Covid-19 and the housing crisis

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Housing affordability in Australia was close to the worst in the developed world well before COVID-19 struck, with over 600,000 out of 2.6 million renting households experiencing housing stress. Now with the economy suspended in mid-air over a quarter of renters are not able to pay rent on time.

Before COVID-19, more than 50% of a low-income private renter’s pay was spent on rent. The worst recession since the 1930’s is clearly exacerbating an already diabolical situation.

Household essentials of food, heating, transport, healthcare and education have to be sacrificed in the struggle ‘to keep a roof over the family’. More than 25% of renters cannot pay rent on time or even pay it at all.

Home ownership has grown to be out of reach for more and more working and middle class people as the national supply of affordable housing remains woefully inadequate.

Fundamentally this is an obvious failure of the capitalist profit driven system, leaving housing up to the ‘market’ and the landlords and big developers who control it.

Coupled with this is the neoliberal strategy of both the Liberal and Labor parties. Both parties privatise and sell off public housing, disguising it with the new friendly-sounding label of ‘community housing’.

This tangle of ‘not-for-profit’ housing organisations all want to make a surplus and pick and choose who they rent to. Often they discriminate, for example against young LGBTIQ people. Consequently in Victoria alone there are over 100,000 people on the public housing waiting list.

Public housing is only 3.6% of housing stock and even though we are in the throes of a housing crisis, it has declined for years. The Morrison government in its recent federal budget did nothing to alleviate the crisis facing ordinary people.

As the government budget makes clear, the point in time is fast approaching when the ‘zombie’ businesses and jobs kept alive on government support will be shot in the head when JobKeeper comes to an end.

How long will the half a million housing loans presently on pause continue before mortgage defaults kick in and the banks kick people out of their homes onto the streets?

Remember Australia has shackled itself with some of the biggest mortgages in the world. What then is the way out of this approaching housing tornado?

Socialist Action calls for:
▪ Immediately cap rents at a maximum of 20% of a tenants income. Private landlords who want to offer rentals must do so through a democratically accountable public agency which would match tenants with landlords and enforce the rent cap. This could permanently provide all those struggling to afford housing with viable rent, so they can stay in their homes or take up accommodation.

▪ Invest massively in Public Housing. A Commonwealth Housing Authority could undertake large scale construction of public housing – creating thousands of jobs and apprenticeships – and acquire vacant or speculatively owned housing stock.

▪ A minimum of 100,000 homes are needed immediately, but over the longer term Australia needs 800,000 more new dwellings to meet the needs of all people. This could easily be financed from the abolition of tax breaks for the rich, like negative gearing and capital gains discount which are worth over $12 billion.

▪ Wipe the debts of workers who default on the mortgages they were sold by the big banks loan shark salesmen. Resist all mortgage foreclosures and evictions.

▪ Fight for a charter of housing rights to set national standards around security of tenure including long term and permanent leases, capped rent prices and bonds. Landlords must be forced to provide proper maintenance and basic standards. Eviction bans should be made permanent.

All this is achievable. Much of it has been done in Australia before in some form or another, but today it requires a socialist perspective, planning and struggle from below.

It would be moronic to expect the ‘rent seekers’, greedy developers, landlords and bankers or their political servants to provide high quality houses for low and middle income workers.

Socialist Action calls on the labour movement to develop a fighting strategy to win these demands. But we have no time to wait for official labour movement figures to organise.

People in housing stress, renting or with a mortgage, should organise together now, lay the foundation for a campaign, and fight back against the rich who run the housing market at our expense and for their profit.

By Mike Naismith