By Luca Belgiorno-Nettis, 4 March 2024, published by The Mandarin.
The issue of housing affordability isn’t going away – even though it seemed that the Albanese Government had settled the matter last year. Now the Greens are baulking over the ‘Help to Buy’ bill. In September, the government passed what it described as ”Landmark legislation to deliver the biggest investment in affordable and social housing in more than a decade”. Leaving aside the social housing programme, the affordable housing component relied on two main planks: “A national target to build 1.2 million homes in well-located areas in 5 years, and a $3 billion new homes bonus.” Just before Xmas, the Minns’ Government was quick to get behind this by announcing its proposal to rezone many areas to higher density.
Just about everyone has an opinion about the problem, including me. For most Australians, the major asset is their home but for the rest, it’s the biggest liability. And there’s the rub. Many think home prices can come down by increasing supply. It makes sense: high school economics. The Government hopes that rezoning and bonuses will do the trick, but there are others who think it’s also a demand problem. Too much immigration and tax breaks are pushing up prices. The Greens are in this camp.
Last year in June most of the crossbench MPs proposed convening a Citizens’ Assembly to deliberate on the issue. That proposal didn’t go anywhere because the Government felt it had the answers and pressed on to pass its ‘landmark’ legislation. But increasing supply in ‘well-located areas’ isn’t that simple. There’s the old chestnut – nimby. Mayors in the Sydney LGA’s are arching up. If residents are going to accept more density, they’re going to want some sweeteners. People need to be involved in the solution.
Alan Kohler, the popular economics commentator, thinks the problem isn’t just about supply and demand. In November last year, he wrote a well-researched essay arguing that: “The doubling of house prices in relation to incomes has distorted Australian society over the past twenty-five years. The winners outnumber the losers two to one. In a democracy that normally would be the end of the matter.”
For younger Australians, home ownership is prohibitive. In 1980, the ratio of house price to income was approximately 3.5 to 1. Now, it’s more than doubled to 7.5 to 1. And it’s not getting any better as house prices keep climbing whilst wages continue to lag. Homeowners might be happy, but their kids can’t get a foot in the door. Governments of all persuasions have failed to seriously address the issue for fear of the electoral consequences. The proposal to convene a Citizens’ Assembly is an attempt to get beyond the short-term electoral interests. It’s about social cohesion, not winners and losers. It’s democracy beyond elections.
Original article available here: https://www.themandarin.com.au/240895-convene-a-citizens-assembly-to-deliberate-housing-prices/
