Wednesday, 12 October 2011

Michael Pascoe on housing affordability

Michael Pascoe has some interesting things to say in Housing affordability: the summit we really need. I'm not sure I agree with everything he says, particularly in regards to negative gearing (disclaimer, I don't have an investment property or any negative gearing). I'm also not sure I support a land tax. Still he has a point.

Edit 12/10: Michael Janda discusses negative gearing and the tax summit in Let's talk about tax.

Edit 19/10: Jessica Irvine in The true cost of NIMBYism discusses modelling by economists from the Reserve Bank that looks at some of the causes of the housing shortage.
Through a combination of empirical research and new economic modelling, the authors Mariano Kulish, Anthony Richards and Christian Gillitzer highlight some factors that contribute to Australians living in more expensive, smaller and lower density housing than we would if the housing market was not constrained by a number of structural factors, including high transport costs, restrictions on density and costs imposed on new housing supply.
Edit 22:10: In Urban Densities: Keep it Real Bob Carr discusses Jessica Irvine's above piece and notes that although it's correct, it fails to address two recent developments that will lower housing density in NSW (with the implication that the increased sprawl will decrease affordability):
One, Barry O’Farrell in April this year gave control over density and zoning decisions to local government. As a result, this will see more high and medium density developments rejected.
Two, the Land and Environment Court has overruled attempts by the previous Labor government to have high density development along the North Shore rail link in Ku-ring-gai shire, boosting densities near the railway station and along a major transport artery. This decision means 10,000 more future dwellings will have to be delivered on Sydney’s urban fringe.
He concludes with:
Jessica finishes her piece saying “Interestingly, the … researchers found evidence that Sydney’s population density has increased in recent years.” Yes, it is interesting. It was also the product of 16 years of sound planning policy. Sydney has the highest population density of any Australian capital. Over the past decade only 21 percent of new homes were built in greenfield areas, compared to over 50 percent in other Australian capitals. Melbourne is going for growth on the fringe. Cities either grow up or out. Stop them growing up and they sure as hell will grow out.

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