28 February 2006

John Hargreaves talks to himself on housing affordability

| johnboy
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ABC Online has a humourous piece in which Minister for Housing, John Hargraeves, asks some truly stupid questions on the subject of housing affordability.

“I would challenge the private rental market to think about the profits that they’re taking out of the private rental market,” he said.

“I’d be challenging developers to say whether or not they really need to make so much profit out of development

They key word here is market. Which means supply and demand. Want to lower prices? Increase supply. Want to raise prices? Reduce supply.

Well-intentioned but dimwitted legislation being a tried and tested way to reduce supply.

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I don’t really, but unfortunately this is one of the main reasons why the Greens will never be a viable party. Total avoidance of tricky questions may be ok for the AWB, but a political party might wish to consider a response if they are more than a fly in the wind party.

The cruel irony here is that I used to be a green voter. I accepted their inconsistencies as something all parties must face, and something I was prepared to suffer for the greater good.

Since they have outright decided on a party level front that supporting somebody who is rorting welfare under the misaprehension of representative and/or educational issues (which coincidentally I find to be one of the weakest political responses I have ever heard – a feat for any party in these times of John Howard, wholesale executive level bouts of amnesia, Tampa crises etc etc).

If I could retract my vote, I would. As it stands, I will no longer even vote green preferences, they have lost the plot IMHO. Welcome to the bottom of the list. (I hope the Red Socialists, bring back communism party are happy, they just moved up one notch by default)

why is it ok for some people to rort welfare and not ok for others ?

Do you really expect someone to answer a “So when did you stop beating your wife?” style question?

Roland, I understand that a pro-green response from you will not be forthcoming, but I would like to know your thoughts of the situation, why is it ok for some people to rort welfare and not ok for others ?

And what relationship does this situation have within a greenie context ?

I’m a greenie (you have my CV) although I tend to plant trees instead of wearing loose fitting hemp clothing and burning incence, all the while banging on about how crap the world is, yet not doing anything worthwhile about it.

(For Information)
Last year, I generated funding to put over 2million trees into the ground, in Australia. This year, I intend to double that figure.

Roland, I welcome your considered response.

Still considering responding Roland ?

Roland, would you kindly like to explain why when I left Queensland to move to Canberra, I was obliged to sell my property in order to be able to purchase a home here ?

Because I was a landholder in Queensland it was bleedingly obvious that I wasn’t eligible for public housing, and nor should I be looking at moving to a new city in order to obtain public benefit in the form of a rent-compensated house.

In what hazy green smoke world does that become a legitimate reason to become a bludger ?

I also believe that purchasing real estate outside of the juristiction of the welfare bubble to be just as fraudulent so it doesn’t matter if Deb purchased the land before or after she moved into public housing.

Infact, had she purchased it while she was in public housing (proof of generation of assets whilst in public care) – that’s an even more hideous and revolting a concept.

Yeah right, Roland. So it’s simply pure coincidence she decides to haul her arse out of there once the world starts pointing out her hypocrisy (but not after trying to defend the indefensible for a couple of months)?

Actually Ari you don’t know that and i know otherwise.

but let’s not let the facts get in the way of tasty venom, shall we.

barking toad1:58 pm 01 Mar 06

There’s one place that could be used immediately for the needy if foskey got the snout out of the trough!

Foskey would still be sponging off my (and your) taxes if she hadn’t been called to account by “personal attack”.

In a gentle attempt to keep the conversation moving forwards, and take away the =(unfounded) personal attack as a method of avoiding the issues, I suggest a visit to http://www.act.greens.org.au, where today’s Media Release begins

Stop just talking and do something

ACT Greens MLA (and private housing renter) Deb Foskey has echoed consumer calls for the ACT Government to stop just talking about housing affordability and do something.

“None of the issues or the possible solutions are new, but they need a whole of Government approach” Dr Foskey said today…

perhaps the gummint coudl purchase 4 or 5 units in each new development and rent them out. by not paying stampduty etc they signifcantly decrease the real cost. it would also minimise the creation of public housing ghettos.

the socialist plea to reduce profits is just theatre for his audience.

caf, what will happen when the decline in the number of full market renters reaches a point when the govt will have no choice but to source supplementary funds to replace this income stream?

Full market renters are becoming a thing of the past as it seems housing is for the needy and not well paid, well to do politicians (and the likes of academics, senior bureaucrats, and other layabouts earning too much $$)

This is a worrying statement from the the CT article: “Last year, Chief Minister Jon Stanhope floated one possible change, limiting market renters to five years before they were obliged to buy the property or move out.”

If he reckons $270 is market rent for a three-bedroom house in Yarralumla, I don’t trust him to ask a fair price for the sale.

Lets say they make a few K on the rent after the bloated costs of the ACT public service have done their work.

That’s still a $350,000 asset pulling a not very good return on investment which could instead be spent putting up genuinely homeless people in the Hyatt.

It’s a terrible use of resources at a time when people are sleeping rough.

barking toad10:15 am 01 Mar 06

And here they come Maelinar, right on cue.

I can’t believe the collective failure of logic that is implied in the criticism of market-rent public housing tenants.

It’s quite simple. ACT Housing makes a profit from market renters – the same profit a private landlord would. ACT Housing makes a loss from subsidised renters. Therefore, for the same bottom line, more market renters allows more subsidised renters. Rocket science this is not.

If ACT Housing isn’t setting market rents appropriately then that’s a separate issue that should be looked at.

BT, according to Areaman and ilk, $270 is an appropriate market rent for a $350k+ house in the inner suburbs.

You and I can continue to dispute that the only market you’d get those prices in is the ‘old boys network’ market, but they’re not listening. Infact they will present you with information that blatantly shows off their selective reading skills, and their bull-headed approach to the situation. They are not interested in doing what’s right, they are clinging to the very thin thread of human decency that allows somebody earning 4 to 5 times what I earn to maintain their accomodation because at one time or another in their, or their parents, or in a recent case, their parents parents, were impoverished.

Whilst I wholeheartedly believe in what you’re saying, it might pay to let the lefties rant for a bit, since anything you say to them will fall on deaf ears.

barking toad9:44 am 01 Mar 06

Slightly off topic but today’s crimes talks about public housing.

Interesting to see that foskey’s rent for Yarralumla is $270 per week – market rent? Yeah, right. Bludger!

More interesting was the report that the mayor has previously suggested that occupiers paying “market” rent should piss off out of the trough after 5 years. Onya mayor – for once I’ll give ya a pat on the back.

Areaman, google the words ‘positive gearing’.

A relatively unheard of concept in Australia, which is based upon the negative gearing principle, but it is infact possible to obtain more rent than the mortgage requirements.

More recently, it seemed to me to be common practice to get the renters to pay half of the mortgage, and you pay the remainder (50/50), although what Seepi was getting at, was the ratios have been changing from 60/40 to 70/30 and even in some circumstances I am aware of, 80/20.

Hargreaves has made these sorts of comments before and then, as now, he comes across as a lightweight. Canberra housing is over-priced (rental and sales market) not only in Australian terms but even in comparison with many OECD nations. Affordable, decent housing should be seen as a human right and the ACT Government, as aprofessed defender of human rights, should do better than mouth these inanities.

will be paying more intot he mortgatge than they are getting from the rent coming in

um… that’s the whole point, otherwise we’d all be buying rather than renting.

I think Hargreaves should challenge himself to see whether he needs to profit from his fat pay packet. Perhaps he could offer up his govt car as a refuge for a homeless person? Not all landlords are cashed up profiteers like he seems to think. Anyone who boughttheir investment house in the last few years will be paying more intot he mortgatge than they are getting from the rent coming in.

I’ve said it before in another thread, but “I wonder if the newly annointed Human Rights Commisar will deal with Housing as a Human Right for those who cannot access public housing due to the selfishness of those who have the means to move into the open market?”

Of course the human rights act can’t be applied for housing as the govt would be faced with a quandry of who has ‘more’ rights to a public house.


Safe, secure, appropriate and affordable housing is an essential human right,without which a number of other rights cannot be effectively exercised.

A lot of devil in the detail of that “Appropriate” there.

And that’s just the opening sentence.

Thanks for the link though.

I don’t think the market has failed, i think it’s responding rationally to the stimulus’ it’s been given.

It needs different stimulus.

here’s a link to a document from ACTCOSS and ACT Shelter called
THE WEALTH OF HOME – A Call for Action on Affordable Housing in the ACT


It talksa bout market failure among other things, and what kind of interevtnions across the world seem to be successful.

The private rental market isn’t the problem. It’s the government.

To my way of thinking, there are properties priced at various points on the scale, from dirt cheap to ultra expensive.

And renting sucks sometimes, because you don’t control the property. You can’t decorate to your own taste and maintain it the way you want. You might get a landlord that won’t fix your hot water service for a couple of days because they can’t be stuffed paying the extra callout fee, even though said utility is classified as an essential service under the lease and must be fixed immediately.

Public housing isn’t much better as an alternative because in New South Wales at least, they look at your GROSS income and assume it’s all disposable when assessing eligibility. You can’t qualify if you earn more than $580 for 3 people.

On top of that you have to pay water rates etc. to the Housing Commission, which doesn’t usually happen in the wider private market. Also you have to wait ages and ages for a place to become available because there aren’t many properties on the Houso register.

So the rental market has a lot more problems than just simply landlords and developers with a profit motive.

The government has encouraged this with their pennypinching, failure to supply enough land and their negative gearing policies, both of which have contributed to higher prices if you want to buy.

I hardly think it’s fair to point the finger at developers and say they’re very bad for doing exactly what you encouraged them to do in the first place.

Here endeth the sermon.

ROTFL Kimba.

Perhaps the government should look at building an affordable housing department in the same vein as banks, telecom, etc if this is such an issue.

Then they can go into direct competition with the free market and drag prices back down like a huge anchor…

But can you see a Liberal government proposing that ?

They’d rather people who drop off the bottom end of the income line to live in multi-storey coffin apartments. (until they can get back on their feet – yeah right)

Yes, I agree the market should be government controlled. Yep we should ban free enterprise and no one should dare make a profit.

We shouldn’t stop there, we can also rename Australia – The People’s Democratic Socialist Republic of Australia.

Maelinar – I figured there probably was an example – I was exaggerating for effect 🙂
Fact is, though, while there are no doubt examples such as the one you gave, expecting an entire market to take that approach over a prolonged period is really grasping at straws for a solution.

I’m sure areaman can supply the statistics that the private rental market according to the world of foskey and other life-dodgers is indeed quite affordable and therefore John Hargreaves is spruking shit.

Nup, I agree housing, both rental and purchase, is amazingly expensive in Canberra. Of course scrapping the security of tenure policy on public housing wouldn’t chaneg this one iota, which has always been my point.

As to how we deal with houseing affordability, from memory the housing affordability talk force had some good ideas, only one of which was increasing supply. I am also pretty sure that “asking landlords nicely to make less money” didn’t make the final report. If Hargraeves was talking to himself maybe it was after lunch, in which case all bets are off.

Spectra, a loose analogy however I recall IKEA ran a day where all profits would go to their staff since they had already exceeded their profit forecasting for that year.

I had to rack my brain for that example though.

I’m all for making housing cheaper,i just don’t think asking landlords and developers to examine their consciences is going to achieve very much.

releasing more land for development would make housing cheaper,

putting Housing ACT onto the open market and using rent assistance to achieve social welfare goals would make housing vastly cheaper.

increased regulation of landlords and developers will make housing more expensive.

The guy needs to ask himself: Has any profit-driven entity ever, in the history of the universe, said to itself “You know what? I don’t need to make this much profit – I could stand to have less money”. The answer, of course, being “Of course not! Are you insane? What are you smoking?”. So it’s not exactly a sound policy to ask nicely for this to occur, in the hope that it will solve the problems.

I’m sure areaman can supply the statistics that the private rental market according to the world of foskey and other life-dodgers is indeed quite affordable and therefore John Hargreaves is spruking shit.

Since he’s been quick to impart these gifts of knowledge over our previous conversations at least.

I think I’ll sit on the Hargreaves side of the fence on this one, housing affordability is at an all time shocking rate regardless of any statistics you can put in front of me, the information I am citing is the rental guide and the prices therein – an active document.

However, as JB said, the market will charge what they will because they can, not for some higher obligation to provide cheap accomodation to strangers.

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