1.1 The Rising Prominence of Housing Policy Debates
Australia has traditionally been seen as a relatively egalitarian country supported by a well-functioning housing system. However, the efficacy of Australia’s housing policy now faces mounting scrutiny. While acknowledging that most Australians remain well housed, one of the nation’s leading housing economists declared not long ago that “it can no longer be said that we are, in general, affordably housed; nor can it be said that the ‘housing system’ is meeting the needs and aspirations of as large a proportion of Australians as it did a quarter of a century ago” (Eslake 2013, p. 7). Such developments have undermined prevailing complacency about the nation’s housing system—and with it, Australia’s traditional housing narrative.
Australia’s time-honoured ‘housing story’ has been facing a growing challenge, not just in the very recent past, but arguably for at least 30 years. The ideal of ever-expanding suburban home ownership is incompatible with the compact city notion that has infused metropolitan planning orthodoxy since the 1990s. At least since the early 2000s, access to home ownership (suburban or otherwise) has become an increasingly remote prospect for many aspirant first home buyers, as property prices have escalated ahead of wages. Sharply falling home ownership rates among young people, and the virtual exclusion of even middle-income first home buyers from extensive areas of our largest cities, have provoked widespread concern. Such anxieties often crowd out media coverage of the arguably more important issues: rising rental stress and homelessness. Yet those concerns have also triggered growing popular unease.
Increasingly, there is disquiet about structurally embedded housing unaffordability as this impacts on economic productivity when workers are locked out of housing markets close to employment growth centres (Maclennan et al. 2018, 2019). Another feature of Australia’s housing tradition increasingly viewed as problematic is the way that tax-subsidised cultural preference for home ownership and property investment has posed growing risks to Australia’s economic stability. In 2019, for example, Australia’s central bank (the Reserve Bank of Australia) warned that the nation’s high household indebtedness posed a “vulnerability” in relation to financial stability (RBA 2019).
All this needs to be viewed within the context of housing system challenges posed by Australia’s sustained population growth, reflecting both natural increase and international migration. Over the last two decades respectively, annual population growth rates have averaged 1.6% (2010s) and 1.4% (2000s) (ABS 2018). In comparator countries, Canada, the UK and New Zealand, equivalent rates for 2017 were 1.2%, 0.6% and 1.9%, respectively (World Bank 2019).
For all of the above reasons, housing policy has acquired growing popular and political prominence in Australia after decades of near invisibility. Housing affordability has emerged as a dominant issue in three of the last five federal elections (2007, 2016, 2019). Numerous parliamentary and other official inquiries have focused on this issue over the past decade (Dodson et al. 2017, pp. 22–28). Thus, it seems that Australia is now fully embedded in an era where housing challenges are consistently at the forefront of public consciousness and popular policy debate. The wide-ranging implications of housing system concerns are reflected in discussions on broader contemporary themes including tenure inequality, mortgage indebtedness and asset-based welfare, as well as urban design and residential development.
It is with all of these considerations in mind that we believe the time is ripe for a book which overviews and critiques housing policy in Australia, compares and contrasts Australian approaches with those of comparator countries, and identifies possible reform directions.
1.2 Objectives and Exploratory Themes
This book’s central aim is to present a broad picture of Australia’s contemporary housing policy landscape, its recent and historical development and its possible future evolution. Historically, it is important to recognise that housing systems in specific countries function within distinctive cultural, political and institutional traditions. These both frame and constrain policy choices and, thereby, the likely progression of policy and scope for policy reform. This refers to path dependency: the idea that “if, at a certain point in time … [policy] takes one direction instead of another, some, otherwise feasible, alternative paths will be closed—or at least difficult to reach—at a later point” (Bengtsson and Ruonavaara 2010, p. 193).
A book seeking to understand and explain policy settings, therefore, faces the practical dilemma of settling on a starting point for analysis. For housing, as for many other aspects of Australian domestic policy, a case can be made for the overriding significance of 1945 and the immediate post-war years as a foundational era. This is strongly exemplified in the story of Australia’s public housing system as recounted in Chapter 4. Other moments or short periods in subsequent history with important housing policy significance would include the middle to late 1980s, when broader financial deregulation formed a radical breakpoint in the financing of private housing investment, as elaborated in Chapters 5 and 6.
Deregulation itself featured in the dawning era of neo-liberal ascendancy, a policy paradigm within which arguably all housing strategy thinking and interventions have been subsequently contained, as further discussed in Chapter 2. In the realm of metropolitan planning, the rapid rise to prominence of ‘sustainability’ in the late 1980s led to the emergence of an urban consolidation ethos as an important framing role for house building from the 1990s onwards, as covered in Chapter 9. Therefore, while a degree of historical context is important in every story, the pertinent extent of it will vary, as reflected in the scope of the chapters that follow. In attempting a comprehensive review of national and state/territory-based policy instruments and programs, we discuss the institutional framework within which housing is provided and the main subsidy, tax and regulatory measures that impact on the housing system. In doing so, we aim to familiarise readers with housing system structures and market processes, as well as with key housing institutions and stakeholders, their roles and interactions. We also seek to engage with associated contemporary debates including those focused on housing affordability and housing tax reform, as well as contestation around the role of the land use planning system in its influence on housing supply and affordabilit...