A Housing Crisis of One’s Own

A few months ago, thanks to the uncertainty that can be living with housemates, I had to move houses unexpectedly. My partner and I were sad to leave the green walls, pink sunrises and brown wood of our home behind, but we knew it was the right decision to find a house of our own.

If you haven’t moved in a while, let me remind you of the weekends filled with calculating how much of a rent increase you can afford, endlessly scrolling through realestate.com and viewing tiny places that would require you to sell half of your belongings. Luckily though, we eventually found a place we could make our own that wouldn’t completely break the bank.

For a few weeks, I lived in the overalls I usually reserve for some of my dirtier (and more fun) hobbies like painting and gardening. I packed box after box in an organised frenzy, lovingly bubble-wrapping our plates and renewing my love affair with the easy-to-use tape dispenser. Never have I been more grateful for the team at Hay Bricklayers (my Mum and Dad) who quickly transitioned into Hay Removalists.

It took a little while to bond with our new home, as we discovered it had a fondness for developing black mould, and the heat pump needed repairing in the middle of a nipaluna/Hobart winter. Whilst the agent was like most horror stories you’ve heard of, luckily, the owner actually wanted to fix the issues. Hallelujah! Had we stumbled on the Holy Grail of rentals?

After a while, with books on shelves, posters on walls and cupboards filled, we came to love our new home. We’ve now spent many hours in the quiet and clean bliss that is your first home without housemates…staring out at birds flying between trees, knitting in the sunlight and having dinner with friends. We told them we were never moving again.

But just when we’d finally settled in, we got the news that the owner had decided to sell the house. Heartbroken at the idea of losing our new home and dreading another move, we entertained the possibility of buying. But our prospects were worse than we’d imagined. On average wages, we couldn’t even borrow half of what this below averagely-priced house was worth – and even that would take us thirty years to pay off.

I always thought in a few years we’d be living the “Australian Dream.” Settled down, with a home where we could paint the walls green, plant native trees in the garden and provide a safe and happy home for our future children. But now, I doubt we’ll be able to afford it without the privilege of the Bank of Mum and Dad, or an inheritance.

So much for never moving again. I’ve warned Hay Bricklayers that another rebrand is on the cards for next year when our lease runs out. In the meantime, we open our home up weekly to inspections. I try to work in my home office while prospective buyers tour the house, asking if our tenancy can be ended early, knocking on walls they want to tear down and commenting on our speaker system.

Two months later, the house is still on the market, and doesn’t seem likely to sell anytime soon (so if you’re looking for some great tenants, I’ve got the investment property for you)!

A standard story for younger generations

While I’ve been self-indulgently complaining about my housing woes to anyone who will listen, I know that my situation is pretty standard for most twenty-somethings, and a lot of people, of varying ages, have it far worse.

Nationally, rental prices have risen 14.6%, and now cost on average over 50% of a person’s weekly earnings. Horror stories of mould-riddled houses, unmaintained appliances and baseless evictions are becoming more and more common.

This is amidst a cost of living crisis, where even eggs and bread will now cost you an arm and a leg. Price gouging by the supermarkets means that a jar of Vegemite is the “low price” of $9.40 at Woolworths. 3.7 million households in Australia are struggling to buy enough to eat. In a wealthy country, more than 2.3 million Australians are actively going hungry, skipping meals or going entire days without eating.

To cope with financial pressures, a record number of people are now working two or more jobs. More people are living with their parents or in share houses. Homelessness is rising. In nipaluna/Hobart, we now see people sleeping outside of shops, and pitching tents along the Hobart Rivulet.

For those lucky enough to be able to break into the housing market, successive interest rate rises have meant that almost half of Australian mortgage holders are under financial stress. Millennials and Gen Z, meanwhile, are paying off almost twice the amount of HECS debt as those that graduated in the 1990s, not to mention those that received free tertiary education in the 1970s and 1980s.

While we’re not the only people doing it tough, the deck seems particularly stacked against young people, as the future seems to be crumbling around us. On top of a housing and cost of living crises, the world is becoming less peaceful, as the numbers of wars rise, from Ukraine to Palestine to Ethiopia. The COVID-19 pandemic, which kept us indoors for years, still lingers. The failed Voice Referendum. Don’t even mention the climate crisis, front of mind in our fears, as we head into our first El Nino season since the Black Summer bushfires.

But as I’m told time and time again, the younger generations have it so easy! Things were much harder back in older generations’ day, when interest rates rose to 18%. We’re so entitled! If we want to afford homes, we need to stop eating avocado on toast! Or maybe nowadays, Vegemite.

The Great Divide

Whilst well-housed Boomers have gotten a bad rap for punching down on the younger generations, I was heartened to hear one of their own bucking the trend and coming out firing with facts for the younger generations. ABC Finance Presenter and New Daily Columnist Alan Kohler has recently written about “The Great Divide” in Australia’s housing.

When Alan Kohler’s parents, and years later he and his partner, bought their first homes, it cost 3.5 times more than their annual income. In 2023, the median house at $732,886 now costs 7.4 times the average weekly earnings.

“In other words, my children – and all young people today – are paying more than twice the multiple of their income for a house than their parents – and their grandparents – did,” Kohler wrote in The Great Divide.

It’s making our society more unequal. The determinants of wealth are now where you live, if you can get a loan or gift from the “Bank of Mum and Dad” (now the ninth biggest lender in the country) and if (and how much) you inherit from your parents.

“The high price of housing is undermining social cohesion and the proper functioning of the economy and the nation,” he writes.

How do we reMAKE the housing system?

Housing is a human right. We need a place where we can be safe, and our physical and emotional health and wellbeing can be maintained. Somewhere to come home to after a day of work, where we can put on our comfiest clothes, share a meal with our family and watch television, before settling into warm beds.

So how do we reMAKE our housing system, and make our society more equal?

According to Kohler, it requires a courageous move from the Albanese Government, which will worry many of the 67% of homeowners in this country (35% of whom might be mortgaged to the hilt in order to provide a safe home for their kids and something to pass onto them). House prices need to stay roughly the same for the next eighteen years, to give income a chance to catch up. This, Kohler says, is better for homeowners than seeing house prices crash, and will allow others to enter the market.

Kohler argues that this can be done by re-orientating houses for living rather than investing, undoing the work of John Howard and other Liberal Prime Ministers in previous decades. Integral to this is ensuring the supply for housing meets demand, through a radical investment in public housing. It also means removing incentives for investors that have driven prices sky-high – including negative gearing and the capital gains discount. Another step is breaking up monopolies in the construction industry and changing how we design our cities, to preference more medium density housing, public transport and walkable neighbourhood hubs.

This has radical implications not only for the affordability and availability of housing, but the way we live our lives. Imagine if everyone who needed a safe place were given one by government. If our outer suburb communities were more centralised and connected. If you could walk your kids to the local school in the morning, and catch a train to your workplace nearby.

But many of us can’t wait eighteen years. We need action on the cost of living, the climate crisis and housing now. We want a system that thinks more intergenerationally, and accounts for the needs of younger and future generations. It’s why organisations like Think Forward are advocating for an Inquiry for Intergenerational Fairness and the Centre for Policy Development are advocating for a wellbeing government, like they have in Wales.

So while we’re waiting for incomes to rise, we need better rental laws and policies, which ensure that people have the security of a safe home. Around the world, there are examples of how we can reMAKE our housing system which would see Australians living happier and healthier lives.

In New York City, rent prices have been controlled for decades, in order to combat the dwindling supply of unaffordable houses. The Rent Guidelines Board, appointed by the city, determines the rent cap, how much rents can be increased. Germany offers tenancy agreements from two to thirty years, with indefinite leases also available. This has resulted in high tenancy rates, with over 50% of the country renting. The Singaporean Government, in response to their housing crisis, built flats, which now house more than 80% of the population in neighbourhood clusters with food, health and playgrounds.

Much more can be done here at home, in light of the challenges we face now and those that are ramping up. As we found in our Care through Disaster project, addressing housing inequality also prevents the worst impacts of climate-fuelled disasters which we know are, and will continue to, affect Australian communities. Reforms now, like more public housing, community ownership of assets like caravan parks, and government investment in movable pods would go a way to ensuring that everyone can be housed before, during and after disaster. And while the federal government has recently brought up the rate of rental assistance by 15% in their last budget – to $180 per fortnight – more assistance is still needed to meet the $600 a week average rental rate.

We’re already seeing examples of how community-owned housing can be used to help those that need it find affordable housing. As the rates of homeless women in the Blue Mountains rose, they set up a community land trust, which will allow houses to be rented out at lower rates to those that need it. We’ve seen similar innovations from individuals looking to buy, with friends and family buying together, buying tiny homes and becoming part of housing cooperatives. As communities find alternative means of living in this new world, we need government and financial institutions to support us by removing the roadblocks.

What do we value?

I’m sure these ideas about how we reMAKE the housing system will, like many economic reforms before them, be met with cries of “but how can we afford it?” and “what about the budget deficit?”. In the words of Dr Richard Denniss, Executive Director of the Australia Institute, it’s time to call bullsh-t on econobabble.

How this country spends its money is about what we value. Do we value giving billions of dollars in subsidies to fossil fuel companies, or ensuring that everyone has a safe place to live? For myself and others in the younger generations, it’s a pretty easy answer. Short-term incrementalism just doesn’t cut it for the growing cohort of younger voters, who are increasingly shifting their votes away from the major parties.

Australia reMADE Co-Director Lily Spencer has recently been delving into what it means to reMAKE our economic system. Her findings provide insight for what kind of principles we might need for an economic system that sees housing as a human right, instead of simply an investment:

We need to reimagine the role of the economy, from an ends to a means. After all, it is just how we produce and provide for one another. Do we have a housing market that meets our goals for society? That ensures that everyone has a safe and affordable place to live, where they can grow and flourish?
We need to broaden the vision of what we measure and value. We talk a lot about house prices and interest rates. What other indicators of success or wellbeing should we be paying attention to? How many people are unhoused? How many people can afford food after they pay the rent?
We need to recast the role of government, from market-fixing to market-shaping. How can government shape a different kind of housing market? One that’s more equitable, affordable and sustainable? Does this require more investment in public housing? Disincentivising housing as a secondary investment? Better laws and assistance for renters? What about more proactive shaping of the wider environment people live in, from transport to supermarkets, so communities don’t have to choose between housing affordability and communities with good resources, amenities and services?
And we need to recast the role of business: from an amoral profit maximiser and servant of the invisible hand of the market, to a servant of society. How can the market better serve our housing needs, within nature’s limits? Do we need to encourage different models of development and lending, different materials in the supply chain? Reduce corporations' primacy in the construction market, and instead incentivise community-led development?
We need to reclaim and reimagine what community can be, and prioritise the infrastructure that connects our communities such as parks, community centres and public transport; as well as more active participation in decision-making and democracy, from kitchen table conversations to deliberative democracy. How can we redesign our cities and suburbs to bring people closer to their community and democracy? How can we support new models of living together? What assets can the community own for the community’s benefit, such as renewable energy?

With these principles in mind, it’s time to throw short-termism aside, and radically reMAKE our housing system in service of our shared needs, goals and values as a country – so that every Australian, young and old, can have A House of One’s Own.