Like a conversation about real estate at a Sydney dinner party, the debate over Australia’s housing crisis contains considerable headshaking and professions of concern, while self-interest floats just beneath the surface, apparent to all.
Labor wants the political advantage of being seen to do something about housing without really doing very much beyond the budgeting trick of establishing a $10 billion “fund” to provide a stream of annual grants to state and territory governments. The Greens — like most of us, actually — want a lot more housing, but just not anywhere near their affluent inner-city electorates, thanks very much. The Coalition thinks we just need to let the market rip and remove planning regulations that restrict high-density developers.
In the mainstream media, YIMBYism is coming into fashion, even at outlets like The Sydney Morning Herald, where NIMBYism has been a staple of coverage for years. We’re told to pity poor developers, hampered by planning bureaucracy (even after planning powers have been taken from local government and handed to expert panels), who would love nothing more than to build all the housing that we need.
As Australia’s best property economist Cameron Murray — one of the few coming to the debate in good faith — has often pointed out, developers have no interest in increasing the supply of housing to the point where it becomes cheaper. Instead, they’ll sit on residential land until the market maximises their returns. Murray has also discredited the oft-touted claim that Auckland’s removal of planning restrictions led to a big rise in residential construction.
The Albanese government is discovering that taking on housing is not merely hard policy — after all, it’s the intersection of several different major policy areas such as migration, the labour force, infrastructure, government services and finance — but is making a rod for its own back that previous federal governments have avoided. The Housing Australia Future Fund (HAFF) is effectively a guaranteed supply of public housing grants to the states and territories (and others who might get lucky along the way) dressed up as a $10 billion fund to sound impressive (and waste a few million a year in fund management fees). This at least avoids relying on flawed private sector supply-side solutions.
But it’s the state and territory governments who are the villains of the piece. They have primary responsibility for housing, not the Commonwealth, through planning, land supply and their traditional role as providers of social housing. But consider how the states responded to the Rudd government’s GFC social housing stimulus package. According to Bureau of Statistics dwelling approvals data, in NSW public housing approvals soared to over 800 a month in 2010 — compared to an average of 70 a month in 2008. But in 2011 they fell to just 46 a month; in 2012, just 24 a month.
Similarly, in Victoria, where before the GFC there had been a small rise in public housing dwelling approvals, the Rudd peak of over 200 a month was followed by a large fall in approvals, with monthly approvals sometimes not even reaching double figures. In Queensland, approvals went from over 400 a month to monthly numbers in the 20s in the years after the stimulus program.
That is, the states simply cost-shifted their public housing spending to the Commonwealth, and then resumed the long-term decline in public housing dwelling approvals that had been going on since the 1990s.
And remember, this is just for public housing approvals — it doesn’t factor in demolitions or sales that remove public housing from availability. In terms of net public housing stock, numbers in NSW have barely shifted over the last decade.
To their credit, both the Victorian and Queensland governments have recently begun significantly increasing funding for social housing. In Victoria, this has led to a sharp rise in public housing approvals, well above the levels of the Rudd stimulus, although this has been accompanied by large-scale demolition, meaning the net increase in social housing stock has been small.
A more recent stimulus package announced in Queensland has yet to filter through to approvals, but a 2021 UNSW report showed the expected impact of over 4000 dwellings in that state, and over 8000 in Victoria. Tasmania also ramped up its social housing spending and is looking at an additional 1000+ dwellings in coming years.
The story in NSW, however, remains bleak: there’ll just be an extra 400 dwellings in net terms in that state in coming years.
The Albanese government is thus trying in one electoral cycle to make up for the failures of states over more than a decade — failures that are only now, slowly, being remedied, and not in our biggest state.
To the extent that the HAFF increases the capacity of the states to better play their traditional role of providing social housing, it’s a good thing — provided the states don’t do what history shows they’ve been eager to do in the past, and use it as an excuse to curb spending again.
“developers have no interest in increasing the supply of housing to the point where it becomes cheaper. Instead, they’ll sit on residential land until the market maximises their returns”
Another strike against capitalism. Another reason why such important industries need more regulation or be put into public hands.
Bernard, your jibe that the Greens do not want public housing “anywhere near their affluent inner-city electorates” is unwarranted, and is certainly not backed up by the link you provided.
In the state and federal seats of Melbourne, where I live, the state and federal members, Ellen Sandell and Adam Bandt, have been consistently standing up for the rights of public housing tenants ever since they were elected. Equally, they have been the first to deplore the Andrews Government’s progressive handing over of public housing (set up in the Hamer era) to private developers, with minimum levels of social housing exacted.
Please don’t fall for caricatured stereotypes of inner city Greens voters and our local Greens MPs.
Agreed. It was a lazy comment. Max Chandler, the new Greens MP for Griffith in Brisbane, essentially won his seat by campaigning on the issue of housing
Yes, I can’t read much of the Fin article linked to as I don’t subscribe to that rag, but from what I can, it seems to refer to a proposed development on a flood plain in his electorate which he opposes for that sensible reason, and if I recall correctly, he has suggested other nearby sites for high-density housing.
Important topic. But please BK, call public housing PUBLIC housing. Social housing can mean a number of things, but is generally a BS term to hide a state govt plan which isn’t public housing.
Yes, please! Enough of the meaningless euphemisms. Public housing is what we need much, much more of. Or, if “public” is too dirty a word, then off-market housing – can’t be bought, can’t be sold, can only be lived in. Enough of the BS indeed.
It’s also worth noting that Cameron Murray recognises the need for us to reduce demand on housing by reducing immigration to sustainable levels. I just wish that Crikey (and some other Left media outlets) would stop cherry picking from people’s research to avoid grappling with a hard topic and look at housing from a systems/holistic perspective.
The topic of immigration levels is too hot a potato even for Crikey
Assuming you are referring to recent reports of huge numbers of immigrants next year, I thought that this had been explained as returnees of expansion and international students as being largely responsible for most of the influx.
Expats
I doubt there are many expats returning now.
There are certainly huge numbers of “students”.
Regardless, they need somewhere to live.
Unfair to say that Greens don’t want social housing near them. Adam Bandt’s electorate of Melbourne has a huge amount of social housing.
That young bloke with the double barrelled name has voted against at least two developments in his area.
That young bloke with the double-barrelled surname is clearly seen by Labor as a major threat – Penny Wong doesn’t waste her invective on nobodies. And yes, that now much quoted article in the Fin which BK links does tell how MCM has opposed two big housing developments for the well-heeled in his electorate. No, they are not public housing, nor even affordable housing.
As GR explained earlier in the week, developers are the antithesis of charities. Yes, we need medium density housing. But it is a gross simplification to suggest we either side entirely with the NIMBYs or we support every proposed housing development.
And most of all, we need state governments to reject the neoliberal nostrums, and build and manage massive amounts of PUBLIC housing.
One is opposed because it’s on mostly flood-prone land and will be high-end apartments. He’s explicitly advocated for it to be purchased by Government to build public housing in the same area (in the non-flood-prone sections).
Don’t know the details of the other, but MCM has made it very clear his top priorities are public housing and affordable housing, so anything that doesn’t involve that is going to be a tough tow to hoe with him.
My understanding was that MCM doesn’t want housing built on a flood plain. Goodness me! How dare he! Sounds pretty sensible to me . . .