No. 22

The roofless and the toothless want room to rumble

STONE the crows! The generation gap used to be about sex and drugs and rock and roll with parents wondering where the kids’ conservatism came from. But now it’s property that pushes them apart.

The parents have the houses and the children have the sulks.

And Lord but there is some serious sulking, as bloggers blather on about how unfair it is that all young hipsters can afford to buy is in suburbs they sneer at. Every columnist’s complaint in the papers is followed by a swag of solidarity from people who agree it is outrageous they cannot live where they like.

Still, it makes a change from journalists with a new baby complaining about, well everything.

But if people in their late 20s and early 30s are howling about housing now, imagine the rage if property prices fell, because that would reduce the tax fee profit they expect to pick up when they inherit the family home, or homes, if they include mum and dad’s investment properties.

When it comes to self-interest, the babies of the boomers are as bad as their parents who whinged the same way 30 years ago.

And are whingeing still. Only now it is not about how hard it is to buy their own roof but the battle to stop anybody else buying where the boomers live. Any urban planner who advocates infill has faced an audience that thinks every development site should be a park. And while they always have a seemingly sensible reason, (too much traffic generally gets a go) in the main it is because they were there first and think too many new residents are bad for the value of the house they bought a generation back.

So we are stuck with people who don’t want to live in the fringe suburbs they can afford versus their parents who want to ensure that this is where everybody, other than themselves, ends up.

Local government that hates the idea of having to collect more rubbish and maintain more roads, and so delays approving developments, doesn’t help. Neither do state politicians who do not dare take on constituents opposed to change of every sort.

In combination, it means that it is very hard to build anything just about anywhere that has mains electricity or town water, which keeps the cost of existing houses high in areas near essential services, art house cinemas and decent delis.

But our aspirations also push up the price of property. We want bigger houses for fewer people, meaning there are fewer roofs to go round. In the decade from 1994-95 average household size declined from 2.69 persons to 2.52, while the number of bathrooms grew from 2.88 to 3.06 per dwelling – Lord knows what everybody is doing with their spare half a bathroom.

And because they are bigger they cost more, freezing out first time buyers, whose aspirations exceed their incomes and who cannot compete with people who already have a stake in the market and want to trade up.

While everybody has a right to do what they like, our obsession with property has little to do with basic needs.

On the basis of the Canadian Occupancy Code, which sets the world-standard – the winters are long and light-on for entertainment in Ottawa – our homes are more than adequate. The Canadians call for no more than two people per bedroom and separate rooms for all but the smallest of different gender kids and, according to the Australian Bureau of Statistics, only 2.8 per cent of homes here fall short of this standard.

Most of us have more rooms of our own than we can use; in fact many of us could survive in smaller digs.  The Brits certainly do. As everybody who watches the property porn on cable TV knows, they pay a fortune for houses you could not swing a cat in, if only because kitty would bang against the walls.

But our aspirations have expanded over the years – meaning the young think the houses their grandparents built are only fit for demolition crews to practise on – and their parents sink savings into their homes or investment properties, seeing them as safer than super. (Are the crows alone in not being able to find the clause in the constitution that states property prices always increase?).

It explains why real estate agents have replaced the old “renovate or detonate” advertisements with pictures of Daleks determined to exterminate any house with less room than the Tardis.

Even without the way the tax system encourages property investment rather than residence (come on, how could the crows entirely ignore the Henry Review?) the difference between what we need, what want and what we can afford ensures we are not building enough roofs where the young want to live.

The National Housing Supply Council says the number of “occupied dwellings” (the crows think it means homes) increased by 127,000 in 2008-2009. This sounds a lot, until you read on and discover that underlying demand was for 205,000 units.

And it isn’t going to get any better, with a medium demand projection estimating we need 180,000 new dwellings a year.

Which means prices will go up for houses in places where the opinion shapers among the young don’t want to live. And even more in areas that appeal.

Of course it would not happen if it was possible to build a lot more accommodation a lot faster and at a lot lower cost. But this isn’t going happen while the tax system encourages investors to bid up prices on investment properties. It is not going to occur while state and local governments hinder rather than help greenfield development. There is Buckleys chance of a building boom while everybody wants to live in houses that would confound the Canadians with the number of empty bedrooms.

And forget affordable high density homes in the inner city. Older people who got there first will never allow their children in if it means that old warehouse becomes flats instead of a park.

If the generations are arguing this hard over housing imagine what will happen when the young and roofless start having to pay more tax to fund healthcare for the property owning toothless.

stephen4@hotkey.net.au

'2012