Profits of doom – can we afford not to build affordable housing?


In the heat of an election campaign when the threat to property investors’ tax breaks if Labor wins power is seen as a fundamental challenge to both house prices and rents, some chilling statistics about housing affordability have been revealed.

A recent Anglicare survey found that fewer than 1 per cent of properties in Greater Sydney and the Illawarra were affordable for singles and families on low incomes. The report said the state would need 200,000 more affordable homes by 2025

And nationally, just last month, a UNSW City Futures Research Centre report claimed there will be a need for 650,000 affordable or social housing homes in Australia in the next 15 or so years. The way to achieve that, it says, may be to cut out the developers.

“Just shifting this … construction to not-for-profit housing providers, either the community sector or government, would reduce delivery costs – by losing the 20% developer mark-up at a stroke,” say the authors of the report, “Filling the Gap: Costing a National Affordable Housing Program” on the university’s website.

Unsurprisingly, private developers aren’t taking this lying down, claiming governments don’t have the budgets to build all these homes.

Lobby group Urban Taskforce’s CEO Chris Johnson claims private developers can make up the shortfall in affordable housing if the government allows them to build more high-rises. The problem is, some politicians are clearly anti-high density development in established suburbs.

“The politicians and community activists across Sydney that are fighting against new urban development are the ones who are stopping the supply of affordable and social homes,” Mr Johnson said back in March.

And just this week the Urban Taskforce issued a slick online ad campaign, called Welcome Home, which appears to be trying to foment a popular movement among young people who desperately want to live in apartments.

You can read a full description of the Welcome Home video HERE.

Its home page even says, “all too often, debates about housing are dominated by older Australians who want to protect their 1970s suburban-sprawl way of life.”

You get the picture.  Old fuddy-duddies are preventing young people from enjoying the lifestyle to which they aspire as they are bussed in and out of the city, to and from the suburbs of the living dead. Facebook visitors are invited to sign an online petition.

Far be it from Flat Chat to decry anything that encourages people to think living in an apartment is a good thing. However, the property development industry has, historically, been motivated more by profits than social policy, so you can be forgiven for being a little cynical.

That said, we are going through a period of fundamental change.  High-rise blocks are muscling into our leafy suburbs because our cities can’t keep spreading outward and there are economic and social benefits for people living closer to their work.

So how does this help with the affordable housing issue? The UNSW report says governments and not-for-profit organisations should be building more, and UTF says the brakes should be taken off high-rise development in “protected” suburbs.

And you know what?  Maybe they are both right.

A version of this column first appeared in the Australian Financial Review.

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