Social housing vital to the future economy

In this time of 2020 change, Exxon Mobil (Esso) will at the end of August leave the Dow Jones industrial average, which is the classic blue-chip stock index that measures investment and company performance of the top 30 companies in the US. Exxon joined the Dow Jones Industrial Average in 1928, as Standard Oil, one of companies descended from John D. Rockefeller’s world-transforming oil monopoly.

It is ironic that the COVID-19 crisis has driven the need for technological solutions and so Exxon Mobil has been replaced in the top 30 Dow Jones Index with Salesforce, (client relationship and management solutions), which has seen massive demand in this past year. Whilst the collapse in the oil price has been pivotal to the value of the old Exxon company, the demand for environmental, social and governance (ESG) investment and the ability to show shareholders adherence to these values is also heavily impacting the financial result for this company.

The task of creating jobs and wider movement to meeting ESG challenges are challenges particularly for the next two Federal Budgets. The question of how the CHP sector can lend a hand was asked, to which the example of the CoreLogic PowerHousing Australia Standard House feature construction of 30,000 homes was obvious. With resources, retail, forest products and other industries in attendance, our sector was unique in that it creates multipliers for all others.

30,000 CHP affordable homes being constructed results in:

  • 30,000 x 43 trades and subtrades gaining work = 1.29 million engagements of quotes, engagement and periods of work from a day through to three months;
  • millions of kids, seeing their parents and siblings head off each day to build the communities of the future;
  • every suburb and postcode in Australia having visible signs of tradies at work building confidence that – despite macro economic and emotional lows – we are moving forward;
  • the parent coming home at the end of the day with the groceries, take away or treats for the kids if they are lucky, with a day of productive output and growing sense of well being; and
  • The jobs and economic benefits that flow further into manufacturing and retailer across every community right across the country with the social and economic outcomes multiplied many times over.

The everlasting impact of creating additional affordable housing for the growing demand to come in FY2021 is evident and last week we made these submissions to Federal Budget consultations driving the point about the our Sector’s ability to lend a hand and the emergence of appetite for stable ESG investment.

There is an awakening of the potential for Build to Rent, ESG Investment and an affordable housing asset class. The institutional investment into the social and affordable housing is a shock absorber that can lend a hand to counteract the biggest downturn in Australian housing delivery and to tackle the mounting challenges in housing affordability facing the country.

But new homes take time to approve, so the foundations of economic recovery won’t be laid if State and Federal Governments don’t act. The October and May Federal Budgets will be the platforms for these announcements and it will be at these critical junctures that the challenges faced by many will need assertive action.