Suddenly politicians have discovered our housing unaffordability "crisis". They ask themselves why, if the economy is booming, are homes so unaffordable. It's not as though there's a shortage of land.
Although there's more than enough land, people are not allowed to build houses on it. State governments have done everything in their power to restrict the building of new homes in new areas. It has been a deliberate policy of governments around the country to limit "sprawl" in favour "consolidation" (code for high-density development). There's one flaw to this grand plan. Few people want to live in high-density accommodation, and existing residents don't want to live near it.
For all the talk about housing unaffordability, there's no mystery to the cause of the problem. The economics of house prices is simple. If the demand for something exceeds supply, its price goes up. In Melbourne over the past 30 years, the cost of constructing a new house has matched inflation. But the cost of land has increased by more than twice the rate of inflation.
While housing unaffordability in Melbourne is not yet as bad as in Sydney, all capital cities are suffering from the same nationwide phenomenon, a shortage of housing.
On Monday, Kevin Rudd announced federal Labor's response. While he acknowledged the issue of land availability, he said that "excessive land release could, however, lead to (reductions) in the value of properties in neighbouring suburbs". Yes, this would happen -- and it would be a good thing. The ALP can't have it both ways. Either it wants more affordable housing or it doesn't.
The State Government refuses to accept that Melbourne's families want to live on a quarter-acre block in a house with a backyard. Further proof of this came last week with the release of the 2006 census data. Our fastest growing suburbs, such as Melton, Whittlesea, and Pakenham, are those where people live in houses, not apartments. In these areas, the increase in population has been much faster than the Government predicted. In older suburbs such as Essendon and Box Hill there has been almost no growth. This lack of growth in traditional middle-class suburbs is being blamed on local residents opposed to high-density development.
Three years ago, the State Government was bewildered by the reaction of Mitcham residents who didn't want to live near a 17-storey apartment building. This bewilderment is a testament to how far removed the Government is from community attitudes on this issue.
Victorian Planning Minister Justin Madden refused to be interviewed about the census figures. This is hardly surprising given that the census is proof that the state's planning policies have fundamentally failed.
In 2002, the Bracks Government launched its planning policy, Melbourne 2030. The key point of the policy is that housing development is limited to specified growth corridors with any building outside those corridors being prohibited. The State Government has refused to consider the alternative strategy of setting planning guidelines and allowing local councils to implement them.
The only thing that Melbourne 2030 does is deliver windfall profits to property developers who are lucky enough to have their land inside the corridor. The planning rules have proved so unworkable that the corridor boundaries have been changed five times since 2002.
The supposed justification for Melbourne 2030 is that high-density accommodation is environmentally and socially preferable to low-density suburban housing.
The environmental argument is dubious. Around the world high-density cities have worse air pollution and worse infrastructure problems than low density cities. New services, for example broadband, are more expensive to install in old suburbs than in new ones. The social argument is also ill-conceived. International research shows that families living in new suburbs have a stronger sense of community and connection with their neighbours than those living in older suburbs.
Melbourne is not the sprawling metropolis that its critics make it out to be. On a worldwide scale Melbourne's density is average for a city of its size.
The motivation behind policies such as Melbourne 2030 is not environmental or social -- it is ideological. Architects and urban planners who have no knowledge of and no interest in how most people live are trying to foist onto others their own vision for Melbourne.
There is a deep-seated hostility to the values of those who choose to settle in the suburbs. The inner-city with its theatres, bookshops and cafes is assumed to be the epitome of cultural sophistication while Kath and Kim country is dismissed as a wasteland. Anyone is entitled to their opinion about how other people live. But when intellectual snobbery turns into bad policy then we have a problem.
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