Australia must move to solve the affordable housing crisis

Image from AAP

The following article by Joe Montero was first published on the Fair Go For Pensioners (Victoria) website (14 November 2023). It explains that the fundamental problem around the crisis in housing affordability is that housing has been transformed into a commodity, where the needs of investor take precedence over the needs of society. This results in market failure, and the answer is non-market solutions.

If having a reasonable home providing an acceptable standard of living was considered as an important human rights issue in Australia, this would express commitment to the 1948 United Nations Universal Declaration of Human Rights , to which Australia is one of the signatories.

Article 25 of the Declaration says that an adequate standard of living is a basic human right, and the subsequent article 11.1 of included in 1966, International Covenant on Economic, Social and Cultural Rights adds weight. Adequate housing is underlined, and this is interpreted broadly, as the right to live somewhere in security, peace, and dignity. It is further clarified in the United Nations Committee on Economic, Social and Cultural Rights’ general comments No. 4 (1991) on the right to adequate housing and No. 7 (1997) on forced evictions.

The key elements are security of tenure, availability of services, affordability, habitability, accessibility, location, and cultural adequacy.

Photo from Megan Wilson and Christopher Statton

Being is the grips of a housing affordability crisis and rise of inadequate housing and homelessness proves that Australia has moved quite a long way from meeting its obligation under international conventions. This is because housing has primarily become a commodity to be bought and sold. Housing all of Australia has a subordinate place to the market.

In 1992, the United States attempted to water down housing as a human right at the HABITAT II meeting. It failed. At least Australia don’t go along the United States’ ambitions at this forum. But Australia did follow down the same road in practice, and this has led us to where we are today.

Australian Government policies have long supported this commodification of housing. This is the reason why they emphasise assisting the market to gain more for investors and delegitimise alternative approaches. By doing this, Australian governments have been turning their backs on international commitments made from the time they were signed.

In the present less favourable economic climate, with falling job security and falling real value of wages, and especially social security payments, the gap between commitment to this basic human right and performance has become a gulf.

Once upon a time, the great Australian dream of owning your own home was widely promoted. Under the Menzies government during the 1940s, it was seen as a means to “control the working man,” in the post war explosion of unionism and militancy. Robert Menzies boasted a mortgage will force the working man to obey, because workers couldn’t afford to risk losing pay, not masking mortgage payments and losing their homes.

Today, the prospect of owning your own home is disappearing, and rising defaults on payment by mortgagees threaten many with the loss of their homes. Renters aren’t doing any better. Those in the capital cities markets know that they can’t afford what they are forced to pay. It’s become worse for both groups since the pandemic.

The deteriorating position of renters have been confirmed by a report from SGS economics and Planning details how the city crisis is moving out to the regions as people are forced to relocate. Increasing populations are forcing up regional house prices and rents. This is what happens with market driven housing.  The report says that renters on JobSeeker must spend at least 78 percent of their income for a one-bedroom flat in the capital cities.

Public housing as an alternative is woefully inadequate and being reduced further. Cooperative housing and other sorts of alternatives to the market are far too small in scale to make any difference.

Meanwhile, governments continue to go about with their obsession of feeding the market. The point is that the housing market is failing to meet Australia’s housing needs. Only a non-market solution is going to provide a solution. A process of de-commodification must begin, and this depends on government and community intervention.

Given the complexities of the problem, only a combined approach is good enough. This should begin with a large-scale increase in public housing. Not the pretend type that uses public/private partnerships to hand most of the benefit to developers and the real estate industry.

Boosting cooperative housing is the second leg. This is important because it is an entry point for raising the voice of renters and putting control over their housing in their hands. Cooperative housing is a standard bearer for democratic housing.

Control over one’s housing is key to ensuring that it meets the needs of the renter.

Other forms of non-private housing can be in the mix, but none should exist as an excuse to cut down public housing.

If a rise in non-private housing is going to be effective, it must be on a scale that it provides a credible alternative to Taking out a mortgage. When people aren’t forced into this option, property prices will go down.

Pushing down the cost of housing would be assisted further through a staged elimination of negative gearing and other provisions supporting the market through taxpayer’s dollars.

Then there is the matter of imposing rent control to ease the pressure on renters remaining in the private market. International experience shows that this can work.

No, denying the oct of such a project for the government will be considerable. If for instance 80 billion was to be set aside for this every year until the need is met, it could be paid for by a 40 percent tax on the super profits of the largest corporations, backed by a re-ordering of government spending priorities.

Australia’s housing affordability crisis can be resolved. All it needs is the political will. If our government lack it, its’ up the community to make this change.

1 Comment on "Australia must move to solve the affordable housing crisis"

  1. NOTHING WILL HAPPEN WHILE PEOPLE ARE KEPT IN THE DARK
    CLAP THE BANKSTERS IN JAIL
    BAN POLITICAL DONATIONS (BRIBES)
    TAX MONOPOLIES TWICE THE USUAL RATE
    PROVIDE SOME COMPETITION IN THE MARKET

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