Greens’ housing plan is a joke – Emma Dawson

March 9, 2024


There are two big structural problems in our national policy approach to housing: the lack of a single responsible federal department, and the withdrawal over the last 30 years of the government as a public provider of social housing. These, along with the folly of freezing rents, are points we at Per Capita made in a submission to the recent Senate inquiry into ‘‘the worsening rental crisis in Australia”, established and chaired by the Australian Greens. Our submission was the most-cited of any in the committee’s final report.

So when, on Wednesday, the Greens announced their first election policy would be the creation of a ‘‘public developer” under the control of a dedicated federal department to build hundreds of thousands of new homes across the country, I was optimistic that some of the evidence they had considered through the inquiry process had made its way into a meaningful policy.

That optimism was badly misplaced. The Greens’ plan, outlined by housing spokesman Max Chandler-Mather at the National Press Club, was bold on vision, big on rhetoric – and entirely wrong on policy. It would, quite obviously to anyone who understands our housing system, make the housing crisis in Australia worse.

Firstly, this isn’t a plan for more social housing. Of its 360,000 homes to be built over the next five years, 70 per cent would be available to rent, of which 20 per cent would be reserved for those on the lowest 20 per cent of incomes. This equates to just 10,000 homes per year.

The current waiting list for social housing is close to 200,000. If this policy got up, we could expect it to close that waiting list by the year 2050 – if those 10,000 homes were allocated to people eligible for social housing. Inexplicably, under the Greens’ plan, they won’t be.

Their policy states that anyone in that lowest income bracket would be eligible for one of the 10,000 public homes reserved for the poor, regardless of whether they meet social housing eligibility criteria. The policy seems designed to sideline the community housing sector, which already creates secure, affordable, long-term rentals for those on low incomes.

Secondly, the Greens’ idea of what is ‘‘affordable” is out of touch. The policy states that rent for the public developer homes would be ‘‘capped at 25 per cent of the national average household income”. Latest figures put that at just over $120,000 per year, or about $2300 per week, meaning the rent cap would be $575 per week. That’s about $200 more than entire the rate of Jobseeker, and $75 more than the maximum rate of the single age pension.

The most impressive moment in Chandler-Mather’s appearance at the Press Club was when he spoke passionately about wanting to ‘‘stop single mums from being evicted”. Why, then, has he set the rent cap at $90 more per week than the maximum parenting payment available to single mothers, and roughly equivalent to the entire income a parent could earn working three days a week on the minimum wage?

Thirdly, the 30 per cent of homes available to buy under this scheme will almost certainly not be affordable to any first home buyer without substantial capital, and the properties might even be ineligible for a mortgage.

As buyers would only ever be able to sell the home back to the public developer at purchase price plus CPI, the risk of making a substantial loss when you need to sell – to upsize when you have a family or relocate for a job – is real. My rough calculations show that, even if someone using the scheme were able to obtain a mortgage with such low rates of capital growth and pay it off in 10 years, they would make a loss of at least $50,000 on a $750,000 home due to interest payments, stamp duty and other purchasing costs.

This means the majority of the roughly 21,000 homes available for purchase each year would likely be bought by people who could buy with cash. This would, obviously, widen the already rapidly growing gap between those lucky enough to have access to the bank of mum and dad, and those trying to make it under their own steam.

I could go on. The policy does not include a method for acquiring land, assumes the states will waive stamp duty, and is vague on the costs of maintenance for rental homes. In short, it’s not a serious housing policy, it’s a campaign tactic.

The Greens are right that our housing market is broken. A third of Australians now rent, and 85 per cent of them believe they will never be able to buy their own home. This is a complete failure of policy, by both major parties over recent decades. Sadly, if the Greens’ plan were put into action, those policy failures would be compounded.

Originally published in The Age, 9 March 2024