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Labor’s housing affordability mess: profit for the few, pain for the many

By Graham Young - posted Wednesday, 9 January 2019

Inevitably there will be mismatches between supply and demand with the wrong sort of dwellings being built in the wrong places.

It will also produce two classes of poor people – those in subsidised accommodation and those on the waiting list, with the latter often being the most in need. How is this a "Fair Go"?

But then, some of the potential "clients" aren't poor, being "nurses, police and teachers", who can't "afford to live closer to work". This appears to be code for "live in Sydney", Australia's least affordable city.


There is a simple solution to rental affordability, and it has served this country well – ensure there is a plentiful supply of serviced land, and then let individual developers, investors and tenants work it out for themselves.

If there is a need for a subsidy, then pay it to all renters who need it, rather than making it contingent on renting government financed properties.

If you can't afford to rent close to work then that is a signal that either you are not paid enough and should demand more, or that you should move to a city where rent and wages more closely align.

Subsidising people to rent in expensive locations increases the rents for everyone else, and leads to more over-crowding and inconvenience, plus higher house prices.

Housing affordability is not an issue that can be micromanaged from Canberra. The responsible bodies are the states, and their different policies and circumstances are reflected in the relative affordability of their real estate.

Sydney is suffering from stultifying planning regulations, slow land releases by LandCom and previously anti-development state governments. Brisbane and Melbourne have pro-development state governments and relatively relaxed planning regulations, plus lots of fringe urban land.


In sum, the only people who will benefit from Labor's "affordability" policies will be the bureaucrats, developers, and social housing cooperatives who will do the deals with government on the housing.

It's a sure fire way to make money for rent seekers. Indeed, it was developing and building such schemes that gave Donald J Trump his first leg-up in the property world. Seems he has apprentices all over the world.

Bad luck for small housing investors, purchasers and tenants.

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This article was first published by The Spectator.

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About the Author

Graham Young is chief editor and the publisher of On Line Opinion. He is executive director of the Australian Institute for Progress, an Australian think tank based in Brisbane, and the publisher of On Line Opinion.

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