Animation of changes in sectoral composition of the Australian economy, by Qtr from 1974 to 2012

According to a report in The Australian last week, the Queensland Housing Minister, Dr Bruce Flegg, is proposing to forcibly move public housing tenants with empty bedrooms into smaller dwellings.

Dr Flegg said a Government audit found there are 8,700 public housing units in the State with two or more unoccupied bedrooms.

Under-occupancy is the biggest single one of the many challenges we are facing with public housing. The finances are unsustainable. Rents are declining dramatically because of under-occupancy … so if you have got one person in a three-bedroom house, they can be paying $90 a week for a house that will rent in the market for $400 a week

There are 30,000 households on the public housing waiting list in Queensland. Dr Flegg says a third of them are “technically homeless … so they are staying with friends and relatives, couch surfing, moving from house to house as good people take them.”

This week the Courier Mail reported he may have upped the ante – he wants to force empty-nesters to either move to smaller properties, pay a higher rent, or share their dwelling with strangers on the waiting list.

Under-occupancy is not just a public housing problem. As I’ve discussed before, it’s also a major issue in the much bigger private housing sector.

This research shows more than 84% of older Australians live in homes that are under-occupied (one or more spare bedrooms) when measured against the Canadian National Occupancy Standard. Almost half have two or more spare bedrooms.

However getting a more efficient match between household size and dwelling size isn’t a straightforward matter. Many older households don’t want to move out of a dwelling they might’ve occupied for many years.

One study found more than 90% of them want to stay put. They value their proximity to friends and family and they value familiarity with their home and neighbourhood.

Empty-nesters also utilise space more fully than is often appreciated. More than 90% regard the size of their home as efficient and suitable to their needs.

People comment that following retirement they spend most of their time at home and they need space “to get away from each other and not to always be underfoot”, to follow hobbies and sometimes part-time paid work…… People state they need room for temporary residents – for frequent visits from children and grandchildren, other relatives and friends.

related study of older private home owners found 23% had one or more temporary residents at the time of the survey. While almost a fifth of these were grandchildren, more than half were adult children and visitors.

In the case of Queensland public housing, the Courier Mail cited a couple, Phyllis and Michael Martin, 78 and 69 years old, who are “shocked and angry” they might be forced from their home of 35 years or have to share it with strangers. Mrs Martin is quoted as saying:

We just couldn’t believe it, we both suffer from medical conditions and we raised our family here, we can’t have strangers in the house and we certainly will not move, it’s all very upsetting. We only have a small three bedroom house. We use two of the bedrooms already, my husband has Crohnes Disease and uses a colostomy bag and I have a heart condition.

Under-occupancy in public housing is also an issue in other states. The Australian says there might be as many as 40,000 under-occupied public housing dwellings across Australia. Contacts the newspaper made with other states suggest the issue is not confined to Queensland.

There’s a good case for a more efficient matching of dwellings with household size, given there are as many as 10,000 technically homeless households on the waiting list. However forcing current tenants to share with others they don’t know is unacceptable.

I’m not sure if Dr Flegg is really contemplating that option or if it’s a beat-up by the Courier Mail. Either way it’s unconscionable and he should formally and firmly reject it publicly.

Addressing the existing mis-match demands a high degree of sensitivity. Many tenants will have lived in their current houses and neighbourhoods for long periods. Some might be ill or have compelling reasons for staying put.

A better approach would be to facilitate voluntary transfers as South Australia reportedly does. Dr Flegg should consider offering a financial incentive to encourage households to move of their own accord to smaller dwellings. But first he needs to have a housing supply strategy in place so there’s appropriately-sized alternative accommodation available in locations that will attract the empty-nesters.

Perhaps there’s also scope to offer households a financial incentive to share their dwellings with others, but it sounds very fraught to me. Which of the two parties leases the dwelling? Who has priority if there’s a dispute? The potential for disagreement between the parties is high and likely to result in high management costs for the housing authority. This particular idea is best forgotten.