John Young’s article, “The forgotten factor: land prices” (News Weekly, May 30, 2009), is spot on in pointing out that land speculation is the fundamental driver of housing unaffordability.
Efforts to provide adequate and affordable housing in Australia fall into three major categories: 1) public housing, 2) rent subsidies for tenants in private dwellings, and 3) subsidised finance for the purchase of private housing (e.g., the first home buyers grant, etc.).
While these methods do assist with affordable housing to some extent, they all have serious limitations. Both government-owned housing and rent subsidies offer only limited security and no opportunity for equity, and when homes are purchased with subsidised finance, they are eventually sold in the open market again and are not generally affordable for the next generation of low-income earners.
The most basic problem with subsidised finance and rent subsidies is that public money flows quickly into the hands of private interests, often in the form of large profits for landlords, developers and speculators. It is not retained for the long-term interests of the community.
There will be no solution to the housing crisis while speculative and absentee land-owners appropriate more from their socially-created value of land than they return to the local community.
A community has a legitimate interest in maintaining continuing access to its land for all of its members, and one way of achieving this is to liberate land from the speculative market via the formation of community land trusts (CLTs).
While these are common in the U.S. and Europe, CLTs are a rarity in Australia, with the latest one in the process of being established in Castlemaine, Victoria. With the formation of a CLT resource centre at the University of Western Sydney, the acceptance of CLTs as a means to providing affordable housing will hopefully accelerate.
Keilor East, Vic.