The solutions to Australia’s housing problems are well known, but the political danger of taking on huge vested interests is clear.
Tax changes hitting millions of people. Taking power away from local councils to prevent development. Greater housing density. More loans by banks to “risky” business propositions.
“The solution is we need to put more money into housing, we need the construction sector to be a larger part of the economy. We need more housing, and here in Sydney we need more in the inner suburbs and in the eastern suburbs,” he says., the earnings of which would finance the construction of 30,000 social and affordable homes over five years.
Public housing in the mid-1960s accounted for about 9 per cent of all housing. It’s now less than 4 per cent and the waitlist continues to grow.Chris Martin, a senior research fellow with the UNSW’s City Futures Research Centre, says that after World War Two, governments sank huge amounts of money intoBuilding societies were subsidised to lend money to prospective homeowners.
“Local councils can have control over the type of housing and the location, but the local council needs to be told the quantity of housing.” Independent economist Nicki Hutley says the problem must be dealt with as soon as possible and believes policy changes have to be directed at NIMBY communities. Other countries are implementing this concept. This month, the Biden administration pledged $US98 million to communities that reduced barriers to affordable housing.“The single largest issue is that we haven’t built enough housing, and we’ve done that for decades. The states will take their own approaches to boosting supply, but there needs to be an incentive for them to get more supply,” he says.
“It’s evident that there is a problem there that we’re not attracting enough investment into building residential homes,” he says.Executive director of progressive think tank Per Capita Emma Dawson says, apart from a huge increase in social housing, there needs to be a change to the tax system and the capital gains treatment of property.
Labor under Bill Shorten took proposals to sharply reduce negative gearing to the 2016 and 2019 elections. Malcolm Turnbull’s government considered changes, including a limit on the number of properties someone could negatively gear, but abandoned the idea in 2017. “All the policies to give people more money to enter the property market have just made the situation worse. They have not worked. They’ve just helped make housing more expensive,” he says.
Eslake says all policies that add to prices – such as stamp duty exemptions or discounts for first time buyers – should be axed. The money saved from ending these programs should then be spent on boosting supply.
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