Economy

Mar 5, 2018

How the rich weaponised NIMBYism to wage class war

A new report illustrates how effectively middle and high-income earners have used the tax system and NIMBYism to drive low-income earners out of housing ownership

Bernard Keane — Politics editor

Bernard Keane

Politics editor

Housing affordability Federal Budget 2017

The Grattan Institute report on housing released today illustrates how, when it comes to housing, Australia's middle- and higher-income earners have successfully waged economic war on the young and low-income earners over the last 40 years.

The success is clear from some compelling data in the report: ownership of housing by 25- to 34-year-olds has fallen from over 60% in 1981 to 45% in 2016. And ownership among the lowest 20% of income earners has fallen from between 60-70% for all groups under 55 to below 50% -- and to just above 20% for 25- to 34-year-old low-income earners.

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29 comments

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29 thoughts on “How the rich weaponised NIMBYism to wage class war

  1. Teddy

    “ Yet more evidence that NSW Labor shouldn’t be allowed near power in Australia’s largest state for many years to come.”

    Fair point, and whenever I hear Bob Carr’s silky voice pronouncing himself the world’s greatest statesman all these years later after his “Bugger off, migrants, we’re full” statement, I still feel like throwing up.

    And NSW Labor is still at, siding with wealthy boomer home-owners in the inner west of Sydney in particular. Linda Burney herself, along with a lot of local inner west Labor royalty were at an anti development rally in Marrickville a couple of weekends ago holding up placards which (deciphered) read: “Go away, migrants, refugees and low income earners! You’re NOT welcome here!”

    But they are battling with the Greens in the “I’m more NIMBY than you” fight for selfish home-owners’ hearts and minds. It’s one Labor simply can’t win. The Greens, freed from the responsibility of doing anything practical about housing affordability, are the champions here.

  2. Duncan Gilbey

    A favourable (to investors) tax environment in combination with a low cost of borrowing have put a rocket under real estate prices since about 2008.

    The Reserve Bank must bear some responsibility for the current housing problems as they have kept interests rates at emergency levels for so long, making borrowing for asset speculation very attractive. If I recall correctly, one of the reasons for keeping rates low was to boost the housing market as the construction phase of the mining boom ended. This suggests that the current housing situation is not an unhappy accident but the successful realisation of a plan.

    I’m surprised that the role of the Reserve Bank hasn’t been mentioned in this article.

  3. AR

    I checked that I hadn’t done a month long Rip van Winkle and awoken on April 1st when the news this morning gave us the shlock-horror, hoo nu, “news” that the young & poor were finding it difficult to buy a house.
    So earth shattering, unbelievable and utterly unexpected…

  4. Richard

    Pretty poor article. You’d have to read the Grattan report to find out what it really says. Obviously the report makes no such claim about an economic war being waged–since it’s a pdf it is easily searched. Keane doesn’t really discuss the recommendations, whether they’d deliver the outcomes claimed, whether the report has sufficient depth to warrant the conclusions, or even what principles should apply when forming housing policy at national, state, and local level. It is in essence an uncritical collection of soundbites.

    There isn’t much to discuss about the article as result, but the report is worthy of analysis. Clearly it is highly political since it doesn’t acknowledge the primary causes of housing unaffordability. If the immigration rate [Federal policy, demand side] is higher than the rate the development industry can build to meet that need [supply side], the obvious happens. The report didn’t claim that the development industry is idle with a lack of work. Resources could be taken from other segments of the economy, but eventually the ponzi scheme will come to an end.

    On a matter of natural justice, Victoria in Future 2016 states the Total Fertility Rate of Victorian women to be 1.8, so Victorians, the majority of whom are Melburnians, are at least sustainable on that measure.

    The report does try to portray Councils to be the problem, allegedly because they say “no” or contest planning matters at VCAT. In a nutshell, Victoria has planning objectives enshrined in law [fairness for example], has a “performance-based” planning system with only a few prescriptive criteria for assessing proposals, has residential amenity standards and other policies to regulate what gets built where. Developers typically seek to maximize their profit so ask for waivers from compliance with standards. If Councils say no, the matter goes to VCAT. VCAT cherry-picks a few elements from a Scheme to justify the outcome they want, frequently setting aside council decisions. Councils then start second-guessing what VCAT’s decision might be, and grant permits for non-compliant developments themselves.

    Glen Eira was quoted in the report. What it didn’t say was the number of times VCAT set aside a GECC decision to reject or ameliorate a proposal despite it failing to comply with amenity standards. Little wonder people jack up at the corruption by an unelected, unaccountable body.

    There is also the “minor” matter of funding the infrastructure required to be retrofitted to support the increase in population. Open space, schools, upgraded public transport, road widening, electricity, water, sewerage, drainage, hospitals, police, tribunals to keep outbreaks of democracy to a minimum. Governments are always struggling to deliver the services citizens demand.

    Another aspect that was ignored was the current dwelling yield. Developers have demonstrated, repeatedly, they can squeeze 6 dwellings onto a typical lot where once was a detached dwelling in NRZ. Obviously they can squeeze more in when not constrained by height limits, setbacks, overshadowing rules, or are spared having to contribute towards additional infrastructure. The report didn’t have the courage to call for a target density per developable hectare.

    Bernard uses NIMBYism pejoratively. I know what’s in my backyard. It casts a huge shadow, doesn’t comply with amenity standards, bypassed the normal planning process. All courtesy of Daniel Andrews.

    1. Woopwoop

      Very well said, except that you imply the Andrews government is the main one to blame.
      Look at what Matthew Guy did to Fishermans Bend!

    2. JMNO

      Very well-expressed. There is a big article in today’s Age newspaper about the totally inadequate transport options for the rapidly-growing western suburbs of Melbourne which apparently are taking the lion’s share of our immigration-driven population growth.

      Even in the 1960 – 1980 era of mass migration the annual settler arrival numbers only once, in 69-70, reached anywhere near the annual settler arrivals that come in each year at the moment. And back then, there was wasn’t the massive/much-larger-than-permanent-entry long-term temporary migration that we have today.

  5. Mish Mash

    Glad you singled out Fairfax’s disgraceful hypocrisy on the housing debate, particularly in Sydney. Pandering to established gentrified intelligentsia on one hand, and campaigning for the disenfranchised on the other. Never the twain shall meet!

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