Funny thing about the various state and federal governments responses to the housing crisis: They don’t mention “public housing”.
“Affordable housing” is all the rage, “social housing” certainly gets a look in and “build-to-rent” is popular, but “public housing” – housing owned directly by government – seems to have been culture-cancelled other than in the context of Anthony Albanese’s “log cabin” story.
Labor governments are giving a good impression of having adopted the discredited Jason Falinski aversion to “houso”, despite it still being the main source of shelter for people priced out of private property.
A key feature of the Albanese Government’s “$10 billion” election-gimmick housing policy is that the imagined profits from the Magic Pudding fund will go to subsidising community housing organisation projects – not actually investing in publicly-owned housing assets.
The neat thing about taking this route is that it allows the government to claim a supposed “up to” $500 million annual dividend from the Housing Australia Future Fund, that will provide 5,000 new homes a year, i.e. the impression is given that the Magic Pudding fund will build them for $100,000 each.
It continues the pattern of governments seeking to outsource housing responsibilities – nobody wants to run public housing.
State governments have been steadily handing over public housing to community housing operators.
Rise of the renter class
Federal governments have worked to grow the landlord class, ignoring the corollary of growing the renter class. There are now more people renting in Australia than people who own their home outright.
According to the latest Productivity Commission review of housing services, the number of public housing dwellings fell by 30,740 to 297,600 over the past decade while the number of community housing dwellings rose by 44,296 to 111,681.
In the context of population growth and soaring housing costs, the net increase of 13,556 – 3 per cent – is stuff all.
Under the decades of bipartisan neoliberal policy, the primary outsourcing hasn’t been to community housing but to “the market” – part of the mix of policies that have promoted a nation of landlords. As everyone but the obvious vested interests recognise, that has been a monumental failure.
It is unfortunate that last week’s series on the housing crisis in the Sydney Morning Herald and The Age ran in a short week dominated by Anzac Day, the release of the defence review and the lead-up to Kyle Sandilands’ wedding – such are our priorities.
Vital role
The series certainly illustrated the problem, but fell short in fingering the vital role of public housing in any eventual solution.
The housing chorus remains dominated by government policies that increase demand for private housing and bleating about planning delays and constraints that make building more difficult.
Subsidising private buyers by one means or another can help the individuals assisted and can be used to win votes but it does not solve the overall problem.
Nobody pretends there is a quick, easy or cheap solution. The Reserve Bank has spelt out that renters are suffering more than people with mortgages and that the rental outlook is only going to get worse – causing significant inflation in the process.
Just as it takes time for the full impact of rate rises to be felt by borrowers, there is a delay between new tenants paying sharply higher rents and those rents working their way through the system as leases expire and people move.
An RBA research paper last month showed the gap between average rents and what new tenants have to pay – but that’s a gap that will steadily shrink.
Unfortunately, the RBA pulls up short of criticising governments for letting public housing stagnate and shrink as a proportion of total housing.
It reminds me of the RBA taking years to publicly connect the loss of bargaining power and reduced union membership with substandard wages growth. D’oh!
Community housing groups and state governments want the Senate to pass Labor’s Housing Australia Future Fund, figuring something, anything, is better than nothing, while the Greens hold it up demanding a national rent freeze.
Yes, the Greens have realised many young renters vote for them.
The rent freeze is not going to happen. State governments couldn’t stand the heat from the real estate lobby and the small target federal government wouldn’t risk angering the landlord class – it’s too large now.
More importantly, it wouldn’t solve the underlying problem, only temporarily helping some individuals.
The real estate lobby runs a questionable line about it forcing landlords to quit the market, resulting in fewer rental properties, exacerbating the problem. That’s ignoring the obvious result of a landlord selling – the property is either bought by another investor or an owner-occupier who would exit the rental market. D’oh again.
As governments faff about, federal Housing Minister Julie Collins told Radio National the sun rises in the east.
“There is no silver bullet,” she said. True, but there also are alternatives to lobbing popcorn at the elephant in the room.
“What we’re doing is working as quickly as we can with states and territories to turn around what are very serious housing challenges in Australia.”
Which means they are continuing to faff about and hope the elephant just disappears into slum share houses and boomers die more quickly to free up their real estate.
One genuine policy
There is one genuine policy that has to be at the core of any solution: Direct government action to increase supply and not by increasing demand.
That means large-scale investment in public housing to reduce the proportion of people crowding into the failed private rental market. Taking the heat out of the bottom of the rental market would reduce pressure on where the market has most obviously failed.
It means a long-term commitment and being game to use those two words, “public housing”, combined with a campaign to educate the population to reject the Jason Falinski mindset, to accept that having a healthy large portfolio of quality public housing is what successful, civilised countries do.
Fixing a problem that has been building over decades will take many years, but it will only be fixed by starting work on it.
And it increasingly looks like Jim Chalmers’ pre-election slogan of building one million homes in five years will only be achieved by direct investment.
The timing is favourable. Private building ambitions are falling, capacity is starting to open up in the hitherto stretched construction industry.
Governments can build on government land without needing to make a profit on the enterprise.
One of the Morrison Government’s worst policy blunders was ignoring the recommendation of most economists at the start of COVID to invest in public housing, preferring to throw $2.5 billion at electors via HomeBuilder – immediate stimulus the industry couldn’t handle.
History will judge it to be one of the Albanese Government’s biggest failures if it can’t say “public housing” and back it with more than a gimmick fund.
