Posted by July 23, 2021 4:19 PM
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Our position on affordable housing

For some time housing in our area has become more expensive. As local residents, we are concerned to protect the physical character and charm of our neighbourhood, and it is also important to support the people who live in our community. Our community is made up of people on a range of incomes and various occupations, and that is a key part of the Marrickville community’s character. If all local housing becomes too expensive, Marrickville will lose many of the people who now live here.

Developers often say they want to provide affordable housing, but new developments usually knock down more cheap rentals than they provide, as new dwellings are usually more expensive. Save Marrickville supports more affordable housing, but bulldozing our heritage buildings and local character is not a good way to address our housing crisis. This is a critically important issue. Federal and State governments have the greatest opportunity to provide affordable housing. Winding back investor tax breaks that inflate house prices, investigating an empty house tax (like they have in Vancouver, Canada) and providing more social housing, would make a real difference. Inner West Council can also play a role through their Affordable Housing Revised Scheme. Save Marrickville has written a position paper on Affordable Housing, you can read it here. We have distributed our written position to numerous Councillors.  

The idea that increasing supply will improve housing affordability is a misnomer. Developers push that argument to convince the media, public and government to allow them to build high rise apartments, but housing economists have shown that the housing market works in perverse ways: because it is an ‘asset market’, increasing supply through major new developments does not automatically equate to price drops. In many cases, increased supply fuels price rises as investor interest escalates, translating into price rises that, in circular fashion, draw even more investors, more speculative interest. During Sydney’s apartment boom from 2012-2017, new approvals were at record highs, and yet prices did not come down. They skyrocketed. Increased supply does not equate to lower prices. It means the housing market acts unlike the markets for ‘ordinary’ goods or services. Market actors - i.e. developers - cannot be trusted to solve affordable housing problems. It is not in their best interest because they only profit when real estate values go up, not down. Affordable housing can only be realised in a capitalist market through much more substantive provision of public housing, non-profit community housing, and/or mandating a higher proportion of privately-developed housing must be genuinely affordable (e.g. rent controls, pegging prices to low income thresholds).
Illawarra Rd development site