Housing policies: designed to create stress, inequity and other health and social problems
The policies of governments at all levels combine to make Australian housing very expensive, and to exacerbate inequities between the housing haves and have nots.
That is one of the overarching themes from the latest Insight journal, published jointly by the Victorian Council of Social Service and Australian Council of Social Service on the topic of housing affordability. It has plenty of interesting reading for those with a concern for the broader determinants of health.
Another theme, which also resonates for the health sector, is the difficulty of achieving public interest reforms in the face of powerful interests, whether wealthy homeowners and investors, or developers.
The edition also highlights some of the jurisdictional obstacles to reform. Adrian Pisarski, Chairperson of National Shelter, writes that “the most alarming element” of the National Affordable Housing Agreement is the hostility between levels of government.
He says: “As one who works in and between both spheres I am constantly surprised at the lack of trust displayed by states and the Commonwealth as they discuss each other’s roles. There is a real imperative at the national level to bring the Commonwealth, states, community and private sectors to the table in a spirit of genuine cooperation.”
In an article titled “Tale of two cities”, Michael Buxton, Professor of Environment and Planning at RMIT University in Melbourne, describes the impact of deregulated planning upon urban disparities:
“Australian cities are increasingly being characterised by two city types as a result of the private sector determining the shape of cities, the type and scale of housing and other uses, the rate of development and ultimately the way cities function. Higher income, tertiary educated, professionally employed households are concentrated in service rich, higher density, inner and middle ring suburbs of Australian capital cities and selected outer urban areas, while lower income households without tertiary qualifications are concentrated primarily in service poor, low density, new outer suburban areas. A range of other public policy measures, such as taxation and incentive programs, have reinforced the disparities in wealth across different areas of cities.”
Meanwhile, thanks to the Insight team for allowing republication of the edition’s editorial below, by Cassandra Goldie, CEO of ACOSS, and Cath Smith, CEO of VCOSS.
At the bottom of their article are snippets from some of the journal articles, but you can download the entire edition.
Housing affordability is a social, economic and health concern
Cassandra Goldie and Cath Smith write:
Housing affordability is one of the most difficult and intractable issues facing Australia as a nation. Not only does it create widespread ‘housing stress’, where people living on low incomes are forced to pay so much for housing they must skimp on essentials like food and health care, but our obsession with home ownership and housing investment is a permanent drain on economic growth and prosperity.This would be a tragedy if we had no solution. It is even more so that, in fact, the solutions are known, but the political will to change is not yet present. However, this simply invites us to embark on a journey of change.
This journey will necessarily involve a transformation in public understanding – where ordinary Australians learn about what is causing constantly increasing housing prices, both to buy a property and to rent [see the article, ‘The Politics of Housing’ and Benjamin Law’s ‘Generation Rental’]; and then become angry about government failure to act, including changing Australia’s tax settings, which win the dubious honour of delivering more generous tax benefits to housing investors than any other nation in the world, and our First Home Owner’s Grants, which deliver scarce tax dollars straight into the bank accounts of housing vendors [‘Door should close on the First Home Owner Grant’].
At this point the journey must turn to our political leaders, who will need to exercise keen intelligence and strong political will to turn the housing policy Titanic around. For real and systemic change that will truly deliver a housing system where every person’s right to be affordably and decently housed is met, this transformation will need to include:
· reform of funding for affordable housing programs [see the article, ‘Shining the spotlight on the National Affordable Housing Agreement’, and ‘Housing bonds: back on the agenda],
· reform of state housing taxes [‘Scrapping stamp duties for a land tax’],
· an overhaul of federal housing tax settings, income support and Commonwealth Rent Assistance [See ‘low income + high rental is a poor equation’ and ‘Fixing rent assistance’],
· smart policies to deliver direct assistance to first home owners that is actually helpful, including scrapping first home owner grants and use of shared equity [‘Shared equity: new models at work in WA’], and
· a new approach to planning and urban development [‘Tale of two cities: supply and demand’ and ‘Investing in infrastructure’].
To show the way we can see some beacons of hope in existing policies in some states and territories, most notably: the exciting self-funding home ownership models in Western Australia, the inclusionary zoning successes in South Australia and the ACT [‘State of housing in Australia’], and federally in the gains made from the often un-lauded but nonetheless significant accomplishment of the Nation Building stimulus package for public and community housing, the success of the National Rental Affordability Scheme, and the progress in addressing homelessness [‘The Road Home: how are we travelling’].
Welcome too are the early insights into views and priorities of the new Federal Housing and Homelessness Minister Brendan O’Connor, outlined here just weeks after his appointment [‘In conversation’}.
We hope this special national edition of Insight, developed by VCOSS in partnership with ACOSS excites your interest to fight with the COSS network and broader community sector for a fairer Australian housing system.
Visit here to catch up on an earlier national edition of the magazine, Fair share, which focused on tax reform, and offered additional analysis about the impact of housing taxation on affordability.
Extracts from other articles
The politics of housing
Sarah Toohey, Campaign Manager of Australians for Affordable Housing writes:
The trouble with housing policy is that housing politics is just so damn hard. What might seem like self-evident solutions will affect the wellbeing (perceived or otherwise) of over eight million Australian households, the vast majority of which are home owners who have, on average, nearly half of their household wealth invested in their home.
When we talk about improving housing affordability, what we mean is slowing down house price growth and, with it, the growth of the investments and wealth of almost seven out of every 10 households. That’s a hard sell.
The current tax and transfer system favours home ownership and encourages over-investment in housing. By and large households receive more in tax breaks the older and wealthier they are and the more expensive their house is.
Sadly the national conversation around housing is dominated by investment speak and industry analysts, people whose interest is in making money from housing – and that’s the opposite of making housing affordable.
Strangely these industry advocates do proffer a range of solutions to housing affordability that are faithfully reported in the media. Sadly these solutions are more ad hoc than systemic and more self-serving than saving. They advocate for an expansion of our cities, when all evidence suggests that this means low income households get pushed out to areas with few jobs, and little public transport.
National Affordable Housing Agreement: Where to now?
Adrian Pisarski, Chairperson of National Shelter, writes:
The first National Affordable Housing Agreement (NAHA) was disappointing on many counts, not least of which that it cut funding for public and community housing by around $1 billion in comparison to its predecessor, the Commonwealth State Housing Agreement (CSHA)3.
The cuts aside, it was a conceptual breakthrough to move from a funding deal between the Commonwealth and States to a properly national agreement, with roles for the other critical players in housing affordability: local government, the community sector, and private finance.
This breakthrough also meant housing policy and funding issues were elevated from Commonwealth and State Housing Ministers and officials to the more powerful central agencies (Premiers, Treasurers and the Prime Minister).
Investing in infrastructure
Caryn Kakas, Executive Director of the Residential Development Council, a national policy division of the Property Council of Australia, writes:
Housing affordability is a puzzle that remains unsolved by all levels of government with Australians continuing to have only limited and unaffordable housing options in both the rental and home purchase markets.
In fact, Australia ranks only behind Hong Kong as being the least affordable housing market in the world, according to the 2012 Demographia International Housing Affordability Survey.
This report found that homes in Australia cost 5.6 times the average salary, compared to the broadly accepted standard for affordability of three times annual income to buy a home.
This means that families without at least two full-time employed members are often priced out of home ownership.
Tale of two cities
Michael Buxton, Professor of Environment and Planning at RMIT University in Melbourne, writes:
Land use planning is a potentially powerful tool for increasing housing affordability. However, in Australia it remains largely unused for this purpose.
The current deregulated planning systems in fact decrease affordability and increase spatial inequality. Everyone wants improved housing affordability but it remains an orphan.
Average Australian outer urban house and lot sizes are the world’s largest, with little diversity apparent. There is now a major mismatch between average household size (2.6 people per household) and dwelling size (Australian homes now have the largest average floor size in the world, 245.3 square metres in 2008-09, with an average 3.1 bedrooms per dwelling3).
Again, because of a failure of government, development companies determine the prevailing pattern of urban design. This conventionally takes the form of large detached houses in single use subdivisions poorly served by public transport, kilometres from retail and other services, and long distances from employment.
This has major implications for housing consumers. Firstly, relatively large, uniform housing and land products cost more to buy. Secondly, the dominant urban form of Australian outer suburbs leads to high social and other costs to residents.
Outer urban household operating costs are rising alarmingly. Home energy costs are significant and will increase substantially. For many people, transport costs in new car-based suburbs are the second highest household operating cost.