Rick and Reward

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-By John Boley

Quite early in our interview, Graeme Jones referred to the idea of the Western Australia Department of Housing taking “calculated risks.” But we quickly agreed that was not quite the right term. How about “displaying leadership?”

Graeme is an extremely busy Executive Director of this exceptionally forward-thinking piece of state apparatus. He explained: “there are sections of the community that sometimes get left out of the market – sometimes this occurs when a rapid shift in prices occurs, and sometimes a niche market is simply overlooked. I think it’s about who’s prepared to see an opportunity and see whether this is a viable commercial transaction. Sometimes the best place to explore opportunities is a government department. I would see the role of one like ours as being to actually take some risks where we think we’ve got enough evidence behind us to suggest it’s not ridiculous. We have a history of moving into a space that doesn’t exist, creating an opportunity, proving it and then if the private sector moves in, we’ll step back out of it.”

The challenges facing WA in terms of housing and accommodation are not unique, but they are certainly varied – factor in the widening disparity of incomes, the contrast between major urban and extreme rural land and rapidly shifting demographics, and you can easily reach a point where demand and supply just don’t match. In seeking to alter the balance to find a better match, the Department of Housing is showing leadership by providing the sort of housing that suits the needs of as wide a range of people as possible, where they need it. And if it’s a gamble, it certainly seems to be paying off for everyone concerned.

The department is active on a number of fronts. “We provide a state-wide service, which means we are operating in metropolitan Perth and regional towns, but we are also responding to different market forces operating within WA. One of our roles is to operate in major regional towns affected by the mining boom.”

In remote areas the department is funded by the Commonwealth to provide major refurbishments and new construction programmes for remote and indigenous town based communities. In Perth and other major regional towns it is also doing a lot of work in putting affordable housing onto the market that people on low to moderate incomes can buy, which is cost effective for them. As Graeme points out, there are those who are doing extremely well in the state, as in the rest of Australia, and others who are not so well off. Additionally, in towns affected by the mining boom, the department has begun assisting key workers into affordable accommodation – people who do a valuable job and are essential to a local work force but they don’t attract the kind of money paid to many in the resources sector.

Importantly, state funding is only a small part of the story and the department is active in a commercial field. It is a land developer; in the most recent Urban Development of Australia Awards (in the WA category) the department won in four categories. “We are a big player in land development,” says Graeme, talking in a narrow window between shuttle trips from the Perth office to remote parts of the Kimberley (2,500 km away, juts as a reminder for anyone who forgets how BIG WA is).

The department identified that significant amounts of three, four and five bedroom (or four plus study) type housing units were being constructed around the state, but little emphasis was being placed on smaller accommodation, especially for younger and smaller households. “There is very little emphasis, except for in the city, placed on one and two bedroom accommodation. So in some of our land developments, we deliberately looked at providing some group housing developments for sale of one and two bedroom stock. We were encouraging the private sector to move into that space. The product that we put on the ground was certainly more affordable because of lower land content and smaller floor areas and it sold really well – to the point where now a number of private developers are looking at that area as a real market opportunity and starting to take it on. It’s an area where we’ve had some success in influencing the private sector to realise a new market.”

This is the ‘risk’ Graeme was alluding to. Previously, households of that size really had limited opportunities in terms of product range. “Now there’s a much greater range which will be coming on the market as a result, I guess, of a little bit of risk-taking by us. But it had to be done to prove that it was viable and therefore something that the private sector should invest in.”

Note that Graeme is not criticising the industry. “No, it’s simply that there is a market that has not yet been tapped properly and we need to create entry points for potential home buyers who need an affordable product.” Developers are of necessity responsible for the bottom line and understandably need surety about the commercial viability of a new product and that’s where the department can and does play a role. As the department blazes the trail, the developers are welcome to follow, participate and partner. The convention in housing subdivisions has been to mainly achieve single residential lots, single lots for a minimum three bedroom size dwelling, but generally larger than that. What the department has done is to put different products on the ground. There is a comparison with accommodation for the over-55s, a market which has opened up in recent times and been successful. “But delving into younger households with a similar sized accommodation really hasn’t been tackled until now.”

In fact, WA ran a programme called WiseChoice some years back, constructing group housing for people of 55 years and over. “It was something that had not really been tackled by the private industry in Western Australia. We moved into that space, we created a number of complexes around Perth and in regional towns as well. It proved a very successful programme. The measure of success was that we didn’t need to play in that area any more because the private sector realised the commercial opportunities and moved into it. For us that was a measure of success because then we were able to pull back, satisfied that the needs of those over 55 were being looked after in that setting. I think that’s the role government expects the Department to play.”

The key worker programme has a particular focus on some of the regional towns. “We’ve actually bought some accommodation, for example in Broome, specifically as key worker accommodation. Broome is very much still a tourist town and some of the people who work there [in the tourist industry] could be on low to moderate incomes” – hotel cleaners or receptionists, for example, or coach drivers. “It’s all those tourist industry jobs that aren’t highly paid. With accommodation at a premium, where does someone on that sort of income live? We are moving into the key worker space to provide accommodation for people so that they are not forced out into difficult living situations because of rising costs.” The challenge in these areas is not so much the price of land but the price of construction. “That’s about transport; it’s about getting tradesmen as well, which can be a real challenge.” At present, many tradespeople are being lured into the high paid mining industry. “It’s also about where to accommodate tradesmen when you’re working in a town. The logistics are really quite challenging and they’re all things that can really influence construction costs.” It’s accepted that trades availability in the residential construction industry is a real challenge in the state, says Graeme, both because the work force is ageing and because many are lured away into resources.

Graeme’s busy schedule reflects “a particular emphasis on Indigenous training and employment in the Kimberley at the moment.” A programme called Employment Related Accommodation Facilities caters for Indigenous people in training or an apprenticeship if they need accommodation while they go through their training. “They can live at this facility and they obviously pay rent for the privilege, but they’ll have somewhere to live while they’re training and skill up. Our view is it’s about continuity and continuing down a path. Our drive is to see people first of all get skilled, and then to be released into the industry and to earn a real wage. Next, our idea would be they typically could be a social housing resident or a resident of a remote indigenous community. Our desire would be that they’ll get a job and then move into home ownership. We’ve opened facilities at Halls Creek and Fitzroy Crossing, we’ve got some more that we’ve acquired in Derby and Broome and we’re also working on two similar facilities in the Pilbara to create opportunities where Indigenous people in particular can start to get a leg-up in terms of training.

Interest from, and activity by, the building industry in [commercial] support of the department’s initiatives is encouraging, even in a cyclical industry. “We’ve always had a good response from builders. Interest might be a little less in a particular busy time but through thick or thin our relationship with the industry has been mutually beneficial.” Graeme says the initiatives are backed up by commercial moves. “Even this recent move to build smaller building product is now being picked up by the industry, which has recognised that it was an untapped market; it’s commercially sound and so they have moved into that space. We’re really delighted at the way the industry does respond.”

Talking fast, Graeme beats the drum a little. Despite the ‘significant expectations’ placed on the department in recent years in the face of the Commonwealth stimulus and the National Partnership Agreement for Remote Indigenous Housing, “in both instances we met or exceeded targets and I think that’s been good in terms of building our credentials within the wider market in WA and on the Commonwealth level as well. It’s enabled the department to have a credible voice in the community and a lot of our success is very much built on the capacity of the industry to respond.”

Despite significant floods in the Kimberley area and losing the major highway for a month in early 2011, “we still met targets for Indigenous housing construction and in the first year of the Program in 09-10 we got paid a $4M bonus as one of the two jurisdictions across Australia to meet their targets, both in numbers and by the target date. All that helps us, but it’s all due to the support that we have received from the industry. It really is a partnership arrangement, we don’t do anything on our own – we do it with the industry.”

Home Automation

Call it ‘domotics,’ and you are likely to receive a blank stare, but refer to it as ‘smart home’ or ‘home automation,’ and you will get a nod of acknowledgement. For the past few years, consumers have heard the word ‘smart’ attached to countless products and services, from food and drink to snacks like popcorn and mobile phones, which no one seems to refer to as a ‘cellphone’ anymore. Yet what, exactly, constitutes ‘smart’?

June 2, 2020, 3:32 PM AEST