Housing Affordability is Bloody Complicated, But Bloody Important


Michael Pascoe writes in The Age about the wicked problem that is housing affordability and land taxation in Australia. It's a good article, requiring a little economic knowledge to figure out what's going on though. 

Last week I watched all nine federal, state and territory treasurers either explicitly or implicitly acknowledge that they're running taxation policies that are bad for the nation because of their impact on housing, perverting the more efficient use of land, worsening affordability, making poverty worse.
If their nine shadow counterparts had been in the room, we would have had 18 politicians equally guilty of taking the politically expedient course rather than attempting politically dangerous change.
They might well call it politically suicidal change.
It's a problem that effects planners like few others, and there are even a few fingers pointed in our direction here. One of these fingers is the Reserve Bank of Australia in this article:
Noting that Australian cities were far less dense than others overseas, the report said zoning limits encouraged people to live further from the central business district than they would otherwise. This had the effect of increasing the footprint of the city and pushing up prices.
With demand for housing in well-located areas set to grow, the Reserve said there was a risk house prices could be pushed higher across the board.
''As population grows and land prices increase, the expected response would be cities to become denser and for land to be used more intensively. However, any fixed set of zoning restrictions will slow this adjustment,'' the report said.

Read more here at The Age.

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