Affordable housing – an environmental perspective

The Commons in Brunswick, Melbourne Victoria. Photo by Peter Clarke.

The Commons in Brunswick, Melbourne Victoria. Photo by Peter Clarke.

Peter McGlone
Tasmanian Conservation Trust

The TCT’s interest in housing relates to: urban sprawl causing loss of bushland and increasing transport emissions; inappropriate infill or highrise housing threatening urban green spaces and residential amenity; and increasing ecological footprint from over-sized and energy inefficient houses.

Building a house will be the biggest environmental impact most of us will make in our lives – with most impact being the energy used to occupy it. Happily, making your house more sustainable will make it more affordable, to buy or rent and to live in.

Smaller houses cost less to build or buy and consume less energy and resources in construction and occupation. Medium rise development can be a very energy and resource efficient housing solution and can be planned to avoid shading existing residential areas. Making existing houses available and affordable for rent or purchase increases supply with the least possible resource demand.

Tasmania’s housing crisis has been recognised for at least two years but frustratingly three big issues have not been part of the discussion. The state government has not committed to fixing the housing crisis and no one is asking them to; there is no mention of the main causes of the housing crisis and what this tells us about solutions; and no mention of the state government’s Affordable Housing Strategy 2015-25 which has remained unchanged while the housing crisis has unfolded.

The Hodgman government is like a football team where the coach will not commit to winning, continuely loses matches but never asks why and applies the same strategy that has delivered loss after loss.

The Housing Strategy is critical in prioritising state government spending but it focuses almost entirely on government and social housing and largely ignores the private housing sector which provides most homes. We have record levels of rental and mortgage stress and this is leading more people into homelessness or needing government housing. Why not tackle the cause of the problem?

The state government makes a token effort to help private housing supply and affordability through releasing more Crown land and the first home owner’s scheme. But both are ineffective and are likely to just supply unaffordable houses (see below).

There are no actions in the Housing Strategy to increase housing availability i.e. making existing vacant houses available for rent or purchase. Last year the government came up with a highly ineffective incentive scheme (see below), which is what comes from a lack of strategic planning.

There are no grants to assist people to make their homes more liveable and affordable by draught proofing, insulation, double glazing and carbon friendly heating – as in New Zealand. The state government offers interest free loans but this will largely benefit the well off who can repay the loan.

The New Zealand government has also regulated to require private rentals improve their standards of heating and insulation and has penalties for noncompliance.

It is easy to conclude that the state government is just interested in new house constructions as a general economic stimulus and has little interest in addressing the housing crisis.

We need to help those who are homeless or in need of government housing while also helping more people to buy their own home or rent securely without financial stress. One answer may lie in the government providing more houses into the private market at fixed prices as the New Zealand government has started to do (see seperate below).

The state government likes grants, but these are ineffective and just a subsidy to the property and construction industries. The first home-owner’s grants are open only to those who construct a new home or buy a newly constructed home. If you wonder why economists say the grants push up house prices, read the Mercury article ‘Couple welcome $20,000 boost’ (11 June 2019). The couple, who were buying their first home, said the $20,000 grant helped them buy ‘nicer finishes or adding an extra bedroom’. Without it they would have just bought a smaller cheaper house.

The government has offered grants for owners of vacant houses to make them available at affordable rates. The take up has been unimpressive as people who take the offer must leave the government housing waiting list but don’t have long-term rental security and the program doesn’t targeted areas of greatest need.

Commendably, Housing Minister Roger Jaensch recently committed to development of a settlement policy that will inform how the Statewide Planning Scheme can be adapted to provide affordable housing and related services. He also flagged changes to facilitate infill and medium-density housing developments. Sadly, the settlement policy will come after the planning scheme has been finalised and changes may be years away. There is no commitment to infill and medium-density housing being affordably priced. There is no corresponding policy limiting urban sprawl.

I commend the Mercury for dedicating enormous space to the housing crisis but few in the media ever mention the myriad causes of the housing crisis and ask if understanding causes might help find solutions. Most commentators can’t get passed blaming Air BNB, but they are only a recent minor contributor. I note the impassioned editorial on 6 June 2019, ‘Act now on homeless’, but not a mention of the causes of the housing crisis.

If we treat the symptoms the problem will just get worse i.e. we may get more people into government houses and emergency accommodation but the number of people needing help continues to get larger.

Housing unaffordability is the result of decades of house prices rising faster than wages due to numerous factors. While negative gearing, taxation, wages and immigration are largely the responsibility of the Australian government the state government can pressure them to make changes. The state can also scrap many of it’s polices that just increase housing supply and prices.

The state government has never committed to fixing the housing crisis but it should. Sue Hickey talked about the government needing KPI’s but it may take the state parliament to force them to commit to fix the problem and set strict targets for doing so.

The New Zealand approach to affordable housing

The New Zealand Labor Government went to the last election boldly declaring they would ‘fix the housing crisis’. It is not hard to realise how they won support for it when you realise that, according to Labor’s policy, 40,000 children are admitted to hospital every year with illnesses related to living in unhealthy houses. But the response is truly revolutionary.

House construction
The New Zealand Government will partner with private construction companies to build 100,000 affordable houses over 10 years through a $2 billion investment, incredibly for sale onto the open market.

The government will dictate the size and price of houses, ensure they are built where they are needed, require that houses are efficient to heat and cool and ensuring adequate transport, other infrastructure and local parks.

Houses can only be bought by first home owners and if they are sold within 5 years any capitol gains must be handed back to the government. Income from house sales will be put back into housing projects

On the down-side, the government intends to change planning rules to allow these houses to be, in their own words, ‘fast-tracked’, including removing the existing growth boundary for Auckland, and will make all unallocated Crown land available for the program.

Crack down on speculators
The New Zealand Government is committed to banning foreign speculators buying existing houses and will only allow citizens and permanent residents to buy them. It will phase out negative gearing by speculators over five years and use the tax revenue that is saved to invest into the housing programs.

Investing in warm, dry homes
The Labor government will assist home owners to make their houses warm and healthy to live in with grants of up to $2,000 per dwelling to pay for up to 50 percent of the costs of insulation upgrades and double glazing or to install a fixed clean form of heating. The government has the goal of making 600,000 houses warmer and dryer.

The Government has introduced new regulations which will require all rentals to be warm and dry and support climate change goals.

Government owned housing
The Labor government promised to reform Housing New Zealand to stop the sale of government owned houses and stop dividend payments to government. All income will be reinvested into new houses and maintenance. Unusually they promise to build more government houses and but did not have targets.