Good post. It must have been very frustrating seeing the knee-jerk nimbyism even if it means they're out of a place to live.
I think we can learn from closer: Auckland would be a good place to start, how did they get the political will there? It happened at central government level. I wouldn't hold my breath waiting for the local councils.
Yeah exactly - in I think part 1 of my preceding series I talk about how Japan has solved this issue due in part to how they set housing policy at the national level. Thanks for reading!
I agree with the missing middle and many other concepts you have in your #affordablehousing articles. I hope you aren't going to leave it there. Looked for you on Twitter but couldnt find, and LinkedIn... now following.
I'm keen to keep up with this topic and help find a feasible/ doable solution.
Thanks Dave - haven’t got twitter, I think I have tried using it like 3 times over the years and I just end up getting mad at it and deleting it. Maybe a forth?
I think what I’ve realised doing this exercise is that there are a huge amount of solutions, all of which will have a different weight / ability to mitigate the issue. Would be great if we could do them all but some are just politically infeasible. economic forces will have to do the rest - if the day comes where more people need apartments because they can no longer afford houses - then the change will come, one way or another.
I agree with this. If you read part 3 of my preceding series it’s all about reducing demand and normalising interest rates and lending criteria is on the top of the list of policy responses. I don’t think it’s an either/or thing and the problem needs to be attacked from both a supply and a demand perspective.
See my response to your other comment re: demand side drivers - I agree just don’t see why we can’t do both?
For what it’s worth the southern Gold Coast at least has an extremely active community because they don’t want it to look like Broadbeach/surfers etc.
Just because those groups talk about NIMBYs doesn’t mean the phenomenon doesn’t exist. if you ranked Australia based on how much consultation we do vs other countries we will be somewhere near the top.
My experience in my career and just talking to people in my life is that the primary reason communities oppose density (even just townhouses, duplexes etc) is the perception that it will devalue their own property. So all of a sudden you're not just proposing 5 townhouses, 2 streets away - you are threatening someone's entire lifetime's worth of accumulated wealth - and the comfort of their retirement.
Not only that, but the act of locking all higher density development out creates artificial scarcity, driving up property values further - so there is enormous financial gain to be had by keeping their communities exactly the way they are and exactly the way they want it. That's about as powerful an incentive as exists anywhere in the economy. It would be weird if they DIDN’T oppose density!
This gets to what I argue is the heart of the issue: Housing has this deviously interdependent nature where it's simultaneously:
- The repository of the entire nation's collective wealth;
I don’t wholly disagree with you but: why is (high) population growth inevitable? Some countries are shrinking. And sneering at an elderly woman who sees the world differently from you is not an attractive quality…
Correct, this guy has just been indoctrinated with university tunnel vision on sustainability principles & perpetual growth mindset, whilst completing ignoring the importance of maintaining the character, community and ambience of the town and area. The more housing, the less community, the more traffic, the more homogenisation and bland "gentification". The guy would rather sell snake oil to his mother than give in to believing his sustainability principles.
100% Nick. High population growth is a direct policy choice.
The Intergenerational Report projected that Australia's population will grow by 13.7m people (50%) in only 40 years on the back of extreme levels of immigration. That's the equivalent of adding another Sydney, Melbourne and Brisbane to Australia's current population in ONLY 40 YEARS!
The Big Australia idiots running the country are literally engineering an intractable housing shortage.
If you want to fix the housing crisis, start by stabilizing the population. It ain't rocket science.
I am hopeful of the emergence of a voice for younger renters who feel they have been permanently priced out of the property market even if they work hard and get a great job. If it’s happened in Tokyo, Auckland and LA it can happen here.
I agree that immigration exacerbates the problem and that we need to find a better balance with it than we have now, but I don’t agree that stopping immigration makes the problem go away.
There are still like 20 more factors driving the housing crisis of which immigration is just one of them.
I also think you’re not fully appreciating how important immigration is to the Australian economy. Not really basing this off much but I think the economy will be worse off without it for a million reasons, not just ageing population. Without immigration we are not a growing country and that is a dire situation for so many reasons beyond the housing issue.
Until we actually have an economy that is diversified and produces stuff, unfortunately immigration is all we have lol. We have less economic complexity than Morocco, Senegal and Uganda.
Important to the economy in what way? Yes it raises GDP but is that a good way to measure success? If a criminal breaks your window and you pay someone to fix it, that is counted as economic activity.
Those walkable paradises urban planners love like Netherlands and Japan aren't growing their populations as crazily as we are.
It certainly helps them to maintain things the way they are. And even though their GDP may be stagnant, on a per capita basis they're doing better than us because we stupidly dilute our GDP increase by growing the population even faster.
Riley glosses over the immigration issue and assumes that high immigration is "good" for Australia because of "growth".
Growth in what exactly? Certainly not GDP per capita. Maybe he means growth in traffic congestion? Growth in infrastructure costs as we are forced to retofit our cities for bigger denser populations? Growth in ugly high rise dog boxes? Growth in the rate of green canopy destruction and heat islands as backyards are chewed up and trees cut down to make way for density? Does he mean growth in desalination plants as water demand grows beyond natural supply? Or growth in energy requirements through the importation of millions more users?
The fact remains that high population (immigration) is a direct policy choice that is working directly against Riley's purported housing concerns.
The first policy solution should be to stop making the situation worse by running an extreme immigration policy.
Leith as we’ve discussed previously, I literally agree with you so I don’t know what this attitude is about. I just don’t think it’s the only way to approach the issue because there are literally dozens of other factors driving it and at this macroeconomic scale - reasonable people can disagree. You say it’s not rocket science but I think finding the perfect place to draw that line is extremely complicated.
I was sceptical of your position because of your explicit endorsement in your 'build more housing' article of high immigration. You literally said that "sustained" high immigration is "really good for Australia" and delivers "so many benefits":
"On balance, having sustained levels of high population growth is a really good thing for Australia and comes with so many benefits. High net migration offsets our low birth rate, so we can hopefully avoid the very-serious ageing population problems we see facing Japan today. Having a consistent base of young people to support our steadily-accumulating horde of elderly is one of the most important things that we can do for our future".
As I said, Australia's extreme immigration policy is the elephant in the room of this whole debate and needs to be tackled head on. Otherwise Australia's housing situation (and a bunch of other livability issues) will just get worse.
Hey Martin as I’ve said to Leith and in other articles, I agree with you that we need to reduce the rate and align it with housing supply data. I just don’t think it’s the only way to approach the issue because there are literally dozens of other factors driving it and at this macroeconomic scale - reasonable people can disagree.
That's fair. It's just hard for people not to fixate on it because it's right in your face. Things we took for granted 20 years ago now feel like the Hunger Games.
Simple things like getting a park at Westfield, getting a seat on the train, getting stuck behind slow walkers on footpaths and escalators, missing out on half price specials at Coles if you don't go on day 1 of the sale.
I'll bet your lady friend from Sunny Coast thinks everything would be perfect if all the people who moved there in the last 20 years would just F off.
Combination of population needed for Australia to defend itself if the US flakes out on us, plus observing the quality of life is much higher in cities of 2-5m due to the amenities. And wishing for Barcelona sized cities every 50-100km all along the coast from Port Douglas to Port Lincoln, and from Esperance to Broome.
Livability is highest in smaller cities. Just look at the Scandinavian nations. Also, most of Australia's immigration goes to Sydney and Melbourne, which have already grown too big and are forecast to grow to around 10m people each by 2060.
Your defence arguments are highly spurious. How does a bigger population guarantee security, especially when a large share of our migrants come from the very place that we are most likely to come into conflict with?
Where is our water going to come from? What about the environment?
And why dilute the nation's per person mineral wealth by 90% with ten times the number of people?
If you are genuinely concerned about Australia's security, it would be far cheaper to invest in some nuclear capabilities than simply importing literally hundreds of millions of people.
Good post. It must have been very frustrating seeing the knee-jerk nimbyism even if it means they're out of a place to live.
I think we can learn from closer: Auckland would be a good place to start, how did they get the political will there? It happened at central government level. I wouldn't hold my breath waiting for the local councils.
Yeah exactly - in I think part 1 of my preceding series I talk about how Japan has solved this issue due in part to how they set housing policy at the national level. Thanks for reading!
Auckland is literally one of the most expensive housing markets in the world, arguably worse than even Sydney.
Probably not the best example to cite.
To buy, yes. But real rents are down, which gives a faster signal than buying prices. https://twitter.com/1finaleffort/status/1623960076951359488. Just citing this example because it’s close to home.
I agree with the missing middle and many other concepts you have in your #affordablehousing articles. I hope you aren't going to leave it there. Looked for you on Twitter but couldnt find, and LinkedIn... now following.
I'm keen to keep up with this topic and help find a feasible/ doable solution.
Thanks Dave - haven’t got twitter, I think I have tried using it like 3 times over the years and I just end up getting mad at it and deleting it. Maybe a forth?
I think what I’ve realised doing this exercise is that there are a huge amount of solutions, all of which will have a different weight / ability to mitigate the issue. Would be great if we could do them all but some are just politically infeasible. economic forces will have to do the rest - if the day comes where more people need apartments because they can no longer afford houses - then the change will come, one way or another.
Why the housing market has many of the characteristics of monopolies https://fresheconomicthinking.substack.com/p/making-sense-of-property-as-a-monopoly-54e
It’s certainly not a competitive market
Thanks Brian will give it a read
https://m.youtube.com/watch?v=d2XzNplDRoM
After a short intro this video shows how closely house prices have tracked borrowing capacity regardless of claims about supply
I agree with this. If you read part 3 of my preceding series it’s all about reducing demand and normalising interest rates and lending criteria is on the top of the list of policy responses. I don’t think it’s an either/or thing and the problem needs to be attacked from both a supply and a demand perspective.
If you follow @DrCameronMurray @jryancollins and @ianmulheirn on twitter you’ll get a more accurate picture of the housing market
Also Josh Ryan-Collins book Rethinking the Economics of Land and Housing
No problem with NIMBYs here at the Gold Coast. Council just flicks them off and approves stuff bigger than the City Plan signals
The real determinants of house prices are borrowing capacity and developers drip feeding the market to keep prices up
The NIMBY meme is heavily promoted by supply side ideologues like the Centre for Independent Studies and the hard-right Cato Institute in the US
See my response to your other comment re: demand side drivers - I agree just don’t see why we can’t do both?
For what it’s worth the southern Gold Coast at least has an extremely active community because they don’t want it to look like Broadbeach/surfers etc.
Just because those groups talk about NIMBYs doesn’t mean the phenomenon doesn’t exist. if you ranked Australia based on how much consultation we do vs other countries we will be somewhere near the top.
My experience in my career and just talking to people in my life is that the primary reason communities oppose density (even just townhouses, duplexes etc) is the perception that it will devalue their own property. So all of a sudden you're not just proposing 5 townhouses, 2 streets away - you are threatening someone's entire lifetime's worth of accumulated wealth - and the comfort of their retirement.
Not only that, but the act of locking all higher density development out creates artificial scarcity, driving up property values further - so there is enormous financial gain to be had by keeping their communities exactly the way they are and exactly the way they want it. That's about as powerful an incentive as exists anywhere in the economy. It would be weird if they DIDN’T oppose density!
This gets to what I argue is the heart of the issue: Housing has this deviously interdependent nature where it's simultaneously:
- The repository of the entire nation's collective wealth;
- The largest user of land in our cities; and,
- How we stay out of the rain;
No other asset or investment functions this way.
I don’t wholly disagree with you but: why is (high) population growth inevitable? Some countries are shrinking. And sneering at an elderly woman who sees the world differently from you is not an attractive quality…
Correct, this guy has just been indoctrinated with university tunnel vision on sustainability principles & perpetual growth mindset, whilst completing ignoring the importance of maintaining the character, community and ambience of the town and area. The more housing, the less community, the more traffic, the more homogenisation and bland "gentification". The guy would rather sell snake oil to his mother than give in to believing his sustainability principles.
100% Nick. High population growth is a direct policy choice.
The Intergenerational Report projected that Australia's population will grow by 13.7m people (50%) in only 40 years on the back of extreme levels of immigration. That's the equivalent of adding another Sydney, Melbourne and Brisbane to Australia's current population in ONLY 40 YEARS!
The Big Australia idiots running the country are literally engineering an intractable housing shortage.
If you want to fix the housing crisis, start by stabilizing the population. It ain't rocket science.
I am hopeful of the emergence of a voice for younger renters who feel they have been permanently priced out of the property market even if they work hard and get a great job. If it’s happened in Tokyo, Auckland and LA it can happen here.
Why didn't you make a prediction about one of the other green policies on your list? Match immigration to housing.
Since most people want things to stay the same, I predict it's likely that at some point we'll elect populist leaders who are anti immigration.
Then we wouldn't need high density if the population could stay the same or even go backwards.
I agree that immigration exacerbates the problem and that we need to find a better balance with it than we have now, but I don’t agree that stopping immigration makes the problem go away.
There are still like 20 more factors driving the housing crisis of which immigration is just one of them.
I also think you’re not fully appreciating how important immigration is to the Australian economy. Not really basing this off much but I think the economy will be worse off without it for a million reasons, not just ageing population. Without immigration we are not a growing country and that is a dire situation for so many reasons beyond the housing issue.
Until we actually have an economy that is diversified and produces stuff, unfortunately immigration is all we have lol. We have less economic complexity than Morocco, Senegal and Uganda.
Important to the economy in what way? Yes it raises GDP but is that a good way to measure success? If a criminal breaks your window and you pay someone to fix it, that is counted as economic activity.
Those walkable paradises urban planners love like Netherlands and Japan aren't growing their populations as crazily as we are.
It certainly helps them to maintain things the way they are. And even though their GDP may be stagnant, on a per capita basis they're doing better than us because we stupidly dilute our GDP increase by growing the population even faster.
Result is we all get a smaller slice.
Riley glosses over the immigration issue and assumes that high immigration is "good" for Australia because of "growth".
Growth in what exactly? Certainly not GDP per capita. Maybe he means growth in traffic congestion? Growth in infrastructure costs as we are forced to retofit our cities for bigger denser populations? Growth in ugly high rise dog boxes? Growth in the rate of green canopy destruction and heat islands as backyards are chewed up and trees cut down to make way for density? Does he mean growth in desalination plants as water demand grows beyond natural supply? Or growth in energy requirements through the importation of millions more users?
The fact remains that high population (immigration) is a direct policy choice that is working directly against Riley's purported housing concerns.
The first policy solution should be to stop making the situation worse by running an extreme immigration policy.
It ain't rocket science.
Leith as we’ve discussed previously, I literally agree with you so I don’t know what this attitude is about. I just don’t think it’s the only way to approach the issue because there are literally dozens of other factors driving it and at this macroeconomic scale - reasonable people can disagree. You say it’s not rocket science but I think finding the perfect place to draw that line is extremely complicated.
Riley, that's good to hear.
I was sceptical of your position because of your explicit endorsement in your 'build more housing' article of high immigration. You literally said that "sustained" high immigration is "really good for Australia" and delivers "so many benefits":
"On balance, having sustained levels of high population growth is a really good thing for Australia and comes with so many benefits. High net migration offsets our low birth rate, so we can hopefully avoid the very-serious ageing population problems we see facing Japan today. Having a consistent base of young people to support our steadily-accumulating horde of elderly is one of the most important things that we can do for our future".
As I said, Australia's extreme immigration policy is the elephant in the room of this whole debate and needs to be tackled head on. Otherwise Australia's housing situation (and a bunch of other livability issues) will just get worse.
And as we both agree - we need some immigration for all the reasons that I cite. And we both agree the current rate is unsustainable.
Exactly. We're not opposed to sane migration. We're opposed to insane, quality of life destroying, extreme migration.
A permanent level of 70k/year as in the 90s (aka the best decade ever) will suffice.
Hey Martin as I’ve said to Leith and in other articles, I agree with you that we need to reduce the rate and align it with housing supply data. I just don’t think it’s the only way to approach the issue because there are literally dozens of other factors driving it and at this macroeconomic scale - reasonable people can disagree.
That's fair. It's just hard for people not to fixate on it because it's right in your face. Things we took for granted 20 years ago now feel like the Hunger Games.
Simple things like getting a park at Westfield, getting a seat on the train, getting stuck behind slow walkers on footpaths and escalators, missing out on half price specials at Coles if you don't go on day 1 of the sale.
I'll bet your lady friend from Sunny Coast thinks everything would be perfect if all the people who moved there in the last 20 years would just F off.
The optimal population level for Australia is 250 million people.
Combination of population needed for Australia to defend itself if the US flakes out on us, plus observing the quality of life is much higher in cities of 2-5m due to the amenities. And wishing for Barcelona sized cities every 50-100km all along the coast from Port Douglas to Port Lincoln, and from Esperance to Broome.
Livability is highest in smaller cities. Just look at the Scandinavian nations. Also, most of Australia's immigration goes to Sydney and Melbourne, which have already grown too big and are forecast to grow to around 10m people each by 2060.
Your defence arguments are highly spurious. How does a bigger population guarantee security, especially when a large share of our migrants come from the very place that we are most likely to come into conflict with?
Where is our water going to come from? What about the environment?
And why dilute the nation's per person mineral wealth by 90% with ten times the number of people?
If you are genuinely concerned about Australia's security, it would be far cheaper to invest in some nuclear capabilities than simply importing literally hundreds of millions of people.
Leith I love you buddy but I’m done here. We don’t need to spend our Sunday arguing about whether or not population growth is good.
My comment wasn't to you, Riley. It was in response to Braised Prichards claim that Australia's optimal population is 250m, which is clearly insane.
Interested to know where you got this number from?
Great stuff. Keep up the good work.
Thanks for reading mate!