THE BATTLE FOR REGULATORY SPACE

Conflicting Drivers of Australian Community Housing Regulation

Dr Tony GilmourAustralasian Housing Researchers’ Conference

Auckland: 17-19 November 2010

Presentation Overview

• Regulation background: theory and recent changes in Australia

• Research project and preliminary findings

• Conclusion: conflicting drivers of regulatory change

Regulation Background

Why Regulate Community Housing?

• Rapid growth of not-for-profit community housing providers

• Regulation driven by sometimes conflicting economic and social motives (Cave, 2007; Gilmour & Pawson, 2010):

• Economic:

Protection of public investment

Need to attract and protect private finance

• Social:

Consumer protection, due to tenants’ limited bargaining power with shortage of affordable housing. Seen as captive service users

Affordable housing as a ‘public good’

• Diverging trends between England and Australia

Recent Developments

• Shift from contract based regulation to appointment of state and territory Registrars from mid 2000s

• Lack of uniformity between jurisdictions

Jurisdiction Overview Tiers

Orgs

Independence from government

New South Wales

Registrar appointed 2008 to cover a wide range of service providers

4 380 Registrar reports to Minister, not the bureaucracy. Funding separate

Victoria Registrar appointed 2006 with strong intervention powers

2 40 Registrar and funding within state government.

Queensland System established 2008 to cover a wide range of service providers

2 350 Run within state government. No registrar

Western Australia

System established 2007. Under review in 2010

3 200 Run within state government. No registrar

South Australia

System established 2008 for growth providers

2 120 Run within state government. No registrar

Tasmania Contractual regulation only. Under review 2010.

n/a 50 n/a

Australian Capital Territory

Registrar appointed 2009 2 8 Registrar is a role within state government.

Northern Territory

Contractual regulation only n/a 1 n/a

• Debate driven by need for private finance and belief in promoting national housing providers

• Move from growth providers with social and economic focus (2008) to growth providers or harmonisation (2009) to 5 options but economic focus (2010)

Proposed National Regulation

Approach

Description Advantages Disadvantages

1 Commonwealth accredit all providers on governance and finance. States regulate on asset management and tenant rights

Universal accreditation to give confidence to investors

Complex split between Commonwealth and State powers

2 Commonwealth regulates large growth providers. States regulate other providers

Quick to implement and clear investors

Two-tier industry structure with a complex transition

3 Commonwealth regulates all Australian community housing organisations

Complete consistency. Clarity for investors

Complex, and likely to be opposed by states

4 Harmonised regulation across all states and mutual recognition across borders

Capacity already exists at state level

Slow and complex to achieve harmonisation

5 One state’s regulator acts as the ‘host’ and performs the Commonwealth’s role

Builds on existing state capacity

Likely to be opposed by most states

• Theory provides a lens through which to view changes/debates

• Interest groups:

Regulatory change ‘an exercise among groups and between groups and the state’ (Francis, 1993: p.8)

Work of Mullins (1997), Mullins & Sacranie (2008)

Issues of power, and need to identify stakeholder groups

• Regulatory space:

Metaphor describing a non-hierarchical policy arena (Hancher & Moran, 1989; McDermont, 2010)

Network theory – need to delineate both geographic and organisational boundaries

Regulatory Theory

Research Findings

• Documentary analysis of 63 submissions to consultation on move to national regulation earlier in 2010

• Statistical analysis plus review of motives and discourse

• Triangulation with qualitative research:

Doctoral research 2007-2008 - interviews

AHURI project 2009-2010

Comparative project with Professor Hal Pawson

• Based on proven application of method to English regulatory change in 2007-8 by Mullins and Sacranie (2008)

• Allows a broader assessment of the community housing sector, not just the regulation debate

Research Method

Submissions Summary

Category No. Regulation approach3

National regulation

of all providers

2

Growth providers

only

4

Harmonise between

states

1 or 5 Unstated

Housing providers by size

Small 9 67% - - - 33%Medium 8 63% 25% - - 12%Large 5 - 80% - - 20%

Housing providers by type

Mainstream 10 30% 50% - - 20%Specialised 12 67% 8% - - 25%

Total providers 22 50% 27% - - 23%Service providers, including banks

6 33% - - 17% 50%

Housing peak bodies 10 90% - - 10% -Government and agencies 6 - - 67% - 33%Other submissions 16 19% - 6% - 75%Total 60 40% 10% 8% 5% 37%

• Larger providers want national regulation of ‘growth providers’, others want Commonwealth to regulate all providers

• Smaller providers feel they are becoming marginalised

• Issues between ‘mainstream’ and ‘specialised’ (older people, disability support etc.) providers.

‘Specialised’ are making claim for sector presence

Strong divide between ‘mainstream’ supporting growth provider regulation, ‘specialised’ wanting all to be regulated

• Too few responses to differentiate between ‘national’ and ‘local’ providers, though several smaller providers operate cross-state such as Salvation Army, Uniting Church

Interest Groups I: Housing providers

• Bankers were less uniformly supportive of move to national regulation of growth providers than might have been expected. Main issue was call for government support of risks

• Peak bodies generally favoured Commonwealth regulation of all providers, despite being largely state-based.

Although fragmented compared to England, CHFA effectively used ‘network power’ to influence outcomes

• Governments and agencies favoured harmonisation which was said to be underway through Regulatory Practice Forum

• Tenants’ rights muted compared to debate in England

• Indigenous and co-op groups marginalised from debate in terms of submissions and boundary to rest of sector

Interest Groups II: Other Stakeholders

• Commonwealth’s push over economic drivers for regulation was contested by many groups making submissions

• Noticeable lack of shared outlook and values across the sector – i.e. contestation a strong feature of many submissions

• Mainly larger providers supporting ‘economic’ drivers

• Wide variety of submissions backed ‘social’ drivers, especially peak bodies and ‘specialised’ providers

• Some counter-intuative outcomes such as Australian Bankers Association more ‘social’ than ‘economic’!

• Widespread belief that the Commonwealth’s ‘economic’ aims were unrealistic – both building capacity and raising private finance

Conflicting Drivers I: Social vs. Economic

• The discussion paper’s ‘de-problemitised’ approach to the sector was challenged by many submissions:

Independence from the public sector raised as an issue, and separation of regulation from funding (especially Victoria)

Calls for regulation to include both state housing authorities and for-profit subsidised housing providers

• Contention over role of Indigenous housing providers, co-ops and the broader social service providers

• Continuing evidence of a wide range of views of what the sector is, and what is should become … who is within the boundaries

Conflicting Drivers II: Sector Boundaries

Conclusions: Conflicting Drivers

• As a consultation process:

Good response: 63 submissions, 480 pages (England: 115 submissions, 767 pages on a sector 37 times as large

Lack of consensus: no single option favoured across a range of different stakeholders. CHFA option gained traction

Likely outcome is harmonisation which was not a popular option. Results of consultation process not released

Normative process has led to most stakeholders now accepting that there will be a move to some form of national regulation

• The two theories (interest groups, regulatory space) proved a useful lens through which to study regulatory change

Process and Theory

• Process reveals the low level of institutionalisation of the sector (DiMaggio & Powell, 1983), though regulation will change this

• Unanticipated finding was difference in conceptualisation of the sector, i.e. where are sector boundaries (traditional vs. ‘big tent’)

• Importance of the ‘battle’ for regulatory space

Battle for Regulatory Space

Traditionalcommunityhousing groups

Small communityhousing groups

Co-ops

Indigenous housing

groups

Specialised housinggroups

State housing

authorities

Private sector NRAS recipients

England vs.Australia?

NSW vs. Victoria?

Regulate growth

providers or all providers?