Housing in Australia is a bin fire – and desperate people will buy anything – Peter Lewis

April 9, 2024

Photo by Pixabay: https://www.pexels.com/photo/low-angle-photography-of-gray-concrete-building-259950/

If you put a solution in front of the public the majority say they will support it, as this week’s Guardian Essential poll shows

Housing in Australia is a bin fire stoked by shysters pumping up their assets for short-term advantage to the detriment of those they claim to serve. And that’s just the policy auction.

Political shiny suits carry on like BMW-driving real estate agents who know it’s a seller’s market, pumping up expectations on all sides in pursuit of the sale.

Liberal braggarts nudge us to dig into our retirement savings to make deposit; Greens roll out shiny new display units and implore us to buy off the plan; while Labor tries to convince us the structure is fundamentally sound and just needs a fresh lick of paint.

Desperate people will buy anything; as this week’s Guardian Essential Report illustrates – if you put a solution in front of the public the majority say they will support it.

What’s striking here is that when you unpack who is up for change, the much-vaunted generational property fault lines collapse. It’s only on tax concessions when boomers split from the consensus.

On one reading this is a clarion call for frenzied activity. But if “everything” is the answer to housing, maybe we need to reflect on the question.

Is the problem affordability? As John Howard famously opined, he’d never met a homeowner who wanted to see the price of housing fall. In a separate question we find a few, but only a very few, who would like to see this happen, with most investors still cheering on the market growth.

A second question surrounds the “supply” of homes for people to live in, with an emerging narrative that communities need to get out of the way and let developers rip so the benefits of their largesse can trickle down to everyone.

A third relates to the number of people for whom the basic notion of a secure roof over the head remains an aspiration. Robert Reich likes to say that every billionaire is a policy failure; every homeless person is a policy catastrophe.

To find the right question we need to confront the contradictions at the heart of housing. Are we talking about the bricks and mortar? Are these component parts that make a community? Or is property primarily a vehicle for personal economic security?

Of course these are not mutually exclusive but it’s revealing how strongly people say that the most important element should be the right to shelter.

It’s easy to dismiss this as opinion poll altruism (no one ever believes voters who consistently say they’d pay more tax for better services) and it is notable that older voters who are more likely to own a home are more likely to see it as a broader right than young people who have yet to attain that material security.

Still, these findings do offer a new way of looking at housing policy by creating a collective hierarchy of need. Priority one: house people. Priority two: build community. Priority three: create pathways to wealth.

Ask the same group of people what is happening in the real world and the responses shift dramatically.

So how might a public debate based around housing as a universal right be different?

We might start by focusing on the more than 175,000 households on the waiting list for social housing and resolve that waiting an average of a decade for support is a crisis not a queue.

We might think about how state governments can free up land and work with not-for-profit community organisations to rapidly build low-cost rentals for people doing it tough.

We might think about how these projects can anchor vibrant communities, where people from mixed economic backgrounds coexist and benefit from the diversity they all bring.

And we might think about how this would put downward pressure on rents for everyone, opening new opportunities for people to get the foothold into housing to achieve the security they legitimately yearn.

By simply inverting the sequence – from trickle down to bubble up – we could reimagine housing and the role governments – federal, state and local – should play.

The good news is that we have a useful data point to begin these conversations: the amount we collectively invest in housing as an economic asset as opposed to our investment in the right to be housed.

According to Per Capita’s Centre for Equitable Housing that number is already running at around $17bn annually in negative gearing and capital gains tax concessions for property investors. In contrast about $3.5bn a year is spent on social housing and homelessness services combined.

I’m no economic modeller but it seems that for every dollar supporting the right to a home there’s nearly $5 supporting the economic asset of, by definition, those who already have accumulated capital beyond a single property.

Inverting this 5:1 ratio by limiting the tax concessions to investors with multiple properties and shifting those funds into building housing for poor people would materially change housing in a way that the vast majority of Australians say they support.

Like so much of the housing market, a bit of honesty about the numbers would be a welcome development. The political agent that recognises this will be the one who brings down the hammer.


Originally published in The Guardian Australia, 9 April 2024.