Future Cairns: State-owned development company key to worker housing

Affordable housing for workers is the biggest handbrake on regional growth - one expert explains this radical way forward.

A CRITICAL housing shortage is the biggest impediment to growth as Cairns plans for 2050 with an anticipated population increase of 100,000 – but one expert has a bold solution.

Not only have house prices climbed by 15.2 per cent in the past year – there are just not enough houses for people to buy, and the rental vacancy rate is at a desperate low of 0.5 per cent.

Simon Kuestenmacher, of the Demographics Group, has an audacious solution to create a way out of an affordable housing crisis.

Businesses are desperately keen to recruit workers – but there is nowhere for them to live.

The Demographics Group co-founder and research director Simon Kuestenmacher proposed a state-owned housing development corporation operating without a profit incentive.

The state government has built a paltry 176 new social homes in Far North Queensland since 2017 and says 234 more will be built by 2025 – but it’s a drop in the bucket.

117 Aumuller St, Bungalow, which has a price guide of less than $450,000, has an ideal layout for a share house, with a master bedroom separated from two other bedrooms by a living space.

And Mr Kuestenmacher points out that on cheaper housing, there are lower margins for builders and tradesmen, so the bottom end of the market will be serviced last.

“The most marginalised people are low income workers,” Mr Kuestenmacher said.

“Instead of relying fully on market forces, the state could build cheaply, get land cheaply with no tax to pay, and this is how you would service the bottom end of the market,” he said.

“It is one way I see low income workers getting housing.”

He pointed to a housing program in Vienna that has attracted global interest – it provides quality affordable housing for workers with the government owning and managing 220,000 housing units – 25 per cent of the housing stock.

“Essential workers live in perfectly all right flats that are affordable, and the state sets fair rent – there are case studies, this is not an airy-fairy idea,” Mr Kuestenmacher said.

He said the alternative was a ‘titans of industry approach’.

“During the industrial revolution, factory owners built towns next to factories to ensure workers had somewhere to live,” Mr Kuestenmacher said.

This 13 bedroom share house at 46 Florence St, Parramatta Park, would be ideal for a business owner to invest in to provide housing for staff.

He cited the Continental Hotel at Sorrento in Victoria, which underwent a $100m revamp but couldn’t get workers.

“They advertised 88 jobs and got eight applications simply because Sorrento is an expensive town to live in,” he said.

“The hotel purchased a derelict aged care home and built really nice, affordable staff accommodation.

“There are endless examples where business owners have bought housing – a share house for young, temporary workers, and then the resort has staff.”

The federal government pays $5.3b a year in rent assistance – but Mr Kuestenmacher said that was not the solution.

This worker’s cottage at 308 Draper Street, Parramatta Park is walking distance to Cairns City. Picture: supplied.

“It ends up heaps cheaper than if you were to rent on the free market, but the problem is it does bugger all to add to housing supply – subsidise rent and hope it magically leads to people building rental accommodation,” he said.

Mr Kuestenmacher said Airbnbs – there are 3300 in the region – were not the problem because those properties were the wrong fit for workers.

“Every paradise town has this issue, but it’s a mismatch of stock as Airbnbs are usually upper quality, if we killed off all the Airbnbs it would ease things a bit, but it wouldn’t solve the housing crisis and wouldn’t serve the bottom end of the market, plus you’re killing off the golden goose – the family market is in Airbnb space,” Mr Kuestenmacher said.

This 13 bedroom share house at 46 Florence St, Parramatta Park, would be ideal for staff accommodation.

A report released by the government’s Infrastructure Australia earlier this year said housing was the key issue holding regional Australia’s economic development back.

It said the lack of appropriate housing in regional areas was putting a handbrake on economic activity.

“Availability, diversity and affordability of housing to meet the growing and changing demands of regional Australian communities is a major constraint in attracting and retaining skilled workers, growing regional productivity and maintaining liveability,” the report stated.

“Sea and tree-changers and higher domestic tourism visitation has also exacerbated housing and accommodation availability and affordability issues for many regions.”

Originally published as Future Cairns: State-owned development company key to worker housing