Housing Crisis Blues

We Bought A Place

In all this chaos, my better half and I bought a place. It's an apartment in Sydney's Southwest, close to the station. It was time. This blog started the last time I was in home ownership and continued through the years I became a renter again. This blog isn't about housing but over the years the renting thing and the housing bubble made me think deeply about the topic. Until the pandemic I had no idea if I would ever get back into ownership ever again, but then a few things went my way for a change, and I could get something going with my better half. It's not much, but - it turns out it's something-not-nothing.

I didn't inherit my chunk of money. My parents are elderly but still alive. I got it through investing in small cap shares - and boy have I a story to tell there, but that's for another day. All I can say is sometimes you get the breaks and when you do, you really ought to capitalise on them. One thing we're glad is that we got to avoid the hellish rental market. Having pets tends to make you gun shy about applying for a rental. This way we get to keep our cat and birds without too many questions. 

We got told by the strata management that if the cat and birds made too much noise they might be asked to leave the residence. I wanted to ask how about the two screaming kids on our floor? Can they be asked to leave the residence? 

Everybody's Talkin' (About Real Estate)

It just sucks that property is the paramount topic for people to discuss. You go to dinner with some people and eventually property ends up being the topic of the conversation. Back when I was a teen, the most boring conversations were about the weather, quickly followed by property. Weather got interesting over time, thanks to Global Warming; property, has not. 

People in Sydney are aware how absurd prices have gotten. The numbers bandied about in normal conversation for middle class people went over $1 million some time ago, and since then there has been a weird feeling that all of Australia has become millionaires if you could just buy that house in the 'burbs. It's demented. Conversations invariably turn on if it is worth it. In these conversations, worth and price tag does a pax de deux in the conversation without actually drawing a conclusion. People without a mortgage or property then are the outright losers in society, but honestly, that is turning into a demarcation between generations. 

This is in stark contrast to the way things were seen in the past. Back in the day about 30 odd years ago, the great fear was that the majority of the Baby Boomer generation would go into their dotage without sufficient savings. After all Superannuation in Australia came into existence well late into their active careers. Various tax concessions wee designed to shore up the savings for the Baby Boomers, and thirty years later we find they hold a lot of property that is now worth a stupendous amount of money. It is the young who cannot begin to get into the property market without a leg up from their Baby Boomer parents. The two saving graces in all of this is that they can't take it with them when they die, and they will die. 

Which, in a weird way brings me back to the point - that it is weird that we've become so obsessed over the roof over our heads at the expense of all else that life has to offer.

But You Need A Roof

As it turns out, a roof over your head is something that you can't just not have. Homelessness is a terrible thing in a society where we have to own stuff to get along, and we need a box in which to place these things. I have no special love for my refrigerator or washing machine, but they must go somewhere. As do book cases and shelving for all the physical media I still possess. We become beholden to the stuff we own. As with food and clothing (and now internet) we cannot get along without it. We cannot be hunter gatherers wandering from cave to cave across the steppes chasing some now-extinct megafauna. 

The housing crisis that is gripping this land is in its essence a gross miscalculation on the part of the money people where they have commodified the one thing we cannot do without. This has necessarily caused  a homelessness crisis to run parallel to the housing crisis where even people on good money can't seem to get a place to live. Housing as a financial instrument has been nothing short of a disaster. If it was made to help Baby Boomers who came too late to the superannuation party, then the whole property bubble party that's been going for 3 decades has more than made up for their late start. The corresponding expansion in the Gini coefficient can't be ignored too much. 

I don't know how all this gets wound back and wound down. We may be stuck with this terrible situation for decades more. It has only been going for 30 odd years, why would it stop now? Why would it be wound back overnight when so many vested interests are standing guard against real change? 

With A Little Vision

If you look at the current major cities of Australia, the vested interests have locked themselves in tight. There is no winding it back without mass electoral revolt. Neither major party can realistically wind back the advantages, but it can start anew. Each state should look to establish new cities where there is nothing right now - a but like how Canberra was built. They should move the capitals and State Parliaments to the new cities, and take government bureaus with them. The new cities with newer zoning systems built from scratch to make sure housing will always be affordable in the places. They should be planned for medium density with public transport, and maybe even be given some tax incentives to build there. 

If you start with tracts of cheap land, at least you have a shot at housing more people with less money. If you plan for medium density, you have a shot at creating urban spaces that won't accelerate to insane prices as the city develops. It would be a genuinely egalitarian approach to urban planning.  

Of course, it would never happen because our politicians are so attached to the current capital cities in each state and that is why I say it would need a little of that vision thing. The alternative is to keep going the way we we are and further entrench inequality. something tells me this is exactly what the political classes want.