Big problem with Albo’s housing plan

In his first budget on Tuesday night, Treasurer Jim Chalmers unveiled a new “housing accord” which aims to address the housing affordability crisis by dramatically accelerating the construction of new homes across the country.

The accord, which was one of the centrepiece announcements in Tuesday night’s federal budget, sets an “initial, aspirational” target of getting a million affordable and “well-located” homes built over a five-year period, starting in 2024.

Most of the money is supposed to come from the private sector, with governments at state, federal and local level making it easier for investors by expediting their zoning, planning and land release processes.

“The ambition of this accord is big and it’s bold — an aspiration to build one million new, well-located homes over five years from 2024,” Dr Chalmers said in his speech.

“Most of this supply needs to come from the market, not the government. But there’s a role for government, and we intend to play a leading role by co-ordinating and kickstarting the investment we know needs to happen.”

This “kickstarting” comes in the form of $350 million from the federal government, which Dr Chalmers expects to fund 10,000 new, affordable homes. He said state and territory governments would fund “up to” 10,000 homes as well.

But Max Chandler-Mather, who ousted Labor’s Terri Butler from the Brisbane seat of Griffith at the May election, has slammed the announcement as “frankly, complete bulls**t”.

“Over the last five years the private sector built just under one million homes, so Labor announcing that under their plans the private sector will build one million homes over five years from 2024 is a complete joke,” he wrote on Twitter.

“These homes would have been built anyway. What’s more these privately built homes that would have been built anyway won’t even be affordable. The treasurer is calling them ‘well located’. We don’t need any more luxury inner city apartments. We need well designed inner-city public housing.

“In reality, all Labor is announcing is $350 million for 10,000 ‘affordable’ homes over five years. Even the $350 million announcement seems dodgy given this amounts to $35,000 per home, so I’d love to know what building contractor they’ve spoken to.

“As for the ‘housing accord’, planning deregulation and handouts to the private sector to build so-called ‘affordable housing’ won’t fix the housing crisis, any more than any housing tax breaks or planning deregulation has in the past.

“The government is doing everything it can to avoid the hard fact that if they want to tackle the housing crisis they need a substantial investment in public and community housing, freeze rents and scrap tax breaks for property investors that drive up the price of housing.

“So all up Labor are proposing 20,000 social homes and 20,000 ‘affordable’ homes over five years. The problem? The current shortage of public housing alone will grow by 70,000 to 590,000. Their plan will see things get worse.

“So here’s what we actually need — one million public and community homes — freeze rents — scrap negative gearing and capital gains. Fund it by scrapping the stage three tax cuts. It’s actually pretty simple. But yes, private property developers, banks and billionaires would take a hit.”

Housing plan receives broad support

Despite the criticism, Labor’s plan has been widely praised both by community groups and industry.

Everybody’s Home, an affordable housing lobby group, described it as a “landmark step towards tackling Australia’s rental crisis”.

“The accord has the potential to be a game changer for housing affordability, which has spiralled out of control with devastating consequences for so many Australians,” said Everybody’s Home national spokeswoman Kate Colvin.

“Bringing the states and federal government together with local government and super funds unlocks enormous potential. We hope this new collaboration will lead to continued growth in social housing alongside growth in affordable housing, to meet the enormous need from people on the lowest incomes.”

Mission Australia, a provider of homelessness and community housing, cautiously welcomed the announcement.

“While we need to understand more of the detail, the national housing accord announced in tonight’s budget seems to offer a very promising beginning for greatly improving housing affordability in Australia,” said Mission Australia CEO Sharon Callister.

“It is encouraging to see the federal government working with the state and territory governments and industry stakeholders to work towards solutions for Australia’s housing affordability crisis. We urge the government to include community housing providers as an essential stakeholder in these discussions.”

The Australian Council of Social Services said the accord was a “serious start to tackling the housing crisis” but that “we will need a lot more social housing dwellings to ensure everyone has a home”.

“People on the lowest incomes are facing multiple and unrelenting crises right now — extreme weather events, rising rents, food and fuel costs, and the prospect of more losing their jobs means that government must deliver on lifting incomes and social and affordable housing,” ACOSS CEO Dr Cassandra Goldie said.

“Instead of spending money on stage three tax cuts, we could lift incomes, including jobseeker and disaster recovery payments, fund social housing, and adequately fund community services so they can help people when they need it most.”

Unions also welcomed the announcement, saying it would alleviate housing pressures while also providing jobs.

“Too many workers are locked out of the housing and rental markets due to rapidly rising house prices and persistently high rent,” said Australian Council of Trade Unions assistant secretary Scott Connolly.

“The housing accord provides an opportunity for more working people to buy their own home and find affordable rental accommodation. The union movement looks forward to working with investors and employers to ensure this pipeline of investment provides good, secure and safe jobs for working people in construction and its supply chain.”

Unsurprisingly, housing and business groups were pleased.

Master Builders said it had been “crying out for action” for decades on slashing red tape, saying the housing affordability crisis was due to supply not keeping up with demand.

“Over the next three years, Master Builders Australia forecasts that new home building starts will fall significantly short of 200,000 per year, the volume of output that will be needed to meet demand,” said Master Builders CEO Denita Wawn.

“Our forecasts indicate this threshold will not be exceeded until 2026. As a signatory to the accord, Master Builders Australia will work constructively with governments and industry to deliver the joint housing target of one million new, well-located homes over five years from 2024.”

Ms Wawn said the peak body had “long advocated for the obstacles faced by the building and construction industry that prevent many of the homes we need from getting built to be addressed”.

“This includes lengthy delays in approvals for land title, development and building applications, occupation certificates, shortage of land in the right places, high developer charges, and inflexible planning laws,” she said.

The Housing Industry Association said addressing the annual housing supply shortfalls — with around 196,000 new homes forecast to start in 2022 and 2023, falling to around 185,000 in 2024 and 2025 — should be a key priority.

“For every year that Australia doesn’t deliver enough new homes to meet demand across the housing continuum, we will see a negative impact on both housing affordability and rental affordability,” said HIA managing director Graham Wolfe.

“HIA has consistently advocated for the federal government to play a leadership role in achieving stable housing supply, year on year, in all forms and for all tenures.”

Property development body Urban Taskforce said attention to states’ planning regulations was “long overdue”.

“Urban Taskforce has been calling out the states’ planning systems, particularly that of NSW, as the problem at the heart of the current housing supply crisis,” said Urban Taskforce CEO Tom Forrest.

“A fresh look at planning restrictions, time frames for approvals and zoning provisions was explicitly referenced in the Treasurer’s speech and this is a clear signal to state planning bureaucracies. Unwieldy, complex and slow planning systems add to risk and costs in delivering housing and this needed to be addressed to unleash the financial might of the superannuation sector.”

The Business Council said it “strongly” supported the housing accord and better federal-state co-operation.

“It has to be matched with an overhaul of state-based planning systems which are holding back vital housing supply,” Business Council CEO Jennifer Westacott said.

The Committee for Economic Development of Australia, meanwhile, said the accord had the “potential to be a much-needed catalyst to substantially boost housing supply”.

“Increased government and institutional investment will need to be complemented by significant planning and zoning reform, and increased productivity in construction to make greater housing supply a reality,” said CEDA chief economist Jarrod Ball.

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