2023-01-08
This article describes The Greens three-point plan housing plan for government to build large numbers homes to ensure everyone has a decent, secure, affordable place to call home. It also argues for rent controls, more secure tenancies and households switching from gas to become all-electric.
By Rob Delves, Green Issue Co-editor
Imagine that we could only campaign on one issue in 2023. What should it be? I’d have to prioritise affordable and greener homes for all – for at least three reasons. Firstly, the need for a decent and affordable roof over your head is about as basic or essential as it gets. Like everyone else, the first two things I’ve always searched for when setting up in a new place are somewhere to live and a job (or at least some income source). Secondly, as The Greens Housing Platform says, Australia is in the middle of a massive housing crisis. Thirdly, the urgent actions to deal with this crisis will inevitably help towards our over-arching goals of reducing poverty and inequality, and transitioning to a zero emissions economy.
The crisis
We have a crisis of affordability and availability of homes to rent or to buy. Rents have been increasing seven times faster than wages and millions are locked out of the housing market. People regularly report long queues at viewing times for rental homes, with those on a tight budget often losing out to applicants offering $50 or more per week above the asking price. The simple fact is there aren’t enough affordable homes. Policy settings of the last forty years – such as ignoring social housing, incentivising private investors and offering grants to first-home buyers ‒ have combined to cause house prices to spiral and create an ever-widening gap between the housing haves and have-nots.
Housing affordability stress is now the fastest growing cause of homelessness in Australia, according to the latest Australian Homelessness Monitor. More than a quarter of people seeking support from homelessness services are without a home for this reason. (The most frequent cause remains family and domestic violence.) The same report found in the past four years there was a 27% increase in people seeking help at homelessness services because they couldn’t find an affordable home to rent. Regional Australia was hit particularly hard, with homelessness surging by 13% since 2018-2019, more than double the rate of state capitals. For Western Australia’s regional areas the increase was 35%.
This is a new frontier of homelessness for Australia: people who are working yet still can’t find an affordable home. A recent Guardian report alerted readers to the dire situation of many working people having to spend Christmas in tents, motels and caravan parks. One example was a 63 year old woman who was forced to spend December in a tent in the Margaret River Caravan Park. Her work as a cleaner doesn’t pay enough for any home to rent in the area. Some of the homes she cleaned were frequently-unoccupied holiday homes ‒ which says a lot about the relationship between our housing haves and have-nots.
Chief Executive Officer of Mission Australia, Sharon Callister, sums it up well: “When gainful employment is no longer enough for many Australians to guarantee a roof over their head, then you cannot deny the housing and rental market is in absolute crisis.”
The Greens campaign
The Greens argue that Labor’s plan to address the housing crisis falls far short of what’s required. However, it’s at least a step in the right direction, so The Greens are offering their support, but are calling on Labor to agree to three much stronger proposals. I’d like to outline these proposals and add some reflections on each one.
FIRST: Build 275,000 well designed public and community homes over the next five years.
The Greens argue that Labor’s plan to build just 20,000 public and community homes over five years won’t even touch the sides of a national shortage of 520,000 public homes. Anthony Albanese makes frequent reference to the importance of state housing when his mother was trying to get by on a low income, yet he refuses to commit to the bold actions needed to provide this same support to the huge numbers in similar situations today. He argues that budget constraints and the high costs of building prevent the government from doing more.
Of course, building 275,000 good quality social housing units will cost billions of dollars, but it’s all about the choices we make. The Greens plan is eminently affordable: addressing the housing crisis is more ethical, more economically rational and much less costly than choices such as Stage Three tax cuts, AUKUS submarines and the current raft of absurdly generous concessions to fossil fuel companies. There are several other unfair policy settings that I would add to this list, for example the enormous sums involved in our very low or even zero taxation of superannuation earnings – a policy choice that transfers billions to the wealthy.
SECOND: Introduce a national two-year rent freeze.
Rent controls have been unknown for at least 40 years, so for most people this proposal may seem like an overly-radical intervention. However, various forms of rent control have been used in the past. They made a crucial difference to the lives of huge numbers of people on several occasions in the 20th Century. Various forms of rent control were introduced during World War I and again in the Depression era, when large numbers of people escaped poverty and homelessness due to policies that reduced rents on average by 23% and restricted the number of evictions. The Menzies government reintroduced a limited form of rent control in 1939 and then Curtin strengthened the policy in 1941, fixing rents at 1940 levels.
These rent controls left a lasting legacy, continuing right through the 1950s with each state implementing its own scheme. In Victoria, where I grew up, rent control sat alongside public housing, offering two strong forms of protection to renters. My parents often talked of how they benefited from the security and affordability of their controlled rent of £3 a week throughout the 1950s for our small but decent family home. As wages steadily increased through the decade, this frozen rent left them with enough money to buy decent consumer goods such as a refrigerator and washing machine, and to save more each week, as the rent fell from well above 20% of their income in 1951 to slightly below that critical level by the end of the decade. As a result they could afford to buy their own home in 1960.
They joined hundreds of thousands of others who became first-home buyers in the so-called golden years between 1955 and 1965. There were two major reasons for this. Firstly, for at least 20 years from 1945 house prices increased more slowly than wages, due to unions ensuring workers benefited fully from productivity gains and also the massive home-building programs, which overcame the housing shortage. The second reason was that government policy focused on keeping housing costs below the poverty threshold of 20% of income for as many as possible, largely through rent controls and including a much larger share of low-cost state housing in the building programs.
In recent decades, I understand that for the bottom 60% of households the threshold for housing stress is officially regarded as more than 30% of income going out on rent. My experience is that the 30% threshold is too high and that 20% is a more realistic figure: most people find they have to cut back on other essentials once their housing costs go above 20%.
The situation today is similar to the immediate post-war years, as growing numbers of Australians have found themselves in unaffordable and precarious rentals. A rent freeze is well justified while we set about building big numbers of social housing units to provide for the needs of lower-income people.
THIRD: Invest $5 billion in maintenance and upgrades for existing public housing
This is the least urgent of the three priorities, but important for at least two reasons. While we don’t expect public housing to have gold-plated bathroom fittings, we should expect these homes to have decent, attractive rooms with good-quality fittings, and to be well-built on sustainability principles to help keep heating and cooling costs low.
I see public housing playing a similar role to a Job Guarantee, whereby what’s offered by the public sector sets decent basic standards that put pressure on the private sector to lift its game. The public-sector alternative in employment and housing therefore alters the power balance between boss-worker and between landlord-tenant, because the public sector alternative is always available. That would require public housing to be massively expanded in quantity and quality, so that it is available to a wide cross-section of people and not solely a poor-quality offering to those in direst need.
This $5 billion investment in The Greens plan could include some aspects of the switch from gas to all-electric homes, which I describe at the end of this article.
Some other Green housing ideas
The three priorities in The Greens Housing Campaign are well chosen. However, I’d like to suggest three other changes that would make an important difference. These aren’t new in broader Greens thinking about Housing policy.
Secure tenure
Having lived in England and met lots of European people, I know that in many countries it is not only possible, but also normal and expected, for tenants to enjoy long and secure leases and many other rights that renters don’t have in Australia. In many European countries the common understanding is that the place where you live is your home, a place where you feel secure, regardless of the form of tenure. This enables renters to enjoy the rootedness in community and the sense of freedom to make the home their own that is only available to owners here. The Greens do have a Renters’ Rights policy along these lines.
Urgent ‒ more varied designs needed
We’re still stuck in the 1950s thinking, where every house is designed for two parents and two or more kids, set on a large block and requiring a car to connect with all the destinations you need to reach. The main design change in recent decades is that the houses have got much bigger and the blocks much smaller. The car is still the only transport option, but the destinations have got further and further apart. Meanwhile, the people seeking to make a home have become increasingly diverse, so that the detached single-storey three-bedroom home is no longer appropriate for the majority of households, if it ever was. Designing a variety of homes suited to singles and couples should be a priority.
The Greens believe that nature doesn’t design monocultures and neither should humans, including of course our housing. Our main alternative to the detached “family home” has been the medium and high rise apartment block. This is suitable close to the CBD, train stations and other activity hubs, especially for people who want to live car-free, but may be less suitable elsewhere. The variety of single, two and three storey terrace houses we built between the 1880s and World War I were widely praised – Paul Keating describes them as the jewels of our urban architecture and I couldn’t agree more. We need to build thousands of new terrace houses in our cities.
Granny flats are another wonderful addition to the diversity of our city design. They are a superb fit for most urban blocks, especially medium-sized ones in the 400-700 square metre range. Granny flats have one big advantage over a standard sub-division (second home at the back) or the standard set of single-story units on a block – they don’t involve adding large areas of concrete for extra driveways and parking. This is a big advantage, especially in our hot climate where as much space as possible should go to trees and bushes.
Terrace houses and granny flats are two important examples of the diversity we need to cater for our more diverse households, but it is not beyond the wit of Aussie imagination to come up with many more different designs to take us as far away from the detached family home monoculture as possible.
Help households make the big switch
Brad Pettitt’s plan for Net Zero Perth involves action on various levels, including of course the individual household. It’s impossible to achieve a zero-emissions economy unless nearly all homes transition from gas to 100% electric. The good news is that this transition will save households at least $1000 per year – and much more if an electric vehicle is included. However, as the business cliché goes, “you have to spend money to make money.” The upfront costs of investing in solar panels and electric cookers, hot water systems and reverse cycle air conditioning are beyond many households, especially renters.
So this is where the government cavalry comes riding to the rescue with its formidable array of (peaceful) weaponry, including regulations, cheap loans and subsidies. In breaking news as I write, The Greens have negotiated a household electrification package as part of its support for Labor’s pre-Christmas bill to cap energy prices. As part of this deal, next year’s federal budget will include funds for low-income households, renters and people living in apartments and public housing to go rooftop solar and switch off the gas to have all-electric appliances.
It's the choices, stupid
My favourite economist, Richard Denniss, often argues that as Australia is one of the richest countries in the world, we can do anything we want, but of course not everything we want. The decisions about how to raise revenue and what to spend it on have little to do with any “There Is No Alternative” economic laws – they are rightly matters for democratic debate.
With regard to housing, we’ve inherited policy settings that enrich the few at the expense of the many, leading to the housing crisis we face today. The Greens must lead the democratic debate about how to change these policy settings to prioritise decent, secure, affordable homes for everyone. That will include debate about how to pay for the huge social housing building program and other changes. We are right to argue for savings from axing the Stage Three tax cuts and the AUKUS program and making sure fossil fuel companies pay a lot more for access to our resources and for the emissions they produce.
However, in my opinion, we should go further: make the case for taking from those who’ve benefited enormously from being the Housing Haves – basically those who bought houses cheaply and now use them as very lightly taxed wealth-generating assets. We should argue for abolishing negative gearing and capital gains tax discounts, but also for replacing stamp duty with a broad-based land tax. Labor won’t initiate such debates for fear of threatening so many powerful and wealthy people. The Greens must make the case for these changes, not all at once, of course. Our three-point plan is to be commended for wisely choosing which battles to fight in 2023.
Header photo credit: ABC News Nic MacBean
[Opinions expressed are those of the author and not official policy of Greens WA]