Wake up, Australia: The usual headlines shouting “housing crisis!” no longer describe the reality – this is a national housing emergency.
There effectively is no rental accommodation available in many cities and regional areas, and not much in the rest, with rents consequently soaring.
Through wilful neglect and dogma, public and community housing numbers have been frozen for more than a decade while the population and need for it have jumped.
Housing prices – the usual attention-grabber – are darkening the aspirations of a generation.
A shortage of materials is pushing up prices and delaying the competition of building that is underway while the policy-fuelled pull-forward of work has resulted in approvals crashing, promising problems beyond the current surge as the immigration tap is turned on again.
And no government is offering anything like a solution.
Oh, there’s the odd Band-Aid and plenty of platitudes, but no government wants to admit the scale of the crisis, no government wants to take responsibility for it, no government is prepared to reverse decades of failed policy to deal with it.
That would be hard. It’s easier to blame other levels of government and kick the can down the road.
Down from the distant heights of state and federal Parliaments, faced with the daily heat of the emergency, housing was the hottest topic in the room at the Local Government NSW conference on Wednesday.
Mayors and councillors from throughout the state had the same story: An unexpected side effect of COVID-19 has been to make housing either unavailable or unaffordable for average workers in regional Australia.
And that was before the current floods added another level of housing-availability pain.
I was an invited speaker at the conference. Councillors immersed in their communities were sick of being simplistically blamed for planning and zoning delays by politicians removed from the reality.
The NSW experience is mirrored around the country.
In releasing Domain’s latest rental vacancy report, the real estate site’s chief of research and economics, Dr Nicola Powell, said Australia was on the verge of a rental crisis.
She understated the problem – we’re already there.
Sydney’s rental market was described as a “chronic failure” with the city’s vacancy rate dropping to a five-year low of 1.7 per cent – but that is better than the national rate of 1.1 per cent, and vastly better than Perth and Canberra on 0.5 per cent, Adelaide on 0.3 per cent and Hobart just 0.2 per cent.
They are record lows for all four cities. In practical terms, a vacancy rate of 0.2 per cent pretty much means no vacancies, which is the case in many regional centres, where housing was snapped up by COVID sea and tree-changers.
Melbourne is the least-worst capital with a vacancy rate of 2.1 per cent, down from 4.4 per cent in February last year.
The national rate of 1.1 per cent is nearly half the 2 per cent it was a year before.
The Domain report further shows the inequality of the pain, with the vacancy rate worst on the city’s fringes, where, like the regions, many people lived because housing was cheaper.
The Sydney region’s Camden equalled Hobart’s 0.2 per cent vacancy rate. Richmond and Windsor weren’t far behind at 0.3 per cent and 0.4 per cent for Gosford and Wyong on the Central Coast.
Real estate agents were reported as saying would-be renters were routinely offering to pay above the asking price and up to a year’s rent in advance to secure properties.
People who can’t afford the high prices closer to their city jobs now can’t find a dwelling further out where prices were cheaper.
As explained in October as the rental crisis was building, rising rents at the lower end of the market suck up a disproportionate share of renters’ income, leaving them with less spending power.
Relying on “can-do capitalism”, freezing and running down public housing, has demonstrably failed.
Figures within the Productivity Commission’s latest report on the delivery of government services displayed the wilful neglect of public housing availability. That was for the last financial year – the situation has sharply deteriorated since then.
The sugar hit of the federal government’s HomeBuilder scheme succeeded in pulling forward building work, keeping tradies extremely busy and worsening materials shortages, but the end result has been $2.1 billion paid to people who mostly did not need it, who would have bought, built or renovated homes anyway.
In real terms, the only sizeable growth area of government spending is the Commonwealth Rent Assistance (CRA) scheme – up $571 million to $5.3 billion last financial year to subsidise landlords at the bottom end of the private rental market.
In NSW, nearly half the CRA recipients were still paying more than 30 per cent of their income in rent. A fifth of them were paying 50 per cent.
Rather than solve the problem, subsidising private landlords – with all the uncertainty and instability of private rentals – perpetuates it.
Biting the bullet would mean a nation-building investment in expanding quality public housing instead of propping up private landlords.
Outsourcing the human right to shelter to property investors has failed, contributing to ridiculously expensive housing for all.
Adopting successful European public housing models would literally be building back better, but government isn’t interested in doing that.