May 6, 2022

Issues and policies

Property damage

By Martin McKenzie-Murray
Image of Opposition Leader Anthony Albanese, Labor MP Emma McBride and shadow housing minister Jason Clare after meeting with young renter Lydia Pulley during a visit to her home in Gosford on May 3, 2022. Image © Lukas Coch / AAP Images

Opposition Leader Anthony Albanese, Labor MP Emma McBride and shadow housing minister Jason Clare in Gosford on May 3, 2022. Image © Lukas Coch / AAP Images

What will it take for Australia to fix the affordable housing crisis?

As I write, my partner, some 3000 kilometres away, has just put our young daughter down to sleep. I’m marooned in a stranger’s apartment in Perth, where I’ve caught COVID, and my isolation from them has invited bitter reflection.

We’ve lived in that home for 10 years now – a quarter of my life – but we don’t own it. We’re renters. It’s the longest I’ve ever lived anywhere by some margin, and unsurprisingly it’s home to me – and not just the bricks and mortar, but the neighbourhood.

This stability matters to me. As a child, my family was constantly moving. There were always new homes, new suburbs, new schools, but the same terrors of readjustment. Before I turned 15, I’d lived in six homes. My partner lived in more, and experienced greater disruption: she emigrated to Australia as a non-English speaking child from Eastern Europe.

Neither of us want our daughter to experience serial dislocation.

I wrote “stability” before, but that’s the wrong word. It implies predictability, which we haven’t had. We’ve been there 10 years, but that decade comprises 10 one-year leases. Our tenancy is unblemished. There has never been a late payment, loud party or negligent damage. We’ve passed every inspection, are friendly with our neighbours, and rarely make maintenance demands. Except in the most trivially cosmetic ways, we have made no modifications to the house.

Yet despite this, and despite requests, we have never been offered anything more than a one-year lease. In retrospect, that decade might look like stability. It’s not. There has never been a guarantee that we will be offered another, and every November we wait for the letter that will confirm – or deny – another year.

For as long as I can remember, renters and young, aspiring homeowners were footnotes to public debates. Interest rates were forever framed by their effects upon homeowners, while rental laws overwhelmingly favoured landlords.

It was as if there were no other circumstances; no other reality beyond the one enjoyed by asset-wealthy older generations. Property – and those that owned it – defined so much of the national political instinct. The biggest headlines, the loudest speeches, the most perverse tax concessions – they all ratified the property owner. Rental laws reflected this obsession: underpinning rental insecurity is the assumption that few would be renting for long. It’d be merely transitionary, they reckoned. Houses weren’t simply to be lived in, but leveraged, flipped, fetishised. They were never just homes, but the source of a vacant national obsession.

Fuck it, I thought. I don’t want your Ponzi schemes, your investment newsletters, your curious entitlements. I don’t want to chase what my parents chased. I’ll chase other things.

And so I did. I chased dreams that had nothing to do with real estate. I moved cities. I changed jobs. I rented without thought. And I watched the gap widen between generations while ownership rates steadily declined – except among the baby boomers, who were using the equity on countless properties for countless more, while columnists smugly papered over their indifference to the construction of a generational booby trap with jukebox wisdom about bootstraps.

When the Andrews government mooted Victorian rental law reforms in 2017 – fairly basic stuff, which sought to redress the imbalance between tenant and landlord – the industry reaction was predictably shrill and threatening.  

“The Victorian government should remember who actually owns Victoria’s $519.2 billion in rental housing stock and line the state’s coffers with a plethora of property taxes,” the president of the Real Estate Institute of Victoria said. “Despite the community’s protestations since these changes were mooted, the Victorian government is this week threatening to strip landlords of the right to have a say over what goes on in their own properties: how is that fair?”

This was precisely the kind of aggressive, hyperbolic industry objection that has sickened so much reform in this country. Now consider that in the same year, Victorian housing expert Professor Terry Burke was warning that “The younger generation of Australians has to appreciate a good proportion of them will not become homeowners in their lifetime, they probably will be permanent renters.”

That was five years ago. Things are much worse now. In the past decade, the average household disposable income rose 30 per cent, while property prices rose more than 80 per cent. In the past year alone, national property prices increased an astonishing 24 per cent. Combine this with significant inflation, increasing job insecurity and historically stagnant wage growth – and now tell me that millennials are profligate fools with too strong a taste for flat whites and smashed avo.   

After delays, the Victorian rental laws came into effect last year. It made unfairly abrupt or vexatious evictions harder, and it banned rental bidding. It’s a start. But only that. If the majority of those now under 30 will rent until they die, then capping bonds and making it easier to have a pet doesn’t cut it, right? Why aren’t we talking about this? Do we want to condemn generations to permanent itinerancy?

Don’t get me wrong – I’m relatively lucky in this regard. We have a good amount of savings, even if it’s a fraction of what would be required for a deposit on the home in which we rent. We can buy something, somewhere. But not here. The neat, three-bedroom bungalow a few doors down went for $1.7 million last week. We’ll move, and it will kill me, but my daughter is young enough not to remember it.

But those younger? Those in their thirties? Twenties? What percentage will own their own home without supersized help from family? Precious few. Can we trust that Australia will introduce European-style long-term leases, at a minimum? For those few that can afford a home, multiplying natural disasters will mean an increasing number are uninsurable. (Interestingly, the Grattan Institute’s housing expert, Brendan Coates, tells me that the chief obstruction to normalising European-style long-term leases in Australia may not be tenancy law, but land taxes. Ours are progressive, meaning it disincentivises large property portfolios whereby loss might be hedged – the threat of one vandalised property means less if you own many. But when the majority of those with investment properties own just one or two, that’s where the vast bulk of their wealth is locked up, and so these mum-and-dad owners are understandably reluctant to relinquish control over who stays and for how long.)

It doesn’t seem to occur to many that this inequity is a social, demographic and political time bomb. Just as decades have been blithely squandered on climate change, so too have decades been spent ratifying the status quo and intensifying the wealth of the comfortable. Australia is the land where the dole remains below the poverty line, but it’s political suicide to remove the perversity of negative gearing. “I think this election campaign has shown our diminished ambitions on housing affordability,” Coates says. “I don’t think we’ve had the debate we deserve. Labor’s shared equity scheme is one piece of the puzzle, but it won’t much affect the young. And we haven’t discussed the drivers of the problem: absence of supply, especially in places where people want to live; tax concessions; planning arrangements and NIMBY objections. Politically, we still don’t want to upset property owners.”    

In this country, we whistle while we kick the can down the road. She’ll be right, mate. But now the gap is a chasm. Resentment will fill it. Faith in the major parties, in the “system”, in democracy itself will decline further. We have ample precedents for this.

France recently came as close as it ever has since World War Two to installing a fascistic president whose campaigns have been financed by Vladimir Putin. In the first round of the French election, the far-right candidate Marine Le Pen and the far-left candidate Jean-Luc Mélenchon, together attracted 45 per cent of the vote. Add the votes garnered by the even more floridly far-right candidate Éric Zemmour, and you have more than half of the voting population casting their ballot for an extreme candidate. What’s more, youth support for Le Pen has grown in every election this century – this year, in the election’s second round, 49 per cent of those aged 25–34 who voted did so for her. This is an astonishing change from even late last century, when French youth were broadly hostile to the far-right.

France faces rising costs of living and long-stalled home ownership – two issues Le Pen repeatedly emphasised, especially in relation to the young. She pledged to cut taxes for those under 30, and offer greater financial assistance to students.

For now, France is stricken by greater national ennui than us. But if many people aren’t assured an affordable home or a secure job, all bets are off. Resentment will bubble, will express itself in nihilism or contempt or disengagement. In 2016, Donald Trump promised to be a bomb – and enough were willing to throw him. Do you think resentment always expresses itself neatly? Rationally? The aggrieved and forgotten will exercise their agency somehow, and in ways that the Australian Complacency is incapable of imagining. Another consideration is demographic: a Monash University study of youth attitudes found increasing numbers saying it was unlikely they’ll have children. “Unsurprisingly, young people see a stable home and financial independence as prerequisites for having a family – both of which seem increasingly unattainable for many in the current employment and housing market,” it found.

For decades, I’ve heard the same sanctified vocabulary, a kind of sick national liturgy: investment, equity, return, offsets, negative gearing, hot spots.  

Like a virulent weed, it grew over my parallel vocabulary, the one that I think about so much more since my daughter came along: family, security, community, roots, predictability, home.

A home. Just one.

Martin McKenzie-Murray

Martin McKenzie-Murray is the author of The Speechwriter and A Murder Without Motive: The Killing of Rebecca Ryle.

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