Magazine of Socialist Action in Australia

Rent control and more public housing now!

Reading Time: 3 minutes

More than 100,000 people are homeless in Australia, and waiting lists for public housing average two-to-three years in most places. In some areas people wait up to five years. In Victoria, 37% of low income earners suffer from housing stress – spending more than 30% of income on rent or mortgages. Some lose more than 60% of their income to rent. More than a million people depend on rent assistance from the federal government.

By David Elliott, Socialist Party

High house prices make home ownership unrealistic for many. First-home buyers are at a record low, and half of all renters are under the age of 32 with more and more renting indefinitely. Mortgage debts are now 86% of Australia’s GDP (up from 16% in 1988), while wages continue to fall relative to prices, and work is increasingly insecure. Rents in capital cities have consistently risen above inflation, driving many out of the inner cities and placing huge stress on those who stay.

This is the result of a housing sector dominated by private landlords, speculation and market forces. It is not ruled out that over the coming decade, Australia experiences a wave of home foreclosures and bankruptcies similar to those seen in the US and Europe. Even back at the height of a historic boom, Australian capitalism was incapable of providing affordable housing to all.

We need to turn this situation around. Housing is a basic need and should be a right. We need a massive increase in high quality public housing. This would not only wipe out the public housing waiting lists but it would create thousands of jobs. It would also act to drive down rents in the private sector. Existing public housing stock needs to be properly refurbished and maintained.

The question of maintenance is important as it seems most state governments have a conscious policy of letting public housing run down to the point of disrepair. This makes sell offs easier. In fact 27% of government controlled residences (Australia wide) have major structural problems, versus only 16% for the general population.

Clearly we need democratic, accountable and inclusive residents associations controlled by public housing tenants themselves to oversee the quality of public housing, with elected tenant leaders in paid positions as there has been in the past.

In the private housing sector we need controls on private rents. Some states have had forms of rent control in the past and cities like New York still regulate private rents today. Very few Australian properties retain the legacy of rent control from the past.

In Victoria for example more than a third of people rent for a decade or more, and most see their rents increase regularly. Landlords encourage new renters to secretly bid against each other, and will accept more than the advertised price. This practice needs to be outlawed. Rents should be linked to wages and the cost of living, and kept below inflation.

Landlords often get loans for rental properties and ‘negatively gear’ them. Negative gearing allows investors to write down the interest costs against other income at tax time. This system benefits landlords with an estimated $36 billion worth of tax breaks each year. Alongside landlords it is the major banks that profit from this situation.

The billions of dollars in tax breaks and interest payments made to the banks gives a glimpse of the huge amounts of wealth associated with the housing sector. If these funds were pumped into the building of new public housing stock and private landlords were properly regulated affordable housing could be made the norm in no time.

A socialist approach to housing is essential if we are to stamp out homelessness, housing stress and ensure the right to an affordable home is provided to all.


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