tag:theconversation.com,2011:/fr/topics/housing-crisis-21402/articlesHousing crisis – The Conversation2024-03-18T19:21:22Ztag:theconversation.com,2011:article/2254462024-03-18T19:21:22Z2024-03-18T19:21:22ZWhat’s the best way to ease rents and improve housing affordability? We modelled 4 of the government’s biggest programs<p><em>This article is part of The Conversation’s series examining the housing crisis. Read the other articles in the series <a href="https://theconversation.com/au/topics/housing-series-2024-153769">here</a>.</em></p>
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<p>Australian state and federal governments spend money in many ways to ease rental stress and get more Australians into home ownership. Four of the most prominent are:</p>
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<li><p><a href="https://firsthome.gov.au/">first homeowner grants</a></p></li>
<li><p><a href="https://unohomeloans.com.au/articles/shared-equity-schemes">shared equity schemes</a></p></li>
<li><p><a href="https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/transfer-duty/first-home-buyers">first homeowner stamp duty exemptions</a></p></li>
<li><p><a href="https://www.dss.gov.au/housing-support/programmes-services/commonwealth-rent-assistance">rent assistance</a>.</p></li>
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<p>Our team at Victoria University’s Centre of Policy Studies has modelled the economic impact of each of them in a way that allows their outcomes to be <a href="https://www.copsmodels.com/ftp/workpapr/g-344.pdf">compared</a>.</p>
<p>The bad news is that we’ve found none of the four can simultaneously lift affordability for renters, lift affordability for owners, get more Australians into home ownership, and boost economic efficiency.</p>
<p>The good news is we’ve found a mix that could work well.</p>
<p>We used Victoria University’s regional economic model to compare the effect of spending an extra A$500 million on the variant of each of the programs presently available in Victoria.</p>
<p>To better assess the economic impact, we assumed the extra $500 million was paid for by an increase in taxation.</p>
<h2>Grants and shared equity</h2>
<p>We found first homeowner grants improve affordability for owners, slightly improve affordability for renters, and slightly increase home ownership rates, but come with a heavy economic cost.</p>
<p>The cost to <a href="https://www.investopedia.com/terms/e/economic_efficiency.asp">economic efficiency</a> amounts to about 20 cents for every dollar spent. Economic efficiency measures the extent to which inputs such as labour, land and capital are allocated to their most valuable uses.</p>
<p>Importantly, that 20 cents in the dollar cost is the economic cost of the spending, not the cost of raising the revenue to fund it.</p>
<p>With the average economic cost of state government taxation in the vicinity of <a href="https://www.copsmodels.com/ftp/workpapr/g-289.pdf">30 cents</a> per dollar raised, that means every extra dollar raised to be spent on a first home buyer grant has an economic cost of about 50 cents, making it an economically expensive way to get people into homes.</p>
<p>Shared equity schemes in which the government part-owns a home with a buyer have similar costs, but are better at getting people into their own homes.</p>
<h2>Stamp duty discounts</h2>
<p>Our modelling finds that stamp duty discounts for first home buyers have an economic benefit. This is because stamp duty is an extraordinarily inefficient tax that makes it <a href="https://theconversation.com/swapping-stamp-duty-for-land-tax-would-push-down-house-prices-but-push-up-apartment-prices-new-modelling-finds-184381">harder for people to move</a>.</p>
<p>Unfortunately, the model also finds stamp duty discounts will make home ownership even less affordable by pushing up property prices, and make it only slightly easier for the first home owners able to get the discounts. </p>
<h2>Rent assistance</h2>
<p>Rent assistance is delivered by the Commonwealth rather than states to Australians in receipt of Commonwealth benefits. </p>
<p>Our study finds its economic costs are low, just 5 cents for every dollar spent, meaning that raising extra tax and spending it on rent assistance should have a total economic cost of about 35 cents for each dollar raised and spent.</p>
<p>We find it has a significant effect in making rent more affordable, but causes home ownership rates to fall, because it tips the balance for financially strained households in favour of renting rather than buying.</p>
<h2>What works best</h2>
<p>If making shelter more affordable for low-income earners is the number one priority, by far the best way to do it is to boost rent assistance.</p>
<p>While the benefits come at the expense of home ownership, for the renters receiving them, they are worth having.</p>
<p>But rent assistance is federally administered. For a state government, the best way to help both owners and renters at the lowest economic cost appears to be a mix of two thirds first home buyer grants and one third stamp duty discounts. </p>
<p>Our modelling suggests such a blend would have a negligible impact on economic efficiency and home affordability, while allowing more owners to rent and, as a result, make renting more affordable. </p>
<p>However, it would be costly. From a national perspective, the same improvement in rental affordability could be achieved for less than one-tenth the financial cost if the Commonwealth were to fund additional rent assistance.</p>
<p>If nothing else, our modelling proves these decisions are difficult.</p>
<p>No single tool is perfect, but using the right mix of them can help – all the more so if the states and Commonwealth can work together. Our estimates can help.</p>
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Read more:
<a href="https://theconversation.com/the-help-to-buy-scheme-will-help-but-wont-solve-the-housing-crisis-224956">The Help to Buy scheme will help but won't solve the housing crisis</a>
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<img src="https://counter.theconversation.com/content/225446/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>For the Commonwealth, the best measure is rent assistance. For the states, it’s a mix of two-thirds first homebuyer grants and one-third stamp duty discounts.Jason Nassios, Associate Professor, Centre of Policy Studies, Victoria UniversityJames Giesecke, Professor, Centre of Policy Studies and the Impact Project, Victoria UniversityXianglong Locky Liu, Research fellow, Victoria UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2253962024-03-18T13:44:28Z2024-03-18T13:44:28ZAwaab’s law is a start but England needs whole new approach to ensure healthy homes for all<figure><img src="https://images.theconversation.com/files/580958/original/file-20240311-28-3bfgij.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/cullum-welch-house-part-golden-lane-1018003162">I Wei Huang | Shutterstock</a></span></figcaption></figure><p>In 2020 a coroner’s court in Rochdale found that <a href="https://theconversation.com/the-disturbing-parallels-between-awaab-ishaks-death-in-rochdale-and-the-grenfell-tower-disaster-195077">two-year-old Awaab Ishak</a> had died as a result of living in a mould-infested home. <a href="https://www.gov.uk/government/news/rsh-sets-new-standards-to-drive-improvements-in-social-housing">New housing standards</a>, devised as part of the social housing regulation bill in response to this tragedy, are now set to come into force in England. </p>
<p>From April 1 2024, all social housing providers in England will have to ensure their tenants’ safety by keeping apprised of the conditions of the homes they let and the needs of the people they house. They will have to listen to complaints and respond within strict time frames, particularly, under the section dubbed “<a href="https://bills.parliament.uk/bills/3177">Awaab’s law</a>”, to problems of mould and damp.</p>
<p>This will improve the lives of thousands living in social housing. However, like many reactive policies, it only addresses one part of a much wider problem. Elsewhere in the housing and planning system, the government is <a href="https://www.gov.uk/government/news/new-laws-to-speed-up-planning-build-homes-and-level-up">cutting regulations</a> to speed up house building, a process that the Labour party <a href="https://labour.org.uk/updates/press-releases/how-not-if-labour-will-jump-start-planning-to-build-1-5-million-homes-and-save-the-dream-of-homeownership/">wants to accelerate</a>. </p>
<p>Health is <a href="https://www.tandfonline.com/doi/full/10.1080/07352166.2023.2260029">often forgotten about</a> in housing policies. Amid the clamour for economic growth, house building targets and reducing bureaucracy, housing quality and tenant wellbeing take a back seat. Regulations and standards are often derided as unnecessary red tape, but they can perform a vital role in protecting health. For residents who live in poor-quality housing, the consequences can be severe. </p>
<p><a href="https://doi.org/10.1016/j.healthplace.2023.103023">Our research on health and housing</a> shows that these new regulations do not go far enough. The next UK government needs a comprehensive healthy-homes strategy, a move championed by the <a href="https://www.tcpa.org.uk/collection/campaign-for-healthy-homes/">Town and County Planning Association</a>. This would prevent tragedy, transform the lives of many tenants and have significant economic benefits.</p>
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<h2>Living with damp and mould</h2>
<p>The new social housing standards are part of a suite of reforms aiming to ensure that all tenants have decent, safe and secure homes. Awaab’s law sets requirements on <a href="https://www.gov.uk/government/news/government-to-deliver-awaabs-law">social landlords</a> to quickly investigate and repair hazardous conditions in the home such as damp and mould.</p>
<p>This is important. Around 1 million homes in the UK have a <a href="https://www.gov.uk/government/statistics/chapters-for-english-housing-survey-2022-to-2023-headline-report/chapter-4-dwelling-condition#damp">problem with damp</a>. Research <a href="https://commonslibrary.parliament.uk/research-briefings/cbp-9696/">shows</a> this can cause respiratory conditions – which can be critical – such as asthma and can damage mental health. In England, residents in an estimated <a href="https://files.bregroup.com/research/BRE_Report_the_cost_of_poor_housing_2021.pdf">75,000 homes experience conditions</a> so serious they are judged to pose an immediate risk to health and safety. </p>
<p>The UK government’s commitment to improving the quality of social housing is to be commended. However, it is striking that the government were only moved into action after a court inquest into the <a href="https://news.sky.com/story/awaab-ishak-toddlers-death-from-mould-triggers-review-of-landlord-guidance-12786323">tragic death</a> of a young child. </p>
<p>One obvious problem with this reactive mode is many important injustices and policy failings go unnoticed. It also means that when reforms do come, they only address one part of a much greater problem. </p>
<p>Damp and mould doesn’t just affect people in social housing. It’s actually a bigger problem in the private rented sector, where an estimated <a href="https://www.gov.uk/government/statistics/chapters-for-english-housing-survey-2022-to-2023-headline-report/chapter-4-dwelling-condition#damp">9% of homes</a> are affected by damp, compared to 5% in social housing. </p>
<p>The lack of security for many private sector tenants and the fear of eviction means they are also <a href="https://youtu.be/1FOc9F1IrOo">less likely to report</a> mould or damp. </p>
<h2>Making homes healthy</h2>
<p>Damp and mould are not the only problem. There are many other ways that poor housing quality can have important health consequences. Over 4,500 deaths in England in 2022 <a href="https://www.bbc.co.uk/news/uk-66890135">were linked to homes overheating</a>. Older people, young children and people with underlying health conditions are the most at risk from extreme heat and the <a href="https://www.resolutionfoundation.org/publications/its-getting-hot-in-here/">greatest burden</a> falls on poorer households. </p>
<p>Climate change will only intensify these problems. However, the UK is not well prepared. Research by the Committee on Climate Change has revealed that 55% of the housing stock in England is currently at risk of overheating. However, that number is likely to increase to <a href="https://www.theccc.org.uk/publication/addressing-overheating-risk-in-existing-uk-homes-arup/">90% of homes</a> with a 2°C rise in temperatures, an estimate well within the range of likely scenarios. </p>
<p>Regulations <a href="https://www.gov.uk/government/publications/overheating-approved-document-o">introduced in 2021</a> to prevent overheating only affect new homes. They will not protect the majority who live in older properties. </p>
<p>If these problems are to be solved, a piecemeal approach that reacts to specific high-profile cases is insufficient. Instead, the UK needs a comprehensive <a href="https://www.tcpa.org.uk/collection/campaign-for-healthy-homes/">healthy homes strategy</a> that addresses not just damp and overheating, but also overcrowding, noise pollution and indoor air pollution, all of which have important health consequences. It must regulate not just the social housing sector, but also housebuilders and private landlords. </p>
<p>With the <a href="https://www.gov.uk/government/publications/statement-of-levelling-up-missions/statement-of-levelling-up-missions#mission-7-health">Conservatives’</a> “mission to level up life expectancy” and <a href="https://labour.org.uk/wp-content/uploads/2023/05/Mission-Public-Services.pdf">Labour’s</a> “prevention first revolution”, both parties have ambitious targets on health. But neither plan will succeed without facing up to the shocking health consequences of squalid housing in the UK.</p><img src="https://counter.theconversation.com/content/225396/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>This research comes from the TRUUD project, a research programme based at the University of Bristol, that aims to reduce non-communicable disease (such as cancers, diabetes, obesity, mental ill-health and respiratory illness) and health inequalities linked to the quality of urban planning and development for use in discussions with government and the developer industry. The TRUUD research project (<a href="https://truud.ac.uk/">https://truud.ac.uk/</a>) is funded by the the UK Prevention Research Partnership (<a href="https://ukprp.org/">https://ukprp.org/</a>).</span></em></p>To truly make UK housing safe and healthful for residents, the government needs a comprehensive strategy.Geoff Bates, Lecturer in Social Policy, Research Fellow, University of BathJack Newman, Research Fellow, School for Policy Studies, University of BristolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2257732024-03-17T19:02:01Z2024-03-17T19:02:01ZStamp duty is holding us back from moving homes – we’ve worked out how much<p><em>This article is part of The Conversation’s series examining the housing crisis. Read the other articles in the series <a href="https://theconversation.com/au/topics/housing-series-2024-153769">here</a>.</em></p>
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<p>If just one state of Australia, New South Wales, scrapped its stamp duty on real-estate transactions, about 100,000 more Australians would move homes each year, according to our <a href="https://e61.in/wp-content/uploads/2024/02/Stamp-duty-effects-on-purchases-and-moves.pdf">best estimates</a>.</p>
<p>Stamp duty is an unquestioned part of buying a home in Australia – you put your details in an online mortgage calculator, and stamp duty is automatically deducted from the amount you have to contribute.</p>
<p>It’s easy to overlook how much more affordable a home would be without it. </p>
<p>That means it’s also easy to overlook how much more Australians would buy and move if stamp duty wasn’t there.</p>
<p>The 2010 Henry Tax Review found stamp duty was <a href="https://treasury.gov.au/sites/default/files/2019-10/afts_final_report_part_2_vol_1_consolidated.pdf">inequitable</a>. It taxes most the people who most need to or want to move.</p>
<p>The review reported:</p>
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<p>Ideally, there would be no role for any stamp duties, including conveyancing stamp duties, in a modern Australian tax system. Recognising the revenue needs of the States, the removal of stamp duty should be achieved through a switch to more efficient taxes, such as those levied on broad consumption or land bases. </p>
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<p>But does stamp duty actually stop anyone moving? It’s a claim more often made than assessed, which is what our team at the <a href="https://e61.in/wp-content/uploads/2024/02/Stamp-duty-effects-on-purchases-and-moves.pdf">e61 Institute</a> set out to do.</p>
<p>We used real-estate transaction data and a natural experiment. </p>
<h2>What happened when Queensland hiked stamp duty</h2>
<p>In 2011, Queensland hiked stamp duty for most buyers by removing some concessions for owner-occupiers at short notice. </p>
<p>For owner-occupiers it increased stamp duty by about one percentage point, lifting the average rate from 1.26% of the purchase price to 2.27%.</p>
<p>What we found gives us the best estimate to date of what stamp duty does to home purchases.</p>
<p>A one percentage point increase in stamp duty causes the number of home purchases to decline by 7.2%. </p>
<p>The number of moves (changes of address) falls by about as much.</p>
<p>The effect appears to be indiscriminate. Purchases of houses fell about as much as purchases of apartments, and purchases in cities fell about as much as purchases in regions.</p>
<p>Moves between suburbs and moves interstate dropped by similar rates.</p>
<p>With NSW stamp duty currently averaging about <a href="https://conveyancing.com.au/need-to-know/stamp-duty-nsw">3.5%</a> of the purchase price, our estimates suggest there would be about 25% more purchases and moves by home owners if it were scrapped completely. That’s 100,000 moves.</p>
<p>Victoria’s higher rate of stamp duty, about <a href="https://www.sro.vic.gov.au/rates-taxes-duties-and-levies/general-land-transfer-duty-property-current-rates">4.2%</a>, means if it was scrapped there would be about 30% more purchases. That’s another 90,000 moves.</p>
<h2>Even low headline rates have big effects</h2>
<p>The big effect from small-looking headline rates ought not to be surprising.</p>
<p>When someone buys a home, they typically front up much less cash than the purchase price. While stamp duty seems low as a percentage of the purchase price, it is high as a percentage of the cash the buyer needs to find.</p>
<p>Here’s an example. If stamp duty is 4% of the purchase price, and a purchaser pays $800,000 for a property with a mortgage deposit of $160,000, the $32,000 stamp duty adds 20%, not 4%, to what’s needed. </p>
<p>If the deposit takes five years to save, stamp duty makes it six.</p>
<p>A similar thing happens when an owner-occupier changes address. If the buyer sells a fully owned home for $700,000 and buys a new home for $800,000, the upgrade ought to cost them $100,000. A 4% stamp duty lifts that to $132,000.</p>
<p>Averaged across all Australian cities, stamp duty costs about <a href="https://e61.in/wp-content/uploads/2024/02/Stepped-on-by-Stamp-Duty.pdf">five months</a> of after-tax earnings. In Sydney and Melbourne, it’s six.</p>
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Read more:
<a href="https://theconversation.com/stamp-duty-isnt-going-anywhere-until-we-agree-on-what-will-replace-it-197398">Stamp duty isn’t going anywhere until we agree on what will replace it</a>
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<h2>Stamp duty has bracket creep</h2>
<p>This cost has steadily climbed from around <a href="https://e61.in/wp-content/uploads/2024/02/Stepped-on-by-Stamp-Duty.pdf">six weeks</a> of total earnings in the 1990s. It has happened because home prices have climbed faster than incomes and because stamp duty has brackets, meaning more buyers have been pushed into higher ones.</p>
<p>Replacing the stamp duty revenue that states have come to rely on would not be easy, but a switch would almost certainly help the economy function better.</p>
<p>The more that people are able to move, the more they will move to jobs to which they are better suited, boosting productivity. </p>
<p>The more that people downsize when they want to, the more housing will be made available for others. </p>
<p>Our findings suggest the costs are far from trivial, making a switch away from stamp duty worthwhile, even if it is disruptive and takes time.</p><img src="https://counter.theconversation.com/content/225773/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nick Garvin is affiliated with e61 Institute. </span></em></p>New estimates suggest that if just one state, New South Wales, scrapped its stamp duty, an extra 100,000 Australians would move homes each year.Nick Garvin, Adjunct Fellow, Department of Economics, Macquarie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2254252024-03-14T20:32:41Z2024-03-14T20:32:41ZHousing policies need to fully consider market dynamics to move beyond ‘tall and sprawl’ cities<p>The federal <a href="https://housingandclimate.ca/">Task Force for Housing and Climate</a> recently released its final recommendations for solving Canada’s housing crisis. The <a href="https://housingandclimate.ca/blueprint/">Blueprint for More and Better Housing</a> contains suggestions for adding new affordable and climate-friendly homes by 2030.</p>
<p>The task force was launched in September 2023 to help federal, provincial and municipal governments address housing affordability and the climate crises in Canada. The report is aimed at building 3.8 million new homes, in line with estimates of housing need from the <a href="https://www.cbc.ca/news/business/cmhc-housing-report-1.6965250">Canada Mortgage and Housing Corporation</a>.</p>
<p>However, the task force’s report recommendations fall short by failing to fully consider land and housing market dynamics. </p>
<p>Its recommendations could incentivize the building of overly-dense urban cores, perpetuating something called “tall and sprawl,” a term that refers to <a href="https://doi.org/10.3390/land12020434">development patterns in cities that have very high, dense urban cores</a> surrounded by large areas of lowrise housing.</p>
<h2>Protecting greenfield areas</h2>
<p>The report’s premise is on target in many ways. Considering <a href="https://climateatlas.ca/canadian-cities-and-climate-change">more than 80 per cent of Canadians live in cities</a> and most <a href="https://www.datalabto.ca/a-visual-guide-to-detached-houses-in-5-canadian-cities/">urban land is residential</a>, any effective urban climate solutions must consider housing.</p>
<p>The report argues that increasing urban density can help protect greenfield areas from being converted to housing. However, it doesn’t take into account that <a href="https://doi.org/10.1002/joc.2237">too-high urban densities — densely paved and without sufficient green space — can exacerbate climate impacts</a>. </p>
<p>This can intensify <a href="https://www.cbc.ca/news/canada/kitchener-waterloo/extreme-heat-report-university-waterloo-deaths-1.6426392">urban heat island effects</a>, a phenomenon where an urban area is warmer than surrounding areas, <a href="https://doi.org/10.1021/acs.est.2c09588">leaving households more vulnerable</a> during <a href="https://doi.org/10.1021/acs.est.1c00024">combined extreme heat and power outage events</a>.</p>
<p>The report recommends governments implement province-wide zoning rules to better manage urban development. But it also suggests eliminating zoning regulations that ensure new buildings leave space for <a href="https://theconversation.com/residential-green-spaces-protect-growing-cities-against-climate-change-183513">the green infrastructure that is essential to address climate challenges in our cities</a>, like trees that provide urban cooling and absorb stormwater. </p>
<p>These actions contradict the report’s excellent suggestion that municipalities should plan for 40 per cent tree canopy cover, which <a href="https://doi.org/10.1073/pnas.1817561116">research shows can help control daytime urban heat island impacts</a>.</p>
<p>Trees need places to grow and thrive, which is typically ensured by regulations like minimum setbacks, landscaping requirements and maximum building footprints. Without these measures, land and housing markets will likely overlook the importance of providing these public good aspects, <a href="https://doi.org/10.1016/j.jeem.2006.12.004">leaving buildings too close together</a> and <a href="https://doi.org/10.1016/j.agee.2003.09.007">encouraging sprawling development</a>.</p>
<p>Housing research tells us how households respond to too-dense, nature-deficient environments. We know that many households seek <a href="https://islandpress.org/books/missing-middle-housing#desc">“missing middle” housing</a>, which refers to medium-density, family-sized housing such as townhomes, duplexes and triplexes, and lowrise to midrise apartment buildings. </p>
<p>Without <a href="https://doi.org/10.1177/23998083231180610">this type of housing being built in the green and amenity-rich environments</a> they demand, <a href="https://doi.org/10.1016/j.jtrangeo.2020.102940">households will move further afield</a>, increasing pressures for greenfield conversion.</p>
<h2>De-incentivizing unaffordable housing</h2>
<p>The report encourages municipalities to <a href="https://www.theglobeandmail.com/opinion/article-public-lands-can-help-unlock-the-housing-crisis-and-our-governments/">build affordable housing on their own land</a>, facilitated by financing, to help them acquire new land. </p>
<p>This is <a href="https://theconversation.com/publicly-owned-land-should-be-used-for-affordable-housing-not-sold-to-private-developers-198654">a strategy that has wide support</a>, but it could backfire by adding fuel to already-inflated land values because it fails to acknowledge <a href="https://doi.org/10.1016/j.cities.2023.104676">how those inflated land values are created</a>.</p>
<p>Housing markets are more than builders who supply homes and residents who demand them. Markets for land, where housing is built and what homes are built are shaped by <a href="https://doi.org/10.3390/land12020434">investors who supply finance</a> and <a href="https://doi.org/10.3390/jrfm16100446">developers who demand finance</a>. </p>
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Read more:
<a href="https://theconversation.com/housing-is-both-a-human-right-and-a-profitable-asset-and-thats-the-problem-172846">Housing is both a human right and a profitable asset, and that's the problem</a>
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<p>For the report’s strategy to succeed, additional policies must rein in investors and developers by de-incentivizing their participation and reducing their impact on land value.</p>
<p>The federal government can address this by <a href="https://mikemorricemp.ca/motion-71-one-solution-to-the-housing-crisis/">eliminating tax incentives for real estate investment trusts</a>. Provincial governments can implement requirements for a percentage of affordable homes <a href="https://housingrightscanada.com/resources/inclusionary-zoning-considerations-for-an-affordable-housing-policy/">(known as inclusionary zoning</a>) across municipalities — not just around transit stations — to prevent developers from leap-frogging regulation by building elsewhere. </p>
<p>Inclusionary zoning decreases <a href="https://theconversation.com/explainer-what-is-value-capture-and-what-does-it-mean-for-cities-58776">land value uplift </a>by reducing market developers’ profits, which creates an entry window for lower-cost and non-profit developers, as envisioned by the report.</p>
<p>The report’s recommendations to eliminate height and density restrictions near transit will further inflate land values. While building more units on a given piece of land might appear to lower housing costs, this is not the case.</p>
<p>At present, <a href="https://www.altusgroup.com/insights/canadian-cost-guide/">highrise development costs are roughly 2.5 times that of lowrise</a> and demand high finance costs to compensate for their high risk. Land values reflect these high costs and profits, especially in areas where highrise builds are expected to be allowed.</p>
<h2>Rethinking urban spaces</h2>
<p>How can these conflicts be resolved? One approach is to establish both minimum and maximum residential zoning heights and densities, aligned with the typologies the report supports. </p>
<p>This would include building 10-unit apartments that follow pre-approved designs in residential neighbourhoods, zoning that encourages <a href="https://www.thestar.com/news/gta/growing-up-toronto-planner-jennifer-keesmaat-pushes-for-lots-of-mid-rise/article_bd1cb649-3dea-5506-b672-e9ebd01b5bb6.html">desirable midrise developments</a> along main streets and creating 16-storey maximum zones to encourage the building of single-stairwell 16-storey buildings recommended in the report.</p>
<p>As <a href="https://www.vox.com/energy-and-environment/2020/1/15/21058051/climate-change-building-materials-mass-timber-cross-laminated-clt">mass timber buildings</a> and other climate-friendlier highrise forms develop, zoning regulations should adapt to enable these typologies to facilitate and reward affordable, <a href="https://www.nytimes.com/interactive/2023/09/18/world/asia/singapore-heat.html">climate-friendly builds</a>. There can still be a place for highrise buildings in well-designed cities, particularly if <a href="https://smartdensity.com/scaling-down-creating-walkable-and-enjoyable-transit-oriented-communities/">we reimagine how higrise and lowrise buildings can be combined</a> to create <a href="https://doi.org/10.1016/S0169-2046(02)00230-X">green and liveable cities</a>.</p><img src="https://counter.theconversation.com/content/225425/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dawn Parker receives funding from the Social Sciences and Humanities Research Council, the Canadian Institutes of Health Research, the Natural Sciences and Engineering Research Council of Canada, Environment and Climate Change Canada, and Mitacs Canada</span></em></p>A new report on sustainable and affordable housing falls short by failing to fully consider land-and-housing market dynamics.Dawn Parker, Professor in the School of Planning, Faculty of Environment, University of WaterlooLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2255612024-03-14T19:25:14Z2024-03-14T19:25:14Z‘I’m home’: how co-operative housing could take pressure off Australia’s housing crisis<p><em>This article is part of The Conversation’s series examining the housing crisis. Read the other articles in the series <a href="https://theconversation.com/au/topics/housing-series-2024-153769">here</a>.</em></p>
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<p>At a time when everything from abolishing negative gearing to capping rents are being suggested as ways to reduce Australia’s housing crisis, little attention has been given to housing co-operatives.</p>
<p>A <a href="https://www.cehl.com.au/WhatIsCoopHousing">housing co-op</a> consists of a group of people who share in the management and running of their accommodation. Applicants are have to meet certain criteria, including means testing. Once accepted, they are expected to contribute according to their capacity and ability.</p>
<p>While only a small provider of accommodation in Australia (0.03% of all homes compared to Sweden’s 22%), <a href="https://doi.org/10.26183/0xpp-g320">new research</a> reveals how developing the sector could relieve some of the pressure.</p>
<p>Working with community housing providers and co-operatives across four states and surveying about 300 co-op residents, our research is the first analysis of the operation and impact of Australia’s affordable rental housing co-operatives.</p>
<p>What we found can inform housing policy and choices.</p>
<h2>How membership differs to renting or owning</h2>
<p>Like all co-ops, housing co-operatives are defined by a “one member, one vote” principle. This means, as both tenants and members, residents have a say in how the organisation runs and how homes are maintained.</p>
<p>This is fundamentally different to renting and owning, providing residents with stability and a greater say in their housing.</p>
<p>Tenant-members can make improvements, decide on policy and make the sorts of connections to their home and community usually thought to only be available to homeowners. As one research participant said:</p>
<blockquote>
<p>Even though we don’t own the space, there’s a real sense of belonging to the site, to the property.</p>
</blockquote>
<p>In Australia, <a href="https://doi.org/10.26183/0xpp-g320">184 co-operatives</a> provide 3,732 homes. Another 25 Aboriginal and Torres Strait Islander co-operatives provide 1,287 homes as their sole purpose or within broader community service delivery.</p>
<p><iframe id="bodZO" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/bodZO/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>Although only a small housing contributor in Australia, these nearly 5,000 co-operative homes are a solid base from which the sector can grow.</p>
<h2>The cost and management of co-ops</h2>
<p>To assess the value of housing co-operatives, we looked at sector costs, tenant-members’ inputs and outcomes.</p>
<p>We found the sector’s costs were similar to those of other types of community housing and that greater tenant-member involvement in managing the co-op lowers overall costs.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/huge-housing-costs-make-us-slaves-to-our-jobs-and-unsustainable-growth-but-theres-another-way-203144">Huge housing costs make us slaves to our jobs and unsustainable growth. But there's another way</a>
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<p>Further, tenant-members’ participation in their co-op also develops their skills, leading to other education and employment opportunities.</p>
<p>Tenant-members expressed high levels of satisfaction with their living arrangements, a strong sense of home, solid social bonds, and an improved sense of health and wellbeing. These positives were shared with their children.</p>
<p>Importantly, <a href="https://doi.org/10.26183/0xpp-g320">our study</a> found participants had a strong sense of agency and voice, which is often missing in other housing tenures, especially renting.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/581180/original/file-20240312-30-jeajp3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Two young people working in a community garden" src="https://images.theconversation.com/files/581180/original/file-20240312-30-jeajp3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/581180/original/file-20240312-30-jeajp3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=424&fit=crop&dpr=1 600w, https://images.theconversation.com/files/581180/original/file-20240312-30-jeajp3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=424&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/581180/original/file-20240312-30-jeajp3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=424&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/581180/original/file-20240312-30-jeajp3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=533&fit=crop&dpr=1 754w, https://images.theconversation.com/files/581180/original/file-20240312-30-jeajp3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=533&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/581180/original/file-20240312-30-jeajp3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=533&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Co-operative members had a strong sense of satisfaction and ownership.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com.au/detail/photo/teens-working-in-an-urban-community-garden-royalty-free-image/82764038?phrase=community+garden+australia&adppopup=true">Lyn Balzer and Tony Perkins/Getty</a></span>
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<p>We also found the more a tenant-member enjoys getting involved in anything from planning a garden to doing building maintenance, the more they will do for the co-op. This cycle is self-reinforcing.</p>
<p>The value of these effects can be extraordinary, with respondents referring to living and participating in their co-operative as “life-changing”.</p>
<p>Co-operatives clearly provide stable long-term housing, as most survey respondents have lived in their co-operative and/or the co-operative sector for over ten years (46% and 55% respectively) and most (74%) want to live in their co-operative for the rest of their lives.</p>
<h2>What helps housing co-operatives succeed?</h2>
<p>We found three main contributors to co-op success:</p>
<ol>
<li><p>the more a tenant-member participates in running their co-operative, the more they benefit. However, participation needs to be equitable, allowing tenant-members’ contributions to vary throughout their lives and for different tenant-members to participate differently</p></li>
<li><p>the more tenant-members learn about their roles and responsibilities, the better the co-op functions and the greater the benefits</p></li>
<li><p>there is no one right way to be a co-operative. There is value in co-ops being diverse, reflecting diverse tenant-members, locations and incomes.</p></li>
</ol>
<p>Co-operatives can help people settle down, grow as individuals, build careers, keep their kids in the same school and contribute to their neighbourhoods.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/want-to-cut-your-new-home-costs-by-10-or-more-thats-what-building-groups-can-do-212458">Want to cut your new home costs by 10% or more? That's what building groups can do</a>
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<p>They are an example of how Australia’s housing system could provide more affordable, stable and dignified housing choices. A research participant expressed this best:</p>
<blockquote>
<p>I had to move so many times as a single mother, every time knowing I’d have to urgently find new, safe, continuous housing for three people and pay for every aspect of the move, bond and rent. The pressure, the fear, was insane.</p>
<p>Living here my kids grew up – the neighbours are great, the public transport is there and it’s been a pretty safe and friendly community. Lifelong friendship and family bonds continue. I love gardening here and can stay active as I age […] I love my neighbours. I’m home.</p>
</blockquote>
<h2>Lessons for housing policy</h2>
<p>While Australia has both ownership and rental co-operatives, most Australian co-operatives are affordable rentals, comprising very low-moderate income households as part of the community housing sector.</p>
<p>Our earlier <a href="https://www.westernsydney.edu.au/__data/assets/pdf_file/0004/1494058/articulating_value_in_cooperative_housing_20190125.pdf">report</a> showed in other countries, housing co-operatives form a large share of mainstream housing supply. For example, in Norway housing co-operatives comprise 15% of all homes.</p>
<p>Our new findings suggest Australia’s housing policies can support the growth of housing co-operatives for renters and owners, so more people can enjoy the benefits of affordable, stable homes.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-private-sector-housing-experiment-has-failed-ottawa-must-now-step-up-on-social-housing-222351">The private sector housing experiment has failed: Ottawa must now step up on social housing</a>
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<img src="https://counter.theconversation.com/content/225561/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Louise Crabtree-Hayes receives funding from the Australian Research Council with contributions from community housing providers in the co-operative sector.</span></em></p>Co-operatives make up only a small part of Australia’s accommodation stock but their users say the benefits warrant it being considered as a way of easing the housing crisis.Louise Crabtree-Hayes, Professorial Research Fellow, Institute for Culture and Society, Western Sydney UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2243612024-03-13T19:15:25Z2024-03-13T19:15:25ZThe ‘Bank of Mum and Dad’ is exposing older Australians to the risk of financial abuse<p><em>This article is part of The Conversation’s series examining the housing crisis. Read the other articles in the series <a href="https://theconversation.com/au/topics/housing-series-2024-153769">here</a>.</em></p>
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<p>Young Australians who would have once been locked out of home ownership are increasingly relying on the so-called <a href="https://theconversation.com/its-not-just-housing-the-bank-of-mum-and-dad-is-increasingly-helping-fund-the-lives-of-young-australians-219966">Bank of Mum and Dad</a> to get a deposit or to guarantee a bank loan.</p>
<p>The Bank of Mum and Dad has become so large as a home loan enabler that the Productivity Commission says if it was an actual bank it would be somewhere between the <a href="https://www.pc.gov.au/research/completed/wealth-transfers/wealth-transfers.pdf">fifth and ninth biggest</a> mortgage lender.</p>
<p>While not all home loan assistance from parents is in the form of gifts, the Productivity Commission says the number of children receiving them from parents has <a href="https://www.pc.gov.au/research/completed/wealth-transfers/wealth-transfers.pdf">doubled</a> in the past 20 years.</p>
<p>Although this is helping young Australians get into the housing market (perhaps at the expense of pushing up housing prices), it is far from clear whether such financial assistance works well for the parents providing the support.</p>
<h2>Transfers of $5,000 to $500,000</h2>
<p>Financial elder abuse is the <a href="https://apo.org.au/sites/default/files/resource-files/2021-12/apo-nid315734.pdf">third most common form of elder abuse</a> in Australia. The perpetrators of elder abuse are most likely to be adult children, with sons more likely to commit financial elder abuse than daughters.</p>
<p>Yet mortgage brokers, financial advisers and even <a href="https://www.smh.com.au/politics/federal/house-prices-even-the-head-of-the-treasury-is-becoming-a-mum-and-dad-bank-20161019-gs5ii5.html">government officials</a> appear to be encouraging older people to provide financial help to adult children wanting to buy homes without considering whether there might be consequences for the parents.</p>
<p>To find out how intergenerational financial assistance works, we conducted interviews with <a href="https://doi.org/10.1002/ajs4.319">52 parents and adult children</a> who have recently given or received financial assistance with home ownership.</p>
<p>The amounts transferred ranged from A$5,000 to $500,000. The average was $75,000. Some amounts were much higher.</p>
<p>The common themes in our interviews were a lack of clarity about whether the payments were gifts or loans, the mischaracterisation of loans as gifts, and undocumented agreements entered into without any documentation or legal advice.</p>
<h2>‘Gifts’ offered without legal advice</h2>
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<a href="https://images.theconversation.com/files/581530/original/file-20240313-20-hcxhmo.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Photo of elder writing a letter" src="https://images.theconversation.com/files/581530/original/file-20240313-20-hcxhmo.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/581530/original/file-20240313-20-hcxhmo.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=964&fit=crop&dpr=1 600w, https://images.theconversation.com/files/581530/original/file-20240313-20-hcxhmo.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=964&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/581530/original/file-20240313-20-hcxhmo.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=964&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/581530/original/file-20240313-20-hcxhmo.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1212&fit=crop&dpr=1 754w, https://images.theconversation.com/files/581530/original/file-20240313-20-hcxhmo.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1212&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/581530/original/file-20240313-20-hcxhmo.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1212&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Lenders want letters.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/correspondence-writing-letter-handswriting-concept-502693273">Shutterstock</a></span>
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<p>Most lenders want older Australians to provide a “gift letter” stating the money they are providing to their adult child is a gift rather than a loan. </p>
<p>This is because a loan would reduce the amount the adult child could borrow from their lender, which may make it harder for them to get a mortgage. </p>
<p>Parents may feel obligated to provide “gift letters” even when they and their adult children regard the transfer as a loan.</p>
<p>There are no requirements for parents to obtain independent legal advice before signing such a letter and no cooling-off period.</p>
<p>Few of the parents we spoke to sought legal or financial advice.</p>
<p>Travis, aged 58 – who provided $50,000 to his son – told us:</p>
<blockquote>
<p>No, didn’t need to. But I guess we didn’t think about it. We didn’t consider doing that, no. But it’s family, so it’s not needed, I don’t think.</p>
</blockquote>
<p>Rosa, who became a guarantor to her daughter and also provided $10,000 to her son, said she “didn’t think about it too much”. </p>
<blockquote>
<p>I just thought, why not, I guess. It’s no worries to me, and it really helps them along. […] I didn’t think about it too much because it was a simple process, really. And you do anything for your children.</p>
</blockquote>
<h2>Little protection from the banks</h2>
<p>Australia’s <a href="https://bankingcode.org.au/resources/banking-code-of-practice/">Banking Code of Practice</a> does little to encourage banks to support parents who provide financial assistance with home ownership to their children.</p>
<p>While it commits banks to “taking extra care” with customers who are experiencing elder abuse, the only documentation usually required for transfers from parents is a statutory declaration (gift letter) written by the parent to the adult child’s lending institution, which may be a different bank.</p>
<p>The code acknowledges that older people’s banks may only become aware of their circumstances “if you tell us about them”.</p>
<p>Shame, and the desire to avoid getting their adult children into trouble, make it unlikely that older people will report financial abuse to their bank.</p>
<h2>Loans become unintended gifts</h2>
<p>Many of the parents we talked to found it difficult and uncomfortable to talk about money. As a result, the parents and adult children often had different understandings of whether the assistance was a gift or a loan, and when (if at all) it would be repaid even when it was a loan.</p>
<p>This ambiguity extended to the parents’ financial positions, with most of the adult children in our study having very little understanding of whether their parent(s) could afford to assist them without compromising their own financial wellbeing.</p>
<p>John (aged 59) told us he gave $150,000 to his daughter and her partner to help them purchase a property. </p>
<p>When we asked his daughter Caroline (aged 32) whether the money was a gift or a loan, she responded, “a loan, yeah, definitely a loan.” However, when asked whether she had begun repayments she responded:</p>
<blockquote>
<p>Not yet. I’m not quite sure, but I think we will work it out when it comes to it.</p>
</blockquote>
<p>When we asked John the same question, he responded:</p>
<blockquote>
<p>Yes, that’s a good question. We said loan, but I’m never going to see that money [laughs]. Maybe a little bit of it, but not the full amount. Definitely not. But we’ll see.</p>
</blockquote>
<p>John’s decision to present the assistance as a loan, despite the expectation it would not be repaid in full, was echoed by multiple participants. </p>
<p>Although their reasoning varied, in general, donors who framed the assistance as a loan did so to either manage their children’s feelings of entitlement, to help their children develop “good” saving habits, or to try to avoid their children feeling dependent or infantilised.</p>
<p>The reasoning behind differing views of whether money is a gift or a loan is less important than the more general point that financial assistance of this type is often not defined clearly from the outset. </p>
<h2>Little legal protection</h2>
<p>Legally, in the absence of evidence to the contrary, funds provided by Australian parents to their children are <a href="https://lsj.com.au/articles/rethinking-the-presumption-of-advancement-in-contemporary-australia/">presumed to be gifts</a>.</p>
<p>This unfortunate presumption carries the assumption older adults’ money will be “passed down” to their children, representing this as the default state of affairs in the absence of evidence otherwise. </p>
<p>It means older adults’ money is represented as not entirely their own, and puts the burden of proof on them to prove that what they had understood to be a loan was a loan – a task made more difficult by the existence of a “gift letter” and the potential of financial elder abuse.</p>
<p>Our study does not find that intergenerational financial assistance is inherently exploitative, but it does point to risks – risks made more likely by the lack of protection offered to parents by banks and the legal system, their understandable desire to help their adult children, and the presumption that financial transfers are “gifts”.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/its-not-just-housing-the-bank-of-mum-and-dad-is-increasingly-helping-fund-the-lives-of-young-australians-219966">It's not just housing: the 'bank of mum and dad' is increasingly helping fund the lives of young Australians</a>
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<img src="https://counter.theconversation.com/content/224361/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Julia Cook receives funding from the Australian Research Council. </span></em></p><p class="fine-print"><em><span>Peta Cook receives funding from National Health and Medical Research Council. She was previously a member of the Board of Directors for Council on the Ageing (COTA) Tasmania, and is a current member of Elder Abuse Action Australia (EAAA) and the Australian Sociological Association (TASA).</span></em></p>Helping adult children buy homes is risky, especially because what begins as a loan can turn into an unintended gift.Julia Cook, Senior Lecturer in Sociology, University of NewcastlePeta S. Cook, Senior Lecturer in Sociology, University of TasmaniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2238392024-03-11T19:14:12Z2024-03-11T19:14:12ZPrefabricated and build-to-rent houses could help bring rents down<p><em>This article is part of The Conversation’s series examining the housing crisis. Read the other articles in the series <a href="https://theconversation.com/au/topics/housing-series-2024-153769">here</a>.</em></p>
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<p>Australia’s rental vacancy rate has hit a historic low of close to zero. The latest estimate from SQM Research is <a href="https://sqmresearch.com.au/graph_vacancy.php?national=1&t=1">1.1%</a>. The latest estimate from the property listing firm Domain is <a href="https://www.domain.com.au/research/vacancy-rates-february-2024-1266500/">0.7%</a>.</p>
<p>As would be expected with hardly any of Australia’s rental properties vacant and available for rent, rents have soared – at first in 2022 only for <a href="https://theconversation.com/rent-crisis-average-rents-are-increasing-less-than-you-might-think-189154">newly advertised</a> properties, and later for properties in general as measured by average rents.</p>
<p>The Bureau of Statistics measure of average capital city rents climbed <a href="https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release">7.3%</a> throughout 2023. It would have climbed by more – by 8.5% – had the bureau not taken account of the increased rent assistance in the May budget, which depressed recorded rents by 1.2%.</p>
<h2>Demand surged while new supply sank</h2>
<p>Vacancy rates have fallen and rents have climbed because the demand for living space has <a href="https://www.ahuri.edu.au/research/brief/why-does-australia-have-rental-crisis-and-what-can-be-done-about-it">surged</a>; at first in the aftermath of lockdowns as Australians sought accommodation with <a href="https://www.rba.gov.au/publications/bulletin/2023/mar/renters-rent-inflation-and-renter-stress.html">fewer housemates and more home office space</a>, and later as borders reopened and Australia’s population swelled.</p>
<p>At the same time, the number of dwellings completed dived in response to shortages of both labour and materials.</p>
<p>Before COVID about 50,000 new dwellings were completed per quarter. Since then, completions have rarely exceeded <a href="https://www.abs.gov.au/statistics/industry/building-and-construction/building-activity-australia/latest-release">45,000</a>.</p>
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<h2>Tweaking tax concessions would do little to help</h2>
<p>While the Australian Greens are <a href="https://www.theguardian.com/australia-news/2024/feb/16/greens-are-targeting-tax-breaks-for-investors-to-make-buying-a-home-affordable-for-renters-max-chandler-mather-says">pressing</a> the government to wind back capital gains tax concessions and limit <a href="https://treasury.gov.au/review/tax-white-paper/negative-gearing">negative gearing</a> in order to wind back home prices, there’s little reason to think the changes would do much to reduce rents.</p>
<p><a href="https://www.ato.gov.au/about-ato/research-and-statistics/in-detail/taxation-statistics/taxation-statistics-2020-21/statistics/individuals-statistics#Table8Individuals">Half</a> of all Australian landlords negatively gear by making a net loss on rental income in order to profit later from concessionally taxed capital gains. Attacking these tax concessions would be likely to cause some of them to reconsider being landlords.</p>
<p>But if they sold, more renters would be able to buy and stop renting, leaving the balance of renters and properties for rent little changed. </p>
<h2>Rent assistance and caps won’t much help either</h2>
<p>While there is popular support for increasing rent assistance, and while it has <a href="https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release">materially cut rents paid</a> over the past year, it won’t create more rental properties.</p>
<p>Very big increases in rent assistance might even lift rents further by increasing the amount renters are able to pay. However, the effect is unlikely to be big because Commonwealth rent assistance is <a href="https://www.servicesaustralia.gov.au/who-can-get-rent-assistance?context=22206">restricted to welfare recipients</a>.</p>
<p>Rent caps or freezes don’t increase supply either, and run the risk of encouraging a <a href="https://theconversation.com/rent-freezes-and-rent-caps-will-only-worsen-not-solve-australias-rental-crisis-208099?notice=Article+has+been+updated.">black market</a> in bidding to pay rents over the legally sanctioned cap.</p>
<h2>What’s needed is more homes, in the right places</h2>
<p>The government’s new <a href="https://www.housingaustralia.gov.au/housing-australia-future-fund-facility-and-national-housing-accord-facility">Housing Australia Future Fund</a> and associated agreements are intended to support the delivery of 20,000 new social and 20,000 new affordable homes over the next five years.</p>
<p>Separately, the Commonwealth and the states have agreed to an ambitious target of <a href="https://www.pm.gov.au/media/meeting-national-cabinet-working-together-deliver-better-housing-outcomes">1.2 million</a> “new well-located homes” over the next five years, up from <a href="https://www.abs.gov.au/statistics/industry/building-and-construction/building-activity-australia/latest-release">918,200</a> over the past five years.</p>
<p>The Commonwealth has set aside <a href="https://www.pm.gov.au/media/meeting-national-cabinet-working-together-deliver-better-housing-outcomes">A$3 billion</a> for “performance-based funding” to the states paid at the rate of <a href="https://www.pm.gov.au/media/press-conference-national-cabinet-brisbane">$15,000</a> for each new well-located home they deliver in excess of their share of 1 million new homes in five years.</p>
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Read more:
<a href="https://theconversation.com/national-cabinets-new-housing-plan-could-save-renters-billions-211696">National Cabinet’s new housing plan could save renters billions</a>
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<p>If the states and territories are able to deliver 1.2 million homes over five years rather than 1 million, <a href="https://theconversation.com/national-cabinets-new-housing-plan-could-fix-our-rental-crisis-and-save-renters-billions-211696">Grattan Institute analysis</a> suggests rents will be 4% lower than they would have been.</p>
<p>NSW is displaying the sort of initiative that will be needed. The state is allowing developers of projects worth more than A$75 million to build <a href="https://www.nsw.gov.au/media-releases/supporting-affordable-housing-construction">taller buildings</a> with more accommodation as long as they use 15% of the floor space for affordable housing. </p>
<p>NSW is also allowing <a href="https://www.millsoakley.com.au/thinking/radical-break-with-past-planning-policies-to-boost-housing-supply/">denser development</a> within 400 metres of 31 train stations.</p>
<h2>Build-to-rent would help</h2>
<p>In Australia, most rental properties (even apartments) are owned by individual so-called “mum and dad” investors.</p>
<p>Overseas in the United States and Europe, they are more likely to be owned by corporations who build <a href="https://www.ahuri.edu.au/analysis/brief/what-build-rent">entire blocks</a> to lease. </p>
<p>These corporations are more concerned about long-term returns than individual owners who want the flexibility to sell, so they tend to offer long-term leases on better terms.</p>
<p>In last year’s budget the government offered build-to-rent tax rules which the Property Council of Australia says could create <a href="https://www.abc.net.au/news/2023-04-07/what-are-solutions-to-australias-housing-crisis-build-to-rent/102143802">thousands of extra homes</a>.</p>
<p>On one hand, they are unlikely to be homes for low-income renters. Developers require commercial returns. On the other hand, an increasing number of renters have high incomes.</p>
<p>The Australian Housing and Urban Research Institute says while in 1996 households with incomes worth $140,000 a year or more in today’s dollars accounted for only 8% of renters, by 2021 they accounted for <a href="https://www.ahuri.edu.au/analysis/news/more-rich-are-renting-while-low-income-renters-face-greater-stress">24%</a>. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-governments-help-to-buy-scheme-will-help-but-it-wont-solve-the-housing-crisis-224956">The government's Help to Buy scheme will help but it won't solve the housing crisis</a>
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<h2>Pre-fabs could also help, and more apprentices</h2>
<p>Another thing that would help is encouraging the use of prefabrication to cut construction times and costs, using locally sourced materials. </p>
<p>Prefabricated homes were used to house <a href="https://www.smh.com.au/culture/art-and-design/postwar-melbourne-needed-homes-and-workers-snail-kits-gave-us-both-20200819-p55n4o.html">migrants</a> after the second world war. More recently they have been used to house <a href="https://www.theguardian.com/australia-news/2022/apr/17/modular-homes-on-way-to-accommodate-new-south-wales-flood-victims">NSW flood victims</a>.</p>
<p>They will still require skilled builders and tradespeople, who are in short supply. Only about half of enrolled <a href="https://masterbuilders.com.au/builders-welcome-targeted-support-for-apprentices/">apprentices</a> complete their training, and the dropout rate has been climbing.</p>
<p>The government has announced an <a href="https://www.dewr.gov.au/australian-apprenticeships/strategic-review-australian-apprenticeship-incentive-system">in-depth review</a> of Australia’s system of apprenticeship support. It’s due to report later this year.</p>
<p>It might also help to prioritise the migration of <a href="https://www.afr.com/property/residential/foreign-tradies-wanted-to-fix-housing-shortfall-20240108-p5evrb">tradespeople</a>. It’s hard to build more homes in the right places, but that’s what we need.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/a-prefab-building-revolution-can-help-resolve-both-the-climate-and-housing-crises-220290">A prefab building revolution can help resolve both the climate and housing crises</a>
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<img src="https://counter.theconversation.com/content/223839/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ameeta Jain does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Australia builds only 45,000 new homes per quarter. If we really want to fix the rent crisis we’ll have to build more.Ameeta Jain, Associate Professor, Deakin Business School, Deakin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2246352024-03-08T05:50:09Z2024-03-08T05:50:09ZLet’s not kid ourselves that private investors or super funds will build the social housing we need<figure><img src="https://images.theconversation.com/files/578510/original/file-20240228-20-s7p4c5.jpg?ixlib=rb-1.1.0&rect=124%2C119%2C3293%2C2109&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://theconversation.com/asset_images/578510/edit?content_id=224635">t_rust/Getty</a></span></figcaption></figure><p><em>This article is part of The Conversation’s series examining the housing crisis. Read the other articles in the series <a href="https://theconversation.com/au/topics/housing-series-2024-153769">here</a>.</em></p>
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<p>Treasurer Jim Chalmers is leading a push to get <a href="https://www.afr.com/companies/financial-services/superannuation-will-fund-nation-building-chalmers-20220822-p5bbty">private investors</a> to help build more social and affordable housing. But we shouldn’t kid ourselves about where the money will come from. </p>
<p>The defining feature of social and affordable housing is a big rental subsidy for the tenant, which no private investor will ever volunteer to pay. In the end, government – that is, taxpayers – will always foot the bill. </p>
<p>The sooner we accept this, the better. Wishful thinking that private investors will wear the cost of rental discounts risks making the limited government subsidies available for housing less effective. </p>
<h2>We need more social housing</h2>
<p>Social housing – where rents are typically capped at 30% of tenants’ incomes – makes a big difference to the lives of many vulnerable Australians. </p>
<p>Yet Australia’s stock of social housing – currently about 430,000 dwellings – <a href="https://grattan.edu.au/news/how-to-tackle-the-rental-crisis/">has barely grown in 20 years</a>, during which time the population has increased by 33%.</p>
<p>A stagnant stock means there is little “flow” of available housing to catch people going through hardship, who then face prolonged, agonising waits while struggling to afford to keep a roof over their head. </p>
<h2>But it’s expensive</h2>
<p>The main reason our social housing stock has stagnated is the expense. </p>
<p>Social housing offers a big rental discount, or subsidy, to tenants. </p>
<p>In Australia, the gap between the subsidised rent and the private market rent is about <a href="https://www.ahuri.edu.au/analysis/brief/understanding-funding-gap-social-housing-and-different-ways-fund-it">$15,000</a> per rental per year. </p>
<p>Because the subsidy to tenants is ongoing, the cost to governments is ongoing. That means that every extra 100,000 social housing dwellings costs an extra $1.5 billion every year. </p>
<p>The same goes for subsidised “affordable” housing, where rents are typically set at 20-25% below the market rate, and which are available to many low- and some middle-income earners. </p>
<p>If the tenant is getting a discount on the market rate, the government will pay for that somewhere along the line.</p>
<h2>Private investors won’t wear the subsidy gap</h2>
<p>Australia has $3.5 trillion of superannuation savings – the fourth-largest retirement savings pool in the world – but practically none of it is invested in Australian housing. The Treasurer <a href="https://www.afr.com/companies/financial-services/superannuation-will-fund-nation-building-chalmers-20220822-p5bbty">wants</a> to change that. </p>
<p>He’s talked a <a href="https://www.smh.com.au/politics/federal/banks-and-super-funds-to-work-on-national-affordable-housing-plan-20221007-p5bo12.html">big game</a> about encouraging private capital, including super funds, to invest <a href="https://www.investmentmagazine.com.au/2023/07/magnificent-gift-chalmers-doubles-down-on-nation-building-super-dream/">specifically in social and affordable housing</a>.</p>
<p>But no super fund should forego returns for its members by paying the subsidy gap for social or affordable housing out of members’ pockets. </p>
<p>It would be incompatible with superannuation funds’ core objective – maximising returns for their members – which funds are obligated by law to prioritise. </p>
<h2>Private investors prefer affordable to social housing</h2>
<p>If we make encouraging private investment in social and affordable housing the goal, we risk misallocating the scarce government subsidies we have. </p>
<p>Most super funds, and other investors, would typically <a href="https://www.propertycouncil.com.au/property-australia/density-bonus-key-to-affordable-housing-in-victoria">prefer to invest</a> in affordable, rather than social housing. </p>
<p>Doing so lets investors finance more homes for any given quantity of government housing subsidies that are available, while taking on less-disadvantaged tenants who are seen as less risky.</p>
<p>We’ve been here before: the <a href="https://www.housing.vic.gov.au/national-rental-affordability-scheme">National Rental Affordability Scheme</a> spent $3.1 billion channelling subsidies to private investors for affordable housing.</p>
<p>Grattan Institute <a href="https://grattan.edu.au/news/learning-from-past-mistakes-lessons-from-the-national-rental-affordability-scheme/">estimates</a> suggest the scheme paid an extra $1 billion in windfall gains to investors, above and beyond the cost of the discounted rents offered to tenants, who typically weren’t the most needy. </p>
<h2>Super funds could make social housing more expensive</h2>
<p>Super funds can help finance the construction of new social housing via loans to <a href="https://www.homes.vic.gov.au/community-housing-providers">community housing providers</a> – as four major funds have recently <a href="https://www.theage.com.au/national/super-funds-stump-up-millions-of-dollars-to-get-more-people-into-homes-20240225-p5f7mw.html?btis=">agreed to do</a>.</p>
<p>But these loans are likely to be on fully commercial terms.</p>
<p>They are deals attractive to federal and state governments worried about taking on more debt. </p>
<p>But they are also likely to make social housing more expensive to deliver because governments can borrow at <a href="https://www.infrastructureaustralia.gov.au/sites/default/files/2019-06/63i.pdf">lower rates</a> than the returns sought by funds. </p>
<h2>Governments can’t avoid their responsibility</h2>
<p>Ultimately, governments have to foot the bill for social and affordable housing. And our priority should be social, rather than affordable housing, since its targeted at people at serious risk of becoming homeless. </p>
<p>The sooner that truth is acknowledged, the sooner we can get on with funding subsidies and the less time we will waste on trying to coax private investors into being something they’re not.</p>
<p>The best way to boost funding for social housing would be to double the size of the <a href="https://www.finance.gov.au/government/australian-government-investment-funds/housing-australia-future-fund">Housing Australia Future Fund</a> from $10 billion to $20 billion</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/the-greens-were-right-to-pass-australias-housing-future-fund-bill-the-case-for-further-delay-was-weak-213255">The Greens were right to pass Australia's Housing Future Fund bill – the case for further delay was weak</a>
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<p>The government-owned fund uses borrowed money to invest in stocks and bonds and uses the income to cover the social housing subsidy gap.</p>
<p>It makes use of the <a href="https://grattan.edu.au/wp-content/uploads/2023/09/HAFF_submission_Aug_2023.pdf">higher return</a> the government can get from investing than from retiring debt, in the same way as the government’s <a href="https://www.futurefund.gov.au">Future Fund</a>.</p>
<p>Doubling the size of the Housing Australia Future Fund could support the building of up to an extra 30,000 social dwellings over the next five years. </p>
<p>Coupled with a further big boost to <a href="https://grattan.edu.au/news/2024-year-of-the-renter/">Commonwealth Rent Assistance</a>, it could really help low-income renters.</p><img src="https://counter.theconversation.com/content/224635/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Grattan Institute began with contributions to its endowment of $15 million from each of the Federal and Victorian Governments, $4 million from BHP Billiton, and $1 million from NAB. In order to safeguard its independence, Grattan Institute's board controls this endowment. The funds are invested and contribute to funding Grattan Institute's activities. Grattan Institute also receives funding from corporates, foundations, and individuals to support its general activities, as disclosed on its website.</span></em></p><p class="fine-print"><em><span>Joey Moloney does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Neither investors nor super funds are prepared to wear the losses needed to put low-income Australians into housing. The government should double the size of its Housing Australia Future Fund.Brendan Coates, Program Director, Economic Policy, Grattan InstituteJoey Moloney, Deputy Program Director, Economic Policy, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2240602024-03-06T19:15:33Z2024-03-06T19:15:33ZInterest rates are expected to drop but trying to out-think the market won’t guarantee getting a good deal<p><em>This article is part of The Conversation’s series examining the housing crisis. Read the other articles in the series <a href="https://theconversation.com/au/topics/housing-series-2024-153769">here</a>.</em></p>
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<p>With most economists expecting interest rates to start falling later this year, prospective home buyers might be weighing up whether to buy now for fear of strong competition for stock, or waiting until repayments are lower.</p>
<p>The financial markets and private sector economists expect the Reserve Bank to start cutting interest rates later this year. But the average forecaster is expecting just one cut in the next 12 months, of 0.25%.</p>
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<p>While rates have risen 13 times since May 2022, the drop won’t be so far nor so fast.</p>
<p>Even by the end of 2026 rates will probably only be around 1% lower than now.</p>
<p>And this may be as low as interest rates go. The interest rates we saw during the COVID recession were arguably the <a href="https://www.bankofengland.co.uk/-/media/boe/files/speech/2015/stuck.pdf">lowest in human history</a>. </p>
<p>We are highly unlikely to return to these lows.</p>
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<img alt="Graph of interest rates dating back to 1575, going down since 1975" src="https://images.theconversation.com/files/578495/original/file-20240228-18-jx645r.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/578495/original/file-20240228-18-jx645r.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=277&fit=crop&dpr=1 600w, https://images.theconversation.com/files/578495/original/file-20240228-18-jx645r.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=277&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/578495/original/file-20240228-18-jx645r.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=277&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/578495/original/file-20240228-18-jx645r.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=348&fit=crop&dpr=1 754w, https://images.theconversation.com/files/578495/original/file-20240228-18-jx645r.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=348&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/578495/original/file-20240228-18-jx645r.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=348&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="attribution"><a class="source" href="https://www.bankofengland.co.uk/-/media/boe/files/speech/2015/stuck.pdf">Bank of England</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
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<h2>Neutral interest rates</h2>
<p>In normal times, we would expect interest rates to be higher than inflation. People can reasonably expect to be compensated for delaying spending. The margin by which interest rates exceed inflation in the medium-term is known as the <a href="https://www.rba.gov.au/speeches/2022/sp-ag-2022-10-12.html">neutral real rate of interest</a>. </p>
<p>This Goldilocks rate would apply when the Reserve Bank is neither trying to squeeze inflation nor stimulate demand. </p>
<p>The Reserve has used <a href="https://www.rba.gov.au/speeches/2022/sp-ag-2022-10-12.html">nine different approaches</a> to estimate this neutral real rate. The average result is that it may have dropped from around 3% in the 1990s to around 1% in the 2020s.</p>
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<p>This is also around the <a href="https://www.bis.org/publ/qtrpdf/r_qt2403b.htm">average value estimated in comparable countries</a>. In these days of global financial markets, it could be expected that there would be similar trends across countries. The decline in the global neutral real rate may be due to a <a href="https://www.brookings.edu/articles/the-hutchins-center-explains-the-neutral-rate-of-interest/">reduction in the global economic growth rate associated with population ageing and higher global savings</a>.</p>
<p>The Reserve Bank aims for inflation to average around the midpoint of its <a href="https://www.rba.gov.au/education/resources/explainers/australias-inflation-target.html">2-3% target range</a>. So if the neutral real rate is around 1%, this would imply that the Reserve’s <a href="https://www.rba.gov.au/statistics/cash-rate/">cash rate</a> (at which banks lend to each other overnight) would be around 3.5%.</p>
<p>This is about what the forecasters are expecting by the end of 2026.</p>
<p>Commercial banks <a href="https://www.rba.gov.au/education/resources/explainers/banks-funding-costs-and-lending-rates.html">set the interest rates</a> they charge on their loans by adding a margin to the Reserve Bank’s cash rate.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/the-help-to-buy-scheme-will-help-but-wont-solve-the-housing-crisis-224956">The Help to Buy scheme will help but won't solve the housing crisis</a>
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<p>They set the interest they pay on deposits by subtracting a margin from the cash rate. The difference between the two (and any fee income) meets the costs of running the bank such as wages and premises, allows for some loans not being repaid and provides some profits. The margins will be smaller if the banking market is very competitive.</p>
<p>Banks generally move their mortgage interest rates in line with the cash rate. If by the end of 2026 the cash rate is 1% lower, it is likely home loan interest rates will also be around 1% lower. This would reduce the monthly repayment on a 30-year loan for $1 million by $700.</p>
<h2>The impact of (somewhat) lower interest rates on house prices</h2>
<p>If the housing market is reasonably efficient, these broadly expected decreases in interest rates should largely be already “priced in” by investors. This would suggest relatively little impact as the expected cuts materialise.</p>
<p>But some potential homebuyers will be able to borrow more once interest rates drop. And many of them will choose to do so. They may then bid house prices up.</p>
<p>This is why <a href="https://theconversation.com/mortgage-and-inflation-pain-to-ease-but-only-slowly-how-31-top-economists-see-2024-218927">most economists are forecasting house prices to rise further</a> during 2024. The average expected increase is 5% in Sydney and 3% in Melbourne. </p>
<p>The increases are comparable to the expected rises in incomes so affordability will not significantly worsen. But buying a home will not be getting any easier.</p>
<p>A similar pattern of expected easing interest rates leading to higher house prices is being observed <a href="https://www.ft.com/content/b6d89def-aea4-4790-9ff5-cddf32f3b36c">around the world</a>.</p>
<p>Renters may be hoping landlords will pass on interest rate decreases to them. But they are likely to be disappointed. Rents have risen not due to interest rate rises but because the vacancy rate is low. With strong population growth, this is unlikely to change soon.</p>
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Read more:
<a href="https://theconversation.com/urbanisation-and-tax-have-driven-the-housing-crisis-its-hard-to-see-a-way-back-but-covid-provides-an-important-lesson-223548">Urbanisation and tax have driven the housing crisis. It's hard to see a way back but COVID provides an important lesson</a>
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<h2>What to do?</h2>
<p>Trying to out-think the market is unlikely to work.</p>
<p>Not buying your dream home and instead waiting for a drop in interest rates may be a mistake. But so might panic-buying something that’s not what you want out of fear of further rises in house prices.</p><img src="https://counter.theconversation.com/content/224060/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Hawkins was formerly a senior economist at the Reserve Bank and the Australian Treasury and was secretary to the Senate Select Committee on Housing Affordability in Australia in 2008.</span></em></p><p class="fine-print"><em><span>Craig Applegate does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Despite different theories, there is no simple answer to whether prospective home buyers are better off buying before or after the expected interest rate drop in the next year.John Hawkins, Senior Lecturer, Canberra School of Politics, Economics and Society, University of CanberraCraig Applegate, Assistant Professor, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2238232024-03-05T19:12:13Z2024-03-05T19:12:13ZWhat is negative gearing and what is it doing to housing affordability?<p><em>This article is part of The Conversation’s series examining the housing crisis. Read the other articles in the series <a href="https://theconversation.com/au/topics/housing-series-2024-153769">here</a>.</em></p>
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<p>Australia’s housing crisis is putting the <a href="https://www.mortgagechoice.com.au/guides/what-is-the-great-australian-dream/">Australian dream</a> to own one’s home out of reach for many.</p>
<p>But it’s not just <a href="https://www.aihw.gov.au/reports/australias-welfare/home-ownership-and-housing-tenure">home ownership</a> that has been affected. Rental affordability has also become a serious issue. This has reignited the debate about negative gearing; whether or not it is fair and whether it holds the key to fixing the housing crisis.</p>
<h2>What is negative gearing?</h2>
<p><a href="https://treasury.gov.au/review/tax-white-paper/negative-gearing">Negative gearing</a> refers to using borrowed money to invest in an asset so it results in a loss which can be claimed as a tax deduction against other income. For example, a property investment is negatively geared if the net rental income received is lower than the mortgage interest. The loss is then offset against other income, such as wages and salaries, which reduces the amount of income tax payable.</p>
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Read more:
<a href="https://theconversation.com/urbanisation-and-tax-have-driven-the-housing-crisis-its-hard-to-see-a-way-back-but-covid-provides-an-important-lesson-223548">Urbanisation and tax have driven the housing crisis. It's hard to see a way back but COVID provides an important lesson</a>
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<p>Negative gearing is commonly used for property investments but also applies to other investments (such as shares). Investments can also be positively geared when net income from the investment is more than the interest on borrowings.</p>
<p>The attractiveness of negative gearing in Australia is mainly due to its ability to reduce the amount of income tax. For this reason, it can be more beneficial to individuals who are on higher marginal tax rates. However, capital gains tax must be paid on any gain when the asset is sold. </p>
<h2>How does negative gearing work?</h2>
<p>Let’s look at a simple example of negative gearing. Say an investment property was rented to tenants at A$500 a week ($26,000 a year), and associated expenses (such as agent fees, rates, mortgage interest, maintenance) were $40,000 for the year. This leaves a shortfall of $14,000.</p>
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Read more:
<a href="https://theconversation.com/think-curbing-overseas-migration-will-end-the-housing-crisis-it-wont-and-we-cant-afford-to-do-it-211120">Think curbing overseas migration will end the housing crisis? It won't – and we can't afford to do it</a>
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<p>The property owner can deduct the $14,000 from their taxable income to reduce their liability. For example if they received $100,000 from wages, they would pay tax on only $86,000 (saving $4,550 in income tax). Individuals on higher incomes and therefore higher marginal tax rates would receive larger tax deductions (for example, someone earning over $180,001 would pay $6,300 less tax).</p>
<p>While negative gearing an investment property can reduce tax while it is being rented, it can also result in a large <a href="https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/what-is-capital-gains-tax">capital gains tax</a> bill once the property is sold (even though capital gains tax is halved for assets held for more than 12 months).</p>
<p>For example, if the cost base for a property purchased ten years ago was $400,000 and it sells for $900,000 today, capital gains tax would be calculated on half of the $500,000 difference. At a marginal rate of 45%, the tax bill would be $112,500.</p>
<h2>How widespread is it in Australia?</h2>
<p>According to the <a href="https://data.gov.au/data/dataset/taxation-statistics-2020-21">Australian Taxation Office</a>, about 2.25 million individual tax payers (21% of all individual tax payers) claimed deductions against rental income for a total 3.25 million properties in 2020-21 financial year.</p>
<p>Of these, 47% negatively geared their properties, claiming a net rental loss. This is equivalent to just less than 10% of all taxpayers. Investors with fewer properties were more likely to be using negative gearing with over 71% of property investors having only one investment property.</p>
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<p><iframe id="Wv9lV" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/Wv9lV/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
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<p>The largest group of property investors (524,220) had one investment property and a total annual taxable income between $50,001 and $100,000. The chart above shows the proportion of property investors by age group.</p>
<p>From 2016-2017 to 2020-2021, the total net rental income on property investments in Australia went from a loss of $3.3 billion to a gain of $3.1 billion (as you can see from the chart below). </p>
<p>For the same period, the proportion of investors negatively gearing their properties dropped from 58% to 47%, as lower interest rates reduced losses.</p>
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<p><iframe id="fXnoe" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/fXnoe/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
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<p>Negative gearing is also becoming less attractive with the government’s recent changes to <a href="https://treasury.gov.au/tax-cuts">tax brackets and marginal tax rates</a>. According to a study conducted by <a href="https://www.pexa.com.au/staticly-media/2023/03/Whitepaper-2-Private-renting-in-Australia-a-broken-system_compressed-sm-1679450145.pdf">LongView and PEXA</a>, 60% of property investors would be financially better off if they instead put their money into a superannuation fund.</p>
<h2>When was it introduced?</h2>
<p>Negative gearing has been allowed under tax laws since 1936. It was thought it would encourage investment in housing and increase supply.</p>
<p>However, debate around its impact on housing affordability led the government to partially abolish it in 1985 by not allowing rental property losses to reduce tax on other sources of income.</p>
<p>There was a shortage of housing and rents rose during the two years it was abolished. As a result, in 1987, negative gearing was reinstated and capital gains tax legislation was introduced.</p>
<h2>Is it used in other countries?</h2>
<p>Canada, Germany, Japan and Norway use negative gearing. In Finland, France and the United States, rental losses can offset future rental income only. In the US, <a href="https://www.irs.gov/publications/p936#en_US_2023_publink1000229891">home owners are entitled</a> to claim a tax deduction for mortgage interest on their own home.</p>
<p>The use and benefit of negative gearing depends upon all aspects of a country’s tax system. So although it may be attractive in countries with high marginal tax rates, other taxes such as capital gains tax, land tax and stamp duties may reduce its appeal. </p>
<h2>Negative gearing’s impact on housing affordability</h2>
<p>Many factors affect the cost of housing, including interest rates, inflation, employment, the overall taxation system and population growth, making housing affordability a complex issue.</p>
<p><a href="https://www.smh.com.au/politics/federal/nz-kills-tax-loophole-on-property-to-slow-soaring-house-prices-20210323-p57d9s.html">In New Zealand, negative gearing is being phased out</a> due to its impact on housing prices. </p>
<p>However, unlike Australia, New Zealand does not have capital gains tax, making negative gearing more popular and more likely to impact housing prices. In addition to phasing out negative gearing, the New Zealand government <a href="https://www.hud.govt.nz/our-work/public-housing-plan/">increased the supply of public housing</a> and <a href="https://www.abc.net.au/news/2023-09-25/nz-auckland-house-supply-experiment-results-in-dramatic-change/102846126">relaxed zoning regulations</a> to provide more affordable housing. </p>
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Read more:
<a href="https://theconversation.com/ageing-in-a-housing-crisis-growing-numbers-of-older-australians-are-facing-a-bleak-future-209237">Ageing in a housing crisis: growing numbers of older Australians are facing a bleak future</a>
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<p>In Australia, however, there are concerns abolishing negative gearing will cause rents to rise, as they did in the 1980s. More innovative approaches to housing affordability are needed to ensure ample supply of property for first home buyers and tenants.</p>
<p>Some consideration could be given to allowing first home buyers to claim a tax deduction for mortgage interest, increasing capital gains tax, limiting the number or type of investment properties held, capping rent increases, or more infrastructure investment from the government for first home buyers and social housing.</p>
<p>One or more of these measures would be a step in the right direction. Negative gearing on its own is not the answer to housing affordability. The whole system needs an overhaul, with a combination of measures needed to adequately address affordability, for now and for future generations.</p>
<p>Taking no action will put home ownership out of reach for even more Australians.</p><img src="https://counter.theconversation.com/content/223823/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Cull is co-founder of the Western Sydney University Tax Clinic that receives funding from the Australian Taxation Office as part of the National Tax Clinic Program.
Michelle Cull is a member of CPA Australia and the Financial Advice Association Australia. Michelle is also an academic member of UniSuper's Consultative Committee and volunteers as Chair of the Macarthur Advisory Council for the Salvation Army Australia. </span></em></p>Negative gearing is popular because it lowers home owners’ tax bills. But its critics say it has reduced affordable housing stock keeping the less well off out of the market.Michelle Cull, Associate professor, Western Sydney UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2235482024-03-03T19:20:07Z2024-03-03T19:20:07ZUrbanisation and tax have driven the housing crisis. It’s hard to see a way back but COVID provides an important lesson<p><em>This article is the first in The Conversation’s series examining the housing crisis. Read the other articles in the series <a href="https://theconversation.com/au/topics/housing-series-2024-153769">here</a>.</em></p>
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<p>The paradox of Australian housing is the abundance of land – 7.5 million square kilometres of it – and the shortage of accommodation.</p>
<p>The pandemic lockdowns and the changes that flowed from them have disrupted the paradox and will take some time to settle down.</p>
<p>By 1911, most of today’s towns were already established. Regional Australia was then home to <a href="https://www.bitre.gov.au/sites/default/files/report_136.pdf">60%</a> of the population.</p>
<p>Since then small towns have died, and regional centres have grown, much of the population has moved to the coast and cities for work, and new towns have grown to support mining in the north and west and farming in irrigation areas.</p>
<p>Today only <a href="https://www.abs.gov.au/statistics/people/population/national-state-and-territory-population/jun-2023">33%</a> of the population lives outside capital cities.</p>
<p>While the first census in 1911 recorded <a href="https://www.ausstats.abs.gov.au/ausstats/free.nsf/0/672F01666C9728B9CA2578390013E61F/$File/1911%20Census%20-%20Volume%20III%20-%20Part%20XII%20Occupations.pdf">24%</a> of the workforce was employed in agriculture, forestry or fishing, the most recent survey recorded less than <a href="https://labourmarketinsights.gov.au/industries/industry-details?industryCode=A">3%</a>.</p>
<h2>Cities made housing expensive</h2>
<p>Packing Australia’s population into capital cities helped push up land prices because the supply of well-located land in cities was limited.</p>
<p>The resultant <a href="https://www.aihw.gov.au/reports/children-youth/housing-stress">housing stress</a> is worse than the official figures suggest.</p>
<p>The Bureau of Statistics <a href="https://www.aihw.gov.au/reports/children-youth/housing-stress">defines</a> housing stress as occurring when a lower-income household spends more than 30% of its gross household income on housing costs. </p>
<p>But as homebuyers have moved further away from city centres to avoid high housing costs, they’ve been hit with higher commuting costs, boosting the number who are in financial stress because of housing. </p>
<p>A <a href="https://www.jstor.org/stable/26144329">study</a> I conducted with University of Canberra colleagues in the mid-2000s found that when commuting costs were included in housing costs the proportion of home owning couples with children in housing stress jumped from 15% to 19%.</p>
<h2>Housing became an ‘investment’</h2>
<p>Rising prices have made buying an extra home a “safe investment” for existing homeowners – all the more so when accompanied by generous <a href="https://images.theconversation.com/files/578471/original/file-20240228-28-6zq6z6.png">tax concessions.</a>.</p>
<p>The more homeowners bought second (and even <a href="https://www.ato.gov.au/about-ato/research-and-statistics/in-detail/taxation-statistics/taxation-statistics-2020-21/statistics/individuals-statistics#Table8Individuals">third</a>) properties, the more price pressure they added to prices which made lightly-taxed capital gains on investment properties seem an even safer bet.</p>
<p>The latest tax figures show <a href="https://data.gov.au/data/dataset/taxation-statistics-2020-21/resource/086c5441-f60a-4f78-8cd3-93d8856ebf2c">2.2 million</a> Australians owning investment properties, up from 1.2 million two decades earlier. This means that at a time when Australia’s population grew 32%, the number of Australians owning investment properties grew 83%.</p>
<p>The more homeowners make investment decisions on the assumption that prices will keep rising, the more resistant they become to measures that wind those price rises back. </p>
<p>Among those measures are <a href="https://www.jstor.org/stable/43189657">relaxed planning rules</a> that would increase the supply of competing properties, and changes to tax rules that would make investing less attractive.</p>
<p>Labor campaigned in <a href="https://webarchive.nla.gov.au/awa/20160627043846/http://pandora.nla.gov.au/pan/158841/20160627-1111/www.100positivepolicies.org.au/positive_plan_on_housing_affordability_capital_gains_tax_reform.html">2016</a> and again in <a href="https://webarchive.nla.gov.au/awa/20190513154843/http://pandora.nla.gov.au/pan/175559/20190514-0131/www.alp.org.au/policies/reforming-negative-gearing-and-capital-gains-tax-arrangements/index.html">2019</a> on restricting <a href="https://treasury.gov.au/review/tax-white-paper/negative-gearing">negative gearing</a> to new housing (with a <a href="https://lawpath.com.au/blog/grandfather-clauses-everything-you-need-to-know">grandfather</a> clause that would allow it to continue on properties that were already negatively geared) and halving the capital gains tax concession.</p>
<p>It lost both elections.</p>
<p>Modelling published in <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/1467-8454.12335">Australian Economic Papers</a> finds that if Labor’s 2019 program had been adopted, the share of households who own their home rather than rent would have climbed 4.7 percentage points.</p>
<p>For most households that would have been able to buy but now have to rent,
renting is an inferior substitute.</p>
<p>But for landlords the displaced would-be owners are useful. They become tenants, helping the investment make sense.</p>
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Read more:
<a href="https://theconversation.com/how-albanese-could-tweak-negative-gearing-to-build-more-new-homes-222739">How Albanese could tweak negative gearing to build more new homes</a>
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<h2>Then came COVID</h2>
<p>The pandemic lockdowns prompted a rethink of how and where Australians lived.</p>
<p>Home offices became more attractive and group houses became less attractive pushing down the average number of <a href="https://www.rba.gov.au/speeches/2023/sp-gov-2023-04-05.html">residents per home</a> and pushing up the demand for homes even before borders reopened.</p>
<p>But many Australians discovered they didn’t need to live as close to their work and moved further away to more distant suburbs, and away from cities altogether to regional locations where housing was more affordable.</p>
<p>While this improved their quality of life by cutting housing and commuting costs, it overwhelmed the supply of houses in those regions and <a href="https://www.news.com.au/finance/economy/australian-economy/australians-desire-to-work-from-home-affecting-house-prices/news-story/da9e4605e132dc1a5a61506f07fd433d">pushed up prices</a>.</p>
<p>In time more homes will be built in those regions to accommodate more of them, unless there’s a <a href="https://www.abc.net.au/news/2023-11-30/push-for-staff-return-to-office-after-working-from-home/103148260">return to the office</a>.</p>
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Read more:
<a href="https://theconversation.com/covid-has-disrupted-our-big-and-regional-planning-has-to-catch-up-fast-139969">COVID has disrupted our big, and regional planning has to catch up fast</a>
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<p>The changes wrought by COVID will provide challenges and lessons for planning, especially planning for housing and infrastructure away from Australia’s cities.</p>
<p>Their enduring legacy is likely to be a demand for more housing per Australian, which will take some time to meet.</p>
<p>But even then, the dynamics of cities and tax concessions for householders who own more than one home are likely to conspire to keep pushing prices higher.</p>
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<p><em>Correction: an earlier version of this article said the first census was in 2011, rather than 1911. This has been amended.</em></p><img src="https://counter.theconversation.com/content/223548/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Yogi Vidyattama previously (in 2020) received funding from ACT Government for economic research related to housing. </span></em></p>Even changing the tax system won’t end steadily-climbing property prices. They are the result of urbanisation, and while COVID has eased some of the pressures, it has added some more.Yogi Vidyattama, Associate Professor, Faculty of Business, Government and Law, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2223512024-02-12T19:23:13Z2024-02-12T19:23:13ZThe private sector housing experiment has failed: Ottawa must now step up on social housing<p>Politicians of all stripes say that <a href="https://www.cbc.ca/news/politics/trudeau-poilievre-housing-election-1.6970389">housing affordability is a top priority</a>. But few are saying much about social housing — the kind that’s needed for low-income households in greatest need of affordable rental housing.</p>
<p>Social housing is non-market housing, either publicly owned or non-profit, and substantially subsidized to ensure low-income renter households pay no more than 30 per cent of their gross income on rent. Canada was committed to this kind of housing after the Great Depression, but <a href="https://publications.gc.ca/Collection-R/LoPBdP/modules/prb99-1-homelessness/housing-e.htm">began to step away from it in the early 1990s.</a></p>
<p>With funding from the Social Sciences and Humanities Research Council (SSHRC), the <a href="https://www.moresocialhousing.ca/">Social Housing and Human Rights coalition</a> is bringing together researchers, advocates and people across Canada experiencing homelessness and housing precarity to raise public awareness about the causes and solutions to the lack of housing for low-income renters. </p>
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Read more:
<a href="https://theconversation.com/canadas-housing-crisis-will-not-be-solved-by-building-more-of-the-same-175221">Canada’s housing crisis will not be solved by building more of the same</a>
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<h2>Failed private sector experiment</h2>
<p>I am a researcher and member of the coalition organizing committee. We <a href="https://mra-mb.ca/wp-content/uploads/Social-Housing-and-Human-Rights-Conference-Primer-small.pdf">have synthesized research</a> that tells the story of a 30-plus year experiment, aligned with the rise of neoliberalism, to rely on the private sector to respond to all housing needs. </p>
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Read more:
<a href="https://theconversation.com/what-exactly-is-neoliberalism-84755">What exactly is neoliberalism?</a>
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<p>It hasn’t worked.</p>
<p>Our examination of housing policy in liberal democracies including Canada, the United States, the United Kingdom, Australia and throughout Europe leads us to conclude, as does the Organisation for Economic Co-operation and Development (OECD), that <a href="https://www.oecd.org/social/social-housing-policy-brief-2020.pdf">“social housing is a key part of past and future housing policy.</a>”</p>
<p>We conclude that if we are to begin to make progress on an increasingly daunting challenge, the government of Canada will need to do two things:</p>
<ol>
<li><p>Create a minimum of 50,000 new rent-geared-to-income social housing units each year for 10 years, starting now. These units should be targeted for the lowest income renter households and those experiencing homelessness, and should have rents permanently set at no more than 30 per cent of household income.</p></li>
<li><p>Invest now in the acquisition, construction, operation and maintenance of new and existing public, non-profit and co-operative-owned housing that meets the unique and varied requirements of low-income renters and people experiencing homelessness.</p></li>
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Read more:
<a href="https://theconversation.com/housing-co-ops-could-solve-canadas-housing-affordability-crisis-181104">Housing co-ops could solve Canada's housing affordability crisis</a>
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<h2>Just scratching the surface</h2>
<p>We recognize that adding 50,000 additional units annually is not nearly enough. Instead, we recommend this as a minimum, based on the Canada Mortgage and Housing Corporation’s (CMHC) projected <a href="https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/housing-research/research-reports/accelerate-supply/housing-shortages-canada-updating-how-much-we-need-by-2030">need to expand overall supply by building 5.8 million homes</a> over the next decade. </p>
<p><a href="https://www.moresocialhousing.ca/wp-content/uploads/2023/11/More-Social-Housing-Call-to-Action-backgrounder.pdf">We estimate</a> that because 33.5 per cent of households are renters, 194,300 of this supply should be rental. Since the <a href="https://chec-ccrl.ca/2021-census/">CMHC has found that approximately a quarter of renters are paying more than 30 per cent of income on rent, living in housing in poor repair or living in crowded conditions,</a> we believe a minimum of 48,575 (rounded up to 50,000) of new rental housing should be at rent-geared-to-income rates affordable to low-income renters. </p>
<p>This more than triples the target in the federal government’s <a href="https://www.placetocallhome.ca/">National Housing Strategy</a> and redirects the focus from modest affordability to deeply affordable. This amount is relatively consistent with <a href="https://www.scotiabank.com/ca/en/about/perspectives.articles.economy.2023-01-social-housing-scotiabank-report.html">calls to double the number of social housing units to more closely align with the OECD average</a>.</p>
<p>New social housing supply requires capital investments for construction so that new housing can be built, and for acquisition so existing properties can be purchased and repurposed or renovated as needed. </p>
<p>New and existing social housing supply also requires investments in ongoing subsidies to support the costs of operating the housing while charging rent-geared-to-income rents. It will require ongoing capital investments for the purpose of maintaining the quality of housing and preserving the stock. Operating costs may include services and programs that support tenants.</p>
<h2>Calls for change ignored</h2>
<p>Social Housing and Human Rights coalition members are now reaching out to MPs across the country to make the case that more social housing is needed. It’s a challenge. </p>
<p>Despite the evidence, some are quick to tell us they don’t believe social housing is needed and that governments should simply incentivize private sector developers and remove “red tape.”</p>
<p>But our research shows no evidence this will work. </p>
<p>Private-sector solutions were the focus of cost-shared federal/provincial/territorial initiatives beginning in 2001 through the <a href="https://scics.ca/en/product-produit/a-framework-to-guide-housing-initiatives-in-canada-by-the-provincial-and-territorial-pt-ministers-responsible-for-housing/">Affordable Housing Framework Agreement</a>. <a href="https://chec-ccrl.ca/wp-content/uploads/2022/08/Background-Primer-on-Canadas-Housing-system-APRIL-20-2021.pdf">But the emphasis on limited capital grants per unit resulted in modest development of units renting at 80 per cent of average market rents</a>, unaffordable to low-income households. Furthermore, agreements requiring rents be set at affordable rates for 15 years have now expired.</p>
<p>The shortage of truly affordable rental housing across Canada has only worsened because governments have not been willing to invest in social housing. Yes, it is expensive — at least in the short term — and it is getting more expensive each year. But as <a href="https://www.munifin.fi/whats-new/finnish-system-for-affordable-social-housing-supports-social-mixing-and-brings-down-homelessness/#:%7E:text=No%20family%20homelessness%20in%20Finland,are%20affordable%20social%20housing%20apartments.">demonstrated by Finland, a country that has remained committed to social housing investment</a>, it pays off in the long term. </p>
<figure class="align-center ">
<img alt="A red brick apartment building." src="https://images.theconversation.com/files/574492/original/file-20240208-20-rd3c9w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/574492/original/file-20240208-20-rd3c9w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=346&fit=crop&dpr=1 600w, https://images.theconversation.com/files/574492/original/file-20240208-20-rd3c9w.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=346&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/574492/original/file-20240208-20-rd3c9w.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=346&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/574492/original/file-20240208-20-rd3c9w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=435&fit=crop&dpr=1 754w, https://images.theconversation.com/files/574492/original/file-20240208-20-rd3c9w.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=435&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/574492/original/file-20240208-20-rd3c9w.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=435&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">An affordable housing complex in Espoo, Finland.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
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<h2>Lessons from Finland</h2>
<p><a href="https://www.thestar.com/opinion/contributors/how-finland-managed-to-virtually-end-homelessness/article_bde7a0aa-5e51-5700-b272-6347ddf69f04.html">The Finns have tackled homelessness like no other country</a>. They know that without public investment in safe, stable housing, people are at higher risk of having poor mental and physical health, poor education outcomes, weaker labour market attachment and a host of other issues that governments must attend to. </p>
<p>There are many strategies needed simultaneously to address housing affordability. The expansion of social housing supply is one.</p>
<p>But calls are all too often ignored by governments turning to the private sector for low-cost quick fixes that continue to fail those in greatest need.</p><img src="https://counter.theconversation.com/content/222351/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Shauna MacKinnon receives funding from Social Sciences and Humanities Research Council</span></em></p>There are many strategies needed simultaneously to address housing affordability in Canada. The expansion of social housing supply is a particularly effective one.Shauna MacKinnon, Professor and Chair, Department of Urban and Inner-City Studies, University of WinnipegLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2216762024-02-08T17:54:55Z2024-02-08T17:54:55ZEncampment sweeps in Edmonton are yet another example of settler colonialism<p>It feels like housing is at a tipping point in the city of Edmonton. </p>
<p>There have been four main events highlighting the situation:</p>
<ul>
<li><a href="https://www.nandalaw.ca/encampments">A case</a> that was brought against the City of Edmonton by the Coalition for Justice and Human Rights about encampment sweeps;</li>
<li><a href="https://edmontonjournal.com/news/local-news/edmonton-police-plan-massive-130-plus-homeless-encampment-sweep-ahead-of-holidays">Encampment sweeps</a> perpetrated by the Edmonton police days before a forecasted deadly cold snap;</li>
<li>A decision by Edmonton City Council to <a href="https://www.cbc.ca/news/canada/edmonton/edmonton-council-alberta-cabinet-homeless-housing-1.7085148">declare a housing and homelessness emergency</a>;</li>
<li>The <a href="https://globalnews.ca/news/10232393/alberta-government-edmonton-homeless-centre/">Alberta government’s announcement</a> that encampments will continue to be cleared out, while also arguing there’s sufficient shelter room. That contention <a href="https://edmonton.citynews.ca/2024/01/11/edmonton-mayor-declaring-housing-emergency/">has been refuted</a> by advocates, shelter workers and the province’s official housing critic. </li>
</ul>
<p>These events should be understood within ongoing settler colonialism and a housing crisis endemic in Canada’s broader housing system.</p>
<h2>Housing in Canada</h2>
<p>The state of housing both in Canada and globally <a href="https://theconversation.com/new-study-reveals-intensified-housing-inequality-in-canada-from-1981-to-2016-173633">is worsening</a>, but the <a href="https://thewalrus.ca/there-is-no-housing-crisis/">housing crisis is not new</a>.</p>
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Read more:
<a href="https://theconversation.com/two-thirds-of-canadian-and-american-renters-are-in-unaffordable-housing-situations-221954">Two-thirds of Canadian and American renters are in unaffordable housing situations</a>
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<p><a href="https://www.homelesshub.ca/blog/five-things-know-about-pre-1964-canadian-housing-policy">While affordable housing policies in Canada emerged following the Second World War</a>, colonialism is foundational to housing policy, evidenced by the <a href="https://www.homelesshub.ca/about-homelessness/population-specific/indigenous-peoples#:%7E:text=Research%20shows%20that%20Indigenous%20homelessness,%2C%20at%2011%2D96%25.">high rates</a> of housing vulnerability that Indigenous Peoples face. </p>
<p>For example, residential schools, <a href="https://www.thecanadianencyclopedia.ca/en/article/pass-system-in-canada#:%7E:text=Used%20in%20conjunction%20with%20policies,19th%20and%20early%2020th%20centuries.">the pass system</a> and other strategies to force relocation, outlined by history scholar <a href="https://www.cbc.ca/books/clearing-the-plains-by-james-daschuk-1.6863578">James Daschuk</a> in his book <em>Clearing The Plains</em>, have limited housing for Indigenous Peoples. Colonial policies are foundational to the current housing system and people’s housing experiences.</p>
<p>Under Canada’s <a href="https://laws-lois.justice.gc.ca/eng/acts/n-11.2/FullText.html">National Housing Strategy Act</a> passed in 2019, the federal government affirmed the human right to housing. This means governments of all levels have a responsibility to recognize this human right. </p>
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<a href="https://theconversation.com/clearing-the-plains-continues-with-the-acquittal-of-gerald-stanley-91628">'Clearing the plains' continues with the acquittal of Gerald Stanley</a>
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<h2>Encampment sweeps violate human rights</h2>
<p>This isn’t happening, apparently, when it comes to encampments, which are both a site of <a href="https://make-the-shift.org/homeless-encampments/">human rights violations and of human rights claims</a>. </p>
<p><a href="https://edmonton.citynews.ca/2024/01/16/edmonton-homeless-encampment-lawsuit-dismissed/#:%7E:text=In%20his%20decision%20Tuesday%2C%20Justice,an%20end%20to%20the%20lawsuit.">The Coalition for Justice and Human Rights was denied legal standing by the judge in its case against Edmonton</a> because he ruled it wasn’t the right group to represent the interests of people experiencing homelessness. </p>
<p>While that means this particular case will not proceed, it garnered significant media attention and does not refute the claims by the coalition, only its standing.</p>
<p>The coalition argued human rights were violated during encampment sweeps. It sought to maintain permanent restrictions on encampment evictions, and had been supported by many advocates in Edmonton, including those <a href="https://www.nandalaw.ca/encampments">who submitted affidavits</a>. </p>
<p>While the coalition’s claims are important, appealing to human rights does not necessarily identify the depth of colonialism’s role in the ongoing events. </p>
<p>Encampment evictions also happen in the context of treaty rights and the <a href="https://www.un.org/development/desa/indigenouspeoples/wp-content/uploads/sites/19/2018/11/UNDRIP_E_web.pdf">United Nations Declaration on the Rights of Indigenous Peoples</a>, which are violated when Indigenous people are forcibly removed from land. </p>
<p>In the case of the sweep of one Edmonton encampment, <a href="https://globalnews.ca/news/9616641/edmonton-homeless-camps-response-change/">a sacred fire</a> was extinguished despite the agreement between an Elder and Edmonton police that a few tents and the fire could remain. </p>
<p><a href="https://jessethistle.com/">Jesse Thistle</a>, a Métis-Cree assistant professor at York University, <a href="https://www.homelesshub.ca/IndigenousHomelessness#:%7E:text=Indigenous%20homelessness%20is%20a%20human,ability%20to%20acquire%20such%20housing.">has developed a definition</a> of Indigenous homelessness that doesn’t just encompass structure and property rights, but also land, traditions, ancestors and family — all of which amplify how the loss of community and relationships that are present at an encampment entrenches homelessness.</p>
<p>Housing scholar and activist Andrew Crosby <a href="https://doi.org/10.22215/etd/2022-15310">uses the concept of domicide</a> — the destruction of home — to examine how settler colonialism is founded on the destruction of Indigenous homes and lives. </p>
<p>Domicide is applicable to the encampment sweeps in Edmonton, the historical domicide that enabled the settlement of Edmonton in the first place, and the laws that governed the unsuccessful lawsuit launched by the Coalition for Justice and Human Rights.</p>
<h2>Coming together in colonialism</h2>
<p>Removing unhoused people, who are disproportionately Indigenous, illustrates that public land is not for living on and is instead settler colonial space. When authorities make reference to “public safety” concerns about encampment, unhoused people are positioned as dangerous. </p>
<p>The destruction of those encampments simply drives people who are unhoused further to the margins. Sweeps do not end people’s experiences of homelessness; they move them out of public view.</p>
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<p>The actions of the City of Edmonton, the city’s police force and the government of Alberta — as well as the courts — have coalesced into an attack on the human and treaty rights of people who are unhoused, as well as the continuation of the removal of Indigenous Peoples from their land.</p>
<p>Homelessness in Edmonton has resulted in <a href="https://www.cbc.ca/news/canada/edmonton/frostbite-amputations-hit-10-year-high-in-edmonton-last-winter-new-data-show-1.6709778">increased amputations</a> due to exposure to extreme cold, while encampment sweeps lead to the overburdening of a shelter system that is already inadequate and the denial of rest for people who are unhoused.</p>
<p>This isn’t to suggest that encampments should be enshrined as a human rights housing achievement. But punitive approaches like encampment sweeps perpetuate settler colonialism and prioritize the perceptions and preferences of the ruling class.</p><img src="https://counter.theconversation.com/content/221676/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Katie MacDonald receives funding from the Social Sciences and Humanities Research Council. </span></em></p>Encampment sweeps in Edmonton are a brutal attack on both human and treaty rights, as well as a continuation of the violent removal of Indigenous Peoples from their land.Katie MacDonald, Associate Professor of Sociology and Interdisciplinary Studies, Athabasca UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2219542024-02-04T13:33:44Z2024-02-04T13:33:44ZTwo-thirds of Canadian and American renters are in unaffordable housing situations<figure><img src="https://images.theconversation.com/files/572601/original/file-20240131-17-86e7f5.jpg?ixlib=rb-1.1.0&rect=55%2C30%2C4032%2C2811&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A new study has found that nearly two-thirds of Canadians and Americans are significantly rent-burdened.</span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><p>Even as housing markets cool in some areas, housing affordability in Canada is <a href="https://globalnews.ca/news/10167093/housing-affordability-bank-canada-index/">the worst in over four decades</a> due, in part, to sustained post-pandemic inflation and comparatively higher interest rates. </p>
<p>According to the Canada Mortgage and Housing Corporation — the federal Crown corporation responsible for administering Canada’s National Housing Act — affordability is defined as <a href="https://www.cmhc-schl.gc.ca/professionals/industry-innovation-and-leadership/industry-expertise/affordable-housing/about-affordable-housing/affordable-housing-in-canada">mortgage or rent payments that do not exceed more than 30 per cent of a household’s gross monthly income</a>. </p>
<p>If a family makes $50,000 per year before taxes, for instance, anything more than $15,000 per year (or $1,250 per month) spent on rent would put them in an unaffordable situation. </p>
<p>Unaffordable housing situations have been shown to have serious negative outcomes related to <a href="https://doi.org/10.1016/j.amepre.2010.08.002">communities’ health</a>, <a href="https://doi.org/10.1016/j.regsciurbeco.2018.07.001">crime rates</a>, <a href="https://doi.org/10.1080/0267303042000204296">homelessness</a>, <a href="https://doi.org/10.1080/10511482.2005.9521542">the well-being of children</a> and <a href="https://doi.org/10.1016/j.jhe.2020.101668">economic growth</a>. </p>
<p>Accordingly, younger generations are <a href="https://www.investopedia.com/millennial-homeownership-still-lagging-behind-previous-generations-7510642">deferring the homeownership dream</a> because of their inability to secure mortgage financing, limited entry-level homeownership options and insufficient incomes.</p>
<p>To date, most research and policy work has focused on homeownership, with little emphasis on understanding the current state of rental affordability. It is becoming increasingly important to address affordability, <a href="https://financialpost.com/real-estate/rents-climb-this-spring-supply-tightens-markets">as demand for rental housing has surged</a> since homeownership is becoming out of reach.</p>
<h2>Unaffordability is a growing concern</h2>
<p>As <a href="https://www.uregina.ca/business/faculty-staff/faculty/wilson-grant.html">economic and strategic management researchers</a>, we were curious about three things: the percentage of individuals or families that are in unaffordable rental situations, how household spending patterns have changed to make ends meet, and whether knowledge of rental economics impacts the likelihood of being in an affordable rental situation.</p>
<p>In our forthcoming study of over 1,000 renters in North America in 2023, we examined household income, monthly expenditures (e.g., rent, food, transportation, clothing, travel, etc.) and knowledge of affordability and basic economics. </p>
<p>We assessed affordability understanding by asking participants if they understood the 30 per cent expenditure rule through a series of questions. Renters were self-identifed and recruited via Prolific, the international survey panel.</p>
<p>By comparing the annual incomes and rental expenditures of households in our sample, results showed that 63 per cent of renters were in unaffordable situations. This means nearly two-thirds of Canadians and Americans are significantly <a href="https://doi.org/10.1177/0042098016665953">rent-burdened</a>.</p>
<p>Although we expected the results to indicate some unaffordability situations, we did not expect it to be this great. </p>
<h2>Solutions to rental crisis</h2>
<p>Our data confirms that unaffordability is not just a homeownership issue, but also extends to the rental market. Given that lasting unaffordability has both <a href="https://doi.org/10.1016/j.socscimed.2016.06.014">social and macroeconomic consequences</a>, it is critical that policymakers and industry leaders seek long-term fixes. </p>
<p>But solutions are complex and require a unified approach. Governments must ensure the rental housing supply is efficient to address the increasing affordability concern. </p>
<p>This means Crown corporations and government investments need to be more common. Additionally, civic policies need to promote new housing development and private investment.</p>
<p>For real estate organizations, the demand for affordable rental housing suggests the need to <a href="https://www.avenuelivingam.com/insights/retrofits-housing-supply/">invest in renovating existing accommodations to maintain adequate housing stock</a> and for developers to prioritize new, affordable rental solutions. </p>
<h2>The knowledge and rental affordability link</h2>
<p>One of the most interesting relationships we found in our data was related to “affordability knowledge” — or the expertise tenants have and use to make economical rental housing choices — and the percentage of income spent on rent. </p>
<p>Specifically, as affordability knowledge increased, the likelihood of being in an unaffordable rental accommodation decreased. The data suggests that the more people know about rental affordability, the better they can make informed rental decisions. This is noteworthy, as most of the recent emphasis has been on how governments, developers and landlords can make housing more affordable. </p>
<p>In addition to <a href="https://www.bnnbloomberg.ca/video/we-re-focussing-on-housing-affordability-for-essential-workers-avenue-living-ceo%7E2545781">affordability efforts by major players in the market</a>, affordability education has an important role to play and should be a top priority for policymakers. Investments in educational campaigns could improve household decision-making and rental affordability.</p>
<p>Historically, households have been good at <a href="https://doi.org/10.1017/s136898000700081x">prioritizing their needs versus wants</a> in economic crises. Unfortunately, our results showed that individuals and families are cutting back on more than just luxury items. </p>
<p>For instance, in all areas of spending, households in unaffordable situations are making budget cuts on everything from groceries to physical activities. In short sprints, these spending re-allocations can be justified and even credited as fiscal responsibility. </p>
<p>But over time, these changes can have <a href="https://doi.org/10.1080/10511482.2015.1020321">lasting health and wellness effects</a>. So while renters have an important role to play, the responsibility doesn’t just fall on their shoulders — strategies require participation from governments and developers as well.</p>
<h2>Where to next?</h2>
<p>Although the most straightforward path to rental affordability in Canada and the U.S. <a href="https://doi.org/10.1016/j.jue.2022.103427">relates to increasing supply</a>, such as increasing new rental stock, a holistic approach that includes educating renters on affordability and basic housing economics can also be beneficial. </p>
<p>However, this is only a partial remedy for more systemic issue of a lack of affordable rental housing in developed economies in our study of Canadian and American renters.</p>
<p>Addressing the rent affordability crisis requires effective civic policies and planning as well as private sector investment and participation to ensure long-term sustainable housing.</p>
<p><em>This is a corrected version of a story originally published on Feb. 4. An earlier version of the story said the Canada Infrastructure Bank had invested $150 million in sustainable affordable housing. In fact, the Canada Infrastructure Bank committed $150 million towards sustainable retrofit projects with Avenue Living.</em></p><img src="https://counter.theconversation.com/content/221954/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Grant Alexander Wilson has consulted for, and received research funding from, the real estate owner/operator Avenue Living.</span></em></p><p class="fine-print"><em><span>Tyler Case does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Most research on unaffordable housing has focused on homeownership, but rental affordability is also a serious issue.Grant Alexander Wilson, Assistant Professor, Hill and Levene Schools of Business, University of ReginaTyler Case, Assistant Professor, Edwards School of Business, University of SaskatchewanLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2218592024-01-25T16:27:41Z2024-01-25T16:27:41ZInternational students cap falsely blames them for Canada’s housing and health-care woes<iframe style="width: 100%; height: 100px; border: none; position: relative; z-index: 1;" allowtransparency="" allow="clipboard-read; clipboard-write" src="https://narrations.ad-auris.com/widget/the-conversation-canada/international-students-cap-falsely-blames-them-for-canadas-housing-and-health-care-woes" width="100%" height="400"></iframe>
<p>Immigration, Refugees and Citizenship Canada (IRCC) has announced <a href="https://www.canada.ca/en/immigration-refugees-citizenship/news/2024/01/canada-to-stabilize-growth-and-decrease-number-of-new-international-student-permits-issued-to-approximately-360000-for-2024.html">a new cap on international students</a>. </p>
<p>In 2024, IRCC aims to issue 360,000 study permits, a 35-per-cent reduction from 2023. This announcement comes on the heels of a doubling of the cost-of-living requirement, whereby international students coming to study in any province except Québec have to demonstrate they have <a href="https://www.canada.ca/en/immigration-refugees-citizenship/services/study-canada/study-permit/get-documents.html#doc3">access to $20,635</a>.</p>
<p>There is no doubt that <a href="https://cfsontario.ca/2022/05/26/private-for-profit-colleges-jeopardizing-international-student-communities-across-ontario/">predatory private colleges</a> and <a href="https://opseu.org/news/the-ontario-government-must-address-exploitation-of-international-students-and-properly-fund-public-colleges-opseu-sefpo/178678/">exploitative international student recruiters</a> have acted unethically, and steps must be taken to address their actions. </p>
<p>International students also deserve access to supports and services they need to thrive in Canada.</p>
<p>But dominant media narratives illustrated in headlines like “<a href="https://www.reuters.com/world/americas/canada-set-two-year-cap-international-student-permits-2024-01-22/">Canada to cap international student permits amid housing crunch</a>” are inaccurate and harmful. They also shift responsibility away from those truly responsible: Elected officials at all levels of the government and predatory private colleges. </p>
<h2>Baseless blame</h2>
<p>Media coverage of the cap has also failed to consider the people at the heart of the issue — the international students themselves who, despite their <a href="https://www.canada.ca/en/immigration-refugees-citizenship/corporate/transparency/committees/cimm-mar-03-2022/international-students.html">significant economic ($22.3 billion) and social contributions to Canada</a>, are being blamed for many of <a href="https://www.theglobeandmail.com/business/commentary/article-capping-foreign-students-wont-solve-canadas-immigration-problem/">Canada’s biggest and long-standing challenges</a>.</p>
<p>The media has also reported on the cap’s <a href="https://www.theglobeandmail.com/canada/article-international-students-cap-reaction/">consequences for public post-secondary institutions</a> which, for years, have commodified international students, viewing them as an important revenue source in the face of <a href="https://www.caut.ca/resources/almanac/2-canada-provinces#:%7E:text=The%20share%20of%20college%20funding,34.1%25%20in%202019%2D2020.">shrinking provincial government grants</a>. </p>
<p>These stories have focused on how this policy will have a dire impact on the <a href="https://globalnews.ca/news/10230540/student-concern-queens-university-financial-woes/">financial sustainability</a> of universities, and how they might be forced to hike domestic/Canadian students’ tuition, which will adversely affect Canadians. </p>
<p>This ignores the impact on international students themselves, who have been exploited by provinces and universities for years and <a href="https://www.indiatoday.in/india/story/no-house-no-jobs-canadian-dream-turns-nightmare-for-indian-students-canada-india-news-immigration-2440331-2023-09-26">who are already struggling to make ends meet in Canada</a>. </p>
<p>Some editorialists have argued the cap on visas and stricter work-permit rules will <a href="https://www.theglobeandmail.com/politics/opinion/article-ottawa-finally-acts-on-international-student-visas-setting-a-challenge/">fix the exploitative post-secondary education “industry.”</a> </p>
<p>The federal government has committed to creating a <a href="https://www.canada.ca/en/immigration-refugees-citizenship/news/2023/10/changes-to-international-student-program-aim-to-protect-students.html">“recognized institution” framework</a> that will see institutions set higher standards for supports, services and outcomes for international students and fast-track study permits.</p>
<p>Likewise, several provinces have committed to <a href="https://www.theglobeandmail.com/canada/article-bc-ontario-planning-crack-down-on-bad-actor-colleges-preying-on/">“cracking down” on predatory colleges</a>.</p>
<p>But there are other ways to prevent the exploitation of international students, including <a href="https://ontariosuniversities.ca/wp-content/uploads/2023/10/Committed-to-Supporting-International-Students-Feb-2023-final.pdf">supporting the transition to studying and living in Canada</a> and creating inclusive learning environments.</p>
<h2>Who’s responsible for the housing crisis?</h2>
<p>The government’s official news release, along with the <a href="https://www.reuters.com/world/americas/canada-set-two-year-cap-international-student-permits-2024-01-22/">media coverage</a> of the announcement, continues to <a href="https://theconversation.com/international-students-are-not-to-blame-for-canadas-housing-crisis-213338">scapegoat international students</a> for some of Canada’s biggest challenges, stating that rapid increases in the number of international students arriving in Canada put “<a href="https://www.canada.ca/en/immigration-refugees-citizenship/news/2024/01/canada-to-stabilize-growth-and-decrease-number-of-new-international-student-permits-issued-to-approximately-360000-for-2024.html">pressure on housing, health care and other services.</a>” </p>
<p>This is neither accurate nor fair. It’s overly simplistic, untrue and xenophobic. </p>
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<a href="https://theconversation.com/whats-behind-the-dramatic-shift-in-canadian-public-opinion-about-immigration-levels-219193">What's behind the dramatic shift in Canadian public opinion about immigration levels?</a>
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<p>Canada’s housing availability and affordability crisis has been decades long in the making. <a href="https://www.cicnews.com/2023/08/is-immigration-causing-canadas-housing-crisis-0838904.html#gs.3hvgdr">Experts believe</a> the housing bubble was caused by a confluence of factors including municipal, provincial/territorial and <a href="https://www.ctvnews.ca/business/what-s-behind-canada-s-housing-crisis-decades-of-policy-failures-says-former-deputy-pm-1.6544653">federal government policies</a>, municipal zoning laws, developers’ interests and central bank policies. </p>
<p>Immigration Minister Marc Miller himself has said <a href="https://www.cicnews.com/2023/08/marc-miller-canadas-immigration-levels-to-remain-steady-or-continue-climbing-0836673.html#gs.3hvi36">immigrants are key to solving the housing crisis</a> because they bring skilled labour into the country. </p>
<p>By overly focusing on demand for housing — and scapegoating immigrants and international students — the government is drawing attention away from immediate actions it could take to increase supply. </p>
<p>The majority of international students cannot afford to compete with Canadians for homes or for rentals. </p>
<p><a href="https://ycar.apps01.yorku.ca/punjabinewcomers/">York University Prof. Tania Das Gupta’s research</a> on Punjabi international students has found many students can only afford to spend a few hundred dollars a month on rent, forcing them to live in <a href="https://www.theglobeandmail.com/canada/article-patrick-brown-brampton-international-student-visa/#:%7E:text=Brampton%20Mayor%20Patrick%20Brown%20is,and%20curb%20unsafe%20living%20arrangements">overcrowded and illegal basements</a>, <a href="https://theconversation.com/canadas-costly-housing-market-leaves-international-students-open-to-exploitation-204242">to share beds, to live in their cars</a> or to <a href="https://nationalpost.com/news/toronto-international-student-sleeping-under-bridge-helped-by-strangers">face homelessness</a>. </p>
<p>These students aren’t the primary driver of rising home prices or rental costs in Canada, and <a href="https://www.thestar.com/business/canadas-international-student-cap-may-offer-temporary-relief-on-rents-some-economists-say/article_0e96f0fc-b941-11ee-bbea-4b52d2a9f68d.html">some economists</a> doubt the cap will have any impact on rental prices. </p>
<h2>Who’s responsible for health-care crisis?</h2>
<p>International students are also being blamed for health-care challenges, despite Canada’s health-care system being <a href="https://www.ctvnews.ca/health/canada-s-health-care-system-is-collapsing-around-us-warns-cma-president-1.5948416#:%7E:text=The%20strain%20placed%20on%20Canada's,opens%20in%20a%20new%20tab">significantly strained since the onset of the COVID-19 pandemic</a> — a time when there was a massive decrease of international students coming to Canada.</p>
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Read more:
<a href="https://theconversation.com/the-pandemic-exposed-the-vulnerability-of-international-students-in-canada-174105">The pandemic exposed the vulnerability of international students in Canada</a>
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<p>In fact, most Canadians believe our provincial/territorial health-care systems have been in decline for more than a decade due to <a href="https://angusreid.org/cma-health-care-access-priorities-2023/">structural issues</a>. </p>
<p>The College of Family Physicians of Canada has been sounding alarm bells for years about Canada’s need for more family physicians <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10125184/">More than six million Canadians don’t have a family doctor</a>. </p>
<p>In its recent <a href="https://www.cfpc.ca/CFPC/media/Resources/Health-Policy/HPGR-FP-Reform-Policy-EN.pdf">policy proposal package</a>, the organization states the most pressing needs for family doctors today include higher remuneration and reduced administrative burdens. International students — or immigrants, more broadly — aren’t named anywhere.</p>
<p>That the federal government is blaming international students for “putting pressure” on the health-care system is both a misrepresentation and an abdication of responsibility.</p>
<h2>Replicating power, privilege</h2>
<p>The cap, as well as the new financial requirements for international students, represent the federal government’s attempt to solve some of the pressing challenges in an ecosystem they helped create. </p>
<p>As Lisa Brunner, an immigration scholar at the University of British Columbia, argues, there are <a href="https://doi.org/10.32674/jcihe.v13i5S.4061">complex ethical issues</a> involved in the ties that bind migration and education. International students will be shut out of Canada due to these new policies, which will ultimately replicate power and privilege. </p>
<p>This pattern of scapegoating in government rhetoric and in media coverage is deeply troubling. It’s already affecting <a href="https://theconversation.com/whats-behind-the-dramatic-shift-in-canadian-public-opinion-about-immigration-levels-219193">public attitudes toward immigration levels</a>, and may spill over to create negative attitudes and behaviour toward immigrants and international students themselves. </p>
<p>Understandably, <a href="https://ici.radio-canada.ca/rci/en/news/2043859/some-international-students-in-toronto-welcome-study-permit-cap-others-worry-for-their-future">international students are concerned</a> and speaking out against the <a href="https://globalnews.ca/video/10245744/maritime-universities-say-international-students-not-to-blame-for-housing-crisis">unfair blame being placed on them</a>.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/international-students-are-not-to-blame-for-canadas-housing-crisis-213338">International students are not to blame for Canada's housing crisis</a>
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<p>It is the responsibility of all levels of government to fix the issues they’ve helped create. This requires taking swift steps to effectively crack down on <a href="https://www.theglobeandmail.com/canada/article-bc-ontario-planning-crack-down-on-bad-actor-colleges-preying-on/">predatory colleges and unethical recruiters</a>, and significantly increase government grants to public universities and colleges. </p>
<p>The government must also invest in health care and create affordable housing. </p>
<p>International students have not created these problems, and the government and media must stop blaming them.</p><img src="https://counter.theconversation.com/content/221859/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Leah Hamilton receives funding from SSHRC.</span></em></p><p class="fine-print"><em><span>Yvonne Su does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Who’s responsible for the factors that led to the federal government’s recently announced cap on international students, and what are the implications for those directly affected?Leah Hamilton, Professor of Organizational Behaviour, Faculty of Business & Communication Studies, Mount Royal UniversityYvonne Su, Assistant Professor in the Department of Equity Studies, York University, CanadaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2213462024-01-23T13:57:58Z2024-01-23T13:57:58ZCould taxing land more than income fix the UK housing crisis?<figure><img src="https://images.theconversation.com/files/570054/original/file-20240118-28-g7dvv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://unsplash.com/photos/brown-grass-near-body-of-water-during-daytime-sHwG19w7ysY">Giulia Hetherington|Unsplash</a></span></figcaption></figure><p>Fifty years ago, a group of activists <a href="https://www.theguardian.com/world/2024/jan/17/centre-point-occupation-housing-homelessness-1974-anniversary">occupied</a> London’s Centre Point Tower in a fabled episode of direct action on housing. At the time, in January 1974, England was beset by rising homelessness and too many empty homes. One of the protesters, Ron Bailey, recently <a href="https://www.theguardian.com/society/2024/jan/17/fifty-years-on-could-we-see-another-centre-point-style-housing-protest">pointed out</a> that this situation “was pretty much like now”.</p>
<p>In fact, the housing crisis is worse now than it was then. In 1974, councils were still building public housing. And house prices and rents were not running as far ahead of earnings as they are today. In the 20 years to 2022, <a href="https://www.ons.gov.uk/peoplepopulationandcommunity/housing/datasets/ratioofhousepricetoresidencebasedearningslowerquartileandmedian">median prices have risen</a> from five to eight times earnings across England, and from seven to 13 times in London.</p>
<p>Quite what is driving this housing cost crisis is a matter of debate. Scholars and politicians agree that supply needs to increase, across the private and, particularly, the public sectors. However, the shortfalls in private newbuild housing – which are often local or sub-regional – do not explain why housing costs so far exceed people’s ability to cover them. </p>
<p>Along with my colleagues <a href="https://profiles.ucl.ac.uk/47330-phoebe-stirling">Phoebe Stirling</a> and <a href="https://www.ucl.ac.uk/bartlett/planning/andrew-purves-">Andrew Purves</a>, I <a href="https://journals.sagepub.com/doi/full/10.1177/09697764221082621">have shown</a> that this disconnect is due to the economic shift, in the latter part of the 20th century, that saw housing transformed from a home into an asset. </p>
<p>Economists, often inspired by the work of <a href="https://www.economist.com/free-exchange/2015/04/01/why-henry-george-had-a-point">Henry George</a>, have long proposed a solution to this problem: a regular tax on land values. Balanced by lower taxes on work, such a levy could play a significant role in easing the housing cost crisis confronting UK families. </p>
<figure class="align-center ">
<img alt="Terrace houses on a London street." src="https://images.theconversation.com/files/570070/original/file-20240118-24-old0n0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/570070/original/file-20240118-24-old0n0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/570070/original/file-20240118-24-old0n0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/570070/original/file-20240118-24-old0n0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/570070/original/file-20240118-24-old0n0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/570070/original/file-20240118-24-old0n0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/570070/original/file-20240118-24-old0n0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">CAPTION.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/a-row-of-brick-houses-with-white-windows-DRsaC2d822E">Collins Independant|Unsplash</a></span>
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<h2>How housing became a financial asset</h2>
<p>At the root of the housing cost crisis is the transformation of housing into a private asset in the 20th century. Successive UK governments worked with financial lenders to activate demand for private housing and shrink the role of the state as direct provider of council homes.</p>
<p>Reduced credit controls in the 1970s, and further banking deregulations, made it easier for families to secure bigger mortgage loans on easier terms and with smaller incomes. Banks and building societies were encouraged to offer a wider range of products, culminating in buy-to-let mortgages <a href="https://www.campionssolicitors.co.uk/history-of-buy-to-let-mortgages">in 1996</a>.</p>
<p>House price growth outpaced underlying inflation and UK housing became a magnet for domestic and international investment. It was now an asset: better than a pension, and the focus of families’ financial aspirations across generations.</p>
<p>UK governments came to see house prices as a barometer for the health of the economy and a political goal. The underlying value of land on which housing sits is now the foundation for the UK economy.</p>
<figure class="align-center ">
<img alt="A row of buildings reflected in a body of water." src="https://images.theconversation.com/files/570071/original/file-20240118-23-mp95i5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/570071/original/file-20240118-23-mp95i5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/570071/original/file-20240118-23-mp95i5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/570071/original/file-20240118-23-mp95i5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/570071/original/file-20240118-23-mp95i5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/570071/original/file-20240118-23-mp95i5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/570071/original/file-20240118-23-mp95i5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">CAPTION.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/brown-concrete-building-near-body-of-water-during-daytime-UD4RP6eqr7Y">Jonny Gios|Unsplash</a></span>
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<h2>Why we should refocus tax on land values</h2>
<p>Homeowners have a “beneficial interest” – an economic stake – in land values, which may rise without any investment or improvement by the owner. The removal of regular tax on that beneficial interest, via the <a href="https://www.legislation.gov.uk/ukpga/1963/25/part/II/chapter/II/crossheading/abolition-of-schedule-a-tax-and-taxation-of-rents-etc/enacted">1963 Finance Act</a>, was one of the ways that government activated demand for private housing.</p>
<p>Reducing tax on earnings and, instead, returning to some form of a regular land value tax would help to solve the housing crisis. This land value tax would be fixed to ownership of any housing and distinct from council tax, as is the case in much of Europe and across the US.</p>
<p>This would increase net workplace earnings. It would also suppress house prices. The relationship between the two, and the extent and speed of any price adjustment, would depend on the balance of tax liability (between earnings and land value) and how quickly the shift happened: too fast and the market would go into shock. </p>
<p>Such a change has the potential to keep people, the over-50s in particular, in the job market. The financial reward from work would increase while the reward from just owning housing, and benefiting from rising land values, would decrease.</p>
<p>It would also make it nonsensical to leave homes empty. Owners would face a tax liability that could either be met by rental income from the building or avoided by selling up. </p>
<p>If taxes on land were to become a bigger part of a household’s liability, then keeping a second home, for amenity or investment, would effectively double that liability.</p>
<p>By increasing the price of luxury or speculative property ownership in this way, taxing land values would help to ensure that land, and the housing on it, is put to productive use, in the sense of being fully occupied. </p>
<p>Overall, it would reduce wealth inequalities centred on housing and restore the function of housing as home, as opposed to asset. </p>
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<img alt="A colourful row of terrace houses in England." src="https://images.theconversation.com/files/570073/original/file-20240118-29-he3dfd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/570073/original/file-20240118-29-he3dfd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=441&fit=crop&dpr=1 600w, https://images.theconversation.com/files/570073/original/file-20240118-29-he3dfd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=441&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/570073/original/file-20240118-29-he3dfd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=441&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/570073/original/file-20240118-29-he3dfd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=554&fit=crop&dpr=1 754w, https://images.theconversation.com/files/570073/original/file-20240118-29-he3dfd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=554&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/570073/original/file-20240118-29-he3dfd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=554&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">CAPTION.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/multicolored-concrete-houses-h95mT1m9Zzs">Bethany Opler|Unsplash</a></span>
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<h2>Why a land value tax is fair</h2>
<p>A regular tax on beneficial interest in land is not an attack on aspiration. It is a means of ensuring that families have affordable access to the housing they need, by re-centering the economy away from housing-based rentierism (making money solely by owning housing).</p>
<p>Land values are created by the agglomeration of human activity. House prices (of which land values are the major component in the highest value areas) increase as cities grow, economies strengthen, and infrastructure is upgraded. Taxing this unearned rent (land values) is therefore fairer than taxing work.</p>
<p>Lots of people would of course object. Private landlords would seek to recover land tax losses through higher building rents. This would be tempered, however, by the release of empty homes to the sale and rental markets. Families would find it easier to buy the homes they need without such a strong asset motive for ownership. </p>
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<img alt="Buildings on a junction in a small English town." src="https://images.theconversation.com/files/570072/original/file-20240118-23-xk277k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/570072/original/file-20240118-23-xk277k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/570072/original/file-20240118-23-xk277k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/570072/original/file-20240118-23-xk277k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/570072/original/file-20240118-23-xk277k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/570072/original/file-20240118-23-xk277k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/570072/original/file-20240118-23-xk277k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">CAPTION.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/brown-and-white-concrete-building-during-daytime-Z9ox5bWHfpg">Liv Cashman|Unsplash</a></span>
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<p>The wider rentier economy, built on untaxed land values, would be floored by a comprehensive taxing of ground rents. But replacing high-land values and low productivity with a focus on productive investment, employment growth, higher rewards from work and more broadly shared prosperity, would be a positive shift. </p>
<p>As the economy restructures away from rentierism, lower land values would make it easier for councils, once again, able to build homes, including in new towns. </p>
<p>Fifty years ago, housing campaigners risked prison to highlight how desperately people needed decent places to live. Without a significant shift away from the <a href="https://rgs-ibg.onlinelibrary.wiley.com/doi/abs/10.1111/j.1475-5661.2009.00366.x">extractive</a> economic model that spawned the housing crisis, the country will continue to be blighted by empty homes and spiralling housing costs.</p><img src="https://counter.theconversation.com/content/221346/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nick Gallent has, in the past, received funding from UKRI, various charitable funders, including RICS, RTPI and housing groups, and from government. He is a Trustee of the Town and Country Planning Association and a Fellow of both the Royal Town Planning Institute and the Royal Institution of Chartered Surveyors </span></em></p>Transferring the tax burden away from people’s earnings and back on to the value of any land that they own would reframe housing as a home, not an asset.Nick Gallent, Professor of Housing and Planning, The Bartlett School of Planning, Faculty of the Built Environment, UCLLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2208072024-01-18T22:34:05Z2024-01-18T22:34:05ZHamilton council passes a bylaw to end renovictions, helping to address housing affordability<figure><img src="https://images.theconversation.com/files/570181/original/file-20240118-29-lbden9.jpg?ixlib=rb-1.1.0&rect=0%2C32%2C5463%2C3606&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Landlords in Hamilton will soon need to apply for a permit for renovations, a move aimed at ending renovictions.</span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><iframe style="width: 100%; height: 100px; border: none; position: relative; z-index: 1;" allowtransparency="" allow="clipboard-read; clipboard-write" src="https://narrations.ad-auris.com/widget/the-conversation-canada/hamilton-council-passes-a-bylaw-to-end-renovictions-helping-to-address-housing-affordability" width="100%" height="400"></iframe>
<p>The City of Hamilton took bold action to end <a href="https://www.cbc.ca/news/canada/hamilton/renoviction-bylaw-1.7086701">renovictions</a>, a practice where tenants are evicted from their homes due to renovations. The city’s <a href="https://pub-hamilton.escribemeetings.com/Meeting.aspx?Id=bfaf56c0-ab0a-4aa8-ae1a-487c82f0f38a&Agenda=Agenda&lang=English">General Issues Committee</a> (comprised of the mayor and all councillors) voted unanimously on Jan. 17 to adopt <a href="https://www.chch.com/hamilton-city-council-passes-anti-renoviction-by-law/">Ontario’s first anti-renoviction bylaw</a>. </p>
<p>Renovictions are one of the leading causes of the <a href="https://www.theglobeandmail.com/real-estate/vancouver/article-even-as-housing-plans-progress-truly-affordable-housing-is-being-lost/">erosion of existing affordable housing</a>. In some cases, renovation work is so extensive that it requires a landlord to have vacant possession of the unit. </p>
<p>However, in many other instances, evictions are done in “<a href="https://renovictionsto.com/RenovictionsTO-RenovictionsReport-Final.pdf">bad faith</a>,” and modest improvements are used as a pretext to remove sitting tenants and dramatically raise the rent for new ones.</p>
<h2>Licenses and permits</h2>
<p>Hamilton City Council will need to ratify the Renovations Licence and Relocation Bylaw at its meeting on Jan. 24. When it comes into effect, it will require any landlord issuing an <a href="https://www.toolsfortenantrights.com/n13-2">N13 eviction notice</a> to obtain a licence from the city, which will cost $715. In order to get that licence, they will need to first obtain a building permit and provide proof from a qualified expert, such as an engineer, that vacant possession is required in order to carry out the renovation work. </p>
<p>In other words, evicting tenants for basic repairs, or to perform a few cosmetic upgrades will no longer be permitted.</p>
<p>If this is approved, the bylaw clearly stipulates that landlords either provide alternative accommodation in another unit, or financial compensation to the tenant for the duration of the renovation. This compensation is a top up between what the tenant was paying in rent and the average market rent of a similar unit.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1747796245119160434"}"></div></p>
<h2>Addressing an existing loophole</h2>
<p>I cannot stress enough how different this is from the current situation facing Ontario tenants. <a href="https://www.ola.org/en/legislative-business/bills/parliament-43/session-1/bill-97">Under existing rules</a>, while tenants have the right to return to their renovated unit once the work has been completed, this rarely happens in practice. </p>
<p>The overarching reason for this is that landlords have no responsibility to their former tenants once the eviction is done. The onus of responsibility to exercise the right to return is squarely and solely placed in the hands of tenants. The relationship between landlord and tenant is severed, and it’s up to the tenant to re-establish it if they want to return home.</p>
<p>That’s the major loophole in the current rules. Combined with a lack of rent control on <a href="https://www.acto.ca/vacancy-decontrol-what-is-it-and-why-does-it-matter/">vacant units</a> (meaning a landlord can charge whatever they want when a new tenant moves in), this creates a huge financial incentive to evict long-term tenants, placing a severe burden on them. Evicting long-term tenants in favour of higher-paying new tenants under the guise of renovictions <a href="https://www.cbc.ca/news/canada/hamilton/hamilton-tenants-affordable-units-1.6796324">erodes much of our existing housing stock that is affordable</a>.</p>
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Read more:
<a href="https://theconversation.com/4-affordable-housing-strategies-that-are-working-in-canada-215137">4 affordable housing strategies that are working in Canada</a>
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<p>Hamilton’s bylaw aims at addressing this in two ways. First, if there are actual instances when the scale of renovations requires tenants to leave, it provides clear pathways and expectations to ensure that they can return once the work is completed. </p>
<p>Second, for those bad faith landlords who want to use renovation merely as a cover to force tenants out of their homes, these new rules provide enough of a disincentive and discouragement to severely curtail and possibly even eliminate the cruel and unjust practice of renovictions.</p>
<p>The bylaw achieves these objectives by binding landlord and tenant together throughout the entire process. It clearly stipulates that the onus of responsibility to exercise the right to return to their former unit is most definitely a shared one between the landlord who owns the home, and the tenant who lives in it and considers it their home.</p>
<p>This is what other successful anti-renoviction and tenant protection policies do, including in <a href="https://www.newwestcity.ca/housing/renovictions-tenant-protection-and-resources">New Westminster, B.C.</a>, which was the first city in Canada to meaningfully address renovictions and <a href="https://www.burnaby.ca/our-city/programs-and-policies/housing/tenant-assistance">Burnaby, B.C.</a>, which arguably has the best tenant protection rules in Canada.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/570221/original/file-20240118-21-5geuz6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="an overhead shot of a row of suburban homes and a playground" src="https://images.theconversation.com/files/570221/original/file-20240118-21-5geuz6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/570221/original/file-20240118-21-5geuz6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/570221/original/file-20240118-21-5geuz6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/570221/original/file-20240118-21-5geuz6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/570221/original/file-20240118-21-5geuz6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/570221/original/file-20240118-21-5geuz6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/570221/original/file-20240118-21-5geuz6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">New Westminster repealed its anti-renoviction municipal bylaw because it became redundant after the provincial government amended the Residential Tenancy Act.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
</figcaption>
</figure>
<h2>Action for change</h2>
<p>It is important to stress that these bylaws don’t emerge out of thin air. They develop through a combination of council members and mayors who champion these causes, staff who conduct research and draft out bylaws as well as advocates, tenants and activists who campaign and organize for a better, fairer and more equitable city. </p>
<p>Several Hamilton councillors have long supported cracking down on renovictions; however, much of the credit for this new bylaw needs to go to <a href="https://acorncanada.org/locations/hamilton-acorn/">ACORN Hamilton</a>, a tenant advocacy and organizing group that has campaigned for years. At their request, I was a delegate at the General Issues Committee meeting in my capacity as a housing expert.</p>
<p>At several council and <a href="https://theconversation.com/cities-must-take-immediate-action-against-renovictions-to-address-housing-crisis-204170">committee meetings</a> over the <a href="https://www.thespec.com/news/hamilton-region/hamilton-city-staff-sorry-about-botched-renovictions-report/article_33aaef91-930b-581f-aa28-62ffa5e7de04.html">past year</a>, tenants and ACORN members shared their own personal experiences of renoviction and its impacts.</p>
<h2>Actual impacts</h2>
<p>Lived experiences often do not show up in statistics. Because of this, it is often <a href="https://doi.org/10.1016/j.geoforum.2021.06.013">hidden from mainstream planning, policy and political debates</a>. And when it’s invisible, it is easy to conclude that renovictions are not a big problem. </p>
<p>My own research, conducted with the <a href="https://www.spno.ca/">Social Planning Network of Ontario</a>, has shown that formal evictions enforced by the courts (and therefore visible within conventional statistics) constitute a <a href="https://www.spno.ca/news/media-releases/144-new-research-report-on-tenant-displacement-across-ontario">tiny fraction of displacement experienced by tenants</a>. </p>
<p>Some <a href="https://www.therecord.com/news/waterloo-region/displaced-renovictions-harassment-pushing-more-vulnerable-tenants-out-of-kitchener-s-inner-suburbs/article_51e68be8-154d-5056-bd74-7d5e74ec5064.html">common tactics used by landlords</a> to force tenants out include offering tenants a few thousand dollars to leave, coercion, intimidation, harassment or ignoring repair requests.</p>
<p>Tenant organizing and advocacy not only fights back against unfair landlords, it provides the necessary push to compel councils to act. Without ACORN’s tireless efforts, Hamilton councillors may not have unanimously adopted Ontario’s first anti-renoviction bylaw.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/wSbjX9NwCHs?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">CTV News looks at how the province of Ontario is attempting to address renovictions.</span></figcaption>
</figure>
<h2>Future housing needs</h2>
<p>In Ontario, this is just the start of action to end renovictions. <a href="https://www.therecord.com/opinion/columnists/waterloo-region-should-consider-legal-protection-for-tenants-against-renovicting-landlords/article_ba8eb223-3b2a-572c-accd-7315e8708dc4.html">Communities across the province</a> are watching closely and developing their own bylaws. </p>
<p>British Columbia provides further inspiration. New Westminster repealed its municipal bylaw in 2021, not because it wasn’t effective (it basically ended renoviction), but because it became redundant after the provincial government <a href="https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/00_02078_01#section49.2">amended the Residential Tenancy Act</a>.</p>
<p>This is the kind of future tenants need in Ontario. There is a growing realization that <a href="https://www.thestar.com/opinion/contributors/the-province-is-setting-a-housing-affordability-trap-for-toronto/article_823f8447-250a-53a4-8b02-2cff8aac11bc.html">we cannot simply build our way out of a housing crisis</a>. We need to build the right kind of supply and proactively work to protect tenants and existing affordable housing. Cracking down on cruel and unjust evictions is an essential way to achieve that.</p><img src="https://counter.theconversation.com/content/220807/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Brian Doucet receives funding from SSHRC and the Canada Research Chairs program. Some of his research is conducted in partnership with the Hamilton Community Foundation, Social Development Centre Waterloo Region and Social Planning Network of Ontario. He has co-written reports on housing and mobility for local governments in Ontario. On Jan. 17, 2024 he delegated in support of Hamilton's renoviction bylaw at the city's General Issues Committee.</span></em></p>Hamilton city council’s vote to pass an anti-renoviction bylaw is an important step in addressing housing affordability in Ontario.Brian Doucet, Canada Research Chair in Urban Change and Social Inclusion, School of Planning, University of WaterlooLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2202902024-01-11T19:10:32Z2024-01-11T19:10:32ZA prefab building revolution can help resolve both the climate and housing crises<figure><img src="https://images.theconversation.com/files/568777/original/file-20240111-26-fi1gdb.jpg?ixlib=rb-1.1.0&rect=650%2C0%2C3231%2C2150&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/real-estate-ecology-concept-1781843480">Sergey Nivens/Shutterstock</a></span></figcaption></figure><p>The world faces an increasing shortage of housing and an escalating climate emergency. These <a href="https://issuu.com/monkeymediamagazines/docs/energy_november_2023_web_magazine/62">urgent global issues</a> call for quick action and innovative solutions. </p>
<p>The numbers show us how stark things are. Construction activities and building operations produce <a href="https://wedocs.unep.org/bitstream/handle/20.500.11822/41133/Building_Construction_2022.pdf?sequence=3&isAllowed=y">more than 40% of the carbon emissions</a> driving global warming. </p>
<p>At the same time, <a href="https://www.ohchr.org/en/press-releases/2023/10/un-expert-urges-action-end-global-affordable-housing-crisis">1.6 billion people</a> live in subpar housing. An alarming 100 million have no house at all. In both Australia and globally, the housing crisis is a pressing and unresolved issue.</p>
<p>Prefabricated building technology offers promising alternative solutions to this dual crisis. Prefab housing modules are made offsite in a factory. The finished components/modules can then be transported and assembled swiftly at the site of the building.</p>
<p>This approach could transform the housing scene. Affordable dwellings could be produced on a massive scale, while greatly reducing the environmental impacts.</p>
<p>This is not merely about building homes. A shift to prefab construction would be a strategic move in line with the Paris Agreement to mitigate climate change.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-world-needs-to-build-more-than-two-billion-new-homes-over-the-next-80-years-91794">The world needs to build more than two billion new homes over the next 80 years</a>
</strong>
</em>
</p>
<hr>
<h2>Cost-efficient and eco-friendly</h2>
<p>Prefab modular construction could be considered a greener alternative in the construction sector. By greatly reducing construction waste (which accounts for <a href="https://nla.gov.au/nla.obj-2983477707/view">40% of landfill</a>) and carbon emissions, it tackles these major environmental concerns head-on. A <a href="https://www.acenet.co.uk/news/industry/mmc-cuts-carbon-emissions-by-up-to-45-academic-study-reveals/">2022 study</a> showed modular construction can slash carbon emissions by up to 45% compared to conventional techniques.</p>
<iframe title="Emissions from construction and building operations" aria-label="Pie Chart" id="datawrapper-chart-yvLU9" src="https://datawrapper.dwcdn.net/yvLU9/1/" scrolling="no" frameborder="0" style="border: none;" width="100%" height="720" data-external="1"></iframe>
<p>The controlled factory-based environment of prefab construction makes it more efficient. This includes integrated <a href="https://theconversation.com/building-activity-produces-18-of-emissions-and-a-shocking-40-of-our-landfill-waste-we-must-move-to-a-circular-economy-heres-how-206188">reclamation and recycling</a> of construction waste. </p>
<p>This approach is highly cost-effective. It’s about being resource-savvy and reducing waste to the bare minimum. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/turning-the-housing-crisis-around-how-a-circular-economy-can-give-us-affordable-sustainable-homes-208745">Turning the housing crisis around: how a circular economy can give us affordable, sustainable homes</a>
</strong>
</em>
</p>
<hr>
<p>Using standardised designs and components on a large scale also cuts the cost of incorporating energy-efficient elements such as better insulation and renewable energy. Building in this way creates structures that are effective, efficient, resilient and help us combat climate change.</p>
<p>Among many possible construction materials, wood or timber is among the most preferred for prefab modular buildings. Timber is <a href="https://greenreview.com.au/mag/NOVEMBER2023.html#pdfflip-PDFF/16/">renewable and an efficient carbon sink</a>. The timber in buildings locks away the CO₂ the trees absorbed from the atmosphere when they were growing.</p>
<p>One creative and sustainable solution to housing shortages is to build modular, adjustable prefab dwelling units. These units are robust and can be adapted to various climates and housing needs with ease. </p>
<p>In a world where cities are growing fast and housing needs are pressing, prefab construction can deliver quality, affordable homes at an impressive pace. It’s an efficient solution for a budget-conscious, carbon-constrained world. </p>
<figure class="align-center ">
<img alt="A house constructed from prefabricated timber parts." src="https://images.theconversation.com/files/568782/original/file-20240111-29-vfolkl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/568782/original/file-20240111-29-vfolkl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/568782/original/file-20240111-29-vfolkl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/568782/original/file-20240111-29-vfolkl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/568782/original/file-20240111-29-vfolkl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/568782/original/file-20240111-29-vfolkl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/568782/original/file-20240111-29-vfolkl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Timber is a sustainable material for building prefab homes.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/house-building-made-by-prefabricated-parts-2346858557">voffka23/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Prefab buildings take many forms</h2>
<p>The beauty of prefab construction lies in its adaptability, making it the building industry’s chameleon. </p>
<p>It can look good almost anywhere, from bustling cityscapes to serene countryside. Imagine a building technique that can seamlessly transition from a cozy mountain cabin to a stylish metropolitan apartment building.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/not-just-daggy-dongas-time-to-embrace-prefabricated-buildings-43120">Not just daggy dongas: time to embrace prefabricated buildings</a>
</strong>
</em>
</p>
<hr>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1422633366604554240"}"></div></p>
<p>Modular homes can be enlarged, modified or even disassembled and moved as communities grow and needs change. </p>
<p>This approach promotes long-term resilience by being adaptable to changes in the climate and housing needs. These buildings are constructed not only for the present, but also for the high-performance requirements of the future.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/prefab-revolution-factory-houses-are-the-secret-to-green-building-42622">Prefab revolution? Factory houses are the secret to green building</a>
</strong>
</em>
</p>
<hr>
<h2>Leading examples from overseas</h2>
<p>We can learn from success stories overseas.</p>
<figure class="align-center ">
<img alt="A crane lifts a module into position in a Berlin office block being built using a modular timber construction process." src="https://images.theconversation.com/files/568780/original/file-20240111-21-lne5r7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/568780/original/file-20240111-21-lne5r7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=348&fit=crop&dpr=1 600w, https://images.theconversation.com/files/568780/original/file-20240111-21-lne5r7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=348&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/568780/original/file-20240111-21-lne5r7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=348&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/568780/original/file-20240111-21-lne5r7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=437&fit=crop&dpr=1 754w, https://images.theconversation.com/files/568780/original/file-20240111-21-lne5r7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=437&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/568780/original/file-20240111-21-lne5r7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=437&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A building module is lifted into position in a Berlin office block built using a modular timber construction process.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/crane-lifting-wooden-building-module-position-2119644065">Jarama/Shutterstock</a></span>
</figcaption>
</figure>
<p><strong><a href="https://www.cchpr.landecon.cam.ac.uk/Research/Start-Year/2020/modular_homes_homeless">A community-focused project</a> in England:</strong> the prefab modular homes in Cambridge are more than just buildings; they are community cornerstones. As well as providing roofs over heads, the project is about creating a sense of belonging. These units, meticulously designed and sustainably built, are shaping the narrative of affordable housing.</p>
<p><strong><a href="https://www.dwell.com/article/prefab-homes-scandinavia-765e7456">Scandinavian eco-friendly living</a>:</strong> Scandinavians have taken modular construction to heart. In this region, known for its design prowess and environmental stewardship, many modular homes are architectural marvels that embody sustainability. Cozy, energy-efficient homes with sleek designs prove that eco-friendly living can be both stylish and functional.</p>
<p><strong><a href="https://blog.prefabium.com/2018/01/prefab-modular-house-wikkelhouse-holland.html">Versatile modular solutions</a> in the Netherlands:</strong> Finch Buildings offers a kaleidoscope of sustainable housing. Here, modular construction is about flexibility and diversity, catering to a range of needs and styles. These timber modular solutions can adapt to different lifestyles and preferences. Housing can be as diverse as the people it shelters.</p>
<p><strong><a href="https://www1.bca.gov.sg/buildsg/productivity/design-for-manufacturing-and-assembly-dfma/prefabricated-prefinished-volumetric-construction-ppvc">Singapore’s urban blueprint</a>:</strong> the city-state is a showcase for the incredible possibilities of prefab modular construction. It’s seamlessly woven into urban planning. Imagine a city where buildings are not just structures, but pieces of a larger, sustainable puzzle. It is a model of how urban development can co-exist with environmental consciousness.</p>
<figure class="align-center ">
<img alt="Larhe modular apartment complex on a green hillside" src="https://images.theconversation.com/files/568783/original/file-20240111-27-1z2jwd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/568783/original/file-20240111-27-1z2jwd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/568783/original/file-20240111-27-1z2jwd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/568783/original/file-20240111-27-1z2jwd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/568783/original/file-20240111-27-1z2jwd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/568783/original/file-20240111-27-1z2jwd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/568783/original/file-20240111-27-1z2jwd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The Interlace is a 1,040-unit apartment complex in Singapore.</span>
<span class="attribution"><span class="source">huntergol hp/Shutterstock</span></span>
</figcaption>
</figure>
<h2>So what’s stopping Australia?</h2>
<p>Australia has been slower than many countries to adopt prefab modular construction. The <a href="https://www.architectureanddesign.com.au/features/comment/barriers-to-prefab-construction-in-australia-and-h">challenges</a> include:</p>
<ul>
<li><p>limited government support and incentives compared to other countries</p></li>
<li><p>a need for more training and expertise in designing and implementing prefab modular construction</p></li>
<li><p>the traditional procurement process in construction is not well suited for prefab methods, so a shift in thinking and approach from construction managers and suppliers is required</p></li>
<li><p>the Australian regulatory environment needs to evolve to promote productivity and support modern construction methods like prefabrication </p></li>
<li><p>a cultural shift within the industry is also needed, so owners and developers demand more sustainable and efficient construction methods.</p></li>
</ul>
<p>The <a href="https://www.mdpi.com/2075-5309/12/9/1355">situation is changing in Australia</a> as the housing crisis has intensified. Recognition of the need for more sustainable, efficient construction methods is growing, leading to a gradual shift in government support and industry adoption. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/building-in-the-same-old-ways-wont-end-the-housing-crisis-we-need-innovation-to-boost-productivity-206862">Building in the same old ways won't end the housing crisis. We need innovation to boost productivity</a>
</strong>
</em>
</p>
<hr>
<h2>Making development sustainable</h2>
<p>The potential role of prefab modular construction in tackling the challenges of climate change and housing shortages cannot be overstated. </p>
<p>Prefab building is charming not just because it is flexible but also because the architectural features have been thoughtfully considered. Every module can be carefully crafted to complement its surroundings. </p>
<p>Adopting this strategy demonstrates a dedication to development that is ecologically conscious, promotes resilience and sustainability and, by meeting house needs, improves community wellbeing.</p><img src="https://counter.theconversation.com/content/220290/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Modular building techniques offer sustainable, affordable and adaptable solutions for a rapidly changing world.Ehsan Noroozinejad, Senior Researcher, Urban Transformations Research Centre, Western Sydney UniversityParisa Ziaesaeidi, Associate Lecturer in Architecture, Western Sydney UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2191932024-01-07T12:34:29Z2024-01-07T12:34:29ZWhat’s behind the dramatic shift in Canadian public opinion about immigration levels?<iframe style="width: 100%; height: 100px; border: none; position: relative; z-index: 1;" allowtransparency="" allow="clipboard-read; clipboard-write" src="https://narrations.ad-auris.com/widget/the-conversation-canada/whats-behind-the-dramatic-shift-in-canadian-public-opinion-about-immigration-levels" width="100%" height="400"></iframe>
<p>In June 2023, Canada’s <a href="https://www.statcan.gc.ca/en/subjects-start/population_and_demography/40-million">population reached 40 million</a>. For the first time in history, the population grew by more than a million (2.7 per cent) in a single year. Temporary and permanent migration accounted for <a href="https://www.statcan.gc.ca/en/about/smr09/smr09_139">96 per cent of this population growth</a>. </p>
<p>Over the past few decades, Canadians have been more positive than negative in their attitudes toward immigrants and immigration. In 2019, Canada was ranked the most accepting country for immigrants (in a survey of 145 countries) on <a href="https://www.cicnews.com/2020/10/canada-most-accepting-country-for-migrants-u-s-6th-poll-1015940.html#gs.1vgl9w">Gallup’s Migrant Acceptance Index</a>. </p>
<p>Over the last few years, Environics public opinion data also indicated Canadians felt very positively about immigrants and immigration levels. </p>
<p>Something changed in 2023.</p>
<h2>A million newcomers in two years</h2>
<p>A few months after reaching this population milestone, the federal government released its new <a href="https://www.canada.ca/en/immigration-refugees-citizenship/news/notices/supplementary-immigration-levels-2023-2025.html">Immigration Levels Plan</a> to welcome 485,000 permanent residents in 2024 and 500,000 in 2025 and 2026. </p>
<p>This announcement came on the heels of an <a href="https://www.environicsinstitute.org/projects/project-details/public-opinion-about-immigration-refugees">Environics public opinion survey</a> revealing a significant increase in the number of Canadians who believe the country accepts too many immigrants. That marks a dramatic reversal from a year ago, when support for immigration levels stood at an all-time high. </p>
<p>Canadians are still more likely to disagree (51 per cent) than agree (44 per cent) that immigration levels are too high, but the gap between these views has shrunk over the past year, from 42 percentage points to just seven. That’s the biggest one-year change in opinion on this question since it was first asked by Environics in 1977. </p>
<p>Rising concerns about the number of arrivals are evident across Canada, but are most widely expressed in Ontario and British Columbia.</p>
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<p>Environics has been surveying Canadians about immigration on a regular basis since 1977. The <a href="https://www.environicsinstitute.org/projects/project-details/public-opinion-about-immigration-refugees">latest survey</a> of more than 2,000 Canadians was conducted in September 2023 in partnership with the <a href="https://www.centuryinitiative.ca/">Century Initiative</a>, a non-profit lobbying and charity group.</p>
<p>The survey was conducted to ensure representation by region, age, gender and educational attainment.</p>
<p>Apart from rising public concerns about immigration levels, there has been no corresponding change in how Canadians feel about immigrants themselves in terms of how they’re integrating and what they contribute to Canadian society. </p>
<p>The public is much more likely to say that newcomers make their own communities a better place than a worse one.</p>
<h2>Housing crisis concerns</h2>
<p>Importantly, the belief that immigration levels are too high is largely driven by perceptions that newcomers may be contributing to the housing crisis in terms of availability and affordability. </p>
<p>As researchers who study attitudes toward immigrants and immigration, we believe it is critical to pay attention to this shift.</p>
<p>There is a large body of research examining how <a href="https://doi.org/10.1177/1368430220983470">perceived threat/competition</a> predicts attitudes toward immigrants and immigration. </p>
<p>This research shows that negative attitudes toward immigrants can develop when situational factors — for example, <a href="https://s3.documentcloud.org/documents/22066660/housing-shortages-canada-solving-affordability-crisis-en.pdf">housing shortages</a>, <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/231219/dq231219a-eng.htm">inflationary pressures</a> and a rise in <a href="https://www.birmingham.ac.uk/news/2023/how-the-global-rise-of-authoritarianism-is-misunderstood-and-why-it-matters">anti-immigration ideologies</a> — combine to create perceptions of group competition.</p>
<p><a href="https://doi.org/10.1111/j.1530-2415.2011.01269.x">Perceived competition</a> may be rooted in real or imagined national economic challenges, as well as beliefs about access to housing, employment and other resources.</p>
<p>In September 2023, when Environics conducted its latest survey, there was a lot of media coverage about <a href="https://nationalpost.com/news/canada/canada-international-students-housing">the housing crisis</a>, including the <a href="https://www.theglobeandmail.com/canada/british-columbia/article-western-canada-flow-of-international-students-worsening-housing-crisis/">scapegoating of international students</a>. It’s possible such coverage may have hardened some Canadians’ attitudes toward immigration levels.</p>
<p>In reality, Canada’s housing shortage was fuelled for decades by myriad factors, including municipal zoning laws, developers’ special interests and public policy on housing. As other scholars have argued, curbing migration is not a solution to this complex issue, nor is it moral. </p>
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<strong>
Read more:
<a href="https://theconversation.com/think-curbing-overseas-migration-will-end-the-housing-crisis-it-wont-and-we-cant-afford-to-do-it-211120">Think curbing overseas migration will end the housing crisis? It won't – and we can't afford to do it</a>
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<h2>Attitudes towards immigrants may change</h2>
<p>Policymakers and community leaders should pay close attention to public attitudes toward immigration levels as they strive to build a diversified and robust immigration system and create <a href="http://p2pcanada.ca/wp-content/blogs.dir/1/files/2023/03/Welcoming-Toolkit-I-Measuring-Welcoming-Communities.pdf">welcoming communities for immigrants</a>. </p>
<p>The latest research demonstrates the public still feels positively toward immigrants and their many contributions to communities and Canadian society. However, there seems to be growing concerns about Canada’s capacity to effectively resettle immigrants, in part due to concerns that newcomers may be contributing to the housing crisis. </p>
<p>If Canadians continue to blame immigrants for the housing crisis, their attitudes toward immigrants themselves — as opposed to immigration levels — may harden. How Canadians feel about immigration levels may also impact the type and level of supports immigrants can access as they resettle, <a href="https://www.taylorfrancis.com/chapters/edit/10.4324/9781315178080-15/role-attitudes-migration-victoria-esses-leah-hamilton-danielle-gaucher">whether they experience discrimination in the housing and labour markets</a> and whether they’re <a href="https://theconversation.com/as-canada-welcomes-historic-numbers-of-immigrants-how-can-communities-be-more-welcoming-206054">warmly welcomed</a> by their communities. </p>
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Read more:
<a href="https://theconversation.com/creating-a-welcoming-and-supportive-environment-helps-immigrants-better-integrate-219787">Creating a welcoming and supportive environment helps immigrants better integrate</a>
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</em>
</p>
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<p>In order to ensure continued public support for immigration, it’s important for political leaders at all levels to address and counter perceptions of threat and competition over housing, jobs and other resources.</p>
<p>In addition to making critical public policy decisions to address Canada’s housing shortage, this will also require fair media coverage and representation of immigrants. </p>
<hr>
<p><em>This article was co-authored by Keith Neuman, Senior Associate at Environics Institute for Survey Research.</em></p><img src="https://counter.theconversation.com/content/219193/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Leah Hamilton receives funding from SSHRC.</span></em></p>The number of Canadians who believe there is too much immigration to Canada rose sharply in 2023. Why have public opinions changed so much in the last year?Leah Hamilton, Vice Dean, Research & Community Relations, & Professor of Organizational Behaviour, Faculty of Business & Communication Studies, Mount Royal UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2144672023-12-21T03:54:57Z2023-12-21T03:54:57ZWhat is pattern book development and how can it help ease the housing crisis?<figure><img src="https://images.theconversation.com/files/556433/original/file-20231029-24-97tdqw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Sydney terrace housing.</span> <span class="attribution"><span class="source">David Kroll</span></span></figcaption></figure><p>Australian cities are grappling with ways to increase housing supply and make it more affordable. One suggested solution is “pattern book” development. The idea <a href="https://www.theguardian.com/australia-news/2023/sep/04/nsw-premier-open-to-pattern-book-housing-across-sydney-as-solution-for-crisis">made headlines</a> when proposed recently by <a href="https://www.housingnow.com.au/">Housing Now</a>, an alliance of businesses and lobby groups in New South Wales. </p>
<p>The problem, they argue, is that housing projects take years to process, due to overly lengthy processes of design, planning and public consultation. The group aims to fast-track development by commissioning “a modern pattern book with a suite of approved designs by recognised architects developed in partnership with local neighbourhoods”. </p>
<p>These ready-made, pre-approved designs for townhouses, terraces and low-rise apartments could then be rolled out at a much faster pace. This, Housing Now claims, would clear the backlog and cut the time it takes to make housing happen. In the past, the alliance <a href="https://static1.squarespace.com/static/64a63292c77d827c598c292a/t/64f042a4cec397286e72dfcc/1693467313798/Housing+Now+-+A+United+Community+Plan+for+More+Homes.pdf">argues</a>, “many of the world’s greatest cities were designed using pattern books”. </p>
<p>What then is pattern book development? Could it help ease the housing crisis?</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/the-housing-and-homelessness-crisis-in-nsw-explained-in-9-charts-200523">The housing and homelessness crisis in NSW explained in 9 charts</a>
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<h2>What are architectural pattern books?</h2>
<p>The term “pattern book” originally referred to books with design templates for textiles, wallpapers, sewing or knitting. For housing, the term is applied to books illustrating a range of architectural designs that could be copied or used as inspiration. </p>
<p>Since the early Renaissance, pattern books allowed architects, builders and clients to share and advertise designs to a wider audience. An example in Victorian Britain was <a href="https://openlibrary.org/books/OL23283282M/The_builder%27s_practical_director">The Builder’s Practical Director</a> (1855), which contains a range of house designs with plans and facades. Architect and surveyor E.L. Tarbuck wrote this book as a reference guide for anyone wanting to build a house.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/556416/original/file-20231029-19-7j1npz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/556416/original/file-20231029-19-7j1npz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=824&fit=crop&dpr=1 600w, https://images.theconversation.com/files/556416/original/file-20231029-19-7j1npz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=824&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/556416/original/file-20231029-19-7j1npz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=824&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/556416/original/file-20231029-19-7j1npz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1035&fit=crop&dpr=1 754w, https://images.theconversation.com/files/556416/original/file-20231029-19-7j1npz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1035&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/556416/original/file-20231029-19-7j1npz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1035&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">House design from a popular 19th-century pattern book.</span>
<span class="attribution"><span class="source">E.L. Tarbuck, The Builder’s Practical Director (London: J. Hagger, 1855), p. 58</span></span>
</figcaption>
</figure>
<h2>Were cities designed with pattern books?</h2>
<p>Certainly, there are houses resembling designs from pattern books across the Western world, including cities such as London and Dublin. </p>
<p>However, the idea that most houses were simply direct copies of designs from such books is unlikely to be historically correct. Until the mid-20th century at least, pattern books were more often used as <a href="https://www.tandfonline.com/doi/full/10.1080/03058034.2017.1346882">inspiration for designers</a>, rather than being merely copied without any deviations. </p>
<p>The growth of many cities in the 19th and early 20th centuries was certainly based on formulaic housing patterns. The rapid urbanisation that came with the Industrial Revolution produced a wide range of terraced, detached and semi-detached houses or apartment blocks with similarities and repetition in their layout and planning. </p>
<p>These repeating patterns were the result of a combination of drivers. </p>
<p>In Britain and Ireland, the leasehold development system played an important role, as small land parcels were laid out in repetitive patterns (often by estate surveyors) and then <a href="https://books.google.com.au/books?id=AJelDwAAQBAJ&lpg=PA1&pg=PT49#v=onepage&q&f=false">leased to different builders</a>. These “masterplans” created a kind of template with approved housing types on which builders could base their designs. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/562367/original/file-20231129-19-q1zu3w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/562367/original/file-20231129-19-q1zu3w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/562367/original/file-20231129-19-q1zu3w.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/562367/original/file-20231129-19-q1zu3w.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/562367/original/file-20231129-19-q1zu3w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/562367/original/file-20231129-19-q1zu3w.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/562367/original/file-20231129-19-q1zu3w.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Houses on the Minet Estate in Lambeth, South London, constructed by different builders under the leasehold system.</span>
<span class="attribution"><span class="source">David Kroll</span></span>
</figcaption>
</figure>
<p>The designs were often based on tried and tested precedents, which had evolved slowly over time. For example, the first houses to emerge in <a href="https://www.routledge.com/Dublins-Bourgeois-Homes-Building-the-Victorian-Suburbs-1850-1901/Galavan/p/book/9781138392670">Dublin’s early 19th-century suburbs</a> were based on the terraced house, a familiar housing typology since medieval times. </p>
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<em>
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Read more:
<a href="https://theconversation.com/englishmans-castle-slum-or-cultural-icon-the-fall-and-rise-of-the-terraced-house-53019">Englishman's castle, slum, or cultural icon? The fall and rise of the terraced house</a>
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<p>In London, another driver was that houses were codified into so-called classes or “rates” in the <a href="https://en.wikipedia.org/wiki/Building_Act_1774#Building_rates">Building Act of 1774</a>. This seems to have further reinforced patterns of similar housing types.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/563892/original/file-20231206-21-z2krp3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/563892/original/file-20231206-21-z2krp3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=440&fit=crop&dpr=1 600w, https://images.theconversation.com/files/563892/original/file-20231206-21-z2krp3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=440&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/563892/original/file-20231206-21-z2krp3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=440&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/563892/original/file-20231206-21-z2krp3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=553&fit=crop&dpr=1 754w, https://images.theconversation.com/files/563892/original/file-20231206-21-z2krp3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=553&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/563892/original/file-20231206-21-z2krp3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=553&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Terraced houses in Pembroke Road North, Dublin, from 1816.</span>
<span class="attribution"><span class="source">Susan Galavan</span></span>
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<h2>Could pattern books ease the housing crisis?</h2>
<p>Housing Now’s proposal of pre-approved design templates and development patterns could indeed help speed up planning approvals for new housing and support planned increases in urban densities. We would still need to consider carefully how this could work in detail, of course. </p>
<p>This housing would need to align with urban design and planning strategies, such as the <a href="https://www.planning.nsw.gov.au/plans-for-your-area/local-planning-and-zoning/strategic-planning-toolkit">regional and district plans in NSW</a>. The proposed typologies would also need to suit the context of their specific settings such as established suburbs, former industrial areas or alongside major highways. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/planning-laws-protect-people-a-poorly-regulated-rush-to-boost-housing-supply-will-cost-us-all-213068">Planning laws protect people. A poorly regulated rush to boost housing supply will cost us all</a>
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<p>A risk is that these pattern book templates will be too monotonous and too prescriptive for people’s needs. Some flexibility in the design and choice would seem sensible. </p>
<p>Pre-approved pattern book templates could set the overall building form and type while still allowing for different designs. Such an approach has historical precedents. </p>
<p>One example is the 19th-century <a href="https://en.wikipedia.org/wiki/Hobrecht-Plan">Hobrecht Plan for Berlin</a>, which determined the building heights and their outline. </p>
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<p>A more recent example (from 1993-2000) of an area developed within an overall master plan of housing types and forms is <a href="https://archello.com/project/borneo-sporenburg-amsterdam">Borneo-Sporenburg in Amsterdam</a>. Within their set terrace-house typology and massing, this development achieved fairly high densities while allowing each house to be custom-designed. </p>
<p>A similar approach could be used to plan increases in density of established neighbourhoods through pre-approved, pattern book housing forms. </p>
<p>Proactive and innovative proposals that help speed up planning approvals and construction of housing are very welcome and urgently needed. One question that remains, however, is how to ensure this new housing will be affordable to those in need.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-do-we-get-urban-density-just-right-the-goldilocks-quest-for-the-missing-middle-211208">How do we get urban density 'just right'? The Goldilocks quest for the 'missing middle'</a>
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<img src="https://counter.theconversation.com/content/214467/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Kroll's research on London housing was funded by the Arts and Humanities Research Council (AHRC) </span></em></p><p class="fine-print"><em><span>Susan Galavan's research on Dublin housing was funded by the Irish Research Council.</span></em></p>Pattern book housing has been proposed as a way to speed up housing supply in New South Wales. It certainly worked in the past.David Kroll, Senior Lecturer in Architecture, University of AdelaideSusan Galavan, Lecturer in Architecture, Atlantic Technological UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2193892023-12-18T00:32:19Z2023-12-18T00:32:19ZHousing and the Albanese government: a mid-term report card<p>The Albanese government can justly claim to have reasserted Commonwealth leadership on housing since its election in 2022. Media attention has focused mainly on the <a href="https://www.theguardian.com/australia-news/2023/sep/11/greens-support-labor-housing-australia-future-fund-albanese-government">legislative stoush</a> with the Greens over the Housing Australia Future Fund. But that’s only one element of a <a href="https://www.ppesydney.net/content/uploads/2023/12/4-Pawson.pdf">raft of initiatives</a> from Canberra over this time.</p>
<p>Many Australians have recently felt the impact of <a href="https://www.news.com.au/finance/economy/australian-economy/rents-continue-to-surge-in-major-capital-cities-adding-to-cost-of-living-pressures/news-story/1e66ad7c7d165d309fdbe39df30a8157">sharply rising rent</a> and <a href="https://www.theguardian.com/australia-news/2023/nov/07/interest-rate-rise-would-see-almost-half-of-australian-mortgage-holders-under-financial-stress#:%7E:text=Those%20on%20a%20typical%20mortgage,the%20cycle%20of%20hikes%20began.">mortgage payments</a> as <a href="https://www.ahuri.edu.au/research/brief/why-does-australia-have-rental-crisis-and-what-can-be-done-about-it">household numbers</a> and <a href="https://www.theguardian.com/australia-news/2023/nov/07/rba-interest-rates-rise-hike-november-official-cash-rate-announcement-reserve-bank-australia#:%7E:text=The%20RBA%20board%20on%20Tuesday,rate%20rise%20since%20May%202022.">interest rates</a> surged in the post-COVID period. However, several fundamental and enduring <a href="https://link.springer.com/book/10.1007/978-981-15-0780-9">housing problems</a> have been escalating for decades. These include:</p>
<ul>
<li><p>home ownership <a href="https://www.aihw.gov.au/reports/australias-welfare/housing-affordability">becoming less affordable</a></p></li>
<li><p>private rental housing receding <a href="https://www.anglicare.asn.au/publications/2023-rental-affordability-snapshot/">beyond the reach</a> of low-income households</p></li>
<li><p><a href="https://cityfutures.ada.unsw.edu.au/documents/689/Waithood_final.pdf">increasingly scarce</a> and <a href="https://www.aph.gov.au/DocumentStore.ashx?id=e856263b-8b5a-4627-8594-329f3aac1aae&subId=746019">deteriorating</a> social housing. </p></li>
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<p>To seriously confront these challenges, the government will need to expand its initiatives and tackle reforms of taxes and regulations, which it has avoided to date.</p>
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<strong>
Read more:
<a href="https://theconversation.com/what-are-young-australians-most-worried-about-finding-affordable-housing-they-told-us-218426">What are young Australians most worried about? Finding affordable housing, they told us</a>
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<h2>Tackling housing on 4 fronts</h2>
<p>The government’s commitments so far can be largely broken down into four policy themes.</p>
<p><strong>1. Direct assistance for low-income groups</strong></p>
<p>The Housing Australia Future Fund is the largest initiative in this area. The goal is to fund <a href="https://blogs.unsw.edu.au/cityfutures/blog/2023/09/how-does-the-haff-add-up-unpacking-labors-10-billion-housing-australia-future-fund/">30,000 new social and affordable homes</a> over five years.</p>
<p>Under the <a href="https://ministers.treasury.gov.au/sites/ministers.treasury.gov.au/files/2022-10/national-housing-accord-2022.pdf">National Housing Accord</a>, another 10,000 affordable rental homes are funded over this period. </p>
<p>However, the unmet need for social and affordable housing <a href="https://cityfutures.ada.unsw.edu.au/social-and-affordable-housing-needs-costs-and-subsidy-gaps-by-region/">exceeds 600,000 units</a>, so these targets remain modest.</p>
<p>Also in the direct assistance category is the May budget’s one-off 15% boost to Commonwealth Rent Assistance. While accurately <a href="https://ministers.dss.gov.au/media-releases/12936">claimed</a> as “the largest increase in more than 30 years”, maximum payments remain far below market rents. As economist Bruce Bradbury <a href="https://theconversation.com/the-rent-crisis-is-set-to-spread-heres-the-case-for-doubling-rent-assistance-196810">argued</a>, the increase should have been 100%.</p>
<p>These initiatives are significant contributions to relieving rental stress when compared to the previous decade of federal inaction. However, that is a low bar.</p>
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<p><strong>2. Direct assistance to first-home buyers</strong></p>
<p>This batch of measures includes expansion of the Coalition-established low-deposit mortgage scheme, now branded the <a href="https://www.housingaustralia.gov.au/support-buy-home/first-home-guarantee">First Home Guarantee</a>. Qualifying first-home buyers can secure a home loan with a down-payment of only 5% of property value – rather than the standard 20% deposit.</p>
<p>There’s also the government’s <a href="https://www.theguardian.com/australia-news/2023/aug/20/labor-shared-equity-scheme-what-is-it-how-does-it-work-who-is-eligible">Help to Buy</a> proposal. Under this shared-equity model, government takes a 30-40% interest in a dwelling acquired by a qualifying home buyer. The buyer’s home loan and equity contribution are much smaller as a result.</p>
<p>But the government may battle to secure Senate approval for this scheme. The Coalition <a href="https://www.abc.net.au/news/2022-05-01/government-takes-aim-labor-election-housing-pitch/101028814">opposes it</a>, saying first-home buyers will dislike the idea of “[having Anthony] Albanese at the kitchen table with you, owning part of your home”. The Greens have <a href="https://login.wwwproxy1.library.unsw.edu.au/login?url=https://www.proquest.com/newspapers/grens-may-block-labor-scheme-first-home-buyers/docview/2792484570/se-2?accountid=12763">queried</a> the workability of proposed scheme rules. </p>
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<p><strong>3. Boosting housing supply</strong></p>
<p>The main push here has been the <a href="https://ministers.treasury.gov.au/sites/ministers.treasury.gov.au/files/2022-10/national-housing-accord-2022.pdf">National Housing Accord</a> agreed with state governments and others in late 2022. Signatories must do their best to enable construction of <a href="https://www.pm.gov.au/media/meeting-national-cabinet-working-together-deliver-better-housing-outcomes">at least 1 million homes</a> – and up to 1.2 million – from 2024 to 2029. This would increase current construction rates by about a third, so it’s a challenging target.</p>
<p>The modest federal investment in social and affordable homes supports the accord aspirations. </p>
<p>More importantly, A$3 billion in new federal funding for the <a href="https://www.pm.gov.au/media/meeting-national-cabinet-working-together-deliver-better-housing-outcomes">New Home Bonus</a> aims to “incentivise states and territories to undertake the reforms necessary to boost housing supply and increase housing affordability”. This approach appears to emulate recent efforts in <a href="https://researchbriefings.files.parliament.uk/documents/SN05724/SN05724.pdf">the UK</a> and <a href="https://liberal.ca/our-platform/1-4-million-new-homes/">Canada</a>.</p>
<p>It remains to be seen if this will work in Australia. There is reason to be sceptical about any strategy to make housing more affordable based on the belief that “inadequate” supply is largely due to planning restrictions. The main consideration for private developers and their financial backers is <a href="https://link.springer.com/book/10.1057/978-1-137-46403-3">expected market conditions</a> when newly built homes are to be sold.</p>
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Read more:
<a href="https://theconversation.com/councils-are-opening-the-door-to-tiny-houses-as-a-quick-affordable-and-green-solution-217267">Councils are opening the door to tiny houses as a quick, affordable and green solution</a>
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<p>If the prime minister is serious about achieving his government’s targets, he may need to consider more direct government involvement in housing production. Much greater social housing investment would be needed in any case to genuinely address the scale of unmet need. He might even contemplate a <a href="https://www.smh.com.au/politics/federal/labor-set-for-conference-housing-stoush-as-big-union-demands-super-profits-tax-20230724-p5dquf.html">union-sponsored proposal</a> to use a corporate super-profits tax to fund massively stepped-up social housing construction.</p>
<p>Equally, state and territory governments could look to revive the <a href="https://link.springer.com/book/10.1007/978-981-15-0780-9">state-commissioned build-for-sale programs</a> of the 1950s and 1960s. That is, homes built for sale at cost price on land owned by government or acquired for the purpose under compulsory powers.</p>
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Read more:
<a href="https://theconversation.com/to-deliver-enough-affordable-housing-and-end-homelessness-what-must-a-national-strategy-do-207120">To deliver enough affordable housing and end homelessness, what must a national strategy do?</a>
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<p><strong>4. Institutional reform</strong></p>
<p>Fragmented and inadequate policymaking capacity bears much of the blame for Australia’s weak record on housing in recent decades.</p>
<p>In response, the Albanese government has to its credit set up an expert panel, the <a href="https://nhsac.gov.au/">National Housing Supply and Affordability Council</a>, and a national housing agency, <a href="https://www.housingaustralia.gov.au/">Housing Australia</a>. However, Housing Australia has been designated as purely a delivery agency with no policymaking remit. This seems highly questionable – especially as the housing minister lacks her own department of government.</p>
<p>Even more concerning are <a href="https://insidestory.org.au/flawed-foundations/">indications</a> that the proposed National Housing and Homelessness Plan may <a href="https://johnmenadue.com/labor-offers-new-help-for-renters-and-first-homebuyers-pm-must-aim-higher/">fall far short</a> of providing a fit-for-purpose rationale for the government’s post-2022 initiatives and, more importantly, a meaningful framework for the much more ambitious reforms Australia badly needs.</p>
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Read more:
<a href="https://theconversation.com/homeless-numbers-have-jumped-since-covid-housing-efforts-ended-and-the-problem-is-spreading-beyond-the-big-cities-194624">Homeless numbers have jumped since COVID housing efforts ended – and the problem is spreading beyond the big cities</a>
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<h2>A promising start, but can do better</h2>
<p>In the first half of its term, the Albanese government made progress on almost all its election pledges on housing. It also brought forward other notable initiatives. This activity corresponds quite well with key dimensions of <a href="https://link.springer.com/book/10.1007/978-981-15-0780-9">Australia’s multi-faceted housing challenge</a>.</p>
<p>At the same time, announced measures are somewhat disparate and many are extremely modest alongside the scale of these problems. To make a real difference, they will need to be expanded and extended over a longer time. They must be complemented by tax and regulatory reforms as yet eschewed.</p>
<p>If the measures to date prove to be a down payment on ambitious and purposeful future action, they may come to be seen as significant. If not, policy analysts of the 2030s will deem them of little importance.</p>
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<p><em>This article draws on a fuller <a href="https://www.ppesydney.net/content/uploads/2023/12/4-Pawson.pdf">housing policy paper</a> published in a <a href="https://www.ppesydney.net/labor-in-government-a-new-special-issue-of-jape/">special issue</a> of the Journal of Australian Political Economy along with mid-term assessments of the Albanese government’s performance across a range of other policy areas.</em></p><img src="https://counter.theconversation.com/content/219389/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Hal Pawson receives research funding from the Australian Research Council, from the Australian Housing and Urban Research Institute, from Queensland Council of Social Service, from the Lord Mayor's Charitable Fund, City of Melbourne, and from Crisis UK. He is also a non-Exec Director at Community Housing Canberra and a part-time unpaid advisor to ACT Senator David Pocock.</span></em></p>The government has made housing a federal policy priority after a decade of neglect. But the scale of the housing crisis means its actions to date are just a start – much more must be done.Hal Pawson, Professor of Housing Research and Policy, and Associate Director, City Futures Research Centre, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2172672023-12-07T19:18:52Z2023-12-07T19:18:52ZCouncils are opening the door to tiny houses as a quick, affordable and green solution<p><a href="https://www.theguardian.com/australia-news/2023/sep/01/australia-rental-price-rice-crisis-data">Soaring rents</a> and <a href="https://www.theguardian.com/australia-news/2023/nov/22/housing-prices-record-levels-corelogic-home-value-index#:%7E:text=Housing%20prices%20back%20at%20record%20levels%2C%20defying%20Australia's%20interest%20rate%20rises,-The%207.5%25%20drop&text=Australian%20home%20prices%20are%20back,to%20the%20data%20group%20CoreLogic.">home prices</a>, <a href="https://www.theguardian.com/business/2023/oct/10/australia-under-more-mortgage-stress-than-any-other-nation-says-imf">increasing mortgage stress</a>, <a href="https://www.abc.net.au/news/2023-11-21/the-uncomfortable-truth-about-immigration-rents-inflation/103128424">record immigration</a> and a growing population are fuelling a <a href="https://www.abc.net.au/news/2023-09-06/housing-crisis-medium-high-density-development-730/102818054">housing crisis</a> and <a href="https://homelessnessaustralia.org.au/wp-content/uploads/2023/08/HA-Overstretched-and-overwhelmed-report-v03-1.pdf">increasing homelessness</a>. In the face of this pressing need, tiny houses offer an alternative housing option. </p>
<p>Tiny houses have become <a href="https://www.greenbuildermedia.com/blog/nine-out-of-10-americans-would-consider-tiny-house-living">popular in the United States</a>. Their popularity is growing in other developed countries such as <a href="https://www.theguardian.com/society/2023/jan/15/priced-out-uk-house-hunters-turn-to-lorry-sized-tiny-homes">the UK</a> and <a href="https://www.ctvnews.ca/canada/we-can-live-how-fredericton-s-growing-affordable-tiny-home-community-offers-hope-1.6660712">Canada</a>. In Australia, however, planning and housing regulations <a href="https://theconversation.com/tiny-and-alternate-houses-can-help-ease-australias-rental-affordability-crisis-182328">present many barriers</a> to using tiny houses as permanent homes. </p>
<p>Dire statistics highlight the need to find homes for Australians quickly and cheaply. The unmet need for social housing has been estimated at <a href="https://cityfutures.ada.unsw.edu.au/documents/522/Modelling_costs_of_housing_provision_FINAL.pdf">437,000 households</a>. The 2021 census counted <a href="https://www.abs.gov.au/statistics/people/housing/estimating-homelessness-census/latest-release#:%7E:text=122%2C494%20people%20were%20estimated%20to%20be%20experiencing%20homelessness%20at%20the,increase%20of%201.6%25%20from%202016">122,494 people</a> as homeless. By 2022, <a href="https://cityfutures.ada.unsw.edu.au/documents/699/CHIA-housing-need-national-snapshot-v1.0.pdf">more than 640,000 households’</a> housing needs were not being met. </p>
<p>Some local councils now see tiny houses as part of the solution to these problems. They are taking steps to make it easier for people to live in them. </p>
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Read more:
<a href="https://theconversation.com/tiny-and-alternate-houses-can-help-ease-australias-rental-affordability-crisis-182328">Tiny and alternate houses can help ease Australia's rental affordability crisis</a>
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<h2>Australia is trailing a global movement</h2>
<p>The tiny house movement is built on several values. These include a preference for smaller homes, the pursuit of minimalism, the desire to live more sustainably and a rejection of the prevailing consumer culture. </p>
<p>The <a href="https://codes.iccsafe.org/content/IBC2018P6">2018 International Housing Code</a> defines tiny houses as dwellings of 400 square feet (37 square metres) in area or less. In Australia, dwellings under 50 square metres are commonly regarded as tiny houses. </p>
<p>The two main types are tiny houses on foundations and tiny houses on wheels. The latter is built on a trailer and must comply with road-legal dimensions and vehicle regulations.</p>
<p>Tiny houses have long been used as dwellings overseas. Faced with high property prices and land scarcity, those who enjoy the convenience of city life with a minimalist lifestyle have embraced tiny homes. </p>
<p>Examples include <a href="https://www.yankodesign.com/2021/10/03/japanese-inspired-tiny-homes-that-incorporate-our-favorite-aesthetic-micro-living-trends/">micro-homes in Tokyo</a>. Japanese micro-homes are often sited <a href="https://edition.cnn.com/style/article/japan-micro-homes/index.html">on irregular leftover pieces</a> of land.</p>
<p>In the US, the Occupy Madison Village is a tiny house commune in Madison, Wisconsin. It provides housing, communal living and community-based decision-making for homeless people to promote their sense of belonging and social participation. </p>
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<figcaption><span class="caption">Tiny house villages have been built across the United States.</span></figcaption>
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Read more:
<a href="https://theconversation.com/3-innovations-helping-the-homeless-in-eugene-oregon-133036">3 innovations helping the homeless in Eugene, Oregon</a>
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<h2>What’s happening in Australia?</h2>
<p>In Australia, the various barriers to tiny house living include local government planning schemes, time limits and other restrictions on occupancy and connection to utilities. Over the past year, local councils have begun to make it easier to live in a tiny house.</p>
<p>The Shire of Esperance in Western Australia was the <a href="https://www.esperance.wa.gov.au/news/2023/may/31/everything-you-wanted-know-tiny-houses-wheels">first local council</a> in the country to recognise tiny houses as permanent dwellings in December 2022.</p>
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<p>Mount Alexander Shire Council in Victoria <a href="https://www.mountalexander.vic.gov.au/Council/News-and-updates/Local-law-changed-to-allow-tiny-homes-on-wheels">removed the permit requirement</a> for residents to park tiny houses on wheels on properties with existing dwellings in June 2023. </p>
<p>The Shire of Capel in Western Australia adopted a <a href="https://www.capel.wa.gov.au/news/council-meeting-august-ocm/23#:%7E:text=Council%20endorsed%20the%20adoption%20of,stay%20accommodation%20under%20certain%20regulations.">tiny house policy</a> to allow ancillary dwellings and tiny house communities in August 2023. </p>
<p>The Surf Coast Shire in Victoria is starting a <a href="https://www.surfcoast.vic.gov.au/Community/Housing/Tiny-house-pilot/Council-to-trial-domestic-use-of-tiny-houses-on-wheels">two-year trial</a> of domestic use of tiny houses on wheels in 2024. </p>
<p>These changes are likely to help people who are struggling to find an affordable home and those on <a href="https://theconversation.com/its-soul-destroying-how-people-on-a-housing-wait-list-of-175-000-describe-their-years-of-waiting-210705">long waiting lists</a> for social housing.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/tiny-houses-and-alternative-homes-are-gaining-councils-approval-as-they-wrestle-with-the-housing-crisis-199667">Tiny houses and alternative homes are gaining councils' approval as they wrestle with the housing crisis</a>
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<h2>A cheaper and faster way to house people</h2>
<p>Tiny houses offer a cost-effective and prompt solution to the issues of affordable housing and homelessness. Their small size means they can be built more quickly and cheaply. </p>
<p>The construction cost of a tiny house is typically A$80,000-$160,000. The median house price for Australian capital cities is now <a href="https://propertyupdate.com.au/the-latest-median-property-prices-in-australias-major-cities/">more than $900,000</a> – and around $650,000 for units. </p>
<p>On average, it takes <a href="https://articles.soho.com.au/2022-guide-how-long-does-it-take-to-build-a-house">four to 12 months</a> to build a house in Australia after the purchase of land and design approval. It takes only <a href="https://www.abc.net.au/news/2021-06-26/tiny-homes-may-train-future-tradies-help-solve-housing-shortage/100242220">about four weeks</a> to build a tiny house commercially.</p>
<p>The average new house size in Australia is the <a href="https://www.commbank.com.au/articles/newsroom/2020/11/commsec-home-size-trends-report.html">biggest in the world</a>. Average floor area has been between <a href="https://theconversation.com/drafts/217267/edit">230 and 246 square metres</a> for the past 20 years. Large houses use more materials and energy to build and run, adding to living costs. </p>
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<h2>Shrinking our environmental footprints</h2>
<p>Tiny houses promote liveable space downsizing and simpler lifestyles. They also demonstrate a stronger responsibility for environmental stewardship. Some have rainwater tanks, composting toilets, solar panels and batteries and can operate completely off-grid. </p>
<p>Because tiny houses use fewer resources, their occupants’ environmental footprint is smaller. They represent a shift towards more sustainable living by prioritising lower energy use (heating, cooling and lighting) and greenhouse gas emissions. These signify a commitment to limit climate change and global warming by moving towards Australia’s net-zero carbon emission target by 2050. </p>
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Read more:
<a href="https://theconversation.com/when-people-downsize-to-tiny-houses-they-adopt-more-environmentally-friendly-lifestyles-112485">When people downsize to tiny houses, they adopt more environmentally friendly lifestyles</a>
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<p>The global tiny house movement represents a concerted effort to reduce the <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8540435/">huge environmental footprint</a> of the building and construction industry. At the same time, high-performing, energy-efficient tiny houses cut occupants’ living costs.</p>
<p>Tiny houses do not cater for all households. They <a href="https://theconversation.com/life-in-a-tiny-house-whats-it-like-and-how-can-it-be-made-better-110495">suit certain demographics</a>, especially single and partnered people with no children or retirees. </p>
<p>Tiny houses can add <a href="https://theconversation.com/people-want-and-need-more-housing-choice-its-about-time-governments-stood-up-to-deliver-it-122390">much-needed diversity</a> to Australians’ housing options. As councils are recognising, they’re a way of quickly expanding the affordable housing supply in a community. Lower running costs and a smaller environmental footprint are added bonuses.</p><img src="https://counter.theconversation.com/content/217267/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Hing-Wah Chau does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Until now, planning and housing regulations have stood in the way of using tiny houses as permanent homes. That’s starting to change as councils look for solutions to the housing crisis.Hing-Wah Chau, Course Chair in Building Design & Senior Lecturer in Built Environment, Victoria UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2178522023-11-27T10:16:18Z2023-11-27T10:16:18ZLeasehold reform: why UK government’s plans could make housing less affordable and less fair<figure><img src="https://images.theconversation.com/files/560409/original/file-20231120-15-c4cbtx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Most flats in England are owned under leaseholds.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/typical-mansion-building-london-45958951">Shutterstock</a></span></figcaption></figure><p>The UK government is introducing plans to reform the system of leasehold property in England and Wales to parliament. The leasehold and freehold reform bill aims to empower leaseholders and achieve greater fairness in the housing market. </p>
<p>The leasehold market comprises of about 4.7 million dwellings – 23% of the private housing stock in England. Most apartments (81%) are owned as leaseholds. </p>
<p><a href="https://housingevidence.ac.uk/publications/leasehold-reform-proposals-in-england-and-wales-the-unconsidered-financial-implications-of-reducing-the-premium-in-lease-extensions/">Research</a> I have done with my colleague James Culley suggests that the reform proposed could have unintended negative consequences on leasehold prices, housing affordability and household wealth. </p>
<p>A <a href="https://theconversation.com/how-leaseholds-bought-at-cost-with-mortgages-are-still-tenancies-and-why-that-should-change-173360">leasehold</a> is a legal contract conferring the owner of a dwelling the exclusive rights to occupy or let it for the duration of their lease. When a leasehold expires, the right reverts to the dwelling’s freeholder. </p>
<p>Compared to an identical freehold dwelling, leaseholds <a href="https://academic.oup.com/qje/article/130/1/1/2337985">lose their value</a> as the lease length shortens, while the value of the freehold interest of the same property rises. The leasehold is thus what is known as a “deteriorating asset”. </p>
<p>A lease can contain additional clauses including paying the freeholder (who owns the land on which the building is built) what is known as an annual ground rent. The freeholder is also responsible for maintaining the land, the building and its common parts and addressing any issues concerning the local community.</p>
<p>Currently, leaseholders can pay a premium to either extend their lease by an additional 90 years and stop paying ground rent or to acquire the freehold in full. This premium rises as the lease length shortens. </p>
<figure class="align-center ">
<img alt="A row of colourful houses." src="https://images.theconversation.com/files/560407/original/file-20231120-26-npvaxe.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/560407/original/file-20231120-26-npvaxe.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/560407/original/file-20231120-26-npvaxe.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/560407/original/file-20231120-26-npvaxe.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/560407/original/file-20231120-26-npvaxe.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/560407/original/file-20231120-26-npvaxe.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/560407/original/file-20231120-26-npvaxe.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Reforming leasehold could make housing more expensive.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/row-colorful-english-houses-1515093797">Shutterstock</a></span>
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<h2>What reform has been proposed?</h2>
<p>The proposed bill bans building new leasehold houses. It also seeks to give leaseholders greater control over the management of their building, along with a proposed “redress” schemes to allow leaseholders to challenge unfair freeholder fees. Subject to a further consultation, there is the possibility of introducing a cap on onerous ground rents in existing leases. </p>
<p>Crucially, the bill plans to reduce the premium (for buying out a freehold or extending a lease) and to standardise the extended lease length, from the current 90 years to 990 years. </p>
<p>The <a href="https://lawcom.gov.uk/project/leasehold-enfranchisement/">2020 valuation report</a> from statutory independent body the Law Commission explored ways to reduce the leasehold premium, including abolishing what is known as the “marriage value” component. That action would mean the premium wouldn’t fully reflect the value of a short leasehold (80 years or less remaining) if it were to be extended.</p>
<figure class="align-center ">
<img alt="Construction underway on a house with scaffolding." src="https://images.theconversation.com/files/560410/original/file-20231120-17-d1gsb7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/560410/original/file-20231120-17-d1gsb7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/560410/original/file-20231120-17-d1gsb7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/560410/original/file-20231120-17-d1gsb7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/560410/original/file-20231120-17-d1gsb7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/560410/original/file-20231120-17-d1gsb7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/560410/original/file-20231120-17-d1gsb7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Reforms will implement a ban on leaseholds in new developments.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/scaffolding-erected-around-houses-new-housing-2209102839">Shutterstock</a></span>
</figcaption>
</figure>
<h2>How would this affect property values?</h2>
<p>Broadly, making it cheaper for leaseholders to extend their lease or buy the freehold on their property would, in effect, lead to windfall gains for leaseholders. Existing freeholders, by contrast, will lose out.</p>
<p>If a leasehold is extended to, say, 990 years, its value would increase to almost the level of the freehold. What’s more, reducing the premium would make it more attractive for existing and prospective leaseholders to extend or purchase an expiring lease. This would increase demand for leasehold properties, which in turn would see leasehold prices rise. </p>
<p>The gains from this won’t be evenly spread, however. If short leaseholds become much cheaper to extend, then they will rise significantly in value. Longer leases, by contrast, will see a lower increase in value because the reduction in the cost of extending them will be lower and they are already closer to the freehold value. </p>
<p>Freeholders, however, will significantly lose out because they will receive less money from the renewed lease or the sale of their freehold.</p>
<h2>What does this mean for the housing market?</h2>
<p>The reforms are likely to worsen housing affordability, particularly in urban areas where there is a high proportion of shorter leasehold stock. Research <a href="https://housingevidence.ac.uk/publications/leasehold-reform-proposals-in-england-and-wales-the-unconsidered-financial-implications-of-reducing-the-premium-in-lease-extensions/">estimates</a> that the short and long-term impact nationally, based on abolishing the marriage value alone, is a 1.0% and 3.2% rise in leasehold prices. </p>
<p>The impact on leasehold prices is likely to vary regionally – due to variations in the stock of leasehold dwellings, lease lengths and the general price of housing. Our research <a href="https://housingevidence.ac.uk/publications/leasehold-reform-proposals-in-england-and-wales-the-unconsidered-financial-implications-of-reducing-the-premium-in-lease-extensions/">shows</a> that the biggest decrease in housing affordability if all short leaseholds are extended, would occur in north-east England, the west Midlands and Wales. </p>
<p>There may be implications for the private rented sector too. Approximately 40% of leasehold dwellings are rented out privately, with a <a href="https://housingevidence.ac.uk/publications/leasehold-reform-proposals-in-england-and-wales-the-unconsidered-financial-implications-of-reducing-the-premium-in-lease-extensions/">significant proportion</a> to low-income households. </p>
<p>If the reforms induce leasehold landlords to either sell up (to realise the windfall gain) or to refurbish the property after an extension (to achieve a higher rental value), this has implications for the wider housing market. </p>
<p>It could decrease the supply of rented accommodation to this income group, and, in turn, would put pressure on an already pressurised <a href="https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/indexofprivatehousingrentalprices/august2023">private rental market</a>. And even though it would lead to more supply in the market for leaseholds, the price for each leasehold would be higher and so less affordable. </p>
<p>Our research shows those who stand to gain the most from these windfall gains are existing owner-occupier leaseholders (mainly middle-income and a significant minority of higher-income households) and landlord leaseholders. If the marriage value is abolished, then owners of short leases will benefit most financially. By contrast, freeholders will lose out.</p>
<p>The government’s stated aim, in reforming leasehold, is to achieve fairness in the housing market. However, part of the current proposals focus on making the premium for buying or extending a leasehold cheaper – not more transparent and fairer. This risks making housing even less affordable and reinforcing wealth inequalities.</p><img src="https://counter.theconversation.com/content/217852/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mark Andrew in the past had received funding from the ESRC (note: it's not relevant to this research). </span></em></p>The proposed reforms could have unintended negative consequences on leasehold prices and household wealth.Mark Andrew, Senior Lecturer in Housing Economics, City, University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2155572023-10-31T16:47:04Z2023-10-31T16:47:04ZWhy converting office space into flats won’t solve the housing crisis<p>The UK government is proposing to further relax planning rules as part of its <a href="https://www.gov.uk/government/news/long-term-plan-for-housing">long-term plan for housing</a>. The Department for Levelling Up, Housing and Communities aims to extend what are known as <a href="https://www.gov.uk/government/consultations/permitted-development-rights">“permitted development rights” (PDR)</a> in England. This would widen a previous relaxation of planning rules to encourage developers and builders to convert empty commercial spaces into housing. </p>
<p>It is being seen as a response to multiple councils across England which have declared <a href="https://theconversation.com/birminghams-bankruptcy-is-only-the-tip-of-the-iceberg-local-authorities-across-england-are-at-risk-212912">bankruptcy</a> (or are warning they might). The housing crisis in England is increasingly being singled out as <a href="https://www.theguardian.com/society/2023/oct/30/councils-in-england-facing-bankruptcy-as-lack-of-housing-pushes-up-costs">the most serious threat</a> to local government solvency. </p>
<p>Meanwhile, homelessness is on the rise, private tenants are increasingly priced out of the rental market, home owners are struggling to pay mortgages and councils are struggling to provide the requisite support.</p>
<p>But, <a href="http://offlinehbpl.hbpl.co.uk/NewsAttachments/RLP/RICSExtendingPermittedDevelopmentRights.pdf">research</a> shows that buildings converted into homes under PDR provide significantly worse residential quality, particularly in terms of size, amenity space and location, than homes given full planning permission.</p>
<p>The loss of local authority oversight that extending PDR would bring will only make the <a href="https://www.theguardian.com/business/2023/apr/15/young-adults-uk-housing">housing quality crisis</a> worse. Furthermore, converting offices into housing is unlikely to significantly boost housing supply in line with need. </p>
<figure class="align-center ">
<img alt="An empty city street." src="https://images.theconversation.com/files/556685/original/file-20231030-19-1ip5mo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/556685/original/file-20231030-19-1ip5mo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=343&fit=crop&dpr=1 600w, https://images.theconversation.com/files/556685/original/file-20231030-19-1ip5mo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=343&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/556685/original/file-20231030-19-1ip5mo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=343&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/556685/original/file-20231030-19-1ip5mo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=431&fit=crop&dpr=1 754w, https://images.theconversation.com/files/556685/original/file-20231030-19-1ip5mo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=431&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/556685/original/file-20231030-19-1ip5mo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=431&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">COVID has resulted in some central office districts being emptier.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/gray-concrete-road-between-high-rise-buildings-during-daytime-HoupC-zHlLo">Ben Garratt|Unsplash</a></span>
</figcaption>
</figure>
<h2>Previous changes to planning</h2>
<p>The UK government <a href="https://researchbriefings.files.parliament.uk/documents/SN00485/SN00485.pdf">trialled</a> PDR in May 2013, primarily to encourage converting offices to housing. This was made permanent in 2016. While developers in England were previously required to submit detailed plans and apply for full planning permission for this, the changes meant they only had to notify the local planning authority.</p>
<p>Conversions of offices to housing under PDR have contributed <a href="https://app.powerbi.com/view?r=eyJrIjoiZTE5YWQ3MDYtZmFjMC00N2YwLWIxM2EtYWY2NTk1NjExYjgwIiwidCI6ImJmMzQ2ODEwLTljN2QtNDNkZS1hODcyLTI0YTJlZjM5OTVhOCJ9">81,282 homes (net)</a> in England since 2015. Although data for specific changes of use (from office to housing, say) is not available before 2015, overall <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/659529/Housing_Supply_England_2016-17.pdf">net change of use</a> provided approximately 12,500 homes per year before 2013. </p>
<p>After PDR was introduced, conversions of offices peaked at 17,751 in 2016-17. In 2021-2022, however, this change of use accounted for just 8,359 units (3.6%) of <a href="https://app.powerbi.com/view?r=eyJrIjoiZTE5YWQ3MDYtZmFjMC00N2YwLWIxM2EtYWY2NTk1NjExYjgwIiwidCI6ImJmMzQ2ODEwLTljN2QtNDNkZS1hODcyLTI0YTJlZjM5OTVhOCJ9">net additional housing</a> in England. </p>
<p>The majority of PDR conversions in England have been <a href="http://offlinehbpl.hbpl.co.uk/NewsAttachments/RLP/RICSExtendingPermittedDevelopmentRights.pdf">small-scale</a> (below 10 units). In other words, the number of homes it can ultimately provide pales in comparison to the government’s target of <a href="https://commonslibrary.parliament.uk/research-briefings/cbp-7671/">300,000</a> new homes per year.</p>
<p>Vacant office space across the UK is higher than before the pandemic, but the <a href="https://academic.oup.com/cjres/article/15/3/597/6670650?login=true#386609022">picture is mixed</a>. Companies still want the <a href="https://content.knightfrank.com/research/2386/documents/en/uk-cities-2023-9882.pdf">best</a> quality office space to bolster branding, staff retention and sustainability credentials. </p>
<p>Office vacancy rates in <a href="https://www.jll.co.uk/en/trends-and-insights/research/q2-2023-central-london-office-market-report">central London</a> were 9.4% in the second financial quarter of 2023. This is significantly higher than the long-term average of 5.5%. However, underlying demand remains relatively high. During the same period, the <a href="https://www.jll.co.uk/en/trends-and-insights/research/q2-2023-central-london-office-market-report">highest level</a> of space under offer by occupiers since 2019 was recorded.</p>
<figure class="align-center ">
<img alt="Office workers in front of a wall of windows." src="https://images.theconversation.com/files/556821/original/file-20231031-27-7p2bl2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/556821/original/file-20231031-27-7p2bl2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/556821/original/file-20231031-27-7p2bl2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/556821/original/file-20231031-27-7p2bl2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/556821/original/file-20231031-27-7p2bl2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/556821/original/file-20231031-27-7p2bl2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/556821/original/file-20231031-27-7p2bl2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">High-specification offices in prime city centre locations are still sought after.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/person-sitting-beside-table-HXOllTSwrpM">Ant Rozetsky|Unsplash</a></span>
</figcaption>
</figure>
<h2>Converting offices is not straightforward</h2>
<p>Office vacancy rates do not necessarily translate into empty buildings, or even readily convertible sections. Office conversions is also a typically <a href="https://www.brookings.edu/articles/myths-about-converting-offices-into-housing-and-what-can-really-revitalize-downtowns/">costly</a> endeavour. </p>
<p>Large buildings are physically complex to adapt for housing, particularly in ensuring <a href="https://www.sciencedirect.com/science/article/pii/S0305900622000848#bib85">natural light and ventilation</a> reach windowless central parts of the internal floor area. Developers also have to <a href="https://lichfields.uk/media/2493/departments-to-apartments.pdf">install</a> additional cabling and piping for domestic use. There are also new requirements regarding external cladding. Many office buildings are thus not <a href="https://www.cbc.ca/news/business/empty-offices-housing-1.6736171">practical or commercially viable</a> to convert.</p>
<p>What’s more, land in central office districts remains valuable. Even if converting an office building is viable, high construction costs and interest rates mean the <a href="https://www.bbc.com/worklife/article/20230817-major-cities-are-now-with-filled-with-empty-office-buildings-what-happens-next">necessary asking price</a> for properties would likely exclude the private housing market where <a href="https://researchbriefings.files.parliament.uk/documents/CBP-7671/CBP-7671.pdf">need</a> is greatest – that of first homes. </p>
<p>Lastly, offices tend to lack the <a href="https://re.public.polimi.it/handle/11311/1053285">features or development potential</a> that have, to date, made older, industrial buildings attractive for <a href="https://www.savills.co.uk/blog/article/227395/residential-property/why-buy-a-warehouse-conversion.aspx">conversion to luxury homes</a>. And there’s also the wider problem that <a href="https://ww3.rics.org/uk/en/modus/built-environment/commercial-real-estate/office-residential-conversion.html">central</a> office districts often do not have the amenities which residents expect in their neighbourhoods either – including schools, GP surgeries, and parks.</p>
<p>With <a href="https://content.knightfrank.com/research/2386/documents/en/uk-cities-2023-9882.pdf">office markets polarising</a> as demand concentrates on high-end spaces, offices targeted for conversion by developers are likely to be older buildings in locations such as edge-of-town industrial parks. There have been well-publicised examples of councils, such as Harlow, in the south-east of England, placing social tenants in <a href="https://www.hometodiefor.co.uk/">hastily converted</a>, isolated office blocks, such as Shield House and <a href="https://www.thebrutalist.co.uk/office/terminus-house-harlow/">Terminus House</a>. </p>
<p>The resulting dire living conditions have seen such developments variously labelled <a href="https://www.theguardian.com/society/2020/sep/27/housing-crisis-planning-converting-office-blocks-homes-catastrophe-jenrick">“open prisons”</a>, <a href="https://www.bbc.co.uk/news/uk-england-essex-47720887">“human warehouses”</a> and the <a href="https://www.tcpa.org.uk/collection/campaign-for-healthy-homes/">“slums of the future”</a>. </p>
<figure class="align-center ">
<img alt="A public square with high rise buildings under a grey sky." src="https://images.theconversation.com/files/556816/original/file-20231031-19-hfvpgr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/556816/original/file-20231031-19-hfvpgr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/556816/original/file-20231031-19-hfvpgr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/556816/original/file-20231031-19-hfvpgr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/556816/original/file-20231031-19-hfvpgr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/556816/original/file-20231031-19-hfvpgr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/556816/original/file-20231031-19-hfvpgr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Harlow’s Market Square, with Adams House and Terminus House (right).</span>
<span class="attribution"><a class="source" href="https://upload.wikimedia.org/wikipedia/commons/b/b8/Market_Square%2C_Harlow%2C_Essex_-_viewed_from_the_north-west.jpg">Mutney|Wikimedia</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>Housing of this kind, which fails to meet even basic human needs, risks further entrenching the socio-economic inequalities driving the housing crisis. This crisis is multi-faceted. It encompasses supply, affordability and quality, which are each <a href="https://www.centreforcities.org/housing/">highly localised</a>. </p>
<p>While <a href="https://researchbriefings.files.parliament.uk/documents/CBP-7671/CBP-7671.pdf">housing need</a> is highest in London and the South East where <a href="https://www.ons.gov.uk/peoplepopulationandcommunity/housing/bulletins/housingaffordabilityinenglandandwales/2022">affordability</a> is lowest, 380,000 new homes per year are <a href="https://www.crisis.org.uk/media/239700/crisis_housing_supply_requirements_across_great_britain_2018.pdf">needed across the UK</a>, with 100,000 for social rent. </p>
<h2>Local planning is crucial</h2>
<p>Bypassing the planning process through PDR means local authorities miss the opportunity to secure <a href="https://www.local.gov.uk/about/news/over-18000-affordable-houses-lost-office-residential-conversions">affordable housing</a> through <a href="https://www.local.gov.uk/pas/topics/developer-contributions">developer contributions</a> in return for planning permission. It also hampers councils’ ability to ensure that new housing responds to local circumstance.</p>
<p>Local oversight of how places are created is important. Local planning authorities are best placed to coordinate the changing built environment as <a href="https://repairresearch.net/download/2174/">town and city centres</a> evolve. They also have a key role in upholding housing quality standards, and in delivering affordable housing.</p>
<p>The planning system supports this. It also <a href="https://www.tandfonline.com/doi/full/10.1080/09654313.2021.1985084">does not prevent</a> underused buildings being converted into housing. In Scotland, the devolved planning system has <a href="https://www.transformingplanning.scot/planning-reform/work-packages/permitted-development/">narrower PDR</a>. </p>
<p>As a result, local authorities retain oversight of conversions, through which they can maintain housing quality standards and ensure redevelopment improves its surroundings. For example, two major shopping centres in Glasgow, the <a href="https://www.bbc.co.uk/news/uk-scotland-glasgow-west-65755768">St Enoch Centre</a> and <a href="https://www.glasgow.gov.uk/index.aspx?articleid=27934">Buchanan Galleries</a>, are currently planned for conversion into mixed-use districts, including substantial housing. The City Council is an active stakeholder in each project. </p>
<p>In its <a href="https://www.tandfonline.com/doi/full/10.1080/09654313.2021.1985084">one-size-fits-all approach</a>, however, the way PDR in England is being advocated appears to be more an experiment with planning deregulation, on ideological grounds, than a long-term response to housing need. Putting the onus on a fragmented market to solve the housing crisis is likely to produce more long-term problems than solutions.</p><img src="https://counter.theconversation.com/content/215557/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Employee of the University of Glasgow, with the International Public Policy Observatory.
Previously received ESRC funding for a collaborative doctoral studentship titled 'Creating well-designed places in Scotland: What does it take?'
Member of the Labour Party.
Licentiate Member of the Royal Town Planning Institute.</span></em></p>Removing local authorities’ ability to oversee how the built environment changes will not solve the housing crisis. In fact, it might make inequality worse.Robert Richardson, Research Associate in Social Sciences, University of GlasgowLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2155822023-10-19T13:28:12Z2023-10-19T13:28:12ZHow corporate landlords are eroding affordable housing — and prioritizing profits over human rights<iframe height="200px" width="100%" frameborder="no" scrolling="no" seamless="" src="https://player.simplecast.com/c864b34e-7908-4cdc-add9-d3d05288b150?dark=true"></iframe>
<p>One factor driving the housing crisis across the country is a shift away from publicly built housing toward large corporate-owned buildings where, as today’s guest Prof. Nemoy Lewis puts it, “housing is treated as a commodity, not a human right.”</p>
<p>For many people living in Canada, housing has emerged as one of the most challenging issues. This is especially true in our largest cities, where financial stress plagues many households.</p>
<p>Home ownership is widely out of reach and for renters, housing is scarce, expensive and <a href="https://toronto.citynews.ca/2021/12/09/east-york-gowan-tenants-rent-increase-starlight/">precarious</a>. </p>
<p>In Toronto, Canada’s largest city, <a href="https://www.homelesshub.ca/sites/default/files/attachments/Lewis-Financialization-Racialized-Impacts-ofha-en.pdf">vacancy rates are at their lowest levels in nearly two decades</a> and average rents have jumped nearly 10 per cent — the sharpest increase in more than a decade. <a href="https://x.com/YSWtenants/status/1708805743581765738?s=20">Last week’s rent strike in Toronto </a> is just one indication that Canadians need solutions. </p>
<p>According to today’s guest, Prof. Nemoy Lewis from the School of Urban and Regional Planning at Toronto Metropolitan University, one of the factors driving this affordability crisis has been a shift away from publicly built housing toward <a href="https://torontoobserver.ca/2022/11/08/thorncliffe-park-tenants-rent-hike/">large corporate-owned buildings</a>. And the result, he says, is that now: “housing is treated as a commodity, rather than a human right.” </p>
<p>Prof. Nemoy discusses the disproportionate impacts these corporate landlords are having on Black and low-income communities — in income-polarized cities that are increasingly accessible to only a small group of wealthy people.</p>
<h2>Read more in TC</h2>
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Read more:
<a href="https://theconversation.com/multigenerational-living-a-strategy-to-cope-with-unaffordable-housing-188114">Multigenerational living: A strategy to cope with unaffordable housing?</a>
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<strong>
Read more:
<a href="https://theconversation.com/cities-must-take-immediate-action-against-renovictions-to-address-housing-crisis-204170">Cities must take immediate action against 'renovictions' to address housing crisis</a>
</strong>
</em>
</p>
<hr>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/five-ways-landlords-unfairly-control-peoples-lives-129511">Five ways landlords unfairly control people's lives</a>
</strong>
</em>
</p>
<hr>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/what-if-we-treat-homelessness-like-a-pandemic-168553">What if we treat homelessness like a pandemic?</a>
</strong>
</em>
</p>
<hr>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/publicly-owned-land-should-be-used-for-affordable-housing-not-sold-to-private-developers-198654">Publicly owned land should be used for affordable housing, not sold to private developers</a>
</strong>
</em>
</p>
<hr>
<h2>Resources</h2>
<p><a href="https://www.homelesshub.ca/sites/default/files/attachments/Lewis-Financialization-Racialized-Impacts-ofha-en.pdf">“The Uneven Racialized Impacts of Financialization”</a> (A Report for the Office of the Federal Housing Advocate, June 2022) by Nemoy Lewis</p>
<p><a href="https://btlbooks.com/book/the-tenant-class"><em>The Tenant Class</em></a> By Ricardo Tranjan</p>
<p><a href="https://www.saje.net/wp-content/uploads/2021/04/RTC.DF_.report.FINALPROOF-July2_2013.pdf">The Rise of the Corporate Landlord</a></p>
<p><a href="https://doi.org/10.1080/02673037.2023.2170988">Ethno-racial and nativity differences in the likelihood of living in affordable housing in Canada</a> by Kate H. Choi and Sagi Ramaj (<em>Housing Studies</em>) </p>
<p><a href="https://www.cbc.ca/news/canada/toronto/lawrence-ave-tenant-strike-toronto-1.6984182">North York tenants join hundreds of Torontonians striking against above-guideline rent increases
</a></p>
<p><a href="https://torontoobserver.ca/2022/11/08/thorncliffe-park-tenants-rent-hike/">Thorncliffe Park tenants protest above-limit rent hike</a> (<em>The Toronto Observer</em>)</p>
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<h2>Listen and follow</h2>
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A major factor driving our housing crisis is a shift toward corporate-owned buildings. Today’s guest, Prof. Nemoy Lewis, explains how we got here.Vinita Srivastava, Host + Producer, Don't Call Me ResilientAteqah Khaki, Associate Producer, Don't Call Me ResilientLicensed as Creative Commons – attribution, no derivatives.