The mainstream media and many politicians are blaming migrants for the housing crisis. Liberal opposition leader Peter Dutton’s racist dog whistle even motivated a neo-Nazi group to organise an anti-migrant demonstration in Naarm/Melbourne.
Migrants are not to blame. But it is a handy distraction from Labor’s pathetic approach to the housing crisis. Labor’s Housing Australia Future Fund Bill proposes to set up an investment fund with $10 billion (initially) and use the earnings for social housing or affordable housing.
The housing affordability and availability crisis predates the current bounce-back in migrant numbers, after the fall during the height of the pandemic. It extends beyond the bigger cities where most of the migrants are heading.
Many regional towns are also facing a severe crisis: even long-term accommodation in caravan parks — a traditional last resort for people priced out of renting houses and units — has become unavailable or unaffordable.
Working-class families are finding it hard to reach the “Australian dream” of home ownership — at least without getting into huge debt.
Video: Housing justice needs system change. Green Left.
Now, with interest rates on the rise, this debt burden is getting even worse. Mortgages in arrears are rising and thousands could soon lose the homes they are struggling to pay off.
We are seeing another massive “market failure”. Every day it is becoming clearer that this is a systemic failure, not a temporary problem.
An entire generation has been completely excluded from the dream. They have resigned themselves to renting, but are also now being slammed with sharply rising rents.
Housing as a commodity
Treating housing as a commodity has made it inaccessible to people who need homes. The cost of housing has been so grossly inflated because the rich minority who own houses and units, in addition to their residences, treat housing as a commodity to speculate in or to “land bank” their surplus capital.
In this way the regular crisis of overproduction, intrinsic to capitalism, has added to house price inflation.
Capitalists who cannot make a profit from investing in production can park their money in land and housing.
They then have an interest in pushing governments to implement measures that keep escalating house prices.
Perversely, governments often sell such measures as “helping” first home buyers. But what appears to be a subsidy to the homebuyer quickly gets added to the price and hence to the capital gain of the capitalists speculating in housing.
On top of that, there is the huge landlord subsidy that is “negative gearing”. This amounted to nearly $9 billion in foregone tax revenue last year and, according to the Parliamentary Budget Office, is set to rise to $20 billion a year within a decade.
Meanwhile, state governments have been running down and privatising public housing. Sometimes, it is privatised to church and other private welfare organisations and classified as “social housing”. But this kind of social housing further feeds the problem of housing inflation, because the owners operate as capitalists.
Solutions staring at us
The solutions to the housing crisis don’t have to be invented: this is not the first time that the capitalist system has made housing unaffordable, even for the very workers it needs to exploit.
Measures such as rent controls have had to be introduced in many countries as a result of earlier housing crises. In many Western Europe cities, rent controls have been in place for generations.
Public housing levels are much higher in many of these countries. In Australia, public and “social housing” comprise about 3.8% of all housing. It is 29% in the Netherlands and 24% in Austria, Scotland and Northern Ireland. It is 21% in Denmark and 17% in Sweden and England.
Public housing in Australia began after the end of World War II and rose to a high of about 7% of all housing by the early 1990s. Since then, Labor and Liberal governments have systematically run it down and privatised it.
This deliberate policy has also stigmatised public housing as something you would want to avoid if at all possible.
But it doesn’t have to be like this.
If some of the hundreds of billions wasted on Stage 3 tax cuts for the rich, corporate fossil fuel subsidies and nuclear submarines were spent on low-cost, good quality, ecologically sustainable public housing, the crisis would be averted.
Apart from addressing the basic need for housing, in this age of climate emergency there is also a massive social good in building and refurbishing public housing to make it ecologically sustainable.
Beyond Zero Emissions (BZE) calculated that, for just $25,000, a home could be renovated to make it a zero carbon emitter. Retrofitting 2.5 million homes over five years to make them net-zero emitters would cost just $15 billion a year, leave its occupants with very low energy bills and create about 200,000 jobs.
BZE also calculated that governments could build net-zero emissions public housing for about $273,000 each home.
A big program of building net-zero public housing would utilise economies of scale and create even more socially useful jobs (in contrast to the pitiful 20,000 jobs from the AUKUS submarine deal).
Public housing can liberate housing from the market: turning a bigger proportion of housing into a social right, rather than a commodity.
This would also put downward pressure on housing prices and rentals in the private sector. It could transform public housing from social ghettos into great places to live.
The argument that this would be unaffordable is unconvincing, given the tax cuts and the AUKUS nuclear submarine and long-range missile purchases.
Another objection is that building new public housing would take “too long” and would come up against supply and skilled labour shortages.
But there are other ways of increasing public housing stock, such as purchasing already built housing. The last census found that 10.1% (1,043,776 homes) out of 10,318,997 private dwellings were unoccupied. Not all of these would be the result of “money living there” instead of people but, clearly, there is room to convert.
We also know that the vacancy rate of commercial buildings is much higher than residential. There may be opportunities to quickly convert vacant public or private office buildings to public housing.
It is estimated that about 4% of all housing stock is used as AirBnB — more than the proportion that is public housing.
Other measures could help, such as vacant housing taxes, short-term rental taxes and rent freezes.
Far from being the most effective means of allocating society’s resources to best serve society, the market is systematically ignoring social needs and refusing to value nature and humanity’s need to live in a sustainable balance with nature. Society, including “the economy”, needs to be reorganised on a cooperative, democratic, egalitarian and ecologically sustainable basis.
[Peter Boyle is member of the Socialist Alliance national executive.]