The Debate About Housing Affordability Misses the Point

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Negative gearing has taken a front seat in this campaign after it was revealed that Labor would be making some changes should it win government. Much of the debate centred around who used it (umpteenth home buyer millionaires or mum-and-dad investors) and whether it raised housing prices, culminating in Malcolm Turnbull’s suggestion that parents should “shell out” to help their children break into the housing market. Given its haunting similarity to the elitist undertones in Joe Hockey’s suggestion that poor people “don’t drive”, Labor and the Greens have made changes to negative gearing key policies, much to the chagrin of conservative commentators. Some commentators, like Waleed Aly, have welcomed the changes in the interests of greater access to housing for young people, but this policy-centred discussion has missed the point. This discussion should in fact be about why we want houses in the first place.

What little commentary we have heard on these motives is dismissive at best. Judith Sloan, contributing economics editor at The Australian, said dismissively on The Drum that the reason young people cannot afford a house is because they are too picky, and “don’t want to live in Penrith”. Despite a clear lack of intergenerational empathy on Sloan’s part, on the same program, self-declared “former political hack” Osman Faruqi places much of the blame for frustration over housing with young people unashamedly at the door of the older generation (who were, in fairness, able to reap the reward of free education and a less competitive and globalised economy).
Though she did not intend to make it, Sloan makes a good point. The point here is not that the youth of this country are “too fussy” when it comes to buying a house, but that a house is not exactly all that they want. Currently, Melbourne and Sydney both feature on Monocle’s list of most liveable cities, but, if the solution to housing is the continued release of crown land on the outskirts of those largest of Australia’s cities, that list will not be home to them for long.

A focus on housing as an isolated piece of construction takes away from the point of a house in the first place, and estate developers and road construction companies have been able to cash in substantially on the ambiguity. In “Utopia”, the excellent sitcom about Australian bureaucracy, the CEO of the Australian Nation Building Authority is speaking with a property developer, and he asks, “will there be schools?”, “will there be hospitals?”. To each question about basic infrastructure, there is only Lane’s cheesy defensive grin as he replies “down the track”. The episode must cut close to the bone for people on the edge of major cities without any public transport links or community infrastructure whatsoever.

To promise all Australians a house is to deny them a real community in which to build a home. The Daniel Andrews government swept to power in Victoria with promises to scrap the east-west link motorway. Yet, it is just these kinds of roads to new developer-led suburbs that will keep being subsidised by governments across the country. The spending on roads comes of course at the expense of spending on any other number of more lucrative and beneficial goods, such as public transport and education. Ultimately, should this property-development-government-road-construction complex continue, these cities may be less worth living in anyway.

So, what is the alternative to cities that creep ever outward until they resemble the great urban messes of Sao Paulo, Beijing and Mumbai? A little known Australian political party called the Science Party had a very curious, but incredibly in-depth plan to build a charter city between Canberra and Sydney on exactly the opposite principles to the ones used today. Rather than sprawling, it would be constructed with high density in mind, just like Singapore and the Japanese cities that feature on the Monocle list.

The good news is that plans to make cities more densely populated have been underway, such as the ‘Postcode 3000’ initiative in Melbourne aimed to make the CBD a place to live as well as work. But more work needs to be done, and a key part of that is making the places that people live accessible. A person living in an outer estate of Melbourne might find they are taking hours in their commute to and from work each day. If regional rail were set up to be fast and cheap, then it could be easily as viable, if not more so, to live in Ballarat, or Bendigo, or Geelong. The Science Party have hit on the greatest myth of Australian urban planning, namely that Sydney and Melbourne (and to a lesser extent, Perth, Adelaide, and Brisbane) are the only cities of any value.

In America, the hipsters are at the forefront of this regional urban renewal. Finding that housing is cheap in Detroit, youth 20-somethings began to move in, and have completely revitalized the city with a new lease on life. Yes, cheap housing caused by decades of decline is a significant part of the pull to places like Detroit, but its city status is not insignificant. Rather than just cheap houses on a massive block with other houses (like the outer developments in Australian cities), it is a place with schools and transport links and amenities that make life actually pleasant and more convenient.

The housing affordability debate has focused too much on the price tag, and not enough on the motivations for buying a house in the first place. The ones that suffer from this shallow discussion are people that want to have a place to live and a decent standard of living, while the one that win are politicians who can use slogans about housing to get a spike in polling figures, and the housing developers that support them to get a spike in their bottom line. In terms of the housing debate, we need to focus on building communities of homes, rather than sprawls of houses.