According to an Anglicare report from April, there were only two affordable rental properties available in Australia for single people on Newstart payments. The market system is failing to meet people’s need for good quality affordable housing.
Anglicare’s tenth Rental Affordability Snapshot revealed again the dire crisis facing those on low incomes. The report highlighted the effects of the long-running housing crisis where no real improvements have been recorded in ten years.
This year the snapshot focused on people receiving government support payments or on the minimum wage. Anglicare found only 4% of the near 70,000 properties surveyed nationally were affordable for those on welfare.
There was one single property that was affordable for an individual on Youth Allowance payments. For someone on the minimum wage, only 2.2% of the properties were affordable. There are 115,000 homeless people in Australia and over 140,000 people are on social housing waiting lists.
A quarter of a million people on welfare payments have to pay over half their incomes in rent. Another quarter of a million pay over 30% of their income in rent, the definition of rent stress.
One third of renting aged pensioners are in rent stress, even after receiving the ‘rent assistance’ supplement.
Clearly the job of providing decent, secure housing for people on low incomes can no longer be left up to the profit-seeking private landlords. Rent control laws that cap payments at 20% of a tenant’s income need to fought for and implemented immediately.
But even for workers with mortgages things aren’t going well.
The Reserve Bank says ‘negative equity’ – when someone’s loan is higher than the value of their home – is a growing concern. Declining house prices are behind this phenomenon.
Across the country mortgage payment arrears have increased every year for the past four years.
The trend is especially strong in Western Australia where unemployment has risen since the end of the mining construction boom. That could be a preview of a near-term national situation.
Falling property prices causing negative equity combined with rising unemployment and mortgage defaults could produce a worsening economic spiral.
Far from relieving the housing affordability crisis such a self-reinforcing loop would tighten the grip of private landlords and drive more people into insecurity, poverty and homelessness.
Australia’s big four banks have consistently booked record profits ever since the global financial crisis. Ordinary people pay increasing mortgages and rents while wages and welfare have failed to keep pace.
All the major political parties support the profit system of the banks, landlords and developers. None of them have any policies that challenge the foundation of capitalism which produces these circumstances.
If Labor had won the federal election, they planned to partially close the tax loopholes for property speculators, something socialists support. But their main housing affordability policy was to give subsidies up to $127,500 per unit to big institutional landlords.
In Victoria the Labor state government is selling off public housing to private profiteers. The shortage of affordable homes is conservatively estimated at over 430,000 nationally.
Instead of privatisation and subsidising profits, we need a program of mass public house building. It could be supplemented by acquiring some of the thousands of properties deliberately left vacant by speculators gambling on the property market.
Such a policy is much cheaper than the costs of subsidies to profit, or the impacts of a recession on ordinary people. Publicly funded and managed housing construction means there is no need to pay a profit margin to bankers, developers or do-nothing shareholders.
Land purchases and taxes could be avoided by building on public land. Idle land could be acquired and compensation paid only when the need for it is proven. Even then, stamp duty would not need to be paid.
Clean, green, energy efficient housing developments designed to be convenient and social would be able to provide thousands of good quality construction jobs, including apprenticeships, on union conditions and pay.
To make this all possible the socialist solution is to take the banks, construction companies, utilities and all the related industries into collective public ownership. Then we could democratically plan to end the housing affordability crisis and raise the standard of living for all working and middle class people.
By Kirk Leonard