New Housing Report Calls for Consideration of Australia’s Migrant Intake

A new Grattan Institute report has recommended the government “consider reducing Australia’s current migrant intake” to improve housing affordability, but a peak housing body warns that the focus should instead be on addressing a shortfall of social housing.

In Housing Affordability: Re-imagining the Australian Dream, the Grattan Institute argues that if planning and infrastructure housing policies do not improve, a reduction in Australia’s current migrant intake should be considered.

“Overall, immigration is almost certainly positive if the required additional infrastructure and housing is built promptly and efficiently. But if governments make poor infrastructure choices and limit housing supply, many Australians will be worse off because of higher housing costs and more congestion,” the report said.

“Until recently, housing supply has not kept up with population growth. Consequently, lower levels of migration might be ‘second-best’ policy that could be better than the alternatives, until Australian governments start to make better choices on infrastructure and planning.

“At the very least, the Australian government should develop and articulate a population policy to be published with the intergenerational report, as the Productivity Commission recommended.”

As well as developing an explicit population policy, the Grattan Institute made 12 other recommendations including limiting negative gearing and reducing the capital gains tax discount, amending tenancy laws to make renting more attractive, and establishing a National Housing Research Council.

“It took neglectful governments two decades to create the current housing affordability mess. They preferred the easy choices that merely appear to address the problem,” Grattan Institute CEO John Daley said.

“The politics of reform are fraught because most voters own a home or an investment property, and mistrust any change that might dent the price of their assets.

“But if governments keep pretending there are easy answers, housing affordability will just get worse. Older people will not be able to downsize in the suburb where they live, and our children won’t be able to buy their own home.”

Affordable housing peak body National Shelter said it agreed with most of the report’s recommendations, but executive director Adrian Pisarski expressed concerns that Grattan’s focus on migration could let the “xenophobia genie out of the bottle”.

“I think we would agree with pretty much everything they said. I’m slightly worried though about examining population and migration without a detailed analysis,” Pisarski said.

“Any time we look at migration policy around housing affordability we allow the xenophobia genie out of the bottle and I’m not sure that’s a constructive thing to do.”

Pisarski also lamented the Grattan Institute’s lack of focus on addressing a shortfall in social and affordable housing.

“I’m a bit disappointed that it doesn’t include recommendations targeting the lowest income households. So it has a disclaimer in it that it doesn’t seek to address the shortfall of social housing in its report and it seems to me to be a big omission in what otherwise looks to be a pretty comprehensive report,” he said.

“It identifies that the young and low income households are the most affected but it doesn’t talk about the direct intervention in the provision of social or affordable housing.”

No mention of social #housing investment and goals by the States/Territories and the Commonwealth for people living on low incomes? @NationalShelter @AdrianPisarski @TurnbullMalcolm @ScottMorrisonMP https://t.co/qd8Dr2d4Br

— Shelter SA (@ShelterSa) March 4, 2018

The Grattan report did note that the provision of social housing has not kept pace with population growth.

“The stock of social housing – currently around 400,000 dwellings – has barely grown in 20 years, while the population has increased by 33 per cent. As a result the proportion of dwellings with subsidised rental has declined from a peak in the mid-1990s by about 1 per cent to just under 5 per cent today,” the report said.

The report went on to state that “publicly funded social housing is unlikely to help most low income earners”.

“Funding to increase the volume of social housing stock will help those low income households who move into it. But no plausible quantity of funding will be enough to provide subsidised housing for all of the 20 per cent of households typically classified as low income,” the report said.

“Even if the social housing stock is returned to its historical share of around 6 per cent of the total stock, by definition it will still house less than a third of households in the bottom 20 per cent.

“Therefore, governments need to pursue the reforms set out in this report that will improve housing affordability more generally. Making housing cheaper overall will help low-income earners… and help more of them than increasing the social housing stock.”

Social housing has only ever been 6% of the housing stock, now down to 5%. Has never helped more than 1/3 in the bottom 20%. Not ignored, but discussed on p.62-66, 131-134 of our report https://t.co/UNmZ0SW7Ke https://t.co/yS0tl5tRed

— John Daley (@JohnDaley_) March 5, 2018

However Pisarski argued that even though social housing has traditionally only housed less than a third of low income earners, it did not mean governments could not play a significant role in providing housing in the future.

“Most countries that have done much better than Australia in tackling housing affordability have much higher levels of social affordable housing subsidised by government, and we still maintain that there is a strong role for government to actually lift the proportion of social housing in Australia,” he said.

“So to say that just because historically we’ve never had more than 6 per cent means that governments can’t play a significant role, I think ignores the role that governments can play and downplays the importance of providing housing for those on the lowest incomes and amongst the most vulnerable in Australia.”

Labor’s shadow treasurer Chris Bowen said he welcomed the Grattan Institute’s report and believed that housing supply was a key issue that needed to be addressed.

“The Grattan Institute makes the point that supply is a key issue, we agree with that. They then go onto say if you can’t fix supply, then look at immigration. Well I agree with them that fixing supply is the better solution,” Bowen said on Monday.  

“We support a National Housing Supply Council, they support it in their recommendations as well. If the government was actually serious about housing affordability they’d look at some of those recommendations.”