On 14 March 1977, a Rolls-Royce carrying the Queen and the Duke of Edinburgh swept through the working-class Sydney suburb of Waterloo to visit a new inner-city high-rise housing commission development.
Reports from the day note the royal couple were “quickly whisked up to the 29th floor to the one-bedroom home of 83-year-old Mr Vyvyan Smith, [where] the Duke gazed out over Botany Bay and the west to the Blue Mountains. ‘Absolutely splendid,’ he said.”
It has been a long time since Australia’s public housing stock was anything to be proud of.
The 1980s brought the beginnings of a shameful decline in the availability and quality of public housing for the poorest Australians. Between about 1950 and 1970, the New South Wales public housing commission built about a sixth of all houses in the state and then sold a third of everything they built to the tenants, helping to fuel rising rates of home ownership in the postwar period.
But these days, the elderly pensioner the Queen met in 1977, who paid $8.80 a week for a single housing commission unit, would struggle to afford to rent in the private market. While pensioners might well be entitled to commonwealth rent assistance, which increases in line with official inflation, over the past two decades the real increases in actual rents in Australia far outstrip the CPI.
And the situation is only getting worse. Despite a public housing building boom in many states and territories, so many derelict properties need to be destroyed that the $10bn being spent to build 23,000 dwellings over the next three years will only end up adding about 15,500 dwellings to the available pool of public housing.
In Tasmania – which is making a big push to build public housing – the waiting list for public housing has blown out from 2,100 in June 2013 to 4,707 in February 2022 and the estimated wait time for “priority applicants” to be housed in Tasmania was almost five years.
By the mid-2030s, it’s estimated 731,000 new public housing units will be needed to house homeless and low-income Australians facing unaffordable private rents.
But of course, there are two housing crises in Australia. The other is housing affordability.
Middle class Australians grasping for the great Australian dream of home ownership now spend up to a decade saving to raise a deposit while they too compete for private rental housing.
Scott Morrison has told these renters that the best way the government can support them is to help them buy a home.
But what if the best solution for them was not to buy a house?
And what if by encouraging these people not to buy a house, we could solve both our national housing crises at the same time?
Recently on ABC TV’s The Drum, we explored a notion that for decades has preoccupied housing researchers like Chris Martin, senior research fellow in the City Futures Research Centre at the University of New South Wales. Martin is convinced by the idea of a massively expanded public housing sector, which could at once wipe out the waiting list and expand the eligibility criteria.
“What if you could provide for a range of tenants, from the neediest Australians to essential workers who couldn’t otherwise afford to live close to where they work, right through to middle income earners, unable to afford their own home but able to pay more substantial rents, which would help subsidise the whole system?” he wonders.
Expanding the eligibility in this way would help end the problem of a marginalised, shrunken public housing system, wasting away on what Martin calls “starvation rations”.
“At the moment it’s a catch-22. Very low-income people can afford only very low rent. The gap between what they can pay and the cost of a reasonable housing sector is not being met by [government]. Therefore, maintenance of existing housing stock becomes a huge problem. So with fewer suitable units available due to the maintenance crisis, priority occupancy is given to those in the most dire need, who naturally can’t pay much in rent. That further reduces the funding available for maintenance and to develop new stock so that public housing sector shrinks further.”
But why would Australians be persuaded to abandon their cultural aspirations around home ownership – or, as another researcher puts it, their “unerring belief that home ownership is the only way to ‘get ahead’” in this country?
Economic modelling by EY Sweeney challenges the notion that renting is dead money. Their research compares the fortunes of two Sydney home seekers with the same starting capital, in any one of 43 local government areas in Sydney between 1994 and 2017. One invests in a house or unit. The other rents and invests instead in an ASX200 index fund, pouring all the additional money they would otherwise have spent on a mortgage, utility and maintenance costs into that fund. Ten years on, the result? 62% of the time the renters were better off than home owners living in the same area.
Thinking big is something Australia used to do.
In a black and white newsreel from 1944 called “Design for Living Post-War”, an announcer – in that slightly shouty newsreel cadence of the day – reports on a similar housing crisis which faced Australia through the Depression and into the 1940s: “The Department of Post-War Reconstruction estimates Australia will need 750,000 homes.”
Oddly enough, that’s almost precisely the public housing deficit facing modern Australia.
The narrator continues: “Most of these will need to be homes low enough in cost for the average wage earner to be able to live in. Everything depends on the plan we make today for tomorrow’s housing in postwar Australia. We planned ‘all in’ to win the war and we’re winning. We have to plan as a nation and not just for ourselves if we are to win the peace.”
What if in post-Covid Australia we went “all in” to solve the housing crisis?
Ellen Fanning is a host of the current affairs ABC program The Drum
