The Green Party’s plan to solve the housing crisis has been decried as “dystopian” by the Australia’s leading lobby group for property developers and owners.
The nation’s vacancy rate has dropped to a record low 0.7 percent, driving up rent prices and demand for homelessness services. Meanwhile, 13 interest rate rises in almost two years have put pressure on mortgage holders as house prices continue to soar.
In response, the Greens have proposed a $27.9 billion (US$18.3 billion) plan aimed at building 610,000 houses over the next decade through a government-owned property developer.
These homes would be sold to first home buyers at a price just over the cost of construction, or rented out at a maximum of 25 percent of a household’s income.
Twenty Percent of Homes for the Bottom 20 Percent of Earners
Of the total number of homes, 427,000 would be released onto the rental market, with about 20 percent allocated to the bottom 20 percent of earners. The remaining properties would be available for purchase.“The public developer would directly compete with private developers and break their monopoly over the supply of housing,” Greens’ housing spokesman Max Chandler-Mather said.
“For decades now the government has left the supply of housing to private developers. And they have catastrophically failed, making massive profits while driving up the cost of housing by deliberately restricting supply, sitting on vacant homes and blocks of land approved for development.”
However, Property Council of Australia chief executive Mike Zorbas—who debated solutions to the housing crisis with Mr. Chandler-Mather at the National Press Club on March 6—called the plan “dystopian.”
“I don’t think anyone has ever solved the housing crisis by adding another government agency,” he said.
“What I can see is incompetence over time.”
Mr. Chandler-Mather said he had visited “one of those dystopias” in Austria. In Vienna, about half the city’s housing is some form of social housing and 80 percent of Singapore’s residents live in publicly-owned and governed housing.
Property Council Calls for End to “Random” Tax Increases
Mr. Zorbas instead proposed improving state planning protocols, an end to “randomly increasing taxes” on investments in new projects, and committing to purpose-built projects such as retirement living and build-to-rent housing.“Grandstanding, gridlock, and policy grenades are not going to house anyone,” he said.
The two also disagreed over rent freezes, with Mr. Zorbas calling them a “stone cold supply killer,” but Mr. Chandler-Mather said they would stop the most vulnerable from being evicted.
Treasurer Jim Chalmers also criticised the Greens’ plan, saying they “talked a big game” and yet failed to vote on the government’s first home buyer scheme.
The Greens have condemned the government’s proposed shared equity scheme as a “lottery,” and have called on Labor to reform property tax breaks like negative gearing and the capital gains tax discount to address the root causes of the housing crisis.
