Of the urgent challenges our society faces, much recent debate has taken on a strange self-contradictory cast. Now, apparently, we can simply remedy housing unaffordability by reverting to 1950’s suburban sprawl!
Well ahead of – and therefore binding – the state’s 30-year strategic urban plan review, the Premier announced that he would accelerate the release of almost 24,000 city-fringe development sites to the north and south – more than twice the number of the troubled and equally remote Mt Barker subdivision – including 15 per cent for affordable housing.
Clearly targeting struggling first home buyers, the Premier’s reasoning is worth repeating:
“One important way the state government can help more South Australians enter the housing market is by promoting the release of more land for residential development…Everyone should have a safe and affordable place to call home.”
The state’s current 30-year strategic plan sensibly seeks a compact urban form with 85 per cent of new housing within established urban areas and 60 per cent close to public transport routes.
Yet, in are sharp break from these objectives, the SA Planning Minister Nick Champion now considers urban sprawl has unfairly become a “whipping boy” in housing debates, a claim he bolsters with comparatively vapid logic: “People live in these communities, they work, they contribute to society, they’re good communities (so) … it will be the market that decides”.
Of course, any mention of “the market” immediately invites sceptical analysis.
It seems that local research has confirmed that the cost-per-dwelling of servicing peri-urban subdivisions is between four and 10 times the cost for intra-urban infill.
As Kelsall further explores, the government’s Health Minister Chris Picton raised concerns about the adequacy of proposed health and transport infrastructure in the new subdivisions.
Yet the Minister for Transport Tom Koutsantonis declared government will not extend existing transport infrastructure, therefore, as is currently unfolding for Mount Barker; the inevitable immense cost of better connecting remote new subdivisions with inner city jobs will now fall to future taxpayers – this despite state infrastructure costs nationally generally rising to unsustainable levels.
None of these considerations touch on the nature of the resultant housing, which, as Tone Wheeler repeatedly reminds us, is generally dire.
So much for affordability.
With urban policies like these, no wonder that 70 per cent of young people think they will never own a house and are turning to other types of investment instead.
The problem reviewed
As Margot Saville explains, the ballooning consumption of wealth in unproductive housing (that is, the resale of existing housing as opposed the production of new housing) is harming our economy.
She adds that for complex reasons the current peri-urban development patterns also correlate with higher rates of obesity and lower fertility of those so housed.
When viewed together, the for-profit housing industry and the consumption of its products can both be conceived as components of a single financialised system, the primary purpose of which is the extraction of profit.
Features of this system include high barriers to entry (both to build and to own), artificial restrictions on supply (both land and apartments), and prices that far outstrip the costs of production, all of which resemble the monopolistic market practices of luxury goods, like the transmogrification of lowly running shoes into high fashion footwear.
There would be nothing in principle wrong with this except that housing also serves an essential human need – that of shelter.
For this reason, attempts to improve housing affordability by tweaking the current system from within are doomed to fail.
Some proposed reforms are actually destructive to social equality, like allowing the young to redirect their superannuation savings towards home deposits. The increased supply of money will simply elevate house prices further, transferring even more wealth to the already wealthy, leaving homes still out of reach and impoverishing the young by the time they reach retirement age. Viewed thus, the Australian residential property sector is starting to devour the nation’s future for reasons eerily similar to those described by Michael Pettis for China:
“…it is difficult to abandon a successful development model. Its very success tends to generate a set of deeply embedded political, business, financial, and cultural institutions based on the continuance of the model, and there is likely to be strong institutional and political opposition to any substantial reversal.”
This is why a new system of housing production is needed, one that prioritises shelter and is tuned to resist financialising tendencies. It does not mean that government should provide this system; instead, governments can coordinate their extensive powers to enable this outcome, as we explored previously.
The Commonwealth announcement
The South Australian announcement appeared in the context of the Commonwealth government’s release late last year of a new National Housing Accord on affordable housing.
The promise to part-fund the delivery of 1 million affordable dwellings attracted most attention but its methodology is just as important.
Briefly, the accord very sensibly seeks a coordinated and collaborative approach, across government tiers and between many industry sectors, sustained over five years.
But perhaps even more relevant to this discussion, the accord requires affordable homes to be “well located.”
The Treasurer considers it is “…more important than ever that we work together to ensure there is an adequate supply of affordable housing where it is needed – close to jobs, transport and other services.”
Hmmm, so a battle is looming
Many observations can be drawn from these conditions, but let’s pick just three.
Firstly, using just two words – “well located” – the national government has expressed a legitimate and urgent interest in the urban policies adopted by state governments.
Solving affordable housing is a national problem requiring collaboration between governments and sectors.
As we reviewed previously, resolving our housing affordability crisis has significance in demonstrating the superiority of democratic governance increasingly under threat from autocracies in our region.
There are also significant economic consequences of poor urban decision making.
The growing consumption of wealth in unproductive housing risks less investment in more productive sectors of our national economy.
Further, the practices around the production and consumption of housing appear to have anti-competitive features, which would damage our economy further.
This risk includes the reduction of wealth transfer to subsequent generations, which will inhibit their capacity to contribute to the sustainable growth of our economy.
Urban policies that add costs to housing, such as requiring more expensive infrastructure, or higher travel costs, will needlessly consume scarce taxpayer funds, harm our economy in the longer term and affect our capacity to address climate change
An additional feature of housing is its significance within cities, which are increasingly important loci of national productivity.
Any urban policies that add costs to housing, such as requiring more expensive infrastructure, or imposing higher travel costs, will needlessly consume scarce taxpayer funds, harm our economy in the longer term through urban inefficiency, and also affect our capacity to address climate change.
Secondly and in consequence, there appears to be a battle looming between the South Australian and national governments over funding and participation in the affordable housing accord.
If ever there was a significant pivotal moment for urban policy, that time is right now
The Commonwealth would therefore be wise to consider if increasingly stretched taxpayers’ funds would be well-spent building affordable housing in Adelaide if that housing will suffer the kinds of shortcomings examined by Kelsell and described above.
Thirdly, if ever there was a significant pivotal moment for urban policy, that time is right now.
There is a pressing need to provide broad, imaginative, informed, well-coordinated, highly-visible, sustained, and persuasive input to national, state and public debates offering fresh ideas for good affordable housing, how it is best provided, and its utter centrality to equitable sustainable and productive Australian cities. A ll at a time when BAU (business as usual) is no longer sustainable.
The two main built-form professional groups – planners and architects – assemble under regulatory and representative bodies that include in their respective charters an obligation to advocate and educate about their disciplines.
They both now need to discharge this responsibility with vigour – right now.
Ahhh, but nothing will happen; it never does
Urban policy issues are important, often complex, yet frequently dull.
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This probably explains why they get little sustained public attention beyond the half-plausible quick-fix suggestions that seem to dominate much recent coverage of housing affordability.
Some think Adelaide is fine like it is. If this view is widely held, the ashen mediocrity of Adelaide’s CBD (previously explored here) looks set to spread across the entire conurbation.
Besides, we are a notoriously relaxed lot; we don’t expect – or get – much from our leaders.
So why bother; those lucky enough to have a backyard might just break-out the sun-loungers, pour a chardy, and watch as these metaphorical fires.
