How the ACT government hobbled low-income homebuyers

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Community Housing Canberra owned dwellings: annual growth rate.

“Land prices for detached housing have exploded beyond the capacity of almost half the residents of the ACT to pay. You know who I mean, the people for whom the Labor Party came into being to represent, support and defend,” writes JON STANHOPE.

THE ACT government seems lately to have gone a little quiet about housing affordability. The yawning gap between its rhetoric on the issue and its lack of achievement would explain why. 

Jon Stanhope.

It’s clear that the government not only does not have a coherent plan for ensuring that the housing market in Canberra delivers affordable housing, but it has also taken steps to discourage and/or prevent it from doing so. A position, to be fair, that is entirely consistent with its essentially neo-liberal spirit.

I have noted previously the decision by the government, which has a monopoly on land in the ACT, to constrain supply for detached housing, for the joint aims, one assumes, of forcing the price up and so increasing its profit while also, for ideological reasons, seeking to force people who can no longer afford a detached house to live in high rise flats/apartments.

Predictably, the ACT has consequently had among the highest increases in median house prices and rents in Australia and a concomitant redistribution of wealth from lower-income Canberra families to higher-income, middle-class, home-owning, families.

Compounding the impact that the government’s land supply policies have had on house prices, the Suburban Land Agency has in each of the last two years failed in a quite heroic way to meet any of its targets for land revenue, operating profit, dividend and total return to the Territory or the supply of land for affordable or community housing.

A primary reason for this is that because of the scale of the reduction in the supply of land for detached housing that its price has exploded beyond the capacity of almost half the residents of the ACT to pay ie those households with gross household incomes of less than (say) $115,000, namely working-class Canberrans, young families, blue-collar workers, people working in hospitality, cleaners, shop assistants and nurses, teachers and police officers. You know who I mean, the people for whom the Labor Party came into being to represent, support and defend.

There are myriad examples of decisions taken by ACT Labor and the Greens Party over the last five or six years to illustrate just how deliberate the assault on successful housing affordability initiatives has been but perhaps the starkest of all is the emasculation of Community Housing Canberra (CHC).

To recap, in brief, under the 2007 Affordable Housing Action Plan the then government supported CHC by:

  • Injecting $3 million in capital;
  • Transferring to it the title to 132 housing properties;
  • Providing a $50 million finance facility at government borrowing rate to enable 1000 new affordable dwellings within 10 years; and
  • Through an MOU, guaranteed access to suitable land for 120 dwelling sites a year.

The charts published here illustrate, in a way that mere words cannot, the impact of two unfathomable decisions taken by ACT Labor and the Greens to discontinue support for CHC.

They first discontinued, in or around 2012 or 2013, the MOU with CHC guaranteeing access to land for 120 dwellings a year thus forcing CHC to compete on the open market with commercial builders for land and secondly, a few years later called in the revolving finance facility thus forcing CHC to obtain finance on commercial terms.

Community Housing Canberra owned dwellings: Affordable Housing Action Plan growth targets and actual results.

The charts show that as a consequence of these decisions CHC missed its 2018 target by about 250 dwellings. If the arrangements that had been originally agreed had been maintained and rolled over, I have no doubt that CHC would today have in the order of 350 to 400 more dwellings than it does.

Greens leader Shane Rattenbury, when asked why Labor and the Greens had decided to deny CHC access to affordable land and finance, infamously responded that it was in order to force CHC “to become more flexible”.

I think there can be no argument but that the result has been, in reality, that CHC went into rigor mortis and is now about as flexible as a dead dog. More relevantly there are 400 or so Canberra families that could today have been living in affordable accommodation, but who are not. Thank you, Andrew; thank you, Shane.



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Jon Stanhope
Jon Stanhope was Chief Minister from 2001 to 2011 and represented Ginninderra for the Labor Party from 1998. He is the only Chief Minister to have governed with a majority in the Assembly.

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