Housing

Eliminating single-family zoning was part of a broader package of reforms deliberated by Alexandria’s city council known as the Zoning for Housing/Housing for All initiative. While most council members welcomed the reforms, lawns across the city have been littered with “anti-zoning” signs for months in anticipation of the vote. Some residents assumed that by eliminating the codes that restrict what can be built how and where, the city would lose its charm.

Others point out, however, that the pride of the city, Old Town, would not be able to exist within the restrictive zoning that has defined Alexandria for the last half-century. Originally laid out in 1749, Old Town follows a grid pattern and is beloved for its multi-story brick buildings housing a mixture of commercial uses as well as medium-, low-, and high-density residential opportunities. By contrast, the majority of Alexandria is zoned exclusively for low-density, single-family residential housing. In fact, it’d be illegal to replicate Old Town in most of Alexandria under the current zoning regime. 

In 1990s Berlin, baugruppen (building groups) came to the fore in response to the German city’s housing crisis. Building groups are DIY collectives of future resident-owners who come together to develop their new homes. Households become producers rather than consumers, so they save on the developer’s profit margin and have more control over building design and quality.

At its peak, about 17% of new homes in Berlin were baugruppen projects. By 2017 more than 600 projects had been completed. The current master plan for redeveloping Berlin’s former Tegel airport calls for baugruppen to produce 2,000 homes – 40% of the project’s housing.

The success of baugruppen has inspired building groups in Australia. Data from one development and advisory service that assists building group members show members have on average saved around 10% on their new home building costs since 2010.

As well, they save on transfer taxes/stamp duties and mortgage interest payments. So in Victoria, for example, total savings could be as much as 16.5% on a A$1 million house.

Many offices are sitting empty following the rise of working from home, while cities around the world face housing crises. Building new housing is extremely carbon intensive. Could converting unused offices into housing help solve both problems?

Victoria should commit to build 60,000 new social housing dwellings by 2034, end the first home owners grant and lobby the federal government to examine tax concessions for investment properties, the state inquiry into the rental and housing affordability crisis has recommended in its final report.

The report stopped short of making any recommendations on rental price regulation, which is a contentious issue between the Greens, who have been campaigning for rent caps, and the government, which has resisted calls.

The 34 recommendations included a call for the government to commit to building 60,000 new social housing dwellings by 2034, with 40,000 of them completed by 2028.

Given that for most Australians their largest asset is their home – or, for some, a portfolio of investment properties – and it is often tied to long‑term financial plans, measures that are even vaguely thought to threaten property values are treated with ‘extreme caution by our politicians’.

It is also difficult to overstate the importance of continually rising house prices to the Australian economy. In 2022, Australia’s ‘big four’ banks – ANZ, CBA, NAB and Westpac — held around $1.87 trillion in home loans. No other country’s banks are as heavily dependent on residential property with housing in Australia having been referred to as ‘the cash cow of the banking sector’.

Also of interest to the Committee throughout this Inquiry was the way in which property is discussed in the media. Outlets such The Age, for example, flipped daily between stories lamenting housing unaffordability and those celebrating strong growth in property prices. Auctions are reported as if they are exciting sporting contests with results celebrated when they ‘soar’ past reserve prices. Similarly, when the Housing Statement was announced in September, the Australian Financial Review warned that the policies risked dampening house prices, valuing rapid growth in house prices over increased affordability. Housing is a human right, and that fact lies at the heart of Inquiries such as this. All Victorians should be able to access safe, secure, quality and affordable housing. The housing choices that people can make are inevitably shaped by their own circumstances, the  broader nature of the housing system, and our social and economic priorities. One question that this Inquiry has faced is whether we want a home ownership society or a landlord society.9 Victoria, along with the rest of the country, is trending towards the latter. As rates of renting increase, so must security of tenure, liveable rental homes and greater consumer protections. But the goal of home ownership should never be out of reach for Victorians.

When we replaced our traditional pattern of development with the Suburban Experiment, there were some unforeseen consequences. Why did we do it, and how can we fix it?

In the years following the 2008 global financial crisis, the “big three” housebuilders that dominate the new-build market in Britain have been able to increase their profits without significantly increasing the number of homes they build. This has happened despite political pressure to increase UK housing supply.

They were able to do this, we argue, because they have built up significant structural power: they can use their control of housing land and housebuilding to secure state support for initiatives that benefit their shareholders by pushing up their share prices and profitability.

[…] 

We argue this state support via planning liberalisation has given volume housebuilders what’s called monopsonistic market power in local land markets. In other words, it’s created a buyer-dominated market. This has kept the cost of their land relatively flat while UK house prices continued to rise. 

[…] 

When market power in local land markets was combined with structural power over the state, we believe volume housebuilders were able to increase their profit margins rather than ramp up delivery to help the government meet its target of 300,000 new homes per year in England. Our research shows it was in the interests of the volume housebuilders not to rapidly increase their housing supply for two main reasons.

Key arguments;

• Post-GFC, the big three successfully adopted a “margins over volume” strategy, allowing them to generate large amounts of cash, most of which has been returned to their shareholders.
• The state played a crucial role in increasing their profit margins, through two main interventions, both of which benefitted larger housebuilders over smaller housebuilders;
  • Mortgage market support schemes which (likely) inflated their sales prices, and allowed them to wind-down their own shared equity schemes.
  • Renegotiation of section 106 agreements and the subsequent liberalisation of the planning system.
• The state’s prioritisation of large sites in the planning system also provided the big-three with (monopsonistic) market power, keeping down the input cost of their land.
• The state shaped the land and housing market in this way because it perceived itself as a necessarily passive actor in the production of housing, reliant on the structural power of the largest housebuilders.

We conclude that in order to expand housing supply in a way that aligns with social and environmental needs, the state needs to recognise its own structural power, and assume a larger and more active role in the housebuilding and land market.

In Scotland, people who meet a broad definition of homelessness get immediate access to short-term shelter and then put on a list for permanent housing, which is usually heavily discounted. Healthcare, a leading cause of debt in the United States, is largely free for everyone in the United Kingdom, as is treatment for the mental health and substance abuse issues that can exacerbate homelessness.

Few people here sleep on the street — about 30 in Glasgow and 40 in Edinburgh on a given night, according to Simon Community Scotland, a leading charity that deploys outreach teams and offers services in both cities. That’s up from recent years when the numbers could often be counted on one or two hands, but still a manageable figure for a pair of cities with a combined population of about 1.2 million people.

The city of Los Angeles, just over three times as populous, estimates that 46,260 people sleep on its streets on a given night.

The problem is not that the owners of multi-million-dollar homes, or those like the landed gentry of the Regency period who are deriving their income from investment properties, still believe that they are humble members of the middle class. It’s how this warped self-image is wielded, in ways that impact everyone—notably, the one in three Canadians who rent. This is most obvious in the inclination of owners to rent on Airbnb rather than long term; in North Vancouver, one Airbnb host complained to North Shore News that “people don’t want to deal with [long-term] tenants” who are less profitable and harder to evict. But it’s also evident in the way that homeowners frequently oppose new developments that encroach on their neighbourhoods, fighting—often successfully—against change and exacerbating unaffordability and insufficient housing supply in the process. This opposition frames apartment dwellers not as prospective neighbours but as interlopers; when BC’s NDP government introduced new legislation to end restrictive zoning in communities with more than 5,000 people on November 1, Vancouver Sun columnist Vaughn Palmer described it as the latest escalation in a “war on single-family neighbourhoods.”