Demand affordable housing

"Address population growth, tax concessions and foreign buyers." (Sustainable Population Party). The federally registered Sustainable Population Party says Australia’s housing affordability crisis is largely driven by demand-side factors, rather than supply-side issues. The party will take its message to the street at upcoming auctions across Melbourne, including The Block Auction on Sunday October 11.

William Bourke, President of the Sustainable Population Party comments on Australia’s housing affordability crisis, and the activities of the Party to tackle this problem, which included large Melbourne auction visits and a Senate enquiry submission into affordable housing (submission 89). The Population Party submission emphasises that the Australian Government’s policy goal must be to stabilise real estate prices. It argues that:

· Population growth is the primary driver of real estate (land value) inflation.
· Speculative investment has amplified its effect but would not sustain price rises without population growth.
· Investors don’t generate more supply because investors need tenants.
· The entire economy suffers from expensive housing.

In particular, the Sustainable Population Party is calling on the Australian Government to help stabilise house prices through the following measures:

• Reduce population growth in Australia.
• End foreign non-resident purchase of Australian real estate.
• Removing the discounting of capital gains tax on investment properties.

“Sustainable Population Party is redefining growth to secure a prosperous economy, healthy
environment and better quality of life for all Australians. A better quality of life includes more
affordable, well-planned and desirable housing,” said William Bourke, President of the Sustainable
Population Party.

“Australia should achieve greater housing affordability and opportunities for first home buyers and
renters. In particular, the Australian Governments needs to tackle population growth, tax
concessions and foreign buyers in order to bring back the great Australian dream.

It is pleasing to now see John Symond and Paul Sheehan join us in identifying population growth policies as being at the heart of Australia’s housing affordability crisis,” said Mr. Bourke.

For more information, http://www.populationparty.org.au/

The headline in the Corriere della Sera, Friday 30 May 2008, was "A million empty houses; an unusual Spanish crisis".

Cement chokes Spain's economy. The Spanish growth rate at 2.2% was one of the "most envied" in Europe, where the Eurozone median was "only 1.7%".

Due, however, to land speculation, Spain has overshot demand. According to a study by the University of Barcelona, housing prices in major cities of Spain have collapsed to 20% less than in 2006. Spain is for the first time in the grip of the unusual problem of having more houses than it needs.

Source:Maria Luisa Cohen in Europe.

Two days ago we wrote about the collapse of the French housing market. Everyone knows about the US housing market collapse. How soon before the Australian one hits bottom?

The fact is that construction is very heavily dependent on oil and banks are very dependent on construction.

With peak oil prices this cannot go on.

History of Spanish Housing 'Market'.

(Source: Sheila Newman, "Land and housing prices, land-use planning and housing systems in Australia and elsewhere (pdf file); the impact of globalisation, the internet, trends in natural increase, households and immigration: Submission to the Productivity Inquiry on First Home Ownership", page 36.)

Even during the civil war Franco was concerned about social housing. In 1957 the position of Minister for housing was created and publicly funded housing went from 100,000 dwellings in 1957 to 397,000 in 1973. By 1970 64% of the Spanish were homeowners. The 1973 oil shock saw massive cutbacks in public and private sector construction but rationalisation of the industry and renovation of older stock has given Spain the highest rate of homeownership in Europe.

About 70% of the Spanish are homeowners. There are few real-estate agencies in Spain because notaries and solicitors handle most sales.

Debt and price hikes up to 85% in 8 years had not yet resulted in a slowing market activity in 2003. Demographic changes, structurally low real-estate taxes and the large proportion of homeowners had all contributed to the high prices. Similarly to Thatcher's Britain, public housing was sold off to individual purchasers, many of whom then resold, causing a speculative boom which coincided with the wider global housing bubble.

See also: French housing market collapses of 29 May 08, Sydney's housing crisis - a different view of 27 May 08, No right to housing in the USA - Americans start to revolt of 26 May 08, Homeless may now sue state in France & Europe: Test Case of 26 May 08, European Union condemns Spain over 'disastrous' over-building of 21 June 07, In Spain, Water Is a New Battleground in the New York Times of 3 Jun 08

(Illustration a fragment from Wreck of the Hope by Caspar Friedrich)
This article is based on a Report from France2 News 25-5-08, translated to give Anglophones a different perspective on the anglophone land and housing system.

"In the United States the housing loan situation is producing more and more homelessness, but now an increasing number of bank victims are trashing their houses to make them uninhabitable before they leave them."

(Ask yourself, how long before the Australian situation gets this bad and are we going to put up with the government letting the banks do it to us?)

With amazement in his voice, the French newsreader announces the gruesome details of homelessness in the United States: "During the US election campaign the number of evictions continues to rise, even to double, as the credit crisis affects more and more people. In the American way, unfeelingly, the bailiffs arrive, put the furniture on the footpath, and the only thing left for the evicted families is their eyes to weep with."

A woman interviewee says, "When I telephoned the credit society, they said, "Well, if you can no longer pay, just leave the keys for us and go outside."

But finally people are beginning to revolt against these insane impositions by their mere fellows in a financial system which is no longer serving the community!

Although so many more people are returning their keys, they are first "meticulously vandalising" the houses they are forced to leave. "Systematic destruction of walls, toilets, electrical wiring, decorations - they destroy everything, with rage in their hearts to avenge themselves."

A bailiff describes his experience: "We have found toilets destroyed by sledge-hammers. People have disemboweled pipes to make them leak; they have cut the wires to the air-conditioners and pulled wiring out of the light fittings."

And it's working: these vandalised properties become unsaleable, even at half-price. Of course this means that cancelling mortgages is costing the banks a lot of money. So now they have begun to pay people bonds if they leave their houses in good condition.

Commentary from newsreader: "Yet the simple solution of renegotiating credit simply doesn't seem to occur to anyone!"

Report based on "Etats-Unis : la crise des subprimes poussent les Américains à quitter leur maison et parfois à la saccager" 20h15m32s, from France2 News 25-5-08, 20h15m32s

Test case in France finds new EU laws permit homeless citizens to sue state for failure to provide housing. (Report on France2 Television News, 22-5-08)

The administrative tribunal of Paris has found in favour of a family in sub-standard housing, whose application to the regional authorities (la prefecture) for better housing had been rejected.

Minister for Housing, Christine Boutin, commented that this legal decision demonstrated that the relevant new laws of 5 March 2007 were working.

"This is evidence that the law works, despite criticism that the right to sue for housing would turn out to be too complicated," she said on France2 television.

Calling the matter urgent, in an interim administrative tribunal the judge in chambers put aside an unfavourable decision made on 3 March by the Paris Mediation Commission, which had refused to consider a request for accommodation which had been made by a single woman who was raising two children alone.

This means that Namizata Fofana will be able to put her case again before the Mediation Commission.

If the Commission agrees that she has a case, the regional authorities (le prefet) will find her housing "within the next six months", Christine Boutin explained. And, if the applicant does not have accommodation by 1 December 2008, she will be able to sue the French state.

In all countries of the EU citizens are entitled to housing as a right, although this is a very new idea for Britain.
It is sad to realise how far from the provision of this most basic of rights have drifted Australia, Canada and the USA.

[English language acccount of case reported in France on 20/05/2008 - translation by Sheila Newman]

The article below was originally a comment on webdiary

On December 4, 2003, Australia’s population was estimated at 20 million and projected to reach about 30 million by 2050. Slightly less than 50 per cent of this growth rate resulted from net overseas immigration. By 5 November 2007, Australia’s population had ballooned by more than one twentieth of itself (or 5.66 per cent) to 21,131,216 and was projected to reach 34 million by 2050.[i] In fact, with that growth rate of 1.5 per cent per annum, it is on course to double within less than 50 years. Annual immigration has been responsible for more than half this growth, even though the birth-rate had increased in a context of misleading pronatalist propaganda.

Before British colonization in 1788 the peoples of Terra Australis managed to conserve an almost exclusively hunter-gatherer nomadic lifestyle. Art[ii] but no written history, has been found, and reconstruction of their impact relies on anthropological, archeological and ecological studies. “Australia” was transplanted and adapted from a British society which was on the cusp of industrialisation. Pre 1788, Australia’s aboriginal population averaged continent-wide less than one person per 8.5 square kilometers – possibly as few as one person per 51 square kilometers.[iii] Numerous clans inhabited the continent at different population densities, reflecting regional rainfall, soils and climate.[iv] Also patterned by climate and soils, the fossil-fuel-era population distribution is similar, but much denser.

Early attempts to establish agriculture failed with some unintensive exceptions recently uncovered.[v] The British managed to gain an agricultural foothold using ‘white’ slaves in the form of convicts drawn mostly from the ragged army of their dispossessed. Their number was later supplemented by indentured labour, displaced aboriginals, and, until Federation, ‘black-birding’ – the practice of kidnapping Pacific Islanders and bringing them to work in Australia, principally for the Colonial Sugar Refinery Company. There is thus no history or tradition of an established pre-fossil fuel agricultural society. The gold-rushes of the 1850s attracted capital, finance and economic migrants, resulting in a rapidly morphing population and economy and formation of a working class. This class made a national wage-fixing pact with capital at Federation in 1904 and also obtained the agreement of CSR to outlaw black-birding [vi] and the importation of other 'non-white' labour, widely perceived as synonymous with slaving.[vii]

The economy intensified after World War II, but much land was cleared and divided up for development by land speculators from the time of the gold rushes of the mid 19th and early 20th century. When the gold ran out, there was a massive depression, which probably assisted the formation of the above industrial laws.

After WW2 business promoted a fear of population implosion among politicians and a policy for mass immigration came in. High immigration, combined with the unforeseen baby-boom that accompanied the petroleum era, made the newly privatized housing industry very powerful and consolidated an economic addiction to population growth. Although the ‘white-Australia’ policy was dismantled, wages and conditions legislation under the 1904 constitution protected workers and made it unprofitable to import labor simply to undercut wages. However, in 2006-7, the conservative government found a way around this - (Workchoices).[viii] At the same time net immigration was encouraged to increase from an average of around 75-80,000 per annum to upwards of 160,000 per annum,[ix] at the behest of the development, housing, mining and financial lobbies. All this took place in the context of a huge increase in mining and construction, including massive engineering projects in most states which have drawn angry but useless protests from Australians. These circumstances underpin Australia’s demographic and material overshoot.

The ideology of multiculturalism has been useful for suppressing protest against this massive population growth by tarring as 'racist' any protest against immigration for whatever reason. It is ironic that the White Australia policy, which was introduced to combat the kind of slavery which the USA was built on, has been replaced with a much nicer-sounding Multiculturalism, which allows the importation of low-wage labour and the flooding of the housing market to benefit speculators, in the context of rising land prices and rising homelessness.

Footnotes

[i] “Australia’s Population” (Population Clock), Australian Bureau of Statistics, www.abs.gov.au [5 Nov 2007]

[ii] Much of which functioned as maps of areas of land with markers for water, game, people and landmarks.

[iii] Total land stock is 770 million ha of 7,700,000 square km. Estimates of population range between 150,000 through 300,000 to 900,000.

[iv] Joseph B. Birdsell, “Australia: Ecology, spacing mechanisms and adaptive behaviour in aboriginal land tenure”, in Ron Crocombe, (Ed.), Land Tenure in the Pacific, OUP/MUP 1971, pp.334-361

[v] Jennifer Macey, “Vic bushfires uncover ancient Aboriginal stone houses”, The World Today, 3 Feb. 2006 12:45:00, www.abc.net.au/worldtoday/content/2006/s1561665.htm

[vi] “With Federation, the Commonwealth Parliament became dominated by spokesmen for ‘White Australia’. In October 1901 legislation was passed prohibiting the introduction of Pacific Islanders after 31 March 1904.”, McKillop, R.F., referring to Bolton, G.C., A Thousand miles away: A History of North Queensland to 1920, ANU Press, 1972, p. 239, in “Australia’s Sugar Industry” on the Light Railway Research Society of Australia site, www.lrrsa.org.au/LRR_SGRa.htm

[vii] The Colonial Sugar Company aroused similar responses among indigenous Fijians who also objected to black-birding as well as to the importing of Indian indentured labour. “The Indian Connection”, Frontline, Volume 17 - Issue 12, June 10 - 23, 2000, www.hinduonnet.com/fline/fl1712/17120130.htm

[viii] “How low can you go?”, Colin Fenwick, Economic and Labour Relations Review,5; (2006) 16(2) www.austlii.edu.au/au/journals/ELRRev/2006/5.html

[ix] “Largest population increase ever: ABS,” Media Release, September 24, 2007, http://www.abs.gov.au/ausstats/[email protected]/Latestproducts/3101.0, “Net overseas migration contributed 54% (162,600 people) to this growth, which was more than the natural increase of 46% (138,100 people or 273,500 births minus 135,400 deaths).” This occurred with confusing changes to statistical methods plus new ease of transfer from temporary to permanent migrant (largely equivalent to European citizenship).