Academics Join ‘Affordable Housing’ Debate 3

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Thursday, June 25th, 2015
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A group of academics has challenged the mantra of governments since the 1980s that the provision of housing is “best left to the market”, saying this will no longer wash.

They say the government intervenes on the housing market on a huge scale through tax concessions, such as negative gearing.

“Unfortunately, these interventions largely contribute to the housing unaffordability problem rather than its solution,” the group has told the Conversation online magazine.

They say while action to maximise supply is unquestionably part of the required strategy, they have described it as a “lazy fallacy” to claim that the solution is simply to “build more homes”.

The academics – from the universities of NSW, Sydney and Western Sydney – say where maximising housing supply can directly ease housing affordability is through expanding the stock of affordable rental housing for low-income earners.

But one of the key reasons for the present predicament is that the prime function of housing has transitioned from a usable facility to a tradeable commodity and investment asset.

“Policies designed to promote home ownership and rental housing provision have morphed into subsidies expanding property asset values,” they say.

They have offered a 10-point plan to tackle housing affordability, including replacing stamp duty with a property value tax and phasing out negative gearing.
10-POINT PLAN TO TACKLE HOUSING AFFORDABILITY:

  •  A phased reduction of existing tax incentives favouring rental investors, such as negative gearing and capital gains tax liability.
  • Redirect the additional tax receipts from reduced concessions to provide affordable rental housing and offer appropriate incentives for prospective home buyers with limited means.
  • Develop financing arrangements, such as government-guaranteed housing supply bonds, while actively engaging with the super funds and other institutional players who have shown interest in investing in rental housing.
  • Replace stamp duty with a broad-based property value tax.
  • Expand availability of more affordable hybrid partial ownership tenures, such as shared equity.
  • Implement the Henry Tax Review recommendations on enhancing rent assistance to improve affordability for low income tenants especially in the capital city housing markets.
  • Reduce urban land price gradients which compound housing inequity and economic segregation and instead encourage targeted regional development.
  • Continue to simplify land use planning processes to facilitate housing supply.
  • Require local authorities to develop local housing needs assessments and equip them with the means to secure affordable housing targets within private housing development projects.
  • Develop a costed and funded plan for existing public housing to see it upgraded to a decent standard and placed on a firm financial footing within 10 years.

 

 

AUTHORS – Hal Pawson, Associate Director City Futures Research Centre, UNSW; Bill Randolph, Director City Futures, UNSW; Judith Yates, Honorary Associate Professor, University of Sydney; Michael Darcy, Director of Urban Research Centre, University of Western Sydney; Nicole Gurran, Professor – Urban and Regional Planning, University of Sydney; Peter Phibbs, Chair of Urban Planning, University of Sydney; Vivienne Milligan, Associate Professor, City Futures, UNSW.
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3
  1. Robert Francis

    Without commenting on the specific merits of any of these policies at an individual level, I must say that this is the kind of multi-lateral thinking which is needed within the affordable housing debate.

    Boosting supply is a must and is essential, but this is only one part of the puzzle.

  2. Tobias S.

    For once the economic eggheads are right – freemarket fundamentalism run rampant is ruining this country.

  3. Jane Bringolf

    I am very pleased to see this call from highly respected academics in the field. The transition of a dwelling from a "home to live in" to the current dialogue of an "asset to trade" is felt most keenly by older people. Those who bought modest worker homes close to the inner city many years ago are being viewed as greedy because the sale value of their home has risen significantly due to no action on their part. But it is their home, which has meaning, emotional security (an important factor in successful ageing) and it also remains a central focus for ongoing family life. Some things are beyond dollar valuations and the meaning of home is one of them.