Content warning: homelessness in no explicit detail.

Despite the housing crisis that has plagued Australia for several decades, neither major party seems interested in providing adequate solutions to the problem this election.

After being a prominent feature in 2019’s election, housing policy has spent far less time in the limelight this time around. Try though they might, the Liberals have been unable to wage another successful scare campaign over Labor ruining the lives of down-on-their-luck landlords.

The reason? There just isn’t that much disagreement between the major parties over housing now. Labor had their go at challenging some of the more pernicious elements of Australia’s toxic and exclusionary housing market three years ago and, well it didn’t go great for them. So, here they find themselves: stuck with the same policy foundations as the Liberals and with barely enough electoral wiggle room to do anything even slightly different.

Housing “Affordability”?

A cornerstone of Labor’s plan for housing affordability is their ‘Help to Buy’ policy: a shared equity scheme where the government takes on 40% of the price of a new home (or 30% for an existing home) for 10,000 low-to-moderate-income homebuyers each year. As long as you have enough for a 2% deposit, you can access this policy with the aim of potentially buying back the government’s equity. Funnily enough, this is actually similar to Howard-era policy supported in 2003 analysis by the Menzies Research Centre.

Now, let’s compare this with the Liberals. Their plan is an expansion of the Home Guarantee Scheme, allowing 35,000 first home buyers per year to take on mortgages with deposits of 5%. This is because the government will step in to guarantee up to 15% of your loan, ensuring that these 35,000 homebuyers are above the 20% threshold for having to pay mortgage insurance. On Sunday, they followed this policy up with a promise to allow first homebuyers to tap into their superannuation.

I have described these policies as plans for “housing affordability” however, I must admit that this is not an entirely accurate description. These policies will make housing more affordable, sure, but only for those who reap the benefits of these schemes. The hundreds of thousands of potential homeowners not on the schemes still have to deal with rising house prices. Considering that these policies fuel demand, we can expect that these inflationary pressures will in fact be galvanised.

Therefore, while we have two policies that are quite different in their particular approaches, they are united by the fact that they are both band-aids applied to the gaping wound that is Australia’s housing crisis.

So, how do we solve the housing crisis?

Allow me, a student journo who has taken approximately three econ subjects, to tell you.

Fourteen years ago, the Parliament released the A good house is hard to find: Housing affordability in Australia report. The report identified the housing crisis as a severe mismatch of supply and demand: demand had been spurred on by population growth, low interest rates, social changes in family structure and a taxation system that incentivised property investment, while housing supply was in an annual shortfall due to restrictive zoning laws, excessive infrastructure charges and a shortage of skilled labour in construction. Moreover, the supply that did exist was often not “the right kind of supply,” failing to accommodate for a necessary diversity of design, price, location and tenure.

The report made a series of recommendations to address the crisis. Among the recommendations were:

• Consider the consequences that the capital gains tax discount, owner-occupier land tax exemption and negative gearing have for housing affordability.
• Encourage state governments to introduce inclusionary zoning to require affordable housing in all new developments.
• Increase social housing to at least 10% of housing stock by 2020.

Well, none of that happened. The opposite did: social housing has actually decreased in proportion from 4.7% in 2010 to 4.2% in 2020.

You might be wondering why so little has been done to address the runaway prices of housing in Australia over the past several decades. The answer is simple: we don’t want prices to go down.

Two thirds of Australians own a house. For many, it is their greatest source of wealth. A decrease in housing prices would mean their investment has failed to pay off. Thus, Australia is divided into a home owning majority with an interest in keeping prices high and a non-home owning minority who are locked out of the market by these high prices. It’s not a good recipe for healthy, inclusive housing policy.

Is there anything good for housing this election?

Earlier, I said that the policies proposed by both parties would heighten inflationary pressures by fueling demand. This is true, but I must acknowledge that they have both made policy commitments to increasing the supply of affordable housing that, if followed through on, could partially offset these pressures. Labor have announced their $10 billion Housing Australia Future Fund to establish 20,000 social housing properties and 10,000 affordable homes for frontline workers. The Liberals have promised to increase their funding for affordable housing by $2 billion to $5.5 billion, supporting 27,500 dwellings.

The only issue is that we need about 500,000 of these dwellings.

Other than these slim pickings, this year isn’t looking good for anyone who’s not a homeowner.

If you’re looking to buy your first home, then you might be able to hop on a government scheme to make it easier to snag a loan for an overpriced property. If you can’t make it onto one of these schemes, then good luck.

If you’re a renter, you can expect nothing to help you deal with escalating rent prices and cost of living.

If you’re homeless, you can similarly expect nothing, despite the pandemic showing the capacity governments have to combat homelessness.

Of course, third parties will be playing a stronger role this election and here there exists more worthwhile solutions. Parties such as the Greens, Australian Democrats, Reason Party and Victorian Socialists have all called for massive expansions in social and affordable housing, with the Greens’ ‘One Million Homes’ and Victorian Socialists’ ‘Housing For All’ policies standing out as particularly ambitious. Farrago also already has a good write-up detailing the housing policies of these parties here.

Ultimately, until the toxic politics of homeownership are tackled in direct and unabashed fashion, there can be no expectation that this housing crisis will be resolved.

This piece was submitted to Farrago as an opinion piece.