Comments on: WA Housing Roundtable https://www.openforum.com.au/wa-housing-roundtable/ Open Forum offers an independent platform for Australian debate Tue, 19 Dec 2023 21:24:05 +0000 hourly 1 https://wordpress.org/?v=4.9.25 By: TheClaw https://www.openforum.com.au/wa-housing-roundtable/#comment-727 Fri, 07 Nov 2008 00:05:00 +0000 http://staging.openforum.com.au/blog/wa-housing-roundtable/#comment-727 Choking Supply and Poking Demand

http://www.aph.gov.au/SENATE/committee/hsaf_ctte/submissions/sub80.pdf 

10 Steps to a Housing Disaster

Starting with only 21 million people and a giant island with 100 acres of land per person, how could we engineer some of the least affordable housing on the planet?

Here is a recipe to make housing unaffordable:

Step 1 – CHOKE NEW CITIES

Divide the island into 7 states and create one giant city per state. Force almost all the people into the giant cities with policies such as:

  • All business zoned in the centre of the city
  • All government departments must be in the capital city
  • Non-giant cities given terrible infrastructure

With decent transport this gives 7 areas with 40km radius, approximately 1700 square metres per person. Still too much land to create a crisis!

Step 2 – CHOKE TRANSPORT

Neglect the transportation system so that it is not practical to live more than 20km from the city centre. This cuts us back to 400 square metres per person. Still plenty of space on average, but the largest cities will need some high-rise housing to get by.

Step 3 – CHOKE HIGH-RISE

Refuse permission for high-rise in many cases. Old suburbs must be preserved for the old people who still live there. No extra housing to be built for young families.

Step 4 – CHOKE LOW-RISE

Much land within range of the city to be kept off the market in the form of national parks,  government land and farms without permission to subdivide. If you have 5 acre or 25 acre farms within reach of CBD then declare the area semi-rural and don't allow extra housing there. With policies like this even low-population cities like Darwin and Hobart can have a housing crisis!

The first four points will choke-off all avenues of extra housing supply, so now let's increase the need for extra houses – one house per family – by increasing the number of families.

Step 5 – HAVE LOTS OF BABIES

In 20-30 years they will leave home to start extra families.

Step 6 – INVITE IN MANY IMMIGRANTS

Why not increase the immigrant intake to record numbers?

Step 7 – DIVORCE IN RECORD NUMBERS AND LIVE LONGER

This will result in a declining number of people per household. We need more dwellings for a given number of people.

Now with the supply of extra houses choked and the need for extra houses increased, price will race upward, as the poorer families are priced-out of housing. Now let's goose the price even more with idiotic economic "demand side" techniques

Step 8 – LOWER INTEREST RATES AND LOWER LENDING STANDARDS

Instead of paying off a $100,000 house at 13% interest, why not service a debt of $500,000 at 7%. Why not use 80% of two incomes and eat poverty food for the rest of your life?

Step 9 – FIRST HOME BUYER'S GRANT

It won't create a single extra house, but it might drive existing house prices up.

Step 10 – TAX ADVANTAGE TO SPECULATORS

With prices racing up, beyond the reach of first home buyers, give more money to those people most capable of driving prices even higher. Use government tax money to encourage rich people to borrow money and buy existing housing to rent-out to poor people. We can pretend that this creates extra cheap housing and is good for the poor people.

Step 11 – A WORLD-WIDE CREDIT BOOM AND ASSET BOOM

Improper to include in the list of 10, but it doesn't hurt to mention it.

…..

Poking Demand and Choking Supply

Government has done something very bad to the supply and demand of starter homes which has led to outrageous prices of starter homes, and supported much higher prices of better homes. In short, government has poked the demand and choked the supply of starter/marginal/extra homes.

Poking Demand:

  • Government brings in many immigrants

Choking Supply:

  • Government refuses permission to build extra housing on the fringe or extra units in the city, and new cities
  • Government add taxes, charges and levies to extra housing
  • Government requires onerous compliance with regulations
  • Government creates delays in approving dwellings.
  • Government neglects transport and other infrastructure which reduces the area in which well-located and well-serviced homes can be built

There is much debate on which of the five chokers (refusal, taxes, compliance, delays, neglect) is the biggest and baddest. Interestingly, if refusal is the big one, then lowering taxes will give a windfall to developers, whereas if refusal is a small one, then reducing taxes will cause a drop in prices. This debate is fascinating from an academic point of view, but rather pointless if the aim is to solve the housing crisis.

It is like watching a man being attacked by five dogs and debating which dog has the bigger bite. Far better to chase off ALL the dogs and save the man.

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By: FHB https://www.openforum.com.au/wa-housing-roundtable/#comment-726 Thu, 06 Nov 2008 08:02:33 +0000 http://staging.openforum.com.au/blog/wa-housing-roundtable/#comment-726 Absolutely

I'm trying to buy my first home in Brisbane, and I'm absolutely disgusted that the govt is spending my taxes trying to stimulate higher housing prices through the use of 'grants', and keeping housing out of my reach. They are encouraging more young people to enter excessive levels of debt and in so doing, setting more of them up to fail.

The money should be going to provide more accomodation, and employing people to provide it and construct infrastructure to support it. Not blown on pushing up the prices of existing houses, again.

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By: Peachy https://www.openforum.com.au/wa-housing-roundtable/#comment-725 Thu, 06 Nov 2008 06:50:06 +0000 http://staging.openforum.com.au/blog/wa-housing-roundtable/#comment-725 Considered approach to housing policy

Scott

The fact that we have a homelessness problem in a country with the with so much land and natural resources would be funny if it were not so tragic.  I wholeheartedly support your view of housing as a basic human right (which needs to be affordable and sustainable) rather than a mere investment class. 

I hope that you and the Australian Greens can advance a thought out and sustainable housing policy to replace the a set of kneejerk policies which have been implemented by current and former Federal Governments.

Keep up the good work!

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