The housing crisis is a national issue that needs an urgent solution in order for the Albanese Government to succeed in the next Federal Election, writes Dr Klaas Woldring.
SOCIAL HOUSING in Australia has often been regarded as second-class, for the poor, a form of governance assistance for those who haven't quite made the grade. Understandably also for most of the between 200,000 to 400,000 migrants and refugees who arrive in Australia annually, housing is a major issue as well.
The enormous shortage of housing of this type for those who are of or can be regarded as fitting these categories is bad enough. The reality is that many who now need proper housing do not even fit these class categories at all.
While housing is essentially a state concern in Australia, the issue has grown into a national problem of such importance and proportion that it is expected to have a decisive impact in the 2025 Federal Election.
The crisis is largely a result of the national attitude that private ownership of a house is the Australian dream. The problem would disappear when sufficient privately owned houses are made available and can be paid for privately. This increasingly unrealistic view is hard to shift but this is what is at stake, a major cultural change. That view is also related to negative gearing based on the private ownership culture and conservative government support for it.
The Albanese Government now has its work cut out for it. Failure could well result in still more serious consequences. Apparently, but hardly mentioned publicly, 22 federal seats could be adversely affected for the ALP should negative gearing be abolished. This is yet another disadvantage of the current electoral system based on single-member districts, primarily serving the two major parties.
To generate and promote a positive renting culture requires a major national initiative and courageous deliberate policy change. Encouraging renting requires a substantial increase in public ownership of new and older houses, either by local, state or federal government. Community ownership is also mentioned in some quarters. It certainly means that renting needs to be encouraged and renters need to be given more protection and rights.
There are certainly great advantages in encouraging renting. It makes moving to another house and place much easier, a great plus for the workforce and the economy. Younger people would find it much easier to find a house when starting their careers.
Currently, around 10% of all housing, mostly privately owned, stands empty for most of the year. The Government could develop measures to encourage making these houses available for renting. In many other countries renting (mostly unfurnished) is very normal, it has no stigma and public ownership for that purpose is common.
The Australian Housing and Urban Research Institute (AHURI) provided some recent interesting statistics in this respect concerning around 45 countries, including the European Union countries. The Netherlands topped the list with 34.1% followed by Austria 23.6%, Denmark 21.4% and the UK 16.7%. Australia came to a mere 4.1%. Plenty of space for a major culture change, one would think.
This article will not analyse the thorny issues of negative gearing and capital gains tax discussed in the media at great length in recent weeks. However, the consensus seems to be that these practices, especially since 1999, have tended to primarily benefit the already well-off. The ALP should abandon this system altogether or drastically reform it thereby generating savings that can be used for social housing.
The current thinking in Labor circles is to provide financial assistance to 40,000 buyers with an equity contribution of up to 40% for new homes and 30% for existing homes. A deposit of 2% only would be required. This Help to Buy scheme may be a start, but it is still aimed at private ownership rather than renting. Much of this is apparently aimed at high-rise buildings in major cities.
The issue demands much broader consideration. That surely concerns also the already very high level of concentration of the population in six or so major cities. Are these highrise buildings going to be built all in major cities and close to public transport options? Just how high will they go? What has happened to the brave decentralisation policies of the ALP of times past? Can governments encourage people to move to the regions, where the cost of land and building is considerably lower than in the major cities? It is already sad to see the huge newly built-up Sydney suburbs with extensive rows of private single houses on tiny blocks of land.
The ALP's Build to Rent Bill has been questioned and is currently blocked by the Greens.
The $10 billion Housing Australia Future Fund would deliver funding to build 30,000 affordable homes within its first five years, including:
- 20,000 new social housing homes — 4,000 of which would be allocated to women fleeing domestic violence and older women at risk of homelessness;
- 10,000 affordable rentals for frontline workers like police, nurses and cleaners who kept us safe during the pandemic;
- $200 million to repair, maintain and improve remote Indigenous housing;
- $100 million for crisis and transitional housing for women and children leaving or experiencing domestic and family violence, and older women on low incomes who are at risk of homelessness; and
- $30 million to build housing and fund specialist services for veterans.
The Greens policy is still uncertain but briefly described on the internet as follows:
The Greens will call on the Federal Government to develop 360,000 homes in the next five years for the public to buy or rent.
The party say the move is necessary to provide the public with affordable homes...
It is also pushing for a rent freeze and a cap on rents, and advocates for the scrapping of negative gearing.
A convincing, well-explained, plausible and financially realistic policy is required now to avoid further delays in bringing the ALP, Greens and sympathetic Independents together as a housing coalition in the Senate.
The recent 68-page major People’s Commission into the Housing Crisis: final report provides considerable insights and presents major advocacy for social housing. It should be widely read in addition to informed commentary by other organisations like the Grattan Institute. The report is highly critical of the ‘unwavering belief in the private market's ability to fix the housing crisis’. It sees social housing as the only way to end Australia's housing crisis.
One would think the ALP and the Greens should adopt this report as part of their housing policies. My view is that the Australian voters would warmly welcome that attitude.
Dr Klaas Woldring is a former associate professor at Southern Cross University and former convenor of ABC Friends (Central Coast).
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