It appears that my warnings about the Housing Summit were more dire than they needed to have been. The only recommendation of any substance to come out of it was a call for a national Housing Ministry. This is really no bad thing.
Chair of the Summit, Professor Julian Disney, claimed on ABC Radio National that the Summit had been a great success and showed how unified the various participants were. In fact, I think the opposite is the case. If there had been unity, then some of the schemes being advanced would have got up – such as the Australian Housing Trust.
In fact, rather than unity, you had the welfare and housing lobbies pulling in opposite directions. One has to remember that ACOSS and Shelter are part of the Services First coalition, which wants better services not tax cuts. Yet the HIA wants to cut taxes, claiming that they make up 30% of the price of a new home. The two views aren’t compatible.
As it is it might not matter that much. Material presented to the conference by Professor Anne Harding showed that “housing stress” has actually declined since 1998. She also found that one-third of those suffering housing stress lived in NSW – presumably Sydney – and that it most affects renters between the ages of 30 and 39. Not only that, but it most predominantly affects sole parents. This supports my argument that the issues are not related to a long-term problem with housing stock, or necessarily related to housing at all. Single mothers are perhaps always going to be in housing stress, but maybe it cures itself once the mothers return to work.
In another presentation, US import Barry Zigas had an interesting graph which showed that in the US, housing was most affordable in the last 13 years in 2000, having been least affordable in the same period in 1994. His graphs appeared to show that the problem is cyclical. They also seemed to show that the interventions he was recommending were at a peak now, yet so was a lack of housing affordability. If this is the case, why should one assume that the prescriptions were fixing the problem at all?
There are some real solutions to the problem, and they are ones that a National Housing Ministry should address. None of them is politically easy. The first is to release more land to the market, with a more realistic pricing structure. There are real impediments in some jurisdictions to timely release of land because of the way that services for catchments are funded, not to mention planning laws that make it difficult to bring land to market. However, poor urban planning can also lead to expensive patterns of development which might keep the price of a block of land low while inflating the costs of occupancy because of the need for a car to travel long distances to work, shop and play.
Another solution is to radically ease up on the rate of immigration to Australia. The Howard government has kept very quiet about it – it doesn’t sit well with their tough on refugees policy – but they have been very generous in the number of migrants who are granted entry each year. The planning rate of the Department of Immigration and Multicultural and Indigenous affairs is over the highest rates of the Hawke-Keating era. More immigrants equals more buyers and renters equals upwards pressure on housing prices.
Yet another solution is to adopt policies which encourage us to have fewer children and form fewer households.
A federal ministry of housing could look at all these solutions, and others, more rationally than the states individually on their own, or housing summits. So my pessimism was misplaced. Despite the ominous press releases, the summit topped out at a sensible conclusion after all.
July 05, 2004 | Graham
Housing Summit a bit flat
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I think almost all the suggestions put forth should have health warnings attached.
Given the cyclical nature of the property market, as you outlined, it’s probably best the the government simply do nothing. I realise that it’s almost impossible for a politician to sit by the sidelines and just watch, but frankly it’s the best thing to do. Having a housing department would probably inspire the relevent minister that he/she had to actually do something. In classic form, we’ll end up with houses in places that people don’t want to live and cheap loans for seven bedroom family homes in Dubbo.
Likewise, it would be worth considering the inpending demographic timebomb before suggesting reducing net immigration.
The future tax payers of Australia (who’s taxes Graham will probably be spending in his retirement on medical services and the like) will almost certainly be well populated with immigrants, if we’re to avoid having taxes go up dramatically to pay for the boomers’ drugs and hip replacements. For this reason alone, I’m often surprised by the resistance that the over-50’s have to immigration …
Comment by Brendan Bouffler — July 6, 2004 @ 1:08 am
There are still more, better solutions than those proposed. Why does land always have to be ‘released to the market’? These are just long-standing patterns of govt choosing to wash its hands of the responsibility of providing housing for citizens, arguing conveniently that ‘the market’ will be able to sort it out best. Clearly, in this case, the market is socially deranged and dysfunctional. The govt could actually retain ownership of the land and create whole price-controlled suburbs, effectively being the developer, but doing it in an outsourced tendered way for the lowest responsible bidders, not selling off land to the highest bidders to short-sightedly enrich its own coffers. Why publish green guides to building at the Federal level only to have builders ignore them? Why not instigate building suburbs of responsible, affordable and sustainable dwellings themselves? Apart from the fact that they’re too chicken to get involved. I assume Brendan is being tongue-in-cheek when he says “it’s almost impossible for a politician to sit by the sidelines and just watch” — that’s what they do best! They watch and deliver empty speeches achieving nothing for a living, haven’t you realised that yet? The Libs and Nationals don’t want to touch it, because it will upset their rich landlord voters, billionaire developers, real estate agents, and other property class types. Labor simply has no excuse not to act, except it’s been somewhat appropriated by the Right as well. Both major parties seem just plain scared to upset the status quo.
I like the suggestion from Graham that the best public policy response is to encourage people to have fewer children — you’re right, it would be a shame to inconvenience those developer billionaires who want to make smaller houses for more money, govt should just advocate smaller families to fill in the shoeboxes they build for massive personal profits. Talk about the tail wagging the dog.
You guys don’t understand what a ‘market’ is or is for, nor what a government is for, nor what constitutes good public policy and action, or citizenship rights and the social contract, nor even that the Housing Industry of course is going to pull away from the welfare sector, as the housing industry association is there to make maximum profits for its constituents, no matter how short-sighted and selfish that view might be. That’s why you need responsible govt, to manage and regulate things fairly from a whole-of-society perspective. It’s doubtful if present governments have the stomach for it, though, preferring instead to draw their parliamentary salaries for just showing up and acting like bags of wind and changing nothing — and scheming and strategising ways to get re-elected.
Note too that immigration policy is now geared to bringing in much larger numbers proportionately of professionals and business types than in previous decades (which were more about low-skilled labour, humanitarian and family reunion strategies). The effect of these people coming into a housing ‘free market’ society is to drive prices up still further.
Best regards, people. I’m always good for a Sociology 101 and Public Policy 101 tute if you’re interested in seriously examining social trends and community welfare issues.
Comment by Sean Reynolds — September 15, 2004 @ 2:16 pm