Let’s stop pretending that the housing affordability crisis is out of our hands

Zoya Patel 8 September 2021 33
Public housing

Public housing is being renewed, but there’s a shortfall of about 3,000 social housing properties in the ACT. Photo: ACT Public Housing Renewal Taskforce.

In my short life, I haven’t experienced anything as significant and scary as the pandemic.

The idea is terrifying that there is a virus that could strike at any time and that the factors that could lead to either my protection from it or my infection are largely beyond my control (beyond vaccination, which I leapt at).

For other Australians – those from older generations or less stable home countries – I imagine it’s not a new feeling. War must be the single most frightening experience that renders people helpless in the face of violence and displacement.

But in a first-world country like Australia, especially living in the bubble of affluence that is Canberra, I’ve been sheltered from most bad things, with little of substance to complain about (I’m sure some readers will wholeheartedly agree on that last point).


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As we try to find a way out of this current lockdown, many in Canberra are facing situations more dire than just the virus alone. The housing crisis for supported and affordable accommodation is dire in our city, with an estimated shortfall of 3,000 social housing properties.

When we talk about the housing crisis, it’s often with a sense of helplessness that echoes some of the rhetoric around COVID: there’s only so much decision-makers can do, rental affordability is in the hands of the market, it’s just a bad time for property prices if you’re buying or renting, and a great time to be on the other side of the coin.

But at the crux of the matter – it isn’t out of our hands, is it?

There are meaningful and tangible ways that we could address housing affordability to make the market more accessible for many and to provide safe accommodation for those who are the most vulnerable. Experts have been calling for a national housing strategy, for a drastic increase in social housing stock, for rent relief measures and meaningful parameters set on investment properties to address inequality for years.

There are even more innovative approaches that have been modelled by countries like Singapore where housing isn’t framed as a financial opportunity, but a necessary social asset for people’s wellbeing and citizens can access government-subsidised housing on long-term leases. Importantly, there’s not the stigma associated with government housing as there is in Australia.


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The framing of the housing crisis as an unfortunate issue that government can only do so much about, and is ultimately down to an individual’s earning power, is a convenient political framework that allows governments to pander to the rich and shrug their shoulders at everyone else.

In the depths of COVID, I’ve been very conscious of those who are renting or insecure in their tenancies. One friend was evicted a month before lockdown and spent weeks attending crowded open homes, unable to match the rent bids that other applicants were putting forward. He eventually found a way to rent through a friend of a friend privately, putting him in a relatively vulnerable situation.

And he’s one of the lucky ones – for those unable to fund any sort of market rent, the situation is incredibly dire.

We talk a lot about the availability of land, the need for more housing options, but by and large, this is in the context of creating options for the middle class. If anything, it provides a pathway for people like me to jump into the market and eventually move into the class above ours until we’re landlords with multiple properties, hoarding the market and reaping the benefits.

I would rather forgo the financial advantage if it meant housing was more equitable and accessible for everyone.

Let’s stop pretending there is nothing we can do to address inequality when a roof over our heads is surely the single most basic human need after food, water and oxygen.


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33 Responses to Let’s stop pretending that the housing affordability crisis is out of our hands
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Amanda Kiley Amanda Kiley 1:52 pm 10 Sep 21

The shortfall in social housing could be alleviated if tenants were moved to another option once housing needs change. I know of a few living in massive homes after their children have left. A couple doesn’t need a 4 bedroom home.

tim_c tim_c 4:43 pm 09 Sep 21

Maybe the ACT Government could stop imposing additional fees, charges, levies and taxes (and whatever else you want to call the extra costs), and release land at a rate that keeps up with demand. It seems the ACT Government is actively trying to force housing prices higher and higher, and so out of touch that its bureaucrats respond straight-faced “it’s because the builders and developers just pass on the additional costs to the end user” (as if all the builders should just become charities and non-profit organisations to build houses without expecting to remain profitable ie. in business).

ChrisinTurner ChrisinTurner 2:57 pm 09 Sep 21

The ACT government could stop demolishing social housing.

Oiledpengu Oiledpengu 10:04 am 09 Sep 21

The migration issue- or lack of it is a mute point. There have been more ex pats return to Australia during Covid than migration would have given us. Perhaps it’s those returnees making prices skyrocket since March 2020

nobody nobody 8:55 am 09 Sep 21

Lenin also dreamt of cheap and equatable housing for everyone, and we all know how badly that went.

    Peter Curtis Peter Curtis 4:22 pm 12 Sep 21

    And your point is ? do nothing ? because it may be seen as ‘communist’

kenbehrens kenbehrens 8:39 am 09 Sep 21

It’s complex.
1. TV shows like the block, create unrealistic expectations for people to aspire to. Go to open house, they’re mostly highly renovated.
2. Two incomes; when husband worked and mum was a homemaker and looked after the kids, people were satisfied with a 3 bed fibro. People want more.
3. Low interest rates; pushes demand via “affordability” for those with solid incomes.
4. Low land supply -Government – pushes demand.
5. Covid reduced supply.
6..ACT Government policy – increasing Rates and Land Tax adds significantly to ownership costs, which are passed onto tenants.
6. Federal policies – 50 % discounted CGT.
Neg gearing. (NB On balance, NG is ok. People should be able to deduct their expenses. Otherwise, they wouldn’t invest and that’d reduce supply).

Much of the issues related to Government.

    chewy14 chewy14 12:22 pm 09 Sep 21

    Ken,
    With regards to negative gearing, your point around supply only really holds if investors were negatively gearing new properties.

    But the majority of negatively geared properties are existing ones, so they don’t impact supply much at all, instead they limit the opportunities for renters who want to buy to do so.

    Which is why of we don’t get rid of negative gearing on property overall from an economic standpoint, it should be limited to new builds only.

    kenbehrens kenbehrens 3:38 pm 10 Sep 21

    For a brief period of time when Keating was PM, he restricted NG and the rental market tightened up causing him to reverse that policy.

    The Costello 50% discount on CGT is of course like free money. Half of the gains are tax-free.
    (Keating charged CGT on your after inflation gains, at your full marginal rate).

    There is a lot of misunderstanding about NG. After tax, a loss is still a loss. Investors are still out of pocket. Ultimately, they accept these ongoing losses because of the prospects of higher future rents and future capital gains.

    Investors are no different to any business operator. If they can’t claim a tax deduction for their expenses, you drive them out of business.

    Mr Shorten tried to restrict NG, as you are suggesting (and cut dividend imputation). With those policies he lost an unlosable election. The ALP had now abandoned both policies.

    Nick Swain Nick Swain 5:04 pm 09 Sep 21

    In the ACT the government is stuck with a narrow income base – mainly property taxes like rates and stamp duty. States usually have wider options such as mineral royalties, larger range of businesses and industries paying various taxes. Perhaps we need an ACT GST or similar?

    Capital Retro Capital Retro 5:38 pm 09 Sep 21

    Do we really need the massive expense of an autonomous government with all the pomp and pageantry that goes with it?

    There’s no reason why NSW couldn’t take over health, education, policing etc. with a council carrying out the usual local government duties.

    The “parliamentary triangle” could be hived off as symbolic area that is recognized as Australia’s capital territory.

    This would solve a lot of problems and create none. Labor would still dominate the politics so they have no reason to oppose it.

    phydeaux phydeaux 6:57 pm 09 Sep 21

    “Do we really need the massive expense of an autonomous government with all the pomp and pageantry that goes with it?”
    Which level of government did you have in mind, Capital Retro? Your comment could apply with equal [ir]relevance to any, from some points of view.

    Capital Retro Capital Retro 8:51 am 10 Sep 21

    Read my post again. I nominated NSW taking over everything that a state government should control with a local council to “collect the garbage and fill the potholes”.

    We already have merged with NSW through the new residential subdivision in west Belconnen.

    phydeaux phydeaux 5:27 pm 10 Sep 21

    You have missed my point. Never mind. That dead horse is not going to flog itself.

chewy14 chewy14 8:13 am 09 Sep 21

Is this article missing the 2nd half where the solutions are going to be proposed?

There’s a couple of motherhood statements about what “experts” say, but no real discussion on what any of them entail.

    Sam Oak Sam Oak 9:07 am 09 Sep 21

    Maybe because the author won’t openly admit the solution is just to suck it up, work harder, apply for higher paying jobs, cut back on their lavish lifestyle, save money and lower their expectations of where they live. House prices are going up because the RBA is printing money to the tune of $4b a week to keep people like this author alive through disaster payments. Maybe if she had all this time to write her cliche gen z grievances in an editorial, she’d also have time to get a second job and be a productive member of society?
    Shelter as basic as food, air and water? Yep, you can drink tap water or choose to buy sparkling bottled water. You can have a fancy 3 course dinner or a packet of noodles and a can of tuna. You can live in a house or a block of flats with new immigrants to Australia. Supposedly our public housing just isn’t good enough for the Afghan refugees we brought into the country? They need mansions in Vaucluse to make up for their hardships under the Taliban.

    Capital Retro Capital Retro 10:34 am 09 Sep 21

    You’ve nailed it Sam. We have turned into a politically divided nation of wimps with too much dependence on welfare. I’m glad you mentioned the fact that it is costing $4 billion a week of printed money just to “keep the doors open” because the financially illiterate media refuses to discuss this.

    If we think that times are tough now we are in for a shock so we had better toughen up now.

    chewy14 chewy14 12:29 pm 09 Sep 21

    Well Sam,
    That isn’t the solution at all but we know you as a heavily invested property speculator would never propose something that hurt your own pocket.

    Your own comment is just a whole word salad of meaningless cliches.

    Whilst there is a small point to make about self responsibility, the main problems around housing are structural and have been exacerbated by decades of government policy to buy votes from the large, older, wealthy cohorts.

    Federal government policy and tax settings are heavily distorting the market in favour of property speculators like yourself. These should be would back to at least a neutral position.

    Locally, we have powerful self interested lobby groups and NIMBY’s preventing more reasonable development opportunities to provide new housing options.

    And we have a local government heavily reliant on land release revenue that encourages them to limit supply.

    assiduous assiduous 3:58 pm 09 Sep 21

    Hi Chewy, here are the solutions.
    1. ACT Government to release more supply onto market at $500 per m2 and below.
    2. land release prioritised first to local residents who do not own property, until supply/ catches up to demand.
    3. Governments should tax land at a higher rate. According to my calculations the bank interest paid on mortgage repayments is 7x higher than the rates charges over 20 years. The cost of the bank interest repayments to cover up front land costs is actually greater than the total taxes received by the ACT government across the sum of rates and the original land sales profits over a 20 year period. That’s pretty inefficient and costly taxation isn’t it? Great if you are a bank though…
    4. Reserve bank mandate to ensure monetary policy does not impact house price movement.
    5. higher interest rates and or loan limits on property purchases
    6. tax reform incl. limitation of negative gearing to new properties, tax treatment of primary residence, taxation of property inheritance..

    The good news is that the time is fast approaching when the political majority will be held by those disadvantaged by the financialisation of housing and poor policies of the last few decades, and thus changes like this can be forced by the younger majority.

    chewy14 chewy14 5:09 pm 09 Sep 21

    Assiduous,
    1. Disagree. The ACT government should simply release land at market rates, rather than trying to distort it. The issue here is more around supply.

    2. Disagree. Why should people who live here now get preference over people who want to move here? The government already does provide schemes for first home buyers so this really isn’t going to achieve much either.

    3. I agree with higher taxation on land only if its matched with lower taxation elsewhere. The overall burden shouldn’t change. Land is a very efficient taxation source.

    4. This is actually an interesting point with the linkages of CPI and interest rates. But I think the same outcomes could be achieved in a better way by enacting some of your items in point 6.

    5. I don’t agree with this, unless it was more around bank stability by tightening lending criteria.

    6. I agree with everything except taxing inheritances because it would be too easy to get around. Better designed Capital gains taxes would achieve the same.

    Good comment, lots of thinking about solutions even if I don’t agree with them all.

    assiduous assiduous 8:09 pm 09 Sep 21

    1. The government is a price setter, not a price taker. Their land release policies have already massively distorted the price of land. The ACT government is the monopoly source of new land. The government is not a business, it does not need to and should not seek to make a profit. It should cover costs only – the RBA zoning analysis on the cost to develop land is the basis for my ~$500 per sqm. In the mid term, once there is no broader social benefit to leading the market, by all means let the market set the price.
    2. For the same reason that Australians should be prioritised over foreigners by our own government. Also, if the ACT government were to lower land prices without such a measure, it would just create excessive demand from interstate many of them opportunistic investors like our rent seeking buddy Sam. Its a temporary measure until supply demand can be brought into balance nationally. In isolation handouts and subsidies to first home buyers only lead to higher prices. What i propose would take first home buyer interest out of the established property market, and improve equality.
    3. Sure, the question of overall tax rate is a separate issue. I merely point out that there are smarter more equitable ways to collect it.
    4 & 5. reflect the fact that credit availability is a huge driver of house price inflation, we don’t want the majority of bank lending directed at inflating land prices, we want it invested in profitable and productive enterprises that improve living standards.
    6. The issue with a captial gains tax is that people trying to move house could end up being taxed because of inflation, relocating would be very expensive, impacting workforce mobility & productivity.

    chewy14 chewy14 10:21 am 10 Sep 21

    Assiduous,
    1. I don’t think the government should be a price setter and I disagree that they shouldn’t make a profit off land. That being said, I agree that their current policies distort the price upwards but the solution to that is better targetted land releases, not artificial price setting.

    2. But you aren’t talking about “foreigners”, your policy is an attempt to prioritise local Australians over other Australians. I dont know how it could be managed or why it would even be desirable in the first place.

    3,4,5 no real issue here.

    6. I’m OK with people who have made massive Capital gains being taxed when they move. Agree that inflation needs to be taken into account but the current blanket 50% reduction is too clunky.

    assiduous assiduous 4:00 pm 10 Sep 21

    thanks Chewy,
    1. Perhaps you could explain then why new home buyers should have to take larger loans out to subsidize the services enjoyed by established owners who paid far less for larger blocks? Isn’t what you suggest just government facilitated rent seeking? Currently the government decides how much new land to place on the market over any given period which gives them the immense power to move prices directly or indirectly. I suppose they could eliminate land development and zoning controls and allow anyone to develop and sell residential land on to the market but I don’t anticipate sufficient support for such a move.

    2. The ACT government is not responsible for solving homelessness in NSW or WA, nor can it. Remember that one of the reasons for this mess is that most of the land gets gobbled up by people who already own homes. Chewy – the ACT government already vets public housing applications on this basis. It’s desirable as it’s in societies interest to unwind this issue quickly, before more people are left homeless, and worsening inequality breeds unrest. Another way to quickly change the situation is a massive government housing program like in Singapore, but i think this won’t be as cost effective as making affordable land available starting with first home buyers.
    7. i forgot to mention the rate of immigration and failure to do commensurate strategic population planning, infrastructure planning and investment. It’s largely left to the private sector which makes decisions in the interest of short term corporate profits, not living standards long term. Governments have been neglecting a key responsibility here.

    krishnarao_1 krishnarao_1 3:13 pm 12 Sep 21

    One of the motivations for working hard is being able to pass some wealth to our kids

    assiduous assiduous 8:07 pm 12 Sep 21

    That’s nice, no one here is trying to discourage productive work. Consider though, would you prefer your kids to get some inheritance late in life, or a smaller inheritance but to have no need for it?

    Something for you to think on…

    “Kindly let me help or you’ll drown says the monkey putting the fish safely up a tree.”

Acton Acton 7:52 am 09 Sep 21

Young first home buyers face extreme difficulty in finding affordable housing. One of the main reasons for this are that general housing aspirations and expectations have changed since prevous times. Houses, even first homes, have become bigger, of higher quality and with more expensive initial inclusions, which has inevitably pushed up building costs, prices and loans. Government policy to limit outer area land supply releases and compel people to live in designated more expensive urban infill areas, as well as higher demand from a growing population with immigrstion are also reasons for higher housing prices. There is no easy solution to this combination of factors. There will be a lot of angst if and when low interest rates rise. I agree that housing affordability is a more difficult problem to solve and for many people a more practical everyday problem than a virus.

    chewy14 chewy14 8:16 am 09 Sep 21

    You forgot the political pressure exerted by inner city landholders to prevent cheaper, inner city housing options and densification to occur near amenities, services and workplaces.

    frankie frankie 10:19 pm 09 Sep 21

    Step 1: Save up and buy a small studio.
    Step 2: Save up and upgrade to a larger place.
    Step 3: Repeat Step 2 until satisfied.

Stephen Saunders Stephen Saunders 7:52 am 09 Sep 21

Under nil migration, median house price has soared to ~ $1.3m in Sydney, ~ $1m in Canberra and Melbourne. World-high levels.

But both parties support a return to 235k mass migration, which, amazingly, is ~ 20k higher than the “Big Australia” years.

Therefore, whatever any LibLab politician says about housing “affordability”, it is just lies and humbug.

Finagen_Freeman Finagen_Freeman 7:17 am 09 Sep 21

You’ve nailed it Zoya. Housing is first and foremost a wellbeing requirement. Investment and multiple holiday homes at the expense of fellow Australians is wrong.
We need to shift the conversation and stop praising people with ‘property portfolios’

    mixalis mixalis 7:39 am 09 Sep 21

    What are you on, now you want to punish people who have worked hard to get ahead in life.. Why! I have met many whos whole endeavour is to get things free !!!!!

    Capital Retro Capital Retro 11:27 am 09 Sep 21

    And the biggest “freebies” that are being handed out now are ones relating to the “new home industry”.

    There were nothing like these handouts 50 years ago when we baby-boomers had to save one third of the deposit for our first home in a highly (and wise) regulated borrowing environment.

    Peter Curtis Peter Curtis 4:24 pm 12 Sep 21

    many people work hard – it has nothing to do with owning a house or having certainty of shelter

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