Homeless run up $100 million hotel bill

The NSW government has spent $100 million on hotel rooms for homeless people since 2000, as public housing declines and shelters turn away those in need.
Nanjing Night Net

A Sun-Herald investigation has obtained documents under freedom-of-information laws that show the program’s rapidly multiplying budget reached $27 million last financial year, up from $3 million in 2000.

A professor of housing policy at the University of NSW, Hal Pawson, said the amount of money spent on hotels in the past decade was enough to build 400 homes under public housing.

The After Hours Temporary Accommodation Line, run by Housing NSW, refers people who cannot find other accommodation to hotel and motel rooms at a cost of about $100 a night. But they cannot stay for more than a month in any given year, and must look for permanent accommodation during their stay.

Professor Pawson said such an emergency response ”doesn’t buy you anything except a bit of breathing space”, while building new affordable housing was an investment.

”Ideally, you should invest a lot more in public housing instead of frittering it away on bed and breakfasts,” he said.

The government could not simply have invested the money spent on hotels in public housing because the need for emergency accommodation was so great, he said.

But he said more investment in housing ”could intercept the homelessness they are trying to mop up with these hotel rooms”.

The fastest growing group seeking emergency hotel rooms were families and single-parents, whose demand for such accommodation was growing at 37 per cent a year, according to a 2011 review of the program conducted by ARTD consultants, commissioned by the government department Housing NSW.

The review projected spending on the program would reach $30 million in the 2011-12 financial year, up from the $27 million the previous year. But the NSW government says it has cracked down on the program and its budget will now not exceed $20 million for 2011-12.

“The former Labor government did nothing to address the ballooning cost,” said the Minister for Family and Community Services, Pru Goward. ”Housing NSW strengthened its procedures and practices … to ensure the system became more efficient.”

A spokesman for Housing NSW said savings were made by check- ing more rigorously that people were looking for their own housing and linking them with real estate agents who had cheap properties on their books.

The program’s budget has ballooned as affordable and public housing have become scarcer.

Professor Pawson said the program’s rising budget was not due to its management.

”This blowout [is] because of housing supply and affordability,” he said.

Professor Pawson also noted that the price hoteliers were charging the government for use of its rooms was rising about 9 per cent a year, well above the rate of inflation. ”Prices are being pushed higher by demand,” he said.

The government would need about 500 dwellings to provide its own temporary shelter for about 14,200 Housing NSW ”clients” who moved through hotel rooms each year, the review found.

However, between 2000-01 and 2009-10, the number of public housing dwellings in NSW fell about 10 per cent, or more than 12,000 properties, as a debt-laden public system has been forced to shed properties with high maintenance costs.

The number of new public housing tenancies has fallen even more drastically, and was down 43 per cent over the past seven years, as the public system becomes increasingly occupied by people with higher needs and longer tenures.

A professor at RMIT, Chris Chamberlain, who until recently ran the Australian Bureau of Statistics’s homeless census, said demand for hotel rooms reflected the growing tightness of the rental market.

“In 2006, the population was 18.5 million. It’s now 22.5 million,” he said. ”We’ve been taking large numbers of new settlers in our capital cities; as a consequence the housing market is really tight.”

Ms Goward did not answer questions about whether the growing demand for the program was a symptom of a housing crisis.

The head of Homelessness NSW, Gary Moore, said emergency hotel room accommodation was necessary as long as the state’s homeless shelters were full.

But the program was not a good use of resources and should to be reviewed, he said.

“We don’t support spending money on motels and hotels to put people in accommodation time and time again,” he said.

”It’s not a very good use of the money. [The government] has changed its policy a little in six months, it’s certainly tightening its application, but it’s not got to the point of asking how better to use $30 million.”

This story Administrator ready to work first appeared on Nanjing Night Net.

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