Housing Affordability Culprit Found: No Action Taken

Excitement! Someone  has actually started making a serious argument about what is really driving housing affordability issues. Well, the Housing Industry Association has, which is a pity because they hardly present as having an impartial perspective. Report done by the Centre for International Economics.

Key finding: 36-44% of final price driven by tax and government rules.

And it’s a good thing they have at least attempted to quantify the effect of mandates and regulation. Read the article, press release or download the actual report.

No-one will do anything though.

I am reminded of the National Dialogue on Universal Housing Design that reported halfway through last year. A collection of worthy stakeholders decided to mandate design on new homes to allow for ageing and disability – with a clear impact on housing prices since it made design demands that may otherwise not have been included. It seemed like a reasonable idea. A compassionate idea. A GOOD THING.Notable among the stakeholders? Not a single homebuyer representative. The list in the report  is below:

  • Australian Human Rights Commission
  • Australian Institute of Architects
  • Australian Local Government Association
  • Australian Network for Universal Housing Design
  • COTA Australia
  • Grocon
  • Housing Industry Association
  • Lend Lease
  • Master Builders Australia
  • National People with Disabilities and Carers Council
  • Office of the Disability Council of NSW
  • Property Council of Australia
  • Real Estate Institute of Australia
  • Stockland.

No wonder these worthies all thought it a great idea to force people to design and pay for home features they may not want. Like reinforced bathroom walls, step-free ground floor access, and so-on.

Not a one of stakeholders will carry the cost of their mandated design. They are either advocacy groups or producers. Ordinary homebuyers were completely ignored in the process. As they are in most planning regulation decisions.

Now if demand for such features is going to increase as supposed, in the future houses without those features will sell for less. Those with them, for more. Probably for an amount that includes the approximate cost of altering a home to meet the aged or disabled purchaser’s needs. It is irrelevant that it costs more to retrofit in this scenario.

Universal design is a reasonable concept. But when it is mandated for people who may never need to benefit from it, in ignorance of how the market may change and account for it, then it is simply a ‘moral levy’ on people who shouldn’t have to pay for it.

Colleagues in the community, ageing and disability sector disagree with me strongly on this. But we are talking about private homes here, not public or quasi-public areas where universal design makes perfect sense. And where the market will adjust if the problem becomes as large as people think it will.

Merely identifying the impact of taxes and regulations on housing prices will mean nothing if worthies still believe they can mandate how people can design their homes without even engaging the core consumer in the process. It isn’t confined to universal design issues; it includes anything from energy standards to intrusive safety concerns. No wonder affordability is an issue. As a society we seem to accept that our homes are no longer ours. There’s something very strange – and worrying – about that.

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