WA Housing Roundtable
Central to this broader conception of affordability is the sustainability of the housing sector – the dedicated people around the country who need and deserve to be properly resourced to look after those most vulnerable in society.
It’s been a long time since there has been much of a focus on affordable housing by the Federal Government. For many years, Government policy has been skewed toward housing as just another investment instrument, with tax concessions encouraging a speculative bubble. This was great for many of those who got into the market and a disaster for those left behind. At the same time, State Governments have cut budgets and run down public housing stock, creating the situation today of interminable waiting lists and the spectre of homelessness alongside some of the wealthiest communities on the planet.
The consequences for the housing affordability sector were laid bare last week in an informal roundtable which I hosted for service providers in Western Australia. When homelessness advocates, community housing providers, migrant settlement and crisis support agencies get together they paint a bleak picture. This is a sector that has been in crisis for so long that the word barely holds meaning; people simply should not have to work under this kind of stress and official neglect.
On the upside, we have a Prime Minister with an interest in homelessness that I believe goes beyond the shallow demands of the media cycle, and an energetic Federal housing Minister who has shown a willingness to try out new ideas. In addition, we have a dynamic Senate where Government legislation is being tested with a degree of scrutiny and rigour which simply didn’t exist in the last years of the Howard regime. With goodwill and hard work, this could be a time in which we make genuine progress in restoring housing affordability to all Australians.
The signs thus far have been mixed, to say the least. The National Affordable Rental Scheme (NRAS) will be in the Senate within a week or two and may pave the way for a rapid expansion of affordable rental stock – if 20% below current inflated rents can be considered affordable. However, we are continually dismayed by the one-sided focus on first homebuyers, with the radical increase in the first homeowners grant (FHOG) and the introduction of first home savers accounts. Neither of these costly initiatives are means tested. The FHOG in particular has been sharply criticised for leading to an increase in house prices and digging more young families further into vast and potentially unsustainable mortgages in fringe areas far from services, employment and public transport.
The first homeowners grant can be used to illustrate some principles by which we should judge the worth of any affordable housing initiative.
Firstly – is it targeted at people in greatest need? Does it address home ownership or broader conceptions of housing security? Does it address longer term issues of affordability including rising energy and water costs and car-dependence? Does it provide for greater diversity in housing supply?
In an age of peak oil, climate change and global instability, we need to remind ourselves that housing is a human right, and that affordability cuts much deeper than the initial price of the house for those who may qualify for a mortgage. We need to target state and commonwealth housing assistance toward energy- and water- efficient affordable housing, close to services, employment and public transport, and we need to make sure that every dollar we spend is going to areas of greatest need. It is time to look toward more innovative models of community housing, shared equity, mixed equity and social co-op developments and so on, and move toward a model of universal security of tenure rather than chasing the mirage of home ownership for all.
Central to this broader conception of affordability is the sustainability of the housing sector – the dedicated people around the country like those who told us their stories last week, who need and deserve to be properly resourced to look after those most vulnerable in society. What was apparent very early in the conversation is that we have the policy tools and the institutional knowledge we need to make substantial inroads into housing affordability. What we need is for those in Government to trust this accumulated wisdom and resource it accordingly.
Senator Scott Ludlam is an Australian Greens Senator from Western Australia and the parliamentary spokesperson on housing issues for the Greens. He would like to especially thank Jay Ridgeway for her assistance in organising the Housing Affordability and Homelessness Forum in Perth.
Peachy
November 6, 2008 at 6:50 am
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!
FHB
November 6, 2008 at 8:02 am
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.
TheClaw
November 7, 2008 at 12:05 am
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:
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:
Choking Supply:
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.