Regional Australia has a housing crisis but it needs infrastructure first: Indi MP Helen Haines

As regional towns and cities absorb a huge influx of new residents fleeing capital cities since the COVID-19 pandemic hit, many are ill-equipped to cater to their surging populations - and it's not just a lack of housing.

Dr Haines, whose federal seat of Indi takes in Wodonga, Wangaratta, and Benalla and stretches to the NSW border, has a solution.

She's calling on the government to establish a $2 billion regional housing infrastructure fund.

"The idea with this fund is to have a pathway for rural councils or community organisations to make applications to underwrite the cost of enabling infrastructure," Dr Haines told the ACM network.

"Things like pipes and pavement, power and poles, into opening up land and to create really contextually appropriate neighborhoods."

Writing exclusively for ACM on the back of the national Young and Regional series tackling the cost of living and housing crisis in regional Australia, Dr Haines said governments at all levels needed to invest "much more" in social housing.

"Especially in regional communities where pandemic-era house price rises are still biting and where, if you are priced out of your town, there is simply nowhere else to move," she wrote.

A March 2022 report by Infrastructure Australia found housing, water security, connectivity, education and access to public transport were the top five infrastructure gaps in country areas.

Availability, diversity and affordability of housing were identified as specific areas for improvement in Dr Haines's area.

Wangaratta, which sits along the Hume Highway between Sydney and Melbourne, has lush parks, safe schools and a booming local food and wine scene.

It's in driving distance from the bigger regional cities of Wodonga and Albury and saw a three per cent rise in population over the five years to 2021.

But with a vacancy rate of 0.56 per cent, median rent of $410 a week, and the median house price at $499,000, there aren't many places to call home.

Unless home is a tent along one of the two main rivers, the King and Ovens, where others pushed out by regional Australia's housing crisis eek out a living.

The town is desperate to build more houses, Mayor Dean Rees says.

There's just one problem - and it will cost $100 million to fix it.

Mr Rees said while the town had "hundreds of acres" of land ready to be developed, the current sewerage system was buckling under demand.

"Our sewerage system cannot cope with the amount of supply going into the system and going through our old infrastructure, which is hundreds of years old," he said.

"I support Helen Haines 100 per cent on anything infrastructure funding, because we're actually behind at the moment."

The nearby town of Benalla would need $10 million alone to fix drainage works before land can be developed into housing, Dr Haines said.

The former Coalition government established the $1 billion National Housing Infrastructure Facility fund in 2018, which offers concessional loans, grants and equity finance to help support critical housing-enabling infrastructure.

But Dr Haines said funds were needed to help regional Australia specifically and ensure councils could provide different types of housing.

Minister for Housing Julie Collins said while there was "no silver bullet", the federal government was working hard to solve the housing crisis.

"These years of inaction on policy at a federal level, combined with devastating floods and fires, have increased pressure on people living outside our big cities," she said.

"There's no silver bullet, but we have plans to tackle this challenge head on, and we are already working hard to deliver them."

Dr Haines said she didn't want regional towns to turn into suburbia or urban sprawl.

Young people in particular would benefit from more creative housing solutions.

"There's lots of airspace in rural villages and towns, and I don't mean high rise, but I mean on top of car parks, on tops of shops," she said.

"There's very few apartments available in rural and regional town, and that's the entry into the market for a lot of young people in cities."

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As the country struggles with a skilled worker shortage, regional businesses say even if they can find employees, there might not be anywhere for them to live.

Dr Haines said planning laws should be loosened so temporary accommodation could be built.

"There's many people in in agricultural settings to wish to put additional dwellings on their properties to enable worker accommodation; there's real restrictions around that," she said.

"There's around 8000 beds up in some of our ski resorts [in Indi] that are not used much over the summer.

"We're looking at ways that we can utilise that accommodation, particularly for younger workers, and provide public transport."

Despite a worsening housing crisis and high rates of homelessness, there were 30 per cent more Airbnb's on the Australian market in April to the end of June 2022 than the same period the year before.

But Dr Haines said the short-term accommodation provider was still valuable for regional areas.

"The transference of homes that would have previously been available for long term rent into Airbnb is widespread across my electorate," she said.

"I don't think the answer is to say get rid of Airbnb because we need the Airbnb's for tourist accommodation.

"I think we need to find the sweet spot between having sufficient Airbnb accommodation for our tourist economy, but having available rentals for our worker economy."

Federal housing minister Julie Collins did not respond to ACM's questions in time for publication.

This story is part of ACM's Young and Regional series. Read more here.