The Social Need for Housing - Coursework Example

Housing Policy Name Institution Date Introduction The supply gap between number of houses and demand for housing has been growing in recent years. Social housing is a solution to this problem where the government provides housing for the most disadvantaged in society. However, the Australian government is not keen on providing social housing due to political and ideological reasons. This essay outlines the ideological and political views that underlie the Australian social housing policy. This paper starts by describing the housing shortage problem that faces many low-income Australians. The failure by the Australian government to participate directly in the provision of affordable housing is part of the reasons why Australia faces a severe shortage of affordable housing. The second part explains the liberal political ideology of the Australian state, and its link to the housing problem. The liberal ideology is contrasted with socialism which allows the government to play a greater role in providing social goods and services. Thirdly, the report analyzes the impact of politics on housing policy in Australia. The social need for housing According to Australian Housing and Urban Research Institute (2001), the need for housing is one of Australia’s biggest social needs. According to Eslake (2013), the number of new housing units available in Australia has been increasing at a slower pace than the population increase. Demographic changes in Australia also suggest that demand for housing units in Australia is also growing. The average size of the Australian family has declined from the high numbers of the 1960 to just 2.64 persons per house (Eslake 2013). The National Housing Supply Council estimates that Australia has a shortage of 228,000 housing units as per 30th June 2011 (Eslake 2013). The shortage of decent housing for all Australian is owed to a number of policy moves made by the Australian government. First, the Australian government makes little direct contribution to increase the housing stock. In the mid-1970s, the Australian government completed 12, 379 housing units per year (Eslake 2013). In contrast, the government only completed 4,000 housing units per year between 1999 and 2009. Secondly, the government pursued a market-led policy in the provision of housing. However, the government also made it hard for private providers to complete affordable housing units (Eslake 2013). In effect, the private housing industry was unable to deliver affordable housing for all Australians. Political and Ideological Views In recent times, Australia has pursued a market-led housing policy. Successive governments have not taken any policy moves towards the social provision of housing. In a society-led housing policy, the government, state and local authorities build house unit, and later sell or rent them out to the public at affordable prices (Beer, Kearins and Pieters 2007). No previous government has been willing to change the country’s housing policy to make housing more affordable for economically disadvantaged Australians. This uncaring attitude towards an apparent housing problem can be owed to the fact that Australian pursues neo-liberal political ideology. In regard to housing, most Australians support or at least appreciate the impact of neo-liberalism. In effect, the political consequences of failing to address the housing problem are not serious or dire from Australian political perspective. Australian politicians do not really care about first time home buyers as they consist of a small population. According to Eslake (2013), fewer than 100,000 people can acquire new houses in a typical year. In contrast, Australia already has over 5.8 million households and over 8 million home owners (Browne 2016). Neo-liberalism means the 8 million will be against housing policies that result in higher property prices. Off course, politicians will care more about the views of the 8 million, than the 100, 000 who might be better placed to acquire new houses if prices come down (Browne 2016). As often put by former Prime Minister John Howard, home owners will disagree with policies that lower the value of their homes. John Howard once remarked that no home owner has ever lobbied for policies that could make houses more affordable to young people buying their first house (Eslake 2013). Neo-liberalism lets markets dictate the prices of housing units in Australia. This market-led approach to housing has led to the inflation of prices, and the overpricing of houses beyond the financial abilities of first time homeowners. Liberalism is a political ideology that has a major impact on the state provision of basic amenities like housing. Liberalism implies that the government should not interfere in the individuals attempt to reach their potential (Hulse 2003). Under liberalism, the government is under obligation not to assist the poor through redistribution of wealth. According to Hulse (2003), liberalism is opposed to redistribution of wealth including provision of affordable housing as this interferes with the ability of some individuals in realizing their full potential (Beer, Kearins and Pieters 2007). This statement is best illustrated by John Howard’s view of the housing problem. Howard highlighted the liberalism political ideology when he argued that not one had ever approached him to say that the value of their houses was increasing. In a liberal society, every individual who owns property will benefit when house prices increase. The state is severely limited in the ways it can influence policy in countries where liberalism is dominant (Beer, Kearins and Pieters 2007). The government is supposed to take a laissez-faire approach to policy matters including housing. Only through such an approach would individuals be able to make their own decisions and advance individual freedoms as much as possible. According to Beer, Kearins and Pieters (2007), the basic tenet of neoliberalism thought holds that the most efficient means of distributing social services and goods is through market operations. According to neoliberals, the government has limited ability to achieve social goals such as affordable housing for all. Neoliberals have called for the government to refrain from the provision of social goods and services in favor of the private sector (Graham and Marvin 2001). The dominance of neoliberal political ideology saw the government’s gradually withdraw from the provision of social goods and services in the 1980’s and 1990s. Dodson (2006) define this withdraw of the state as the rollback of the state. In Australia, the government slowed its involvement in the direct provision of affordable housing. Socialist ideology calls for the intervention of the state in the provision of basic services such as housing, water and electricity. The socialist model of housing calls for allocation of houses to all people regardless of their income (Tsenkova 2010). The consumption of housing units is constricted with national standards for number of households and space per person set. In socialist housing, housing is a constitutional right where the government has an obligation to provide housing to all people. Although socialist housing limits the choice of homeowners in terms of quality, size and location of housing units, it commits to the provision of affordable housing for all individuals (Tsenkova 2010). As seen in Eastern Europe, in the 1970s a balance between state/market ideas in the housing sector can help to solve the affordable housing problem. The Greens Party in Australia has advocated for a more socialist approach to the housing problem in Australia. In its housing policy during the 2013 federal election, the Greens proposed a new housing policy called the “better deal for renters” (The Greens 2013). The Greens proposed new measure that would see the government build 122,000 new housing units in the next 10 years. The Greens proposed a social financing mechanism which they called the Affordable Housing Supply Bond. The Greens (2013) also proposed assistance of disadvantaged Australians in paying rent through the extension of the National Rental Affordability Scheme (NRAS) (The Greens 2013). The Greens also proposed a new program that would see university students get assistance in paying rent. The Greens appear to have a sound policy for addressing the housing problem in Australia. In contrast, the liberals and labour seem content to leave the provision of housing to market mechanism. Both the Labour and the Liberal party failed to provide a concrete housing policy in the run-up to the 2013 federal elections. According to Pleace (2000), the assumption that markets can deliver affordable housing is weak as seen in English experience. In England, the government assumed that housing would become more affordable, if the government further de-regulated the construction industry, supported council housing and loosened planning systems. However, the government maintained that council houses would have to be ceded to alternative landlords. Unfortunately, the policy led to a severe shortage of affordable houses in the whole of England. Influence of Politics on Housing Policy in Australia One of the biggest impacts of political ideology in availability of affordable housing in Australia is the unavailability of adequate and well-located land for housing development. According to Eslake (2013), all the barriers to affordable housing should be dismantled to give poor and young Australians a chance to own a home. However, property and planning heavily impacted by politics which allow for speculative land acquisition. Real estate developers acquire industrial, rural or low density land, and lobby for its rezoning (Browne 2016). The rezoned land is several times more expensive than its acquisition price. Unfortunately, liberal political ideology allows for such speculative practices that impact the provision of affordable houses in Australia. Liberalism in Australia has allowed residents and home owners to oppose policy measures meant to increase the affordability of homes in Australia. The Property council of Australia staunchly opposes the use of inclusionary housing measures that are predominant in European and US cities (Browne 2016). Under inclusionary measures, rezoned land would have to set aside space for development of affordable housing units. Although, inclusionary measures have limitation they provide well-located homes for low-income groups. Inclusionary measures also ensure that low-income individuals benefit from urban development and development of infrastructure (Hulse 2003). Politicians are also at the forefront of lobbying for policies that keep house prices high. Politicians are often changing roles from advocacy, industry representative and officialdom. According to Browne (2016), Treasurer Scott Morrison was a former manager with the Property Council. The Property council is lobbying against changes to the negative gearing policy that is partially responsible for the shortage of affordable housing units in Australia. Politics can linked to high prices of housing units in Australian, and the associated low home ownership rates. Property prices have continued to grow in Australia as demand for house. In a policy response the government started giving out cash handouts to assist young people to buy their own home (Eslake 2013). This policy response is rooted in economic liberalism that maintains markets are the best providers of social services and goods. The government gives cash hand-out to first-time home owners and leaves them at the mercy of the market. According to Eslake (2013), cash hand-outs can only worsen the housing shortage in Australia. Beer, Kearins and Pieters (2007) argues that cash hand-outs increase the upward pressure on housing unit prices, and do very little to make housing affordable for young people looking for a decent home. One critic of the cash hand-out system argues that the grants should be renamed “Home Vendors’s Grant” as the cash hand-out end up with home vendors (Eslake 2013). However, some State and Territory governments have started to reform the way they offer home grants to first-time home owners. Many states no longer provide cash hand-outs to first-time homeowners who buy existing home. Instead, the state governments have expanded assistance to first-time homebuyer’s intent on buying new house (Eslake 2013). This policy move ensures that the cash hand-outs do not play a role in inflating the prices of existing housing units. However, some of the cash hand-outs will certainly end-up boosting the profit margins of builders and developers. Housing assistance in Australia Australian housing policy reflects the neoliberal stance of successive governments in the country. Australia shifted its social housing policy from assisting citizens acquire new houses by impacting supply to a model that subsidized demand (Dodson 2006). Australia has been accused of going too far in it neoliberal approach to the housing problem. According to Dodson (2006), Australian has applied neoliberal construct to housing more explicitly than other countries. Australia was more committed to assisting the market capacity to increases supply of housing units and thus keeps prices low. However, the Australian social housing policy has gone through major shifts depending with the ideology of the government in power. In mid 1990’s, the Labor Party had proposed changes that would have made houses more affordable, It also committed to increasing the commonwealth’s government income assistance for individuals seeking to buy new homes (COAG 1995). In 1995, Labor began implementing the ‘flexibility program’ which would have raised the amount of assistance Australians seeking to acquire new homes would receive (COAG 1995). However, labour lost the 1996 Federal Election to the conservative-liberal National coalition. This coalition of parties believes more in neoliberal ideals than Labor, and was expected to reduce assistance for first-time home owners. The coalition immediately cut the budget for housing by $200 million (Dodson 2006). In response to the cuts in the housing budget, states instituted measures that reduced the ability of first-time home buyers to acquire new homes. For example, Victoria came up with a “segmented waiting list’ that only provide public housing to those will the greatest social need (Dodson 2006). The cuts meant that only households with complex and multiple housing needs had a chance of being allocated public houses (Darcy 1999). This instance shows that the rollback of the government involvement in provision of affordable housing leads to constriction of the supply of affordable housing to Australians. The changes also saws the Victorian government increase the rate of rent for public house in the state from 20 per cent of rent to 25 per cent (Dodson 2006). The neoliberal ideology of the conservative regime since mid-1990 has seen a marked decline in the supply of public housing or assistance to acquire new home (Dodson 2006). The more liberal conservative regime has supported demand subsidies. The neoliberal approach that assumes market will be able to provide solution to the housing problem has been faulted by many authors and researchers into the housing problem (Hulse 2002). According to Eslake (2013), the market should not be left to decide the prices of houses that should be paid by young and disadvantaged Australians as they seek to acquire decent dwellings. Housing is a basic need and thus should be the constitutional right of every Australian (Berry 1999). Housing should be approached from a socialist ideology, especially when the housing problems of Australia’s most economically disadvantaged are being considered. Conclusion Australia’s market-led social housing policy has been unable to provide adequate housing units for over 100,000 Australians. This shortage of affordable housing is associated with the neoliberal idea that the government should not be involved in the provision of social goods and services. Instead, it is assumed that the market will be able to provide housing for all. This assumption has influenced the Australian government to reduce its involvement in direct provision of housing units to Australian. Ideally, the government should be involved in direct provision of housing as this is a basic right that every Australian should not be denied. However, Australia has remained a staunchly neoliberal state that is opposed to the interference of government in business. Australians do not support government efforts to make housing more affordable for Australians from all walks of life. Unfortunately, the number of Australians seeking to acquire new homes is too low and this means housing is not considered a pressing political issue in Australia. References Australian Housing and Urban Research Institute 2001. Australian Housing Policy Project: Facts Sheet 4 - A brief history of government involvement. Melbourne, Australian Housing and Urban Research Institute. Beer, A., Kearins, B. and Pieters, H., 2007. Housing affordability and planning in Australia: the challenge of policy under neo-liberalism. Housing Studies, 22(1), pp.11-24. Berry, M., 1999. Unravelling the" Australian Housing Solution": the post-war years. Housing, Theory and Society, 16(3), pp.106-123. Browne, C 2016, Housing policy is captive to property politics, so don’t expect politicians to tackle affordability, accessed 3rd April 2016, http://theconversation.com/housing-policy-is-captive-to-property-politics-so-dont-expect-politicians-to-tackle-affordability-55384 Council of Australian Governments (COAG) 1995. Council of Australian Governments Communique. Canberra, COAG. Darcy, M., 1999. The discourse of'community'and the reinvention of social housing policy in Australia. Urban Studies, 36(1), pp.13-26. Dodson, J 2006. Rolling the State: Government, neoliberalism and housing assistance in four advanced economies. Griffith University Urban Research Program Eslake, S., 2013. Australian Housing Policy: 50 years of failure. Address to the 122nd Annual Henry George Commemorative Dinner, The Royal Society of Victoria, Melbourne, 2. http://greens.org.au/cut-housing-waiting-lists Hulse, K. 2002. Demand Subsidies for Private Renters: A comparative review. Melbourne, Australian Housing and Urban Research Institute. Hulse, K., 2003. Housing allowances and private renting in liberal welfare regimes. Housing, Theory and Society, 20(1), pp.28-42. The Greens 2013. Social Housing Wait Lists, accessed 3rd April 2016, Tsenkova, S 2010, The Legacy of Socialist Housing Systems, Contributions to Economics 2 Read More