Introduction
The quality of people’s lives critically depends on their living conditions. It means that housing is the central determinant of well-being and an essential aspect of a welfare state. At the same time, housing quality is influenced by numerous factors (Dalton & Nethercote, 2021).
For instance, in Australia, most citizens reside in homes that meet or exceed the benchmark for high-quality or adequate housing (Dalton & Nethercote, 2021). Homeownership rates remain high, which can be attributed to the existing housing policy (Dalton & Nethercote, 2021). At the same time, nowadays, many households experience housing cost pressures, while housing undersupply impacts the emergence of new ones (Dalton & Nethercote, 2021). For this reason, it is necessary to review the existing policy to determine whether it can be modified to effectively manage the situation.
Policy Overview
The housing policy in Australia will be analysed to investigate the housing affordability crisis in the state. The investigation will utilize frameworks for political analysis provided by Dalton et al. (1996) and Popple et al. (2018). They help answer the major policy questions, such as why, who, what, when, and how. Thus, the existing approach to regulating the issue rests on the idea that the market will satisfy people’s housing demands with minimal government intervention (Dalton & Nethercote, 2021).
At the same time, cities create spatial arrangements through land market and employment mechanisms, leading to increased housing inequalities (Dalton & Nethercote, 2021). These two path dependencies are crucial for understanding Australia’s current housing policy (Dalton & Nethercote, 2021). Moreover, the existing approach focuses on providing Australians with a safe place they can call home, increasing housing affordability, and supporting citizens in home ownership (Dalton & Nethercote, 2021). However, the existing problematic issues indicate the need for discussion and additional change.
In general, the policy addresses the issue of housing affordability in the state. It has always been a key focus for countries seeking to improve the quality of people’s lives. Thus, the current research shows a growing decline in housing affordability (Dalton & Nethercote, 2021). The average weekly costs are high, comprising $493 for owners with a mortgage, $54 for owners without one, and $397 for renters (Australian Bureau of Statistics, 2022a). The spending may be too significant, especially in light of the global financial crisis.
Furthermore, an increasing number of individuals spend more than 30% of their gross household income on housing costs (Australian Bureau of Statistics, 2022a). At the same time, the causes of declining housing affordability are complex and are associated with economic change, population growth, and urbanisation (Dalton & Nethercote, 2021). This means that the issue remains complex and requires additional investigation.
The discussed issue may be considered a problem for both the government and citizens in the state. First, the negative changes in housing affordability indicate the decreased effectiveness of the existing policies in the state and the lack of practical tools that might help resolve the problem. At the same time, housing affordability is a crucial indicator of quality of life and well-being (Dalton & Nethercote, 2021). This means that for vulnerable population groups or households with low incomes, the declining affordability level is a significant problem that needs to be addressed. Otherwise, there is a risk of further worsening of the situation, necessitating more complex actions and policies to address the issue.
The housing policy can be analyzed in the context of the welfare state and Australian public policy. The government is responsible for shaping the production, consumption, and exchange of homes and specific services associated with them (Dalton & Nethercote, 2021). However, the statistics show that there are around 1,043,776 unoccupied dwellings, according to the national census (Australian Bureau of Statistics, 2022b).
Furthermore, housing policy is directly linked to taxation, planning, building regulation, finance, and employment policies (Dalton & Nethercote, 2021). It means that the issues are interrelated and can be viewed as part of Australia’s bigger context and most social policies. At the same time, Australia experiences the increasing densification of urban areas and fringe expansion, which promotes inequalities (Dalton & Nethercote, 2021). For this reason, the housing policy should be analysed in the context of complex social issues in the state.
In Australia, providing its citizens with secure and comfortable dwellings is one of the major government duties. Social allocation is based on the idea that social subjects should engage in specific negotiations and interactions to ensure the satisfaction of all parties (Dalton & Nethercote, 2021). In Australia, the concept of a homeownership society influences housing policy and the relationship between individuals and the government (Dalton & Nethercote, 2021).
The housing costs and the ability to pay were initially supported by full employment, regulated housing finance, and a welfare safety net (Dalton & Nethercote, 2021). In this way, the state utilizes its institutions and bodies to establish the foundation for a homeownership society. It also provides mortgages and tax expenditures to regulate the sphere and ensure individuals can access housing.
The Australian government plays a vital role in the housing market. First, it determines the policy framework that regulates the market’s work (“Housing,” 2023). Second, it might directly intervene in the sphere’s work when it cannot provide the necessary outcomes (“Housing,” 2023).
Furthermore, specific types of social provisions are ensured within the policy. For instance, the National Housing and Homelessness Plan is designed to help Australians access safe and affordable housing (“National Housing and Homelessness Plan,” 2023). The measure should help to address issues constraining the existing housing system and determine actions needed to overcome challenges (“National Housing and Homelessness Plan,” 2023). Furthermore, the National Housing and Homeless Agreement was introduced in 2018 and offered $1,6 billion yearly for states to improve access to secure and affordable housing (“National Housing and Homelessness Agreement,” 2023). In this way, the existing housing policy is designed to ensure that citizens are supported in their efforts to acquire safe and suitable housing.
At the same time, specific factors impact individuals’ eligibility for affordable housing. The last one can be defined as housing suitable for households characterized by moderate or low income and able to meet their basic needs (“About affordable rental housing,” 2023). Housing is affordable if it costs less than 30% of gross household income (“About affordable rental housing,” 2023).
Thus, Australian citizenship or permanent residency, a household’s ability to secure housing in the private rental market, and ownership of other assets are vital for eligibility (“About affordable rental housing,” 2023). The services and benefits are provided in accordance with the existing policy, relevant legal acts, the National Rental Affordability Scheme, and the agreements mentioned above. In this manner, the housing policy operates through regulations introduced by the government and its agencies.
Thus, the provisions and benefits mentioned above are sponsored by the government. Thus, the need to increase affordable housing impacts the use of available funds. The government established the $10 billion Housing Australia Future Fund to ensure resources are available to increase the housing supply and ensure appropriate service delivery (“Improving housing supply and affordability,” 2022).
Furthermore, the fund will help to build 20,000 new dwellings required to meet the current needs for affordable housing (“Improving housing supply and affordability,” 2022). Moreover, the Australian government is expanding the $1 billion National Housing Infrastructure Facility to increase the flexibility of existing policies and unlock additional funds that can be used to support benefits (“Improving housing supply and affordability,” 2022). In this way, Australia’s housing policy is funded using budget costs acquired through taxation and other activities.
Altogether, the policy under analysis aims to provide affordable housing to Australians. As the central body responsible for policy implementation, the government monitors the realization of existing incentives within the established framework. It establishes funds and impacts the market’s work to ensure it functions effectively and appropriately.
The eligibility criteria help to determine individuals who might use affordable housing services. The budget is used to sponsor the activities and improve the situation. However, there are still problems, such as declining housing affordability, that should be considered.
Historical Analysis
The roots of the current housing policy emerged soon after World War II, when the concept of the welfare state gained prominence. Australia increased home ownership from 50 to 70 per cent by the mid-1960s (Dalton & Nethercote, 2021). The progress was achieved through the implementation of a model with front-leading housing costs, which was also supported by mortgage-free and low housing costs for nearly all households (Dalton & Nethercote, 2021). Additionally, full employment, breadwinner wages, and regulated finance helped maintain the desired housing affordability levels (Dalton & Nethercote, 2021). In this way, the policy emerged due to the social ideas prevalent in the second half of the 20th century.
However, during the next several decades, the state failed to ensure high housing affordability. For instance, between 1991 and 2001, the state’s population grew by 11.5%, while the housing stock increased only by 18.3% (Eslake, 2013). Although the share of home-owners remains high (around 70%), the problem is evident (Weeks, W. (2000).
Furthermore, between 2001 and 2011, the population grew by 15.9%, while housing stock increased only by15.2% (Eslake, 2013). This means that over time, the effectiveness of the policy has decreased due to numerous factors. As a result, the housing affordability crisis has become significant, and a critical need exists to ensure the most effective and workable approaches are selected. The geographies of housing also impact the development of the crisis, as some territories are characterised by reduced access to housing (Dufy-Jones, 2018). Under these conditions, the policy has historically been topical for Australia.
Social Analysis
Currently, the Australian housing policy faces significant challenges and hardships. It is evidenced by the change in statistics and the emergence of negative trends. For instance, the proportion of home ownership without a mortgage was reduced to 62% for older households in 2015-16, compared to 77% in 1995-96 (Dalton & Nethercote, 2021).
Moreover, there was an increase in the number of households that rent up to 10% (Dalton & Nethercote, 2021). Finally, homeownership decreased from around three-quarters of the population (76%) to over two-thirds (67%), while renting from a private landlord became a more widespread practice (Dalton & Nethercote, 2021). The numbers evidence the growing housing affordability crisis, as individuals lack access to dwellings that meet their requirements and help create new families.
For this reason, the government tries to address and alter the situation. First, affordable housing programs are introduced to ensure eligible populations can acquire the necessary dwelling (Dalton & Nethercote, 2021). Second, the government spends around $53 billion annually on housing-related transfers and specific taxation (Dalton & Nethercote, 2021). This means that there is increased attention from the government devoted to the problem as it recognises the critical importance of the issue and the necessity of resolving it.
Another possible incentive is the use of shared ownership and shared equity schemes to establish cooperative and co-living arrangements (Dalton & Nethercote, 2021). However, the scope of the problem necessitates additional regulations and adjustments to the existing policy to achieve significant improvement.
Thus, the low-income population is one of the most vulnerable groups associated with the policy. Between 2017 and 2018, approximately 1 million low-income households experienced financial stress (Australian Institute of Health and Welfare, 2021). This means they spend around 32% of their income on housing costs, which iscritical to achieving the desired quality of life (Australian Institute of Health and Welfare, 2021).
Furthermore, young families planning to live independently and own their own houses might also suffer from the crisis (Australian Institute of Health and Welfare, 2021). Moreover, specific geographical patterns exist in the distribution of vulnerable populations, as housing costs differ regionally (Australian Institute of Health and Welfare, 2021). The highest housing costs are characterised in Queensland, while Tasmania has the lowest (Australian Institute of Health and Welfare, 2021). For this reason, a significant number of citizens are suffering from issues related to the policy.
The deficit of affordable housing contradicts social values that are important for Australia. It calls for a national strategic framework supporting the integration of public subsidies, intervention programs, and financing (Dalton & Nethercote, 2021). Thus, the central goal of the housing policy in Australia is to enhance access to affordable and secure housing in Australia (“Housing,” 2023).
The given goal stems from social values and neoliberalist ideas of the welfare state, with considerable attention devoted to the well-being of every individual (Williams, 2000). However, considering the existing issues and the affordability crisis, achieving these goals becomes complicated and requires additional effort. Moreover, there is a need for new prospects and incentives to ensure access to broader populations.
Nevertheless, the existing problem is recognised by the authorities and researchers. Currently, there is a high degree of consensus on what should be done to improve Australia’s housing policy. Bipartisan support, along with a robust framework and interventions across the three tiers of government, is a possible approach towards addressing the problem (Dalton & Nethercote, 2021). Moreover, there is a need to create an enduring supply of new, affordable housing that meets the needs of emerging households (Dalton & Nethercote, 2021). The aforementioned incentives demonstrate that the government and society have reached a consensus on the issue and are prepared to collaborate in addressing it.
Economic and Political Factors
There are also economic and political aspects associated with the housing policy in Australia. First, the current crisis can be linked to economic challenges similar to those associated with the housing shortage soon after the Second World War (Dalton & Nethercote, 2021). Moreover, the majority of the state’s economy is concentrated in large cities, offering individuals opportunities to earn and live (Dalton & Nethercote, 2021). These factors shape the housing market and affordability (Dalton & Nethercote, 2021). At the same time, the political factors include the questions of employment-related mobility, income, and overall level of income in the state (Dalton & Nethercote, 2021). The government focuses on addressing the issues to create the basis for further improvement.
Conclusion
Altogether, the affordable housing crisis in Australia can be attributed to the current housing policy. It is impacted by the government’s involvement and the market’s overall development. However, the current situation indicates that the sphere fails to self-regulate effectively, as numerous households struggle to find affordable dwellings and spend more than 30% of their income on them, which may exacerbate the situation.
Nevertheless, the analysis shows a high level of consensus between the major parties involved in decision-making. The government has already launched specific incentives to build additional housing and address the issue. For this reason, it is possible to predict the new changes in the policy, and it is becoming more practical to resolve the affordable housing crisis.
References
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