Covid-19 forces us to re-examine the sort of society we want to be. One area that deserves attention is social and affordable housing.
Australia’s unemployment rate is forecast to reach at least 10% by June. Many will be unable to pay the rent or mortgage. The Government responded with a generous suite of financial support packages and rental safeguards.
In Singapore 80% of people live in government-owned housing. In the UK its 17% but aiming for 25%. The OECD average is 8%. In Australia it is only 4% – mostly social housing. This wasn’t always the case.
During the 1950’s Australia built huge numbers of government-owned housing when net public debt was 60% of GDP (higher than now). Affordable housing for low-income earners allowed them to lead productive lives. Furthermore, there is a strong link between providing affordable housing that close to jobs and our economic performance – and thus, our capacity to pay off national debt.
Since 1970 successive governments have deliberately sold off social housing. This short-term thinking has left too many low-income earners exposed in a Covid-19 recession. These families will have to rely on the private rental market.
I’d suggest we aim for 20 – 25% of housing to be government owned social and affordable housing. The housing should be managed by community housing providers and spread thoughout metropolitan areas rather than in concentrated pockets. This will give housing a Reserve Bank-style moderating influence to smooth out fluctuations.
We are long overdue for an evidence-based conversation about social and affordable housing.