Housing crisis

Thinking big helped Australia solve a housing crisis in the 1940s. We can do it again | Ellen Fanning

On March 14, 1977, a Rolls-Royce carrying the Queen and Duke of Edinburgh swept through Sydney’s working-class Waterloo suburbs to tour a new inner-city high-rise housing commission development.

Reports from the day note that the royal couple were “quickly taken to the 29th floor of the one-bedroom house of Mr Vyvyan Smith, 83, [where] the duke gazed out over Botany Bay and west to the Blue Mountains. “Absolutely splendid,” he said.

It’s been a long time since Australia’s public housing stock has been proud of itself.

The 1980s marked the beginning of a shameful decline in the availability and quality of public housing for the poorest Australians. Between about 1950 and 1970, the New South Wales Public Housing Commission built about a sixth of all the houses in the state, then sold a third of everything it had built to tenants, helping to fuel the rise in homeownership rates in the post-war period.

But these days, the elderly pensioner the Queen met in 1977, who was paying $8.80 a week for a single housing commission unit, would struggle to afford to rent on the private market. While pensioners may well be eligible for Commonwealth rent assistance, which rises with official inflation, over the past two decades actual increases in Australia’s real rents have far exceeded the CPI.

And the situation is only getting worse. Despite a boom in public housing construction in many states and territories, so many abandoned properties need to be demolished that the $10 billion spent to build 23,000 homes over the next three years will only end up adding about 15,500. housing units in the available social housing stock. .

In Tasmania – which is making a big push to build council housing – the waiting list for council housing has risen from 2,100 in June 2013 to 4,707 in February 2022 and the estimated wait time for “priority applicants be housed in Tasmania was almost five years old.

By the mid-2030s, an estimated 731,000 new social housing units will be needed to house homeless, low-income Australians facing unaffordable private rents.

But of course there are two housing crises in Australia. The other is housing affordability.

Middle-class Australians who aspire to the Big Australian Dream of home ownership are now spending up to a decade saving to raise a down payment as they too compete for private rental accommodation.

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Scott Morrison told these tenants that the best way for the government to support them is to help them buy a house.

What if the best solution for them was do not to buy a house?

And if by encouraging these people do not buy a house, we could solve our two national housing crises at the same time?

Recently on ABC TV’s The Drum, we explored a notion that for decades has preoccupied housing researchers like Chris Martin, a senior fellow at the City Futures Research Center at the University of New South Wales. . Martin is convinced by the idea of ​​a massively expanded HLM sector, which could both erase the waiting list and broaden the eligibility criteria.

“What if you could support a range of tenants, from the most needy Australians, to essential workers who otherwise couldn’t afford to live close to work, to middle-income earners unable to pay their own house but able to pay higher rents, which would help subsidize the whole system, he wonders.

Expanding eligibility in this way would help end the problem of a marginalized and shrunken public housing system wasting what Martin calls “starvation rations.

“At the moment it’s a catch-22. People on very low incomes can only afford very low rents. The gap between what they can afford and the cost of a reasonable housing sector n is not fulfilled by [government]. Therefore, the maintenance of the existing building stock becomes a huge problem. So, with fewer suitable units available due to the maintenance crisis, priority occupancy is given to those most in need, who understandably cannot pay a lot of rent. This further reduces the funding available for maintenance and for developing new inventory so that the public housing sector shrinks further.

Ellen Fanning discusses housing with Chris Martin on The Drum

But why would Australians be persuaded to abandon their cultural aspirations around home ownership – or, as another researcher puts it, their “unshakeable belief that home ownership is the only way to ‘get ahead? ” ” in this country ?

EY Sweeney’s economic modeling challenges the idea that renting is dead money. Their research compares the fortunes of two Sydney housing seekers with the same starting capital, in one of Sydney’s 43 local government areas between 1994 and 2017. One invests in a house or unit. The other leases and instead invests in an ASX200 index fund, pouring all the extra money it would have otherwise spent on mortgage, utility and maintenance costs into that fund. Ten years later, the result? 62% of the time, renters were better off than landlords living in the same neighborhood.

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Thank you for your opinion.

Thinking big is something Australia used to do.

In a black-and-white newsreel from 1944 titled “Design for Living Post-War”, an announcer – in this slightly garish news cadence of the day – reports on a similar housing crisis that Australia had to coping during the Depression and into the 1940s: “The Department of Post-War Reconstruction estimates that Australia will need 750,000 homes.

Curiously, this is almost precisely the social housing deficit facing modern Australia.

The narrator continues: “Most of them will have to be housing that is affordable enough for the average earner to live in. It all depends on the plan we make today for the housing of tomorrow in post-war Australia. We planned the “all in” to win the war and we are winning. We must plan as a nation and not just for ourselves if we are to win peace.

What if in post-Covid Australia, we went “all in” to solve the housing crisis?