Ideas@TheCentre

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'Housing crisis' calls for radical solution

Alan Anderson | 26 March 2010
One of the most prominent issues in Australian newspapers every week is the ‘housing crisis.’ Unfortunately, no politician has been prepared to acknowledge the cause of the ‘crisis,’ let alone propose an effective solution.

Consider these facts:

1. Australia’s population is rising.
2. The number of Australians living per dwelling is stable or declining.
3. The amount of available land within any fixed radius of our major CBDs is a static quantity.
4. The number of dwellings per unit of land in our inner suburbs is constrained by development laws.

It follows with mathematical certainty that the percentage of Australians living within a fixed radius of our major CBDs will fall. The Prime Minister bemoans ‘a lack of affordable housing in our inner cities.' However, affordability is a relative concept that only represents the percentage of the population who can ‘afford’ something.

Some commentators have suggested that the solution is to cut immigration. But the massive cut needed even to stabilise population levels would have severe economic and strategic downsides.

Perhaps what is needed is some good, old-fashioned central planning? We could take China’s lead and bring in a one-child policy. How about mandatory sterilisation?

We could make young people stay at home longer, but demographers are already warning that Gen Y takes too long to grow up. Let’s scrap that idea and instead take pity on their long-suffering baby boomer parents.

We could force everyone into share housing (but anyone who remembers their booze-addled student days knows this would probably have a detrimental effect on productivity).

Maybe we could fill in Sydney Harbour? But this would leave our largest city with few redeeming features.

The government could build new CBDs, but given that they can’t even build a school hall without a multi-million dollar cost blow-out, this probably wouldn’t be the most cost effective solution.

Or we could take the NSW government’s advice, and seize private property to hand to favoured high-rise property developers in return for political donations. But, unfortunately, the Western world is littered with ugly, government-prescribed tower blocks from the last time the state decided to mandate architectural ‘efficiency.’

All of this sound too radical? Instead, we could just remove the power of local governments to regulate development, restore sovereignty to landowners over their own property, and let the free market break open the closed shop of our inner cities.

That would really be a radical solution to fix our housing problems.

Alan Anderson was a senior adviser to Treasurer Peter Costello and Attorney-General Philip Ruddock. His article ‘Liberating Our Cities’ is in the latest issue of Policy released by The Centre for Independent Studies this week.