(I've edited this post a few times; I don't want to come off sounding ascerbic, but I do feel strongly about this too)
I'm still working through what my ideas for addressing affordability actually are, but I am confident that the solution will have to look very different from what we have now. One of the particular things I keep coming back to is that affordability has to mean not just the price of the mortgage, but the price of the whole lifestyle both to the individual and to the community.
You mention the idea of encouraging people to consider living in Mt Pleasant (for example), but I think once again about what they are going to do when they get there. There is a limited range of jobs that can be done remotely, largely white-collar jobs. A much larger range of jobs are location-specific: retail, manufacturing, entertainment, services, education, even health. I worry that your idea leads to a flight from the city by well-paid professionals who effectively abandon it for the country, leaving behind the working class. Otherwise, would Mt Pleasant be able to provide a full range of career opportunities for people in these trades, will they have to travel long distances to work, or will they move to the town only for as long as they have that job and then move on?
One of the things that I really want to address was this:
stumpjumper wrote:The fundamental issue I'm trying to sort out is that most (by no means all) adult Australians show a consistent preference for detached houses on their own land.
First things first, if we changed our planning today to require that all new development must be multi-family dwellings, we are hardly going to be denying the majority of people the ability to live in a free-standing house, as the current balance is already so skewed in the other direction. Wikipedia gives the figure:
Adelaide's inhabitants occupy 341,227 houses, 54,826 semi-detached, row terrace or town houses and 49,327 flats, units or apartments
(No attribution, I'm guessing that it came from the census) If we built 115 apartments per week for the next 5 years, that will have added just under 30,000 apartments to the market, which means that free-standing houses still outnumber flats, units and apartments combined
by a factor of four to one. By building nothing but 115 apartments per week, it will be 50 years
before there was an equal number of apartments and free-standing houses.
Second, it is not clear to me that the correct role for the State is to be a conduit for people's desires. If many people would prefer to drive a Monaro than a Corolla, should we subsidise the cost? If the majority of people would like to holiday in Paris more frequently, do we help pay for it? If the majority of parents would like their children to attend private schools, do we stop funding public schools and redirect the money to St Peter's and Wilderness? And what if their desires are contradictory - "I want water in the Murray and I want green lawns, bushy roses, and cheap cotton". I believe the Government's role is to represent the State, which certainly includes its present population but (perhaps in a more nebulous way) also must be future generations. The responsibility of the government is to convince people its decisions are the right ones. I am not convinced of their current decisions, which are neither affordable now nor (I believe) sustainable in the longer term.
Also, if you have some figures on the costs of development and infrastructure, I'd be interested to see them. I suspect that many studies don't go sufficiently far in considering the costs beyond that of the initial build-out. If I am a business, I must consider both the cost of buying my facilities and equipment (cap-ex) and the cost of operating and maintaining them (op-ex). For most (ie almost all) businesses, op-ex will totally dominate cap-ex over the longer term. Op-ex for roads is principally maintenance, which is largely a function of length and traffic volume: long road in greenfield may be cheaper to build, but cost more to maintain. What is also a typically nefarious tactic in the case of roads is not considering the op-ex that has been spread across all the people that are travelling on them (the cost of owning and operating a car, the time spent travelling). Another good one is comparing per-kilometre costs and ignoring that there are now more kilometres needed.
On this theme, that affordability is not simply identical with cheap housing, I recently saw this paper
from the Brookings Institute (one of the innumerable groups over here that their media call "policy wonks"). It gives an alternative measure of affordability to include the price of mobility; so affordability = (housing + transportation) / income. One of the things that jumps out at me from this is that in many cases families are spending more on transportation than on housing, so transportation is now at least as big a problem for affordability as housing. And this in a nation that has substatially lower car and fuel prices than Australia.
The site that hosts that paper, http://www.community-wealth.org
, is for a group whose position -- generating wealth from within a community -- seems very germane to the discussion that we are having right now. I can't say that I had heard of them before a day ago, but I'll certainly be reading their stuff soon.
In fact, I want to throw another perspective into this discussion. We've talked about "why is housing so expensive" almost exclusively; what about the other factor in the affordability equation -- why is income so low? Here
are some statistics from the US Federal Reserve on income trends over nine years. The years 2004-7 represent a recovery from the crash of 99-01 (dot-com, 9-11, Afghanistan & Iraq), but look at this graph showing changes on median-vs-mean income over that period:
During the "recovery", the average of all incomes across the US rose, but the median income - the point at which half the population got more and half got less - dropped. Digging into the stats, you can see the upper decile income level rose sharply - that's where the recovery actually took place. I'm willing to bet that Australia's statistics will tell a similar story: income remaining level for the vast majority of people while sharply increasing for the richest few. I'm not a believer in "trickle-down economics" (as if the elite are protecting us from a deluge of money), and it strikes me that this disparity needs to get recognised as one of the sources of our affordability problem.