Magazine of Socialist Action in Australia

Western Australia’s housing crisis

Reading Time: 4 minutes

Socialist solutions desperately needed

The mining boom in Western Australia (WA) has brought untold riches particularly to the top 10% of mainly company bosses and highly paid executives. But for low and middle income earners there is a dark side. The housing situation in particular points to the one sided nature of the boom.

For example there are more than 22,000 people on the public housing waiting list in WA. Many have been waiting for years. In fact the average wait time is 7 years with those on the so-called priority wait list averaging 2 years. The priority wait list includes people suffering from severe domestic violence, people with serious mental health issues and people sleeping in cars.

In one example it was reported that a 21 year old mother with two children lives with seven other people in her parents’ house. Her partner lives nearby with a friend because there is no room in the dwelling for him. They both work in low paid jobs but cannot find a rental property at a price they can afford.

Mandy Whitton, who runs a social welfare centre at the Koondoola Primary School in Perth, recently said “We had one family, a mum and dad, and four little ones, sleeping in a car outside the school. We have families sleeping in the park and more and more we have families who are split up. So mum and little one will go to one family member, other kids and the dad will go to a friend”.

The rental vacancy rate is just 1.9% in WA which explains why so many low and middle income people are finding it almost impossible to find an affordable home. Recent reports have estimated that the median weekly rent in Perth is nearly $500 per week. However it was reported last month that the average rent on offer in April 2013 was $550 per week and rising. The housing market is even worse in mining towns like Port Hedland where the median rent is $2000 per week!

The capitalist housing market is utterly incapable of providing people with the basic security of a roof over their head. Landlords are taking advantage of the fact that demand is outstripping supply with over 1000 people a week moving to WA from abroad and the eastern states. Many landlords are also setting rents aimed at those in highly paid resource sector. Those who work other sectors are often locked out of the market through no fault of their own. For those wanting to buy their own home the situation is no better. The median house price in Perth is over $510,000.

In a nutshell landlords and developers are taking advantage of the fact that there is a massive shortage of homes. The National Housing Supply Council (NHSC) reported that Perth would require 357,300 new dwellings over the next two decades, and WA as a whole would need 466,900 in total to cover demand. Nothing close to this is being built.

Both the Coalition state government and the ALP opposition support the ‘Affordable Housing Strategy’. This inadequate strategy has provided for a paltry 8000 properties since 2010, less than 3000 a year. This includes new houses built by the State Housing Commission and housing associations as well as homes built via Keystart – the government assisted mortgage program. This strategy hopes to house 20,000 families by 2020 – a drop in the ocean compared to what is required.

Neither of the major parties takes the issue of housing seriously. In fact during the recent state election campaign neither the Coalition nor Labor had anything of substance to say on this issue despite the fact that this is the most important issue facing working class people in WA.

The issue of housing stress is already impacting on people more broadly. Irina Cattalina, the chief executive of the West Australian Council of Social Services (WACOSS) recently said “We are seeing homeless rates start to increase and essentially the demand for financial assistance. People are using so much of their income to keep a roof over their head they don’t have enough to balance the rest of their household bills.”

Clearly this issue needs to be addressed. The Socialist Party’s alternative to the government’s failed strategy is for the state to build at least 25,000 publicly owned homed homes in WA every year. These homes should be offered as a priority to people on low incomes and have their rents capped at no more than 20% of people’s income.

A massive house building program would not only quickly eat into the public housing waiting list and but it would create thousands of jobs in the construction and related sectors. By increasing supply it would also have the effect of lowering rents in the private market.

At the same time the government needs to legislate to regulate the private rental market to ensure that landlords are not taking advantage of the short supply while the new homes are being built. In the private market rents should be similarly capped at 20% of people’s incomes.

We demand that all new homes should be built with the input of local communities in mind. It is not enough to just develop sprawling suburbs. We need to build real functional and social communities that include services like childcare centres, community rooms, schools and full access to public transport. A proportion of new homes should be built for local Aboriginal people and designed with regard to aboriginal culture and family circumstances.

Such a program could be paid for by taxing the mining companies at a higher rate as well as the banks and the big property developers – all of whom are making super profits. It is estimated that more than $100 billion could be realised over the next decade if the big miners were taxed at 40% of their projected profits. Even more wealth could be captured if those companies were brought into public ownership.

In fact if all of the major sectors of the economy were brought into public ownership, and under the democratic control of workers and the community, a sustainable plan of production could be implemented which would allow us to not only build the homes we need but also all of the other services we require to increase the living standards of people across the board. This is the socialist solution to providing jobs, homes and a future for our society.

By Mick Suter


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