Fundamentally, the barrier to resolving the current affordability crisis is policy sclerosis affecting housing variety and delivery. Despite electoral promises of solutions none have seriously canvassed the full variety of alternatives, leaving many gathering dust in the policy tool shed. These are just some of the issue that will be tackled in the upcoming TFE Review on affordable and sustainable housing models.
Boundaries that once separated global affairs – formerly the arcane preserve of international policy wonks – from the local, have largely evaporated in recent decades.
A good example is the climate crisis.
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As demonstrated by the LA fires, the global failure to curb greenhouse gas emissions is now wreaking individual pain, even on privileged Westerners, complementing the climate hardship long endured by the less-newsworthy Global South.
Along the global/personal axis, these impacts are vectorially bidirectional; consider the recent US presidential election.
Increasingly resentful, disenchanted voters delivered victory to an individual likely to up-end America’s place in the world and the world itself. According to its now unfettered, shrieking-and-shuddering, hard-right wet-dream, Russia’s war against Ukraine, the climate crisis, cost of living concerns, wokeness, women’s rights, the alleged venality of political opponents, immigration, tariffs, and the very nature of truth itself are all now up for grabs in the “land of the free”.
Reminding us of Napoleon’s aphorism, “never interrupt an enemy while it is doing something stupid”, the list of dire commentariat predictions of these policies should gladden the heart of America’s foes.
Further, just as boundaries between the international and the local have dissolved, the commercial underpinnings of most political campaigns now have a distinctly retail-shopping-mall hue, to an extent that, like the condensation of Disney’s output into its Mickey Mouse ears, a whole political discourse has collapsed into the physical object of the MAGA cap: “‘Nuff said”, it says.
(A wry aside, if the dark predictions of pundits prove correct over the next four years, consumer protection law may require a MAGA cap recall for product accuracy re-adjustment. See title image for corrective suggestions.)
The democratic hollowing out
Philip Zelikow suggests that the idealism underpinning the building of post-war global democratic institutions has been slowly hollowed out ever since.
Almost universally, a politics of acting and performance has replaced a politics of action and delivery. Repeatedly, significant global challenges that demand coordinated, cooperative actions have not received any. To illustrate, Zelikow cites responses to the COVID-19 epidemic, but the climate crisis also springs to mind.
He does acknowledge that the response to Russia’s invasion of Ukraine – though it could have been sharper – was a rare exception to this do-nothing pattern.
Zelikow suggests that democracy risks autocratic overthrow unless it delivers greater and more immediate material benefit to citizens than autocracies do.
Some attribute this failure as the reason the Arab Spring petered out, followed by widespread return to the autocratic governance models that grip most of those states today.
We know that international prestige or decline starts at home.
As we endeavour to increase our regional influence, can we reasonably press the merit of our example and prestige if we cannot adequately house our own citizens?
Wrongly targeted delivery the cause of housing affordability failure
Unfortunately, our responses thus far to the housing crisis have been more “performative” than practical.
Largely ignoring the many alternative affordable models already trialled successfully elsewhere, our policy responses hewed closely to BAU (business-as-usual) planning tweaks and delivery by the for-profit sector.
As this author has repeatedly explained, it is simply wrong-headed to expect that a highly market sensitive sector should redirect its efforts towards supplying a growing market demand for more affordable housing which that the sector has repeatedly demonstrated its uninterest in.
The whole point of the for-profit sector is the generation of profit: exactly what it says on the box, which is directly antithetical to rendering its output more affordable.
Furthermore, though the for-profit sector is affected by government policy, it is not an instrument of government.
This fundamental point is well illustrated by the food nutrition sector’s efforts to tackle the US obesity epidemic. Exploring the efficacy of adding hunger suppressants to fizzy drinks, some researchers were unsurprisingly rebuffed by manufacturers, whose whole business model turned on promoting increased consumption of their unhealthy product.
At the risk of tedious repetition, alternative typological and delivery models include turbocharging the not-for-profit sector exemplified by Nightingale and other similar initiatives, which have been so effective in other nations.
To add another example, Dwell recently reported on the emerging success of Ancillary Dwelling Units (ADUs) in the US in dealing with housing affordability.
Essentially a version of “missing middle” development, ADUs are frequently imaginative additions to existing American sprawl, largely delivered by individual homeowners, a dominant tenure pattern that chimes closely with Australia’s.
An update by the same author predicts that wider adoption of the ADU initiative across the US could significantly improve – but not solve – housing affordability, allow aging-in-place, and be a more compatible “fit” with the USA’s predominantly suburban settlement and ownership patterns.
That author also reports a nationwide reduction in preferred dwelling sizes, with all the concomitant easing of demand for energy, land and construction materials. This contrasts with our nation’s persistent appearance at or near the top of tables of average dwelling sizes, globally.
The tax settings make housing worse, but governments don’t budge
Likewise, taxation settings. Recent Cabinet Paper releases reveal that despite evidence capital gains tax and negative gearings investment concessions were fuelling a housing affordability crisis after only four years of implementation, governments of both hues did nothing to address these effects for the following two decades.
This failure included decisions not to adopt the sensible measure to redirect these concessions to favour the construction of new dwellings only.
The point here is that affordable housing solutions MUST first address the means and incentives of delivery and typology of that housing; everything else is secondary.
After some three years, during which governments of all tiers and hues have recognised the urgency of affordable housing measures, each entry in the imminent TFE Review will, by reflection, catalogue our governance failure.
This failure is being noticed internationally. The IMF identified five Australian cities in its list of the 10-least affordable globally – one of which was Adelaide, yes Adelaide!
It went on to urge determined government action to address the problem, echoing Zelikow’s point.
The cost of not doing so will be too great for our nation to bear. We are not immune to the demographic declines seen more stridently in nations like Japan and now China, where a rapidly aging population will soon simply lack the resources of productive youth to look after itself.
Though the despair of Australia’s youth should be expressed in anger at the intergenerational inequity we are inflicting on them, it could equally be manifest in the nihilistic switched-off “otaku” culture of many of Japan’s youth.
If so, placing our nation’s future in the hands of a generation that no longer gives-a-s**t would be a recipe for sharper national decline than demographics alone might predict.
If we continue to do next to nothing with our housing policy, then we can at least console ourselves with the proliferation of MAGA hats.
As our nation’s name shares an initial with America’s, a cap modified as per the title image should be relatively cheap and available to us all as we subside into our dotage.
