The election driven policy agenda continues on today with housing. Labor have released a paper highlighting housing affordability (both owned and rented) as a growing problem and have outlined some ways they will tackle it if elected.
From my reading, this looks to be moving in a positive direction. First, front and centre are issues of regulation that might be causing house prices to be high or supply to be low.
The Commonwealth should also work with state and local governments to reform development assessment processes, which add to the cost of new housing through delays, disputes and inconsistencies in the application of local planning laws.
By streamlining development assessment processes and implementing a range of efficiency reforms, up to $1 billion may be saved in costs and time delays resulting from the myriad of complex and inconsistent development assessment systems.
This is especially the case when it comes to the provision of infrastructure services to open up new areas for development.
Second, there are moves posited to create links between superannuation and house mortgages; as housing purchases are a savings decision, this appears to be a good direction to move in.
Third, they want to promote shared equity schemes. I am a big supporter of this direction and, indeed, see it as a solution for some low income housing issues with the government owning the land and people building and owning the house. The scheme of tax credits also looks promising:
Tax credits against tax liability for investors who agree to charge below market rents is another way of reducing investment hurdle rates for investors. It creates an incentive to invest in constructing affordable rental properties or rental of established houses for below market rent.
So this paper is a good one, it highlights an issue and canvasses solutions. Just the sort of thing to stimulate debate.
[This post appeared in Crikey, 4th July, 2007]