Wednesday, March 16, 2022

Why politicians must pretend to want cheap housing

UQPPES Statecraft Autumn Lecture, March 2022

Let me start with my thesis.

Much of the contemporary debate about housing affordability is a distraction; promoted by vested interests and reinforced by political incentives. The proposed solutions are usually policies that favour property owners, not renters and buyers.

The first way we know something is off is the language. Affordability is a beautifully vague word. It’s a word that works nicely as a covert signal—that is, a word that means something different to your target audience compared to others.

Aspiring homeowners can be led to believe that the word implies cheaper prices to buy homes. Maybe also cheaper rents. They feel their concerns are acknowledged. It appears like something is being done for them.

For homelessness and public housing advocates, the word affordability can imply a boost to public housing investment to provide non-market housing options to the neediest. The word makes it appear that something is being done for them too.

But the beauty of a covert signal is that the true meaning is known only to the target audience. In this case, large property owners and developers. They know that affordability means that absolutely nothing will be done that puts the value of their property assets at risk. To them, the word is an invitation to participate in the next great property scam.

They know that to appear to be doing something about affordability, their political mates will simply ask them what policies they want. Whatever tax break, rezoning, or subsidy they come up with will then become the nation’s new “affordable housing” policy.

It is no leap to say that these outcomes are in fact the real objective of pretending to care about cheap housing by distracting us with the word affordability.

In his 1946 essay on Politics and the English Language, George Orwell wrote:

When there is a gap between one's real and one's declared aims, one turns as it were instinctively to long words and exhausted idioms, like a cuttlefish spurting out ink.

Affordability is a long word that hides the real aim of boosting the asset portfolios of major property owners behind the declared aim of making housing cheaper for residents.

So why must politicians play this Orwellian game of pretend at all? There are three political economy issues at play.


Read the rest of this post at my new substack page and please subscribe there to get new posts to your email.

Sunday, March 13, 2022

Falinski's housing inquiry report will be peppered with lobbyist catch phrases...

...and many journalists will lap it up uncritically.

Like the dozens of previous housing inquiries before it, Falinski’s inquiry into housing supply will find that giving valuable rezoning development rights to well-connected property owners and developers is the housing policy we need.

The puzzling part is that the housing developers interviewed under oath during the inquiry said that they wouldn’t flood the market to decrease prices even if they could.

Falinksi: Is it not your view that, if we increase the amount of supply, prices will go down?

Mr Helmers: I don't think that's the case…

Mr Long: My view is consistent with Richard's: rezonings won't necessarily lead to lower housing prices…
Falinksi: …[d]o you think if state local governments rezoned more land to allow greater supply, that you could see dwelling prices drop by 20 per cent?

Mr Warner: No. Straight out, I concur with some of the comments before. It's not going to create that much of a difference.

For perspective, Australian capital city housing prices increased 21.7% in the year to September 2021. No housing developer thought it plausible that mass upzoning could get close to reversing one year’s price growth.

Instead, they all latched on to the phrase that mass rezoning will “will moderate price growth”. I have no idea what this means. If price growth is zero in the counterfactual, will it mean prices start falling? If it moderates price growth, why can’t rezoning moderate price growth down to a negative?


Read the rest of this post at my new substack page and please subscribe there to get new posts to your email.

Sunday, March 6, 2022

My COVID story - Part 2

Read My COVID Story - Part 1 here.

January 2021 - Sticking with the crowd

I was approached to write a short piece for The Mint magazine. I sent a rough draft of the type of article I would write. When it dawned on them that I was going to challenge the COVID mantra they decided that they must stick with the crowd and not publish anything.

I later put that draft piece on my blog. The predictions in it have been quite accurate. Take a look.

Back then, zero COVID was still a thing that people thought was possible, despite all evidence. The vaccines were going to be the way to achieve that dream. 

June 2021 — Vaccinate the kids becomes a thing people want to do

I was invited on ABC’s Q+A television program to be a panelist sharing opinions about COVID policy. You might be wondering how someone gets invited. My experience was that Stan Grant and the producers wanted to be able to say that our reaction to COVID was overblown but didn’t want to have to say it themselves and cop the flak.

Here’s a write-up about that appearance from ABC News.

Read the rest of this post at my new substack page and please subscribe there to get new posts to your email.