Housing In The Public Interest – Markets Are Not the Answer

“Housing is recognised as a human right – with this in mind, in South Australia we have over 7,000 people without suitable housing including rough-sleeping, couch-surfing, and inappropriate accommodation. At the same time we have 17,000 people on South Australia’s public housing wait-list.

These statistics show that there is a housing crisis happening in our community and it is primarily affecting lower-income individuals and families. So, what has been the response by the State Government? 564 new public houses, halting the sale of 580 public properties, banning rent bidding on the tenant’s side (not actually banning the practice in full), along with contributing to greater urban sprawl with a residential land release of 25,000 new blocks of land.

While this may be some of the largest action taken to improve the housing situation in over a decade, it is too little. We must take radical action to address the crisis. The first step needs to be a rent freeze. While there is a lot of opposition to a rent freeze the objections can be countered.

So, the idea that supply would drop if a rent freeze were enacted comes from the market’s tendency to have supply meet demand, and if there is a price cap in an otherwise unregulated market there would be a shortfall in the market supply. While this is true, we do not live in “economics world” – in the real world the government has the ability to write laws and intervene in the market.

The government has the power of compulsory acquisition and can place taxes on unoccupied properties. In the argument that investors would flee the market, well – that is sort of what we need to happen to drive down prices. Investors can’t take the land with them, and so this threat rings hollow to a degree.

If the issue is the loss of capital investment in the housing system, then the government should fill that loss of investment with large-scale public housing programs similar to those seen in Vienna during what’s called the Red Vienna period.

During the Red Vienna period there was a massive investment into public housing, where the constructed residences were high density, high quality, and highly connected. I have not seen private industry provide for as many people in as short a time. Trying to incentivise investors into caring for people’s basic needs hints at the real fact that the market would sooner see someone die on the street than house someone in a hard situation.

Housing is recognised as a human right, and we should not be taking a half-hearted approach to basic human rights being neglected in any country, let alone our own. The market can not deliver these rights and so we must seek a different avenue for seeing that the basic rights of people are met.” – By Brendan Folwell.