Robert Pradolin on Why Housing Belongs in the Infrastructure Column

In this episode, we sit down with Robert Pradlin, founder of Housing All Australians, a national for-purpose organisation representing the voice of the private sector, creating business-led actions to deliver housing solutions for Australians in need.

And we're going to explore three big areas, why Australia must treat Housing for All as essential economic infrastructure and

how institutional investment could unlock large-scale solutions for affordable and social housing and how innovation in construction particularly around engineered timber could radically reduce costs and carbon emissions and really what's holding us back from achieving all of this welcome to the elephant in the room this is the podcast where we love to talk about the big things in property that never usually get talked about

I'm Veronica Morgan, real estate agent, buyer's agent and buyer's agent mentor, co-host of Foxtel's Location, Location, Location Australia, author of Auction Ready and co-host of Your First Home Buyer Guide.

Hi, I'm Chris Bates, ex-financial planner and mortgage broker, currently ranked number three in the annual MPA Top 100 Mortgage Broker Awards. Before we get started, everything we talk about today is not personal advice, and we recommend you engage the services of a licensed and experienced professional.

Our guest today is Robert Pradelin, whose 40-year career in residential development spans everything from greenfield subdivisions to high-rise apartment towers. And after decades building communities, Robert has shifted his focus to addressing the systemic issues behind Australia's housing crisis.

With experience in both the private sector and at the policymaking table, he brings a rare depth of insight into why housing affordability isn't just a social problem, it's an economic imperative.

We are looking forward to a very big discussion today about how the private sector can play a very crucial part in solving our housing issues. Thank you so much for joining us today, Robert.

It's a pleasure.

Robert, I've been doing this for a while, obviously, in the development sort of construction industry. But I mean, you've also been on this mission for the last seven years. So this is not an overnight thing that you've started. What sort of got you in the first place to really take action?

Because you sort of had to go in a whole different direction. And where are we up to in that journey? Because I feel like Maybe we're a little bit more aware than maybe where you were, say, seven years ago.

Look, it's actually been going on for a lot longer. In fact, someone republished an article that I wrote 10 years ago about a frog boiling in water in terms of the housing crisis that I saw back then. And really, 10 years later, nothing's really changed. And that just concerns me.

But to go back to address your question as to why, when I was at Fraser's and selling apartments, housing, and land to people that can afford it, Like most Australians, I assumed that our governments were looking after our vulnerable people, and I discovered that they weren't.

And the more I learned, the more I got concerned about the future, and I'm actually in the industry. And I came to the view that if I didn't know that, what other Australians didn't know

So it started off as a very humble approach to say, maybe if I start something, there might be a few more people like me out there. I've got to tell you, I'm overwhelmed by the private sector concern about our vulnerable community.

And we've collectively now termed it compassionate capitalism because profit and purpose do not need to be mutually exclusive. They can add value. And unfortunately, we've allowed ourselves as the private sector to be tarnished by the few.

And therefore, we are all perceived to be greedy bastards when the reality is 95% care, but have never had a conduit to demonstrate that through. And that's what I think we've become. So yeah, we view things with an economic and business lens, but the public policy outcome.

How do you sort of go about that? Is it trying to bring together the private sector in terms of the construction industry to sort of come up with solutions rather than rely on the government doing that?

I mean, how are you bringing it all together and making sure that everyone's in on this, not just one developer, for example?

Yeah, look, at the end of the day, I've just got to be over government. I'm actually tired of waiting. It is a train crash that's been coming for the last 10, 20 years, but no one's really looking at it that way. So we start off with a one-page strategy, right? Very simple.

We had four ideas out there.

The first one is let's look at all the existing empty buildings that are out there that developers are holding for the next phase of development cycle and use them as short-term shelter because we're in a crisis and this is our private sector response, short-term shelter while we build the hundreds of thousands of additional homes our country needs.

The second one was, there's no economic business case for housing. We have cost-benefit ratios for roads, for schools, for hospitals, not for housing. I wonder what an economic study would look like if it says, what is the long-term cost to Australia of this housing crisis continuing?

And what is the future cost to future generations? And what is the cost-benefit ratio? So that was pillar number two, and we've done that study and happy to share that study. The third one is, can we create a mechanism that would unlock private sector capital to drive affordable housing for our workers?

So that was the third pillar. And the fourth one is, we've got so much empty land out there in terms of church and community land that we should be unlocking that on a long-term lease so the church doesn't lose the land.

but society could use the land to build affordable housing and, again, help the housing crisis. So there is no one solution. It's a number of them, but that was the one-page strategy that started our journey.

And if I can elaborate on the first one, because you asked me that question, how did we get engaged?

Well, when the idea was first touted and the ABC heard about it and I was on the ABC News and then I was on Neil Mitchell the next day and we started to talk about this housing stuff,

Again, using the empty building scenario, I started to get phone calls from a whole range of people, from a very wealthy family all the way through to a homeless guy that found me on LinkedIn.

And he said something like, I am one of the great unwashed, but thank you for trying, and everything in between. And they all said the same thing. We know we've got a problem. Just tell us what you want us to do.

So the first what we term pop-up shelter was an old aged care facility in South Melbourne. It was owned by Casper Care. It was a 52-room facility, and we refurbished 32 rooms with Metricon and all their staff and subcontractors for free.

We gave it to the YWCA because we do the building part, but we don't do the difficult part, which is about the people. So we always work with a not-for-profit.

So we gave it to the YWCA, and in four years, the YWCA had helped over 140 women stabilize their lives at zero capital cost to government. Since then, we've done 12 in St Kilda with Mervac,

31 empty apartments in South Melbourne that were empty and Better Living Group from Coburg refurbished it all for free. We're on current affair. We did another one in Box Hill.

And the last one we did in Victoria was in Sandryham where Mercy were the owner and was part of an expanded property portfolio for the future expansion of the hospital. The old covent had been lying empty. So we signed again a peppercorn leeks for five years with Good Shepherd.

And Henley went through and refurbished the whole thing and furnished it for free. And that is what I term compassionate capitalism. We've done it in Tasmania. We've got a building under construction in Perth. We've launched one in Queensland with Queensland Rail.

And this week, we launched our first one in New South Wales with Urban Property Group. Again, empty buildings. They went through and did it all pro bono. And we're going to hand it across to women community shelters.

Now, I think this is just a drop in the ocean of what the private sector can do.

So these are a bit of a win-win, right? Because the private sector, this is future development land potential that they're going to develop at one point. They've just land banked it. They don't want to spend a lot of money on the building. They don't want to put on the rental supply.

So it's kind of just going to get vacant and just sort of not getting used, right? And it's just going to get run down and then they're going to knock it down anyway.

Is that sort of the target piece of land or building that you're looking for and saying, well, I know you're going to build that in five, 10 years time. Can we just house, you know, and solve a bit of a social issue at the same time?

Correct, that is the principle. Some of these have been not-for-profit organisations that have owned the land, but the principle is the same. If I'm a property owner and I've got an old aged care facility, it's going to take me five years to get a planning permit.

Let me use that for the community use at no additional cost. They pay all the normal outgoings as if it's empty and the variable cost is paid for by the operator, which is a not-for-profit. but they get the property free. So they've got no overheads other than running costs.

And to be quite frank, as a developer, as a compassionate capitalist, it adds value to my discussion with council. I am helping. One project we got delayed by local government by 12 months and it was ready to occupy.

As soon as the state government heard that in Victoria, they said, we are fast-tracking all of these developments. So we get fast-tracked planning approval because we are helping communities.

And the more people that hear that across the country, I got to tell you, the more people that come and reach out and say, how can we help you? We agree with your values. We are capitalists, but we care about our community. And if you think about it, philanthropy are compassionate capitalists.

They got a successful business that now they're giving back. So we're just gelling with Australia's business values in my view.

There's a whole movement called conscious capitalism. So, I mean, this sort of fits in very well with that whole concept. So not every capitalist is a capitalist pig.

Correct.

But I think what's interesting, though, is that, A, you've gone and done something about it. I'm curious about a few things.

One is really, I guess, the economic imperative because you said off air, you know, that you're coming at this from it's a business case or it's an economic case rather than a socialist case. And I like the fact that these two things don't have to be mutually exclusive.

Because we do have to care for those in our society that aren't able to care for themselves. But I'd be really keen to hear, I guess, you know, your case for that. But also just before we get to that, a smaller question.

In a situation where you've got hold of a building that maybe has five years, it was going to be unoccupied and you can stop squatters moving into it, you can stop being derelict and graffitied and there's lots of damage that can happen.

even though a building might be demolished, you know, there's a lot that can happen in the intervening time. So there's lots of reasons why you might actually prefer that your building to be used in such a way.

What happens though, when the planning approval comes through, particularly if it's accelerated, so you actually get less of an opportunity for this social good. And then you've got people that need to be rehoused. Is there enough of a sort of a supply of opportunities coming that you're able to rehouse those people?

Or is that that create a sort of bottleneck problem or just kicking a can down the road?

Well, it's, They're very good questions. The first one we did, we had to address that problem because at some point in time, the owner may want the building back and they didn't want their name to be front page of the paper saying kicking grandma around. Yeah. Right?

So, as part of the agreement with the non-for-profit, there's a six months what they term decanting strategy. So, there's a six months notice period. And in this case, the YWCA has to rehouse those women elsewhere and make the facility empty, just like a normal agreement between the private sector.

But to go back to your question, we always try and line up the builders before we really start because as soon as the planning permit's ready, we'd like to hit the ground running. And so it is really a bit of a coordination thing.

We're still learning as we go because every state has its nuances and how it's doing in Queensland is a little bit different to Victoria. But ultimately, it's all about relationships and spreading the word.

Because normally, at the end of every conversation I have with an individual or a company, it generally works out the same. They say, how can we help? Because ultimately, going back to the original question, it is in all our economic and social interests to do this. Because

Whilst it's a housing affordability problem that we're all aware of because of the current media, the real underlying concern I've got is we are heading for civil unrest at a point in time. And even the right-wing capitalists, the dirty pigs that you mentioned,

It's not in their family's self-interest to have civil unrest happening. So unless you contribute, be careful about what you leave your descendants. So it is all about aligning self-interest.

But getting back to the economics, just to put some numbers to this, there was a report done in 2020 run by Chris Leptos for what they called NIFIC at the time, which is now called Housing Australia.

Federal government actuaries quantify the shortfall of investment needed over the next 20 years in just social and affordable, not the $1.2 million they're talking about, no, to social affordable as $290 billion.

That represented 44,500 social and affordable homes built every year for 20 years. Housing Australia is currently aspiring to build 11,000 homes every year for five years. Where's the 33,500 shortfall going to be coming from?

We have to innovate and step outside the box because it just is not working for the future of our society. I was talking to someone just yesterday about the front page of the papers in Tasmania going back a couple of years ago. I remember the headline with just four letters. help.

That's how bad it got in Tasmania. And that's reflective of Australia. But since then, we've normalized it and we're expecting homelessness to be there. Therefore, we're allowing it to actually happen underneath our nose.

It's going to get a shitload worse until one day we end up like LA and there's homeless people everywhere, which makes people and businesses feel uncomfortable. This is a business issue.

You feel that now, actually, to be honest. We know this and governments have been dramatically reducing their investment in social and public housing for decades now. And you alluded to it in your opening sentences, basically, that the Developers have been branded as being greedy.

Individual investors have been branded as being greedy. And yet, in many cases, we're part of the solution. And individual investors effectively have been actually providing the solution for the last decades.

But what would you say would be the main structural barriers that would be stopping institutional capital from flowing into affordable housing in Australia at this stage, at this point of time?

At the end of the day, Australia is not economically viable as it currently sits, right? And I'll unlock a little bit of that. In America, built rental multifamily homes have been going on for a long time, but the landscape in America is very different to Australia.

Our land component is very, very expensive and our building costs you've seen go up. So from an investment return point of view for overseas capital, we are expensive.

And that's why the current Housing Australia remit, where we have got international capital, it needs a top-up by the federal government to make sure they get a reasonable return for risk. But it's still a very limited way of doing it because it's through a grant application through Housing Australia.

You must use a community housing provider and they are the salt of the earth. But I've got to tell you, if we're going to solve this $290 billion problem, we cannot solve it through a niche market called a community housing provider. We have to engage the real estate ecosystem.

in delivering things that are economically viable for the market to drive the solution. Because if we do not get the market to drive the solution, we will never solve Australia's housing crisis. And if I could just touch on the economic study that we did, which was the first.

On an average for Australia, and this is in some way a little bit irrelevant because every state just looks at their cost benefit ratio. But on an average, It's a two to one cost benefit ratio in terms of building affordable and social housing, and it's pay back to future generations.

It's better than any investment in roads and schools and hospitals. It should be classified as fundamental infrastructure for a future prosperous country. In Victoria, it's one to 3.3%.

which means for every dollar we spend, we save $3.3. The concern that I've got, again, for the future is that we did an economic study cash flow on that report.

And it says, as of from today, in today dollars, by 2032, the additional costs is an extra $25 billion per annum in the unintended consequences.

Now, knowing I understand the industry as I do now, my real concern is that by 2032, they can't afford it because the government's got limited budgets. And therefore, we start cutting back the support we have offering for a greater number of homeless people.

So in my view, that ends up we are going for a lose-lose scenario. Our values are being eroded slowly, and we're not even realizing it.

Robert, New South Wales seems to be jumping on the front foot a little bit in terms of, like you said, there's no economic case for a lot of developers to just build affordable housing, right? Their economics aren't there and people can't afford to buy at those levels and make a profit.

I'm not sure if councils or governments basically almost did pro bono and they reduced the cost to develop or they gave funding to developers at a cheaper rate. I don't know if there's a case where if there's some tweaks to the proposition for developers, you can make it more enticing for them?

Or is it better to do what Chris Minns is doing and saying, well, okay, you can develop that site within these limits if you're going to build it 100% to build to sell.

But if you build a certain portion for the affordable sort of housing market, we'll allow you to build a lot more on that site. Do you think that's a good policy? And do you think he's supportive of what they're doing?

Yes. Look, let me unpack that a bit. The answer is yes, right? Because again, if you take the view that majority of developers are compassionate capitalists, there's a couple of things that I look at. Even though they do philanthropy in the business sense, they're not philanthropists. They're not charities.

So as long as I am no worse off, I'll do some key worker housing. Social housing is different, right? Key worker housing for Australian workers. And what Premier Minns is doing is exactly what our economic model does, which is provide additional value in the land by saying a 30% uplift.

That creates additional land value. And that additional land value becomes the subsidy for a number of affordable homes to be able to be leased before the low market rent for a period of time of, say, 20 or 30 years. So the developers cost neutral.

But at the moment, they need the community housing sector to buy those. Under our economic model using technology and creating a central digital register, the developer can then package those. Let's say there's 10 affordable homes at 70% of market rent.

I can put a restrictive covenant on those homes and sell it to my mom and dad investor database, but always monitor compliance on the digital register to make sure that it's being used for the right purpose at the right market rent, et cetera, et cetera.

I've just unlocked private sector capital to drive essential worker housing at scale nationally. So we've been talking to the federal government and the state governments, and everyone is, well, the federal government discussion just this week have acknowledged, Rob, you're right, we need a register.

We're now going to go and talk to the states to see whether they all want to be part of this. I'm saying it's taken bloody four years to get here to date.

I was about to say, is that part of the problem?

absolutely part of the problem. They do not want to risk anything. And my view is we can't afford to wait for all the boxes to be ticked to make sure we're not going to make mistakes. We have to be pursuing this through the private sector.

And whilst we need to get government on board and the Municipal Association of Victoria has signed a letter of support for this, we have to bring as many stakeholders on board as possible. And we've done that over the last several years.

Property Council, UDIA, Committee for Melbourne, Sydney, Brisbane, real estate institutes, everyone agrees. But government, wading through treacle. That's the description I do, just wading through treacle. But it's part of our process, unfortunately. We want to try and work together.

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So how does Australia's approach to social and affordable housing compare to other countries like the UK or the US? Because they've obviously got different funding models, but also different sort of models of government as well.

But at the same time, we are told, and this seems to be a home crisis or a development crisis or a rental crisis, let's say, widespread across the world at the moment. So this isn't just an Australian thing.

So I guess what's unique to us and what isn't and what can we learn from other countries?

Yeah, the best way to describe that, I think we're coming from the furthest point behind compared to some other than maybe the US. In the UK, they've had inclusionary zoning, which obligates a developer to actually provide some social affordable housing as part of their development. But it's been ingrained.

So therefore, when you buy the site, you factor in how much less you pay the landowner to make sure you can fund the subsidized housing. Here, we're on average less than 4%. In the UK, it's probably more like 10 plus, right? Europe is even greater, less than 4%.

And you just can't include another cost to development without them being able to take it off the landowner because it's ultimately someone has to pay. And if you introduce an additional cost once I bought the site, I'm going to push my prices up because I can't afford to carry it.

And I had this discussion with the Victorian government when I was still at Australand or Fraser at the time over 15 years ago. but they wanted to introduce it in their term.

Now, they never introduced it, but if they would have listened to my advice, because all the developers said you would expect, we're thumping the table to say you cannot introduce this now, et cetera, et cetera, et cetera. And I said, stop, stop, stop.

What happens if the government says we're going to introduce it today, but it's not going to take effect until 10 years from today? Who around the table would object? Not one, because they hadn't bought the site.

So if they would have enacted it 15 years ago, we would have had inclusionary zoning five years ago. The cost to industry would have been basically zero because you bought it for less. And we would have had more housing supply in this very, very important space.

But no one looks more than three and four year past their electoral cycles, unfortunately. And that's part of the problem.

Which is sort of bizarre, isn't it? Because you think, well, the government has shirked their own responsibility. Like you said, you identified that a decade ago or maybe more. I mean, we can see it in that there's irrefutable evidence that public investment has gone down in housing.

And yet they don't have an appetite to support developers or the private sector in part of the solution. It sort of beggars belief.

It does beg a belief, but it's a fairly simple analysis, really. And I'm quoting a politician that I won't mention that I spoke to over a decade ago. He said, Rob, until the general public actually demand it, we're just going to be playing lip service, right? So it's part of the problem.

Yeah. Is the public demanding it enough now? No. It's still not loud enough. But also when you think about it, it's the most disadvantaged sector of our society that is impacted by this.

And so I guess your argument here is, well, we're all going to be affected if we don't do something about it. But again, at what's the tipping point do you think?

I'm not sure. Part of our approach from a marketing point of view is we want to create respectful unrest to educate the Australian public about what they don't know. Because without respectful unrest, there's never any political self-interest on both sides of politics.

And part of that is why, I'm not sure if you saw that link of the film Undercover, which was narrated by Margot Robbie. And it's about a story about how Australian women over 50 are becoming the fastest growing cult of homeless in Australia.

It is now on Netflix for listeners to look at, and it's quite disgraceful how we've allowed women to sleep in class all around the country. We don't see that. Therefore, it doesn't exist. We've now been part of another documentary that just got released on Binge just this week called Sold.

It's a very different view on it. It's more of a comedic but serious place on it.

And again, it's just trying to educate the public about what the issues are in our country and then trying to get a respectful uprising, really, because without that sort of unrest, there's no real interest in politicians because whilst they say they're doing stuff, and they are, don't get me wrong, we're much better now than where we were.

But if you go back to my original figures, We need 44,500 social affordable. We've already contracted the bill to leave it. Where's the other 33,500? It should be on the agenda.

Yeah. We first interviewed Michele Adair back in 2019. We started thinking, well, this is something that needs to be talked about. And we have talked about it progressively across that time. And then, of course, COVID hit.

And then after that, everyone's suddenly aware of this problem that's been brewing for a long time, as you've been saying.

But there have been some projects, you know, we've interviewed Nightingale. There's a number of different organizations that are in a small scale trying to do something about it. And I guess it's all these small activities, a bit like what you're talking about.

There's a project you were involved in, the Green Project in Parkville. Can you walk us through some of the key lessons from that and why it's such a game changer?

Yeah, again, let's put it in context too. The green is part of a Commonwealth Games Village development where we got introduced to public housing. So we had to deliver 20% as public housing. But the green was really a step change, which hasn't really been embraced by the industry.

And I'll go through why in a minute. What the green was, part of my history, I used to work for AB Jennings, right? So building houses. Then I worked to work for a company called Hudson Conway that developed the casino, but I was focused on the multi-story residential.

Then I went back to Australand at the time, which became Fraser's, going back to domestic building. And what I said at the time is that, why can't we build five-story buildings like we do houses with sticks?

So the green is a five-story lightweight building with what I'm saying domestic residential construction methodologies and subcontractors that was built at 25% less than concrete.

It's so interesting because you hear a lot of people saying, oh, well, we need to employ more commercial building, the techniques using in commercial industrial building into a residential, more prefab walls and all that sort of palaver.

But you're actually going the opposite here to say that you've gone back into that more artisanal, if you want to call it that, method of building approach.

Without getting political in this conversation, you've got two workforce streams. One I call domestic residential that does houses. The other one's commercial residential that does multi-story with the CFMEU workforce.

Yeah, okay.

The cost difference is so significant that when governments say we're going to curb the urban growth boundary because we're going to go up vertically, the cost to deliver a six square apartment is the same cost as a townhouse.

Why and how can a family live in a six square apartment when the family wants a townhouse? And that differential in cost delivery is why we haven't got the housing diversity because I did a paper going back years ago when Fraser Brown was looking to do a multi-storey at Ringwood Station.

I said it will never get built because the cost to build that in Ringwood is the same cost to build it in Southbank. And I had to sell at the time a six square apartment for $330,000, which is the cost of a townhouse.

Why would anyone pick a six square apartment when you can buy a townhouse next door for the same cost? That is a sleeper. That is a sleeper.

So back to the green project, what you're pointing out is the method of construction. And am I putting words in your mouth here? Necessitated a different set of trades on site that not necessarily organized in the same way. What did that allow?

Well, we used the same trays that we used to build houses, but we just did it very safely with the whole commercial approach of hard hat safety, all that stuff. And we just educated and uplifted their safety skills so we could use their labor and their designs on a mid-rise tower in timber.

At the same time, Len Lease was doing Forte, which you might recall. And between Forte and the green, we changed the building code nationally for Dean to satisfy with timber. Because the other benefit of timber is a carpet capture, right?

So if you really think about it, and I did a keynote address to the timber frame industry a couple of years ago, and I said, because I was a builder and developer, licensed builder for Fraser's.

I said, since Fraser's closed the building arm, pretty much where I left, the industry has done nothing because it's very much still a cottage industry. The commercial side is actually quite sophisticated and they have a lot of woods construction processes, just the labour force differences are what they are.

That's the fact of life. But don't expect them to deliver the same product, which is what government thinks should happen, but it won't.

Timber, okay, but you've got to chop down trees in order to use timber in construction.

You've got to harvest trees. This is plantation timber.

It's pine. Harvest, that's a good distinction there. Does a timber beam, for argument's sake, or a truss, does that continue to capture carbon even though it's no longer living?

Look, I'm not 100% favorable to all this stuff, but it does capture carbon. The RMIT did analysis of what we did with the green and what Forte did for Lend-Lease, and there's a huge carbon opportunity there as well.

Can you elaborate, I guess, on some of these modern construction techniques and like mass timber, I guess, how does that play a role in reshaping the economics of residential development?

Mass timber is very different to what I'm saying is lightweight timber. Mass timber is more from the sustainability point of view. It's aesthetically pleasing and comforting, but it's probably the same cost, if not a little bit more expensive than concrete. So there's no real cost difference, but there's more aesthetics and niche market.

Lightweight timber built up to five stories, it's not only as sustainable, it's also cheaper. You've got to follow the money.

I'd imagine that there's only, like you couldn't build, or could you, build in an earthquake area or whatever. I mean, there's obviously going to, or cyclone, there's got to be certain climates and zones that would lend itself to that as a construction facility.

As an engineer, that's my profession, right? You can design all that stuff. As long as you know the assumptions, you can design anything. The whole thing is lightweight, is easier, simpler to construct.

And if I really had my wishing wand, I'd love lightweight five-story timber buildings to be built by women because they are clean, quiet. It really fits the brand of a... female workforce because they are more detailed, they're more particular.

And the commercial construction, the more the perception of it's welding, it's concrete, it's dirty, it's men, lightweight timber built by women, how many construction jobs would you get from government? So I think there's a huge opportunity there, huge opportunity.

You just reminded me when I was at school and I was doing metalwork and I was picked on by the boys because they told me that I should be doing woodwork, not metalwork. So you just done the same thing, I think.

Jokes aside, what are the sort of innovation in construction methodology, materials and techniques? could we be embracing or what exists or what's in development? Because really, I mean, there's been lots of talk about our productivity and construction sector being stagnant or going backwards because we're still relying on old methods.

Is that a fair characterization? And if not, what's the real picture? What should we be looking forward to?

It is a fair characterization. And the green, if it goes back more than nearly 10 years now, a lot of it was prefabrication in the factories. So prefabrication has been around for a long time, and now it's talked about as part of the solution, and it definitely is.

But what's lacking in the prefabrication is not the innovation. It's the pipeline. I've known many prefabricators who spent millions of dollars getting the proper equipment, but unless they get a continuous pipeline of work, they all go broke.

So government needs to give a few people, because you can't do it across the whole board, the pipeline to actually allow them to mobilize private sector capital at scale. So we can do these things in numbers. And what's lacking is the continuity of work.

Because even Lendlease set up their own factory in New South Wales. They ended up closing it down and selling it because they couldn't get enough economies of scale to make it actually economically work.

Wow. But the New South Wales state government just came out very recently with prefabricated housing. So it seems to be, as a government, they're looking at ways in which they can embrace somewhat this type of technology. So you talk about the pipeline. So where can that pipeline come from? Is it only government?

It's not only government, but government's the one that underpins the economic viability of a large factory. And there are some. Bowen's got one in Geelong. There's fabrication in Albury, Rawdong. We just have to have enough to actually allow them to get a pipeline because that will definitely help.

But we need to unlock new capital because let's say we've got all the prefabrication we can. Government's money is limited. The $33,500 shortfall, it has to be funded somehow.

We need to step outside the box, as I said earlier, use digital technology to make sure that people are accountable and they're qualified to receive below market rent and allow the private sector to drive the delivery of affordable housing rather than waiting for governments to provide a grant and the whole process and et cetera, et cetera, et cetera.

We must find a market mechanism that unlocks the private sector to drive the public outcome rather than just wait.

So effectively what you're talking about is a giant collaboration, right? And what needs to happen for these groups to be able to collaborate efficiently and effectively?

Because when I guess people look to government and overarching, particularly on a national scale here, but like you've said, if you wait for government, it's never going to happen. So what does need to happen?

given I know a fair bit about this and how and why I'm concerned about it. And again, everyone at Housing All Australians, other than our CEO, which is the first full-time employee, are doing this out of the love and the concern for the future, right? So that's the main thing.

If I had my wish, I would actually declare war on homelessness as a country, and I'll use that term very deliberately. When we are at war, enemies come together.

This is how important it is, because we're normalising this, we're not seeing it, but enemies have to come together to work in the long-term national interest, not for us, but for our grandkids and their descendants. And through water, you put aside your differences. We have to collaborate.

This is too big for any government to solve on its own. It is a community-wide problem, and that includes business. Let me just expand a bit at the business side.

This is now a national business problem because there are businesses that are not efficient because they cannot find workers because the house is too expensive. This is a fundamental productivity issue for our country. It's a GDP issue because you can't maximize your GDP if you can't find the workers to fill the roles.

And we're close to a few organizations. There's one that's a not-for-profit called Tourism Northeast. They represent the tourism industry in the eastern part of Victoria. They're trying to encourage key workers to go to regional Victoria to fill the jobs that I've mentioned before are missing. They did a survey.

They will get key workers going to regional Victoria on one condition. 90% said the job must come with a house. Now, if you don't get a house, you don't get the worker.

It's such a fundamental issue that we have to address it as such, which is why I think we should declare war on housing and homelessness. And if I could just make one more point about this, and you can tell I'm pretty passionate.

Homelessness is the canary in the coal mine to a much bigger issue in the housing continuum. And if we don't go upstream and solve the affordable housing for workers, our homelessness is going to go through the roof because I'll keep on dropping in.

I mean, the other sensitive topic here is probably around migration and growing our population. And how do you vision that? I mean, you've done the cost of benefit. This would have been part of the conversation. There's two sides to it, right? So how do you see it?

Look, I think immigration is an important part, but we need to be sensible as to how and what we do. And key workers are a part of it. But let me give you some of the potential solutions, right? And again, there's always hairs on some of these, but just hear me out.

There's 13 million empty bedrooms in this country. And a lot of them are probably with pensioners that are in great locations, but their family's grown up, they're in one single home, and they've got two or three bedrooms that are empty.

Now, there's a security issue which has to be solved, but 1% is $138,000, so 1%. But a pensioner's not going to put someone in the spare room because the accountant tells them, you get $1 of income, you lose your pension, and your capital gain's tax-free.

Why don't we incentivize them in the national interest to open up 1% of those empty bedrooms for key workers that are productive close to where society needs them while we build those homes. We've got to look at the empty buildings that exist and provide carrots.

You've got to unlock some of the empty bedrooms, at least for a decade, until we build the housing. These are long-term strategies, and we have to align the public interest with all the mechanisms we can, including pensioners. You've got 10 years.

You can get them income for that bedroom, and we won't even pay tax on it because the cost-benefit ratio is in the government's interest.

Yeah, I mean, Scott Keck brought that out, right? Back in COVID days, it was concern around that. But you obviously barked up that tree a few times. How do the governments feel about that? Because that to me is like a real low-hanging fruit. And I agree.

And not just pensioners, it's people of all different ages, even just current homeowners. Like if you want to rent a room out, then you're thinking, I was just chatting to a mate just a couple of hours ago who's renting downstairs. I was like, is that going to go on your books?

That's going to affect your capital gains tax. It makes so much sense for him just to He's got a hole downstairs that he can rent out. But I've got to think about the tax consequence of that. And should we just evolve our tax system? Because that's a very small tweak.

And what do the governments, when you do bark up that tree, what do the governments say? Waiting through treacle. To me, it's such a low-hanging fruit.

The cost-benefit ratio is just a sound business case. Surely, while the industry is imploding, And we're not building the housing we need. We have to look at lateral solutions as I had to relieve the pressure. These are pressure relief valves.

I'm not saying to keep it forever, but do it for a decade while we build some of the homes we need and population adjusts. And that might cater for some of the immigration pressures, right? We need to look laterally as opposed to thinking still inside the box because that ain't working.

They've got all the data there, right? Because they do the census every five years. And the census basically shows that we've got a massively underused housing stock, right? Of dwellings. We've got 11 million dwellings and we should be able to house everyone, but it's just all in the wrong order.

And I think about people with 40 mortgages, right? If you don't have to pay tax on renting out a room and it gives you an extra $300 a week and...

That's a real big saving for a family and they would do it, but then they know they've got to pay tax and it's going to affect their capital gains tax. And maybe the government thinks, well, all the people who are already doing that, I'm not going to get tax on them.

But maybe the government's just got to think, well, what's the overall problem they're trying to solve here?

Well, our objective is to keep on talking to businesses and government podcasts like yours to spread the message out, because if there's enough of it that says, they can't ignore it. So it's getting that respectful unrest happening.

Yeah. Also, in terms of whether you'd free up room or two in your house, it's not just that I have to pay tax. Because it can be complicated too, apart from the fact that, yes, you've got to do it.

Then it becomes you've got to pay more for accountants and all the rest of it to work it all out.

But, you know, I think myself, I think I've got two free bedrooms in my house now and I'm rattling around there and I'm thinking, well, I could put a couple of students in there.

But then if I'm going to do it off the – I'm not doing it, so therefore don't come at me, the ATO.

But if I was going to do it off the books, then there's no security checks and there's no protections for me.

So that's the other side of it. So people might go, oh, look, I'll do it, but I don't want the complications of the accountant, et cetera, et cetera. But then I don't want to take the risk of bringing people into my house without any protections whatsoever. no bond, no nothing.

So you can just see the way the hurdles that if they legitimize that, put systems in place to facilitate that, I imagine it could free up quite a lot of space.

Well, again, that's the issue. And I know Peter Mars, you have a chat to me and Peter's rightly on the whole tax issue, which is fine, but we've seen how slow any change there is. What we try and do is saying, these are the current scenario, these are the current rules,

How do we operate within the rules to actually get shit done? And that's what we're trying to do. So to me, this empty bedroom, even if it does only half a percent, it's still 50,000. Let's think laterally, people.

Well, I mean, look, they've been prepared to look at land tax. The state governments have been prepared to look at land tax to facilitate build to rent as a whole industry. Well, it's a lot more complicated and there's potentially bigger cost to government for that in terms of what they're foregoing.

The different governments, of course, I get that. Back to the collaboration. Collaboration story though. So your message is to basically beat the jungle drums, raise the awareness, which we are doing, but that's this long, slow thing. We asked earlier about tipping point.

I guess we don't really know what that tipping point is, but I guess what we're suggesting here, the groundswell of discontent and the groundswell of awareness that there is this major problem is what is needed to grow or the groundswell of discontent for those who really are disadvantaged by this situation turns into civil unrest.

Isn't that how you'd sum it up?

Pretty much.

If I can maybe put a call out to any of your listeners that are in businesses that can add something towards refurbishing somebody's empty building and to come on board as part of the Compassionate Capitalism Army to please reach out through our website because we're constantly adding companies, you know, Quest Apartment Hotels, Metricon, Henley, Mervac, Interface.

Dulux has been so generous across the whole country that it's unbelievable. And it's all for helping others. Compassionate Capitalism exists.

Yeah, we will put the link in the show notes because I think this is really important. Before we wrap up though, Rob, we really appreciate this discussion. It's been a good one. Have you got an example of a property dumbo for us?

Well, probably not a property dumbo because I had a bit of a think about what I heard over my career, but there's something that I did

do, and I didn't do it 100% well, which I wouldn't mind sharing, is that when I bought my first sort of unit site when I was 23 to build my set of units, you know, you normally measure the front and you measure the length of the block to make sure it's the right lot.

And I did that and it actually married up. But when I started to developing, I realized that rather than straight lines, the block was actually slightly skew and I was out by 400 millimeters. So I had to go through adverse possession to my neighbors, which took two years.

And luckily, the neighbor next to me was there for 30 years. Otherwise, I couldn't prove it. So my recommendation to all your listeners, get a surveyor to reestablish a lot before you settle.

Because if you find it out before settlement, it becomes the owner's responsibility to give you the title that you've just bought. I was lucky that I got rounded, but I got to say it could have been disastrous.

It's an interesting one that there is such a thing as title insurance. So for an individual property owner who buys like a house, you can take out title insurance against such things like that. But as a developer, you are very reliant on particular wits and setbacks. to maximize the site, obviously.

So that could have been absolutely catastrophic. And I don't know any state or territory in this country where a survey is a vendor disclosure, a prescribed document that needs to be provided by a vendor. So really quite a huge amount of properties that are purchased without a survey.

One doesn't even exist and nobody wants to undertake the cost to get one during settlement. So it's an interesting one. But from a developer's point of view, I would imagine that it'd be well worth the money getting a survey done. Definitely.

Definitely. Especially before settlement because then the obligation can go on the vendor provider before you settle.

Yeah. Is that in every state and territory that's the case or just Victoria?

I'm pretty sure it's every state and territory, but I can't be 100% sure. No, definitely Victoria.

Victoria, yeah. And well done at the age of 23, Bunga Development site.

It's a long time. I could never do it now. I could never do it now.

So we won't let our younger listeners, please don't bash on Bob and Rob for that. It's been a great chat. Look, thank you so much for your time, Robert, today. I'm sure our listeners will find this, you know, some of the solutions, I guess, that you're putting forward are really interesting.

And we will definitely, as I said, please, if you're interested in contributing in any way or finding out more, we'll have the link in the show notes for you to check.

Great. Thank you. Thank you very much for the opportunity to share the story. Thank you, Robert.

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