al., 2022) with the social housing sector increasingly residualized to house only those with ‘high and complex’ needs (Freund et al., 2022). Housing in Australia, as in many other neoliberal economies (O’Callaghan & McGuirk, 2020), has become, first, a financial asset and, second, a home. The hyper-financialization of housing has led to perverse outcomes, including a housing stock that is increasingly unfit for purpose and in substandard condition (Baker et al., 2019a).

Substandard housing has strong associations with population health and well-being (Ige et al., 2019). For instance, housing that is too cold in winter has effects on cardiovascular disease (Singh et al., 2022), respiratory disease (Webb et al., 2013) and mental health (Liddell & Guiney, 2015). Housing that is damp and mouldy has been shown to have wide-reaching effects, particularly on acute asthma in children (Keall et al., 2012). Likewise, housing that is insecure or unaffordable has long-term effects on residents’ mental health (Baker et al., 2019b; Daniel et al., 2018; Singh et al., 2019). Internationally, some countries have acknowledged and responded to the health burden of substandard housing by prioritizing health-supporting or ‘decent’ housing (Grealy, 2021). For example, the UK requires all rented houses to be fit for human habitation under the Homes (Fitness for Human Habitation) Act 2018. Aotearoa–New Zealand has a similarly enshrined minimum standard for housing through the Healthy Homes Guarantee Act 2017. The Act requires all houses offered for rent to meet the Healthy Homes Standard and be issued with a Warranty of Fitness by 2024. Evidence demonstrates that such standards have led to reduced substandard housing with subsequent significant uplifts in the health of residents (Saegert et al., 2003). Australia, however, has no such comparable or effective legislation.

All new houses and homes undergoing significant renovation in Australia must demonstrate compliance with various requirements under Volume Two of the National Construction Code. The code governs aspects such as structural quality, ventilation, energy efficiency, plumbing, and fire and electrical safety. New homes, however, only make up about 1% of the overall housing stock each year (Horne, 2017), and there is no comparable national instrument that ensures the quality and condition of homes being bought or leased within the ‘second-hand’ market (Lang et al., 2022). In some Australian states and territories, properties offered for private rental have a requirement of minimum standards. For example, Victoria has (recently heightened) Minimum Standards under the Residential Tenancies Act 1997, while South Australia has a Substandard Property Register that applies rent controls to properties not meeting requirements under the Housing Improvement Act 2016. Historically, these instruments have had limited effectiveness, primarily due to the vast power imbalance between tenants and landlords, the onus on tenants to alert and request maintenance or remediation, and the exceptionally competitive rental market that disempowers tenants to self-advocate (Morris et al., 2021).

With renewed awareness of the central role that housing plays within our lives following the COVID-19 pandemic (Rogers & Power, 2021), and the emerging prioritization of housing policy at both national and state and territory levels (e.g., recent residential tenancies reforms by the Victorian Government and current review of the Residential Tenancy Act in South Australia), there is an opportunity to inform and advocate for comprehensive and effective policies aimed at ensuring all Australians have a decent and health-supporting home.

In this paper, we examine two international policy settings aimed at raising housing standards – the Homes Act 2018 (UK) and the Healthy Homes Act 2017 (Aotearoa–New Zealand) – to draw lessons for the remediation and regulation of houses within the Australian public and private rental sectors. In synthesizing key features of housing intervention policy from these international case studies, this paper identifies institutional shifts required to effectively reprioritize the housing–house nexus post the COVID-19 pandemic.

2. AUSTRALIA IN THE INTERNATIONAL CONTEXT

While Australia is not alone in challenges of housing quality and remediation (e.g., Pevalin et al., 2008), the absence of any sustained national focus on addressing problems of housing quality (Pawson et al., 2020) indicates that it is not yet at pace with many international counterparts. In recent decades, changes in the quality of Australia’s housing stock have taken place within the context of neoliberal housing policies (Beer et al., 2007), and the further commodification and financialization of housing (Beer et al., 2011; Clapham, 2018). For instance, authors have discussed, at some length, the increasing priority attached to housing as an investment and source of wealth, and the follow-on effects to condition, quality and access of this prioritization (Arundel & Ronald, 2020; Dewilde & De Decker, 2016). It is possible to track changes to Australia’s housing regime across government policy settings since late last century.

Australia’s present housing landscape can be characterized as a neoliberal policy regime, with institutional government frameworks that support a commitment to self-responsibilizing through market processes (Beer & Lester, 2015), and housing outcomes that typify Australia’s housing system as embedded in a ‘late’ capitalist governmentality. Clapham (2018) identified three key determinants of a housing regime: (1) welfare ideologies – the attitudes and approaches adopted by nations to the support of the vulnerable; (2) institutional structures – the impact of the tools and mechanisms governments use to achieve their housing goals; and (3) housing outcomes – the ‘wellbeing of the dwellers’ (Clapham, 2018). The application of an institutional lens to questions of housing regimes (Stephens, 2020), and the consequences for housing quality, is useful because it highlights the shift to neoliberal philosophies of government in Australia evident from the early 1980s (Pusey, 1981), which has resulted in the stripping away of many of the structures that supported better housing (Burke & Hulse, 2010).

The quality of newly built housing in Australia has been affected by changing institutional structures, especially the ongoing reform of building and planning standards (Gurran & Phibbs, 2013; Moore et al., 2019). While a national standard for new construction has been sustained over the past 40 years – the Building Code of Australia – many aspects have become increasingly permissive over time, as industry has urged governments to adopt a more relaxed approach to deliver efficiencies and lower housing costs. Both building and land-use planning codes have been amended to allow smaller dwellings, new building techniques and materials, and new construction methods (Ruming et al., 2014). Importantly, many stages in the construction process that were previously subject to inspection by government agencies are now managed through private certification and other within-industry quality control measures (van der Heijden, 2010). Change in the institutions of building regulation has contributed to much-discussed instances of high-rise towers being abandoned soon after first occupation (Oswald et al., 2021), as well as a greater sense of impermanence within new low-density dwellings (Ilozor et al., 2004).

Within Australia’s existing housing stock, the marginalization of social housing, which arose as a consequence of the findings of the 1991 National Housing Strategy (Edwards & Wooding, 1991) and its focus on private rental housing support is widely held to have resulted in under-investment in government-owned housing and inadequate maintenance of a rapidly ageing stock (Yates, 2013). Concurrently, income tax arrangements that encouraged the rapid growth in private rental housing (Badcock & Browett, 1991; Berry, 2003) contributed to both house price inflation and shortfalls in repairs and maintenance as landlords sought short-term capital gains (Berry, 2000). Taking an institutional perspective on Australian’s housing regime, and in particular, the public and private rental sectors, highlights failures of regulation and oversight throughout the housing system, from production and provision, to purchasing and letting, and in maintenance and upkeep during occupation.

In the following two sections, we overview the institutional contexts in which the Homes Act 2018 and the Healthy Homes Guarantee Act 2017 were developed and enacted. The case studies are used to shed light on the range of policy responses potentially available to decision-makers in Australia, while also drawing attention to the influence of path dependence and the need for deliberate interventions with the capacity to initiate new pathways to achieve fit-for-purpose housing across Australia. We acknowledge that the ‘healthy housing’ policy settings in both the UK and Aotearoa–New Zealand are imperfect and, in some instances, face considerable criticisms (e.g., Bevan, 2019; Murphy, 2020; Walsh, 2021), however they provide useful comparison as they represent two neoliberal regimes with similar housing systems and broader social welfare settings where responses to unhealthy housing conditions are further progressed.

2.1. The Homes Act 2018, UK

For over 50 years the English Housing Survey (EHS) has documented housing conditions. In 2015, 12% of houses were estimated to have one or more of the 29 Housing Health and Safety Rating System (HHSRS) hazards (DCLG, 2017). Using other panel data, Pevalin et al. (2008) reported that more than 50% of the population surveyed by the British Household Panel Survey (BHPS) had housing problems, and found associations with worsening health measures, particularly among women. Similarly, Imrie (2004) drew attention to shortfalls in appropriately designed dwellings for persons with a disability revealed by the English and Scottish Housing Surveys. Though varied, the measures and data sources demonstrate considerable problems with housing quality across the UK. For instance, in 2011, the Building Research Establishment Trust (BRE) estimated the cost to the National Health System of leaving poor quality housing unaddressed was upward of £600 million per year (Nicol et al., 2011).

The primary method for improving housing quality among the existing stock is the Homes (Fitness for Human Habitation) Act 2018. The Homes Act resulted from two decades of policy development in the UK. The Decent Homes Standard and Initiative followed the return of Labour Government in 1997, when the Chief Medical Officer of Health, Sir Donald Acheson, conducted an inquiry into health inequalities across England. The inquiry adopted a ‘joined up’ socio-economic model of policy design – placing housing as one of six key living and working conditions. Following the UK Fuel Poverty Strategy (2001 and 2004), the Decent Homes Standard was developed. The standard was further defined through the Housing Health and Safety Rating System (HHSRS), which was signalled in part 1 of the 2004 Housing Act that became effective in 2006. The HHSRS took a risk assessment and hazard reduction approach, focusing on the potential effect on health, rather than on the physical characteristics of a dwelling per se. The focus of the Act was primarily on social housing; however, private leasehold properties occupied by vulnerable people could also be subject to the Decent Homes Standard. In 2014, the UK Government introduced the Care Act, which placed a duty on local authorities to integrate services including housing to improve health and well-being, particularly for vulnerable groups. The current Homes Act 2018 came into force in March 2019 and applies to both private and socially rented housing to ensure that properties are fit for human habitation at the beginning of the tenancy and throughout.

While a number of criticisms (Bevan, 2019; Walsh, 2021) as well as opportunities for enhancement (e.g., in response to the UK’s Department for Levelling, Housing and Communities’ 2022 consultation; Marshall et al., n.d.), of the Homes Act 2018 have been identified, useful lessons can be drawn from the UK experience:

• Explicit links to health within housing policy settings have been made.

• Landlords are responsible for providing a home fit for human habitation at the commencement and throughout a tenancy.

• Clear guidance on the definition of housing deficiencies and associated hazard level is provided.

• Robust data on housing conditions are collected and used to monitor housing quality and trends over time.

2.2. Healthy Homes Guarantee Act 2017, Aotearoa–New Zealand

Aotearoa–New Zealand boasts a strong history of research on construction quality and housing conditions, which has documented problems within the housing stock, as well as trialled intervention strategies. For example, recent work by the Building Research Association of New Zealand (BRANZ) suggests that approximately 14% of owner-occupied houses and 32% of rented properties were poorly maintained (BRANZ, 2017). The NZ Census and General Social Survey also revealed a range of housing problems, including mould, damp, indoor cold and overcrowding across the stock. Notably, the prevalence of such housing quality problems was greater in housing occupied by Māori and Pacific Peoples (StatsNZ, 2020). There is robust evidence on the effects of poor housing quality on health conditions in Aotearoa–New Zealand including, for example, acute rheumatic fever (Oliver et al., 2017), wheezing in children (Shorter et al., 2018) and acute respiratory infection (Ingham et al., 2019).

Healthy housing conditions work has been prioritized by the New Zealand Government over the past two decades (Royal Society Te Apārangi, 2021). This work, alongside a series of effective house retrofit programmes (e.g., Howden-Chapman et al., 2007), informed the Healthy Homes Guarantee Act 2017, which came into effect in 2019. The Act requires all rental properties meet the Healthy Homes Standard and be issued with a Warranty of Fitness by 2024.

The Healthy Homes Standard is still in its early stages of rollout with little evidence on its effectiveness as a policy instrument. The Healthy Homes Standard only applies to rental properties and a study conducted before the passing of the Act found some reluctance among homeowners to voluntarily improving aspects of their homes following a Warranty of Fitness assessment (Chisholm et al., 2019). Overall, the Aotearoa–New Zealand experience supports:

• A very strong link between research and policy development.

• A narrative of shared responsibility and national priority conveyed through the policy documentation surrounding the Act, for example, in reference to protecting the health of children, the elderly and other vulnerable members of the community.

• The health benefits of prioritizing physical building inspection.

3. DISCUSSION

While acknowledging the limitations of each of the policy settings above, the lessons gleaned from these two international contexts may be usefully considered in the future development of legislation to improve housing conditions in Australia. In reflecting on these lessons, we identify the following institutional shifts required to effectively reprioritize the housing–health nexus in Australia:

• Policy objectives on housing conditions need to be formulated, articulated, and linked to the protection and improvement of human health. A number of positive changes might be assumed from this action, for example, a ‘balancing out’ of Australia’s housing regime to reprioritize housing services as a state-provided safety net. Importantly too, elevating housing standards and delivering healthier housing is a critical way to raise the living standards and quality of life of First Nations communities.

• Community awareness and political will are more important than (potentially limiting) structures of government, making positive action possible under all governmental settings, including federation and unitary systems of government.

• There is an acknowledgement of collective social responsibility. Both the Aotearoa–New Zealand and UK examples demonstrate aspects of collective responsibility, for example, around social responsibility to more vulnerable members within the community (e.g., young people, older people, persons experiencing a disability, First Nations Peoples), and the responsibility of housing providers, whether public or private, to provide good condition housing. Housing, framed in such terms, implicates rented housing, both public and private, as an initial low-hanging-fruit intervention point within the housing system. The investment and other actions of social and private landlords have the capacity significantly raise housing standards for the most vulnerable.

• Mandatory requirements are transparent and objective and based on robust evidence. Transparency is needed around the timeframe of policy implementation so that housing providers and owners can plan for remediation work. Transparency and objectivity are also needed around the setting of mandatory requirements, for example, the UK’s HHSRS provides very clear characterization of housing hazards. Mandatory requirements should be founded on robust evidence, for example, as featured in the Aotearoa–New Zealand case.

• There are formal protocols for tracking progress. Both of the international cases had some form of housing survey, which enables the tracking of trends over time and evaluation of the effectiveness of policy intervention.

4. CONCLUSIONS

Prioritization of the housing–health nexus constitutes an important component in efforts to redress the effects of the hyper-financialization and deregulation of housing systems commonplace in many contemporary global neoliberal economies. This paper has reflected on the policy trajectories of similar nations for healthy housing standards. Reflecting on the development and enactment the two housing standards, our assessment of these international experiences indicates a number of key policy lessons that will assist in realizing the health-supporting potential of the Australian rental sector – an explicit link in policy objectives between housing conditions and human health; generation of political will and community awareness; acknowledgement of collective social responsibility; the setting of mandatory requirements based on evidence; and the monitoring of progress. This policy review has demonstrated that delivering a healthier housing system requires shifts at an institutional level. Governments have the power to do this through the regulatory frameworks they control and, while additional public sector investment may assist this transition, in many economies an impactful transition to a better-quality housing stock will only emerge once private investors reshape their maintenance, construction and upgrading activities.

ACKNOWLEDGEMENTS

Our thanks to Dr Cathryn Hamilton for her assistance in reviewing and summarizing the relevant Australian legislation and selected international policy.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the Australian Research Council [grant number DP190101188; LE220100040].