I was asked to make a submission to a Senate Inquiry into Financial regulatory framework and home ownership, and appeared very briefly at a hearing Here’s what I wrote
Why not recreate the state Hosing Commissions that existed in the 50s-70s? They were dismantled during the fever dream that was neo-liberalism in the 80s & 90s.
Also, not sure if the various arguments about the cause of the current crisis are correct. Britain, USA and Australia seem to be suffering from the same crisis maybe there are different causes but maybe there is an underlying cause affecting all housing markets on the Anglosphere?
"the focus will inevitably be on relatively expensive apartments, which will do little directly to resolve the rental housing crisis facing households on low and moderate incomes" Doesn't an increased supply of high quality units reduce the prices landlords can get for existing, lower quality stock?
I still think there is potential for a differently structured 'help to buy' scheme. One where the govt provides little economic subsidy because they claim the expected capital gain, while helping people become home owners. This would require some valuation process to split the land and dwelling value upon sale.
Not necessarily. Because the subsidised buyer won't be receiving the benefit of capital gains, they won't be prepared to bid as much for the property. Or to put this another way, if the economic subsidy from the govt is negligible, then there will be negligible addition to demand.
Why not just allow build to rent to expand to cover low and medium income housing and not just expensive? Is "social housing" just a workaround to local land use and building code restrictions?
As for the negative gearing, is that not just a problem of income instead of progressive consumption taxation?
The problem with this solution is that all housing is expensive regardless of quality, size and location. Supply of labor and material in the building industry is just below that needed to meet demand so prices remain high. There are many reasons for this (covid, big mines in a small pop. country, gutted TAFE system etc). Any build to rent scheme, or social housing expansion for that matter, needs an expansion of the workforce which means rebuilding TAFEs with free training, wages to attract trades back from the mines, and governments ready to absorb the cost of both. There is no insentive for the private sector to do so. Governments can atomise the cost across the whole economy and over time with a real economic return from better housed employees/consumers paying more tax/spending more,
Why not recreate the state Hosing Commissions that existed in the 50s-70s? They were dismantled during the fever dream that was neo-liberalism in the 80s & 90s.
Also, not sure if the various arguments about the cause of the current crisis are correct. Britain, USA and Australia seem to be suffering from the same crisis maybe there are different causes but maybe there is an underlying cause affecting all housing markets on the Anglosphere?
Why not, indeed?
"the focus will inevitably be on relatively expensive apartments, which will do little directly to resolve the rental housing crisis facing households on low and moderate incomes" Doesn't an increased supply of high quality units reduce the prices landlords can get for existing, lower quality stock?
Sooner or later, but not fast enough to address the current crisis. As I said, the effect is indirect
I still think there is potential for a differently structured 'help to buy' scheme. One where the govt provides little economic subsidy because they claim the expected capital gain, while helping people become home owners. This would require some valuation process to split the land and dwelling value upon sale.
Won't this tend to simply subsidise demand, while not helping supply?
Not necessarily. Because the subsidised buyer won't be receiving the benefit of capital gains, they won't be prepared to bid as much for the property. Or to put this another way, if the economic subsidy from the govt is negligible, then there will be negligible addition to demand.
Some palpable points
Why not just allow build to rent to expand to cover low and medium income housing and not just expensive? Is "social housing" just a workaround to local land use and building code restrictions?
As for the negative gearing, is that not just a problem of income instead of progressive consumption taxation?
The problem with this solution is that all housing is expensive regardless of quality, size and location. Supply of labor and material in the building industry is just below that needed to meet demand so prices remain high. There are many reasons for this (covid, big mines in a small pop. country, gutted TAFE system etc). Any build to rent scheme, or social housing expansion for that matter, needs an expansion of the workforce which means rebuilding TAFEs with free training, wages to attract trades back from the mines, and governments ready to absorb the cost of both. There is no insentive for the private sector to do so. Governments can atomise the cost across the whole economy and over time with a real economic return from better housed employees/consumers paying more tax/spending more,
Agreed. As it happens, my next post will be about trades training.
Fixed now, thanks