Australia’s housing crisis: bolstering community and individual resilience with meaningful structural reform

Ehsan Noroozinejad Farsangi

Australians have proven themselves resilient in the face of housing pressures – but structural reform to boost supply and dampen rising costs is desperately needed.

13 March 2024

The housing crisis in Australia has turned into a national issue. Many people no longer have the opportunity of home ownership due to skyrocketing rents and rising property values. Meanwhile, low-income renters are forced to live in increasingly precarious conditions in a rental market that seldom provides respite. This raises the question of whether strengthening Australians’ resilience can solve the problem – or if an entire overhaul of the country’s housing legislation and policy is required.

Although resilience is a praiseworthy trait in people and societies, I argue it is not a substitute for substantive policy interventions. The present housing crisis, marked by a severe disparity in affordability and a dearth of accessible housing, necessitates a multimodal strategy that blends creative legislative changes with supportive measures that build resilience on both an individual and public level. To address this problem, a deliberate, long-term policy framework that guarantees affordable, stable housing for all Australians must replace band-aid solutions.

The housing crisis: scope and impact

Australia’s housing crisis affects a broad spectrum of the population. Due to years of legislative neglect and market overheating, low-income tenants are currently in the centre of a storm. Many of these tenants pay over 30 per cent of their income in rent, which puts them in a stressful housing condition, only made worse by the economic shocks flowing from COVID-19. Homeowners are negotiating an unstable environment of growing mortgage repayments, and those who are unable to make their payments face the imminent possibility of foreclosure.

The problem is reflected in rising rates of homelessness (more than 120,000 Australians do not have a secure place to live) and a marked decrease in younger people’s homeownership. This change in the population highlights a larger trend in Australian society: the diminishing belief that homeownership is attainable for people of all economic levels.

The repercussions go beyond sudden financial difficulties. A dire picture of the crisis’s long-term effects is portrayed by the inherent links between home stability and health, education, and employment prospects. Furthermore, quickly pursuing inexpensive housing leads to urban expansion, which worsens environmental deterioration and puts further strain on infrastructure.

Australia can learn a great deal from other jurisdictions facing similar challenges, especially in Europe, and observe successful strategies from countries such as Finland, Austria, and Denmark. These nations have taken action in the form of creative land-use strategies and large investments in social housing. However, the particular Australian context – which is marked by a high degree of urbanisation and speculative real estate investment – requires customised solutions that deal with root causes alongside symptoms.

The role of resilience

Resilience for many Australians takes the form of innovative living arrangements, such as multigenerational homes or shared housing, which are becoming more and more popular to save housing expenses. Resilience is also witnessed in community efforts, where local groups provide assistance, advocacy and workable solutions to those worst affected by housing shortages.

Resilience, while it might lessen the impact and provide a feeling of communal cohesion, cannot solve underlying structural problems. If we rely just on community and individual resilience, we risk normalising housing instability and diverting attention away from the need for broad policy change. A strong legislative framework that guarantees fair access to affordable housing for all Australians will be the ultimate foundation for resilience.

The need for reform

Historically, governments have either failed to address the acute shortage of affordable housing supply or encouraged speculative investments that push up housing costs. As a consequence, investors’ interests are increasingly served by the housing system, rather than low-income earners or first-time tenants.

Preferential tax treatments, such as negative gearing and capital gains tax discounts, have incentivised speculative investment in the property market, driving up prices and keeping out prospective purchasers. The situation has been made worse by a lack of substantial investment in social and affordable housing, making an increasing proportion of Australians susceptible to housing stress and homelessness.

In addition, new building has been hindered by stringent zoning regulations and an unduly bureaucratic planning system, especially for medium-density choices, that strike a balance between cost and urban accessibility. Political pressure has often caused state and municipal governments to oppose required changes, which has resulted in a mismatch between the supply of housing and the demands of a population that is expanding and diverse.

The need for reform is clear. Policy must change from encouraging speculative investment to giving all Australians access to reliable, affordable housing. This entails reworking incentives that skew the housing market, making large investments in cheap and public housing, and expediting the planning procedure to promote a range of housing alternatives.

Australia needs a comprehensive policy approach that accounts for complex relationships between housing affordability, accessibility and stability. This calls for the adoption of long-term plans that advance sustainable development, equitable growth and community wellbeing. Small, incremental reforms can only deliver so much. Big, comprehensive adjustments are required to guarantee a robust and equitable housing system.

Innovative policy solutions

Creative policy measures that take into account both supply and demand are needed. These remedies need to be comprehensive, combining long-term plans to improve housing accessibility and affordability with short-term assistance for those in crisis.

  • Prompt relief via support packages and regulatory adjustments. For individuals under stress due to housing, immediate action is imperative. To prevent renters from unexpected rent increases, this may include passing legislation imposing restrictions on rental increases, like the policies put in place during COVID-19. Increasing Rent Assistance dramatically may provide tenants instant financial relief; this is a policy that is backed by many social and economic welfare activists. Further regulating short-term rental platforms like Airbnb could relieve strain on regional markets by bringing homes back into long-term rental pools,
  • Broad-based land tax reform.Implementing a broad-based land tax, which would also apply to owner-occupied homes, has the potential to deter speculative property ownership and promote the development of underutilised land. This could significantly enhance revenues for housing expenditures while encouraging a more effective use of urban property by capturing the value rise of land from improvements in public infrastructure.
  • Enhancing tenants’ rights. Stable and secure housing conditions depend on meaningful rights for renters. This means stopping evictions without cause and further regulating rent hikes. These changes can increase the viability of renting as a long-term option by giving renters more security.
  • Scaling up investment in social and affordable housing. A considerable increase in public investment in social and affordable housing is required. To encourage more social housing projects, this may include increasing already-existing funds or creating new funding sources, perhaps in collaboration with the private sector and non-profit organisations.
  • Mandatory developer contributions for affordable housing. State governments and councils should further mandate developers to contribute to affordable housing projects or incorporate a certain number of affordable housing units in new buildings, in accordance with worldwide best practices. This strategy would help distribute the advantages of development more widely and diversify the supply of homes.
  • Making use of technology and innovative building practices. Using cutting-edge building technology, such as 3D printing and prefabricated modular homes, may cut down building costs and schedules. Simultaneously, if the right technologies are being used, it will also help tackle climate change.
  • Comprehensive planning and zoning reform. Streamlining and simplifying planning procedures, particularly in urban areas where demand is highest, can spur greater development. Zoning change that promotes medium-density development may increase the variety of housing alternatives available while maintaining urban liveability.

Bridging policy and resilience

Building community and individual resilience is just as important as enacting legislative changes to address the underlying causes of Australia’s housing problem. This twofold strategy not only helps with current problems but also prepares society for future challenges. Policies must encourage and enable communities to create local solutions, including cooperative housing developments and community housing initiatives.

Not only can such initiatives provide people with a place to live, but they may also foster a feeling of community and support among occupants. Legislative changes should support creative housing designs that can adjust to shifting requirements, guaranteeing that resilience is woven throughout Australia’s housing infrastructure. Australia can ensure a more inclusive, flexible, and sustainable approach by coordinating legislative changes with initiatives to strengthen resilience. This will eventually result in communities that are not just housed but also supported and linked.

Piecemeal solutions are no longer acceptable; instead, a strong commitment to structural change is required to guarantee that every Australian has fair access to affordable housing. To implement the suggested reforms and create a more sustainable and inclusive housing system, policymakers, stakeholders and the community must coordinate. They should make use of technology, innovative legislation, and local initiatives. This call to action is not just about providing shelter – it’s about reaffirming the right to a stable and secure home as a cornerstone of a fair and prosperous society.

Dr Ehsan Noroozinejad Farsangi is a Senior Researcher at the Urban Transformations Research Centre, Western Sydney University, where he specialises in Smart-Resilient Construction and Infrastructure. With a wealth of experience, Dr. Noroozinejad previously held a prestigious position at UBC Smart Structures in Canada, focusing on novel housing solutions in North America. He holds esteemed positions as an Associate Editor for several distinguished journals. Dr Noroozinejad’s prolific and influential academic career is underscored by the publication of over 140 high-impact journal papers, seven books in collaboration with esteemed publishers, and various patents.

Image credit: vladimirsukhachev/Getty Images

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