It’s no secret that Australia is amid a historic housing crisis. Never has the divide between the propertyless and property owners been so stark.

The building industry is in a state of crisis. Caught between rising prices and fixed-price contracts, construction companies have collapsed across the country. Unwilling to lift wages, the remaining builders struggle to retain and attract tradespersons. That should not come as a surprise. The alienating conditions, difficulties, dangers, and stresses of construction means it has one of the highest suicide rates of any industry.

Only the most foolish of career politicians would not use such a crisis to their advantage. There has been a ferment in state and national parliaments around the issue of housing.

There must be. A whole generation is locked out of housing, and the theatrics of parliament are part of stage-managing the crisis. The social explosiveness of the housing issue – even if yet to manifest as protest – is too hot to be ignored. So, how will it be managed?

Propaganda and Misinformation

Firstly, by a great deal of propaganda and misinformation. The class division in society means this will take many forms. The default option of the capitalist class is to demonise its victims – the losers in society, those who’ve fallen through the cracks.

Those who experience homelessness are primarily portrayed as living on the street, and the cause of homelessness as a personal choice or moral failing. Economic hardships and mental health issues are often closely intertwined – those who suffer from both are easily stigmatised by a society that values individual achievement and wealth accumulation as markers of success.

But the scale of the current housing crisis means the approach of stigmatising people experiencing homelessness threatens to open social fissures. Increasingly, working people acutely feel the cracks are widening. The issue of housing security is not just affecting the most marginalised in society.

The ruling class and all its attendant institutions must be seen to be responding to the crisis and doing so in a way that appears that they are doing everything they can to resolve it.

The crisis generates an excellent opportunity for politicians to present themselves as saviours to ordinary people. The more the crisis is talked about via their speeches, press conferences and social media, the more they can present themselves as “getting things done” – the great pragmatists, ever fair, ever noble.

From a decades-long crisis, suddenly, seemingly enormous and impressive resources are mobilised. Government agencies and their private partners spring into action. Very technical policies, statements and packages are elaborated with new regulations enacted. The language of unity and all sectors working together is used enthusiastically.

The Victorian Government’s “Affordability Partnership”

With great fanfare on 20 September, the Victorian state Labor government announced a package it described as the “biggest shake-up to planning and housing reform in generations”. The government estimates Victoria will reach a population of 10.3 million by 2051, and that there will need to be the construction of 2.24 million houses in that time. The new policy, summed up in Victoria’s Housing Statement, aims to build 800,000 new homes in ten years.

No doubt many Labor supporters, who can’t (or don’t want to) make the distinction between public and social housing will present this as a big boost for public housing. However, the policy is not government-provided public housing but for social housing.

The term “social housing” encompasses a broad range of scenarios. Social housing units are sometimes owned and managed by government entities, such as the Department of Health and Human Services (DHHS), just like public housing.

However, it can also involve housing provided by non-profit organisations, housing cooperatives or private landlords who receive government subsidies to make units more affordable. It does not remove the profit motive from housing provision; it’s challenging to apply for and can be very exploitative. It is usually a boon for developers.

There is good reason to be more than just a bit sceptical of this announcement. This was not an announcement made in partnership with trade unions or organisations that provide social services. The proposal has the full backing of the big end of town – the Housing Industry Association, Master Builders, the Property Council and the Urban Development Institute of Australia.

The Andrews Government’s announcement puts forward it’s pro-developer stance in a straightforward manner, “it’s a simple proposition: build more homes, and they’ll be more affordable. But the Government can’t fix the problem alone. We’ll do it in an Affordability Partnership with industry”.

Under the Housing Statement, it will be easier for developers to bypass opposition from local government and community groups and build taller and denser apartments. The government has targeted 44 high-rise public housing buildings (described even by the most liberal press as “monolithic”) for demolition.

These building are throughout Melbourne’s inner city areas, where Labor’s base of support is increasingly middle class. This follows the contours of gentrification that has afflicted working-class communities.

A Shoddy Landlord

“Our 44 high-rise towers are old, they are out of date, they are crumbling, they need to go”, Premier Daniel Andrews said. In this, there is an admission that the Victorian state government has been an awful landlord – their neglect now justifies more creeping privatisation.

The towers in Flemington, North Melbourne and Carlton will be the first to go. But what of the residents?

The residents of the tower blocks have complained that the announcement came as a shock to them and have no idea where they’ll go next (the media did not consider this on the day to be the most controversial part of the plan).

As part of the announcement, the government has proposed a 7.5% tax on Airbnb and Stayz accommodation. This has been described as “disastrous” by large sections of the mainstream media. As the government claims, it is a very modest tax that will only raise about $70m a year when it comes into effect in 2025. If it comes into effect, it will be the first tax to be levied in Australia on short-stay accommodation and could lead to a national tax being imposed – at least that is what the industry fears.

Premier Daniel Andrews was persistently hounded by a journalist at the announcement who accused him of proposing the highest tax for short-stay accommodation worldwide. Yet other cities have similar taxes. Los Angeles (which faces a much more severe housing crisis) charges a 14% tax on short-stay lodgings.

Perhaps the tax is a bit of a diversion from what’s really at stake – a clever bit of deception to get the right-wing chattering classes riled up while the real issues are not addressed. The more malcontent and angry the reactionary loons of Victorian politics get; the more Andrews can present himself as a progressive statesman.

There is no guarantee in Andrews’s announcement that public housing will be retained or anything like 800,000 homes will be built. The statement was made to grab headlines.

CFMMEU says ‘Tax the Rich’

Zach Smith, national secretary of the construction division of the CFMMEU, has a plan for public housing that would work: place a tax of 40% on corporate super-profits to address the housing crisis. Such a tax would raise billions of dollars.

Smith told the National Press Club in July, “Millions of Australians are worried about their capacity to afford the most basic of human needs. And this failure is not one of wealth. Australia has plenty of money. The wealth exists…It exists in the profit columns of a very small and very elite group of corporations. And we just have to funnel just a portion of it in the right direction”.

The union enlisted the services of Oxford Economics Australia (OEA) to analyse how a super profits tax could be used to support housing construction. OEA estimates that an investment of $511 billion is needed to close the housing gap by 2041, or an average of $28 billion annually.

According to the OEA report, this involved the implementation of a “permanent 40% tax on surplus earnings” for both mining projects and non-mining companies with an annual turnover exceeding $100 million. This tax measure would apply to approximately 0.3% of companies operating in Australia.

Housing Australia Future Fund

The federal government has also started paying attention to the issue of housing, sparking debate and controversy in parliament with its $10 billion Housing Australia Future Fund (HAFF) for constructing 30,000 new social housing units within a five-year period. The Greens backed the bill after securing $3 billion to construct public and social housing this year and $500 million yearly.

This is a valuable concession to have won, considering the HAFF was initially intended to be based solely on returns from the stock market. A criticism the Greens faced (as aired on the ABC’s painful Q&A) was that “something is better than nothing”.

As Greens Senator Max Chandler-Maher noted, the government’s future fund lost 1.2% ($120 million) last year, meaning there would not have been a cent for any housing. He added that schools and hospitals are not funded via returns from the stock market, so why should housing be viewed differently from any other social service?

Public Housing as a Last Resort

Australia’s public housing system falls behind many other developed capitalist nations. It is often in a state of disrepair, considered a last-resort option, and perceived as a societal burden. In contrast, several European countries, including Austria, the Netherlands, and Belgium, offer valuable models showcasing how, even within the constraints of capitalist governance, it is possible to create affordable housing that is innovative, well-designed and attractive. But that is not the vision of the Labor Party.

A criticism Chandler-Maher has made is that negotiating with the Labor Party on housing has essentially been to deal with the political arm of the property developers and banks. What needs to be added to the campaign for more affordable housing is a mass grassroots campaign to build a social movement around this issue.

It pays to be an internationalist in outlook to find that pathway forward.

The Mietenwahnsinn (Rent Madness) movement

A notable campaign for more public housing in Europe was the “Mietenwahnsinn” (Rent Madness) movement in Germany. This campaign emerged in response to skyrocketing rents and housing affordability issues, particularly in major cities like Berlin, Munich and Hamburg. Mass protests in 2018-2019 attracted up to 40,000 people.

Key features of the “Mietenwahnsinn” campaign included:

Mass Protests: The movement organised large-scale protests, demonstrations and rallies in major German cities, drawing thousands of participants. These protests aimed to raise public awareness of the housing crisis and pressure politicians to act.

A Genuine Social Movement: The campaign brought together a diverse coalition of housing activists, tenant associations, grassroots organisations and concerned citizens, making it a powerful and influential force.

Rent Control: The campaign called for stricter rent control measures and limitations on rent increases. In Berlin, for example, there was a successful push for a five-year rent freeze on existing rental contracts.

Expropriation Referendum: In Berlin, the campaign also successfully collected signatures for a referendum on ousting large housing companies. The goal was to transfer housing units from private corporations to public ownership. While the referendum has yet to be implemented, it garnered significant support and attention.

Political Impact: The “Mietenwahnsinn” movement (which can’t be pronounced without sounding very passionate) had a notable political impact, influencing policy decisions at the local and national levels. It pressured politicians to prioritise housing issues in their agendas and take steps to address the housing crisis, including tenants’ rights.

It is an example of successful grassroots campaigning that could be emulated here with the right initiatives and leadership.

Additional Information and Sources on Housing in Australia

Housing ownership has steadily declined in Australia in the last twenty years.

A 2021 report from the Grattan Institute states that there are around 400 dwellings for every 1,000 people, which is amongst the lowest supply rates among developed nations. The report noted what we all know to be obvious: “Homeownership rates are falling, especially among the young and the poor. Without change, many more young Australians will be locked out of the housing market. Owning a home increasingly depends on who your parents are, a big change from 35 years ago. People on low incomes–increasingly renters–are spending more of their income on housing”.

A survey by The Household Income and Labour Dynamics in Australia (HILDA) showed that between 1996 and 2014, home ownership amongst 25–34-year-olds declined significantly from 52.2% to 29.2%.

Sydney is not only the most unaffordable place in Australia to buy a house, but is second only to Hong Kong for global housing unaffordability. An average home costs more than 13 times the median salary, according to a Committee for Sydney report released at the beginning of September.

According to the latest CoreLogic Home Value Index, released in August 2023, the median price of a house in Sydney now sits at $1,333,985, while a unit is $817,059.

Australia’s second-largest city, Melbourne, ranks number three in the Global Liveability Index of 2003. If not long out of date, this ranking must surely be some economic conjuring trick because Melbourne house prices are also insufferable for most people. The Median house price sits at just under $920,000.