Long Read: Can the Great Australian Dream be Saved?

Friends, it’s been a long time since I updated this news opinion/portfolio blog. And I notice a LOT of people have subscribed since – so hey, how’s it going, welcome to the club.

I thought I might share with you my article I wrote for my major narrative journalism subject this semester. And it’s on something all of us know a lot about – housing. The purpose of this article was really to showcase the multidimensional realities – and indeed, the complexity – of finding a solution to Australia’s housing nightmare. It’s written in a long form, narrative style so expect a strong sense of voice and embellishment where it is appropriate. I hope you enjoy it – I certainly had a great pleasure writing it.


“Is the home ownership dream dead, Tess?”

“It’s so f***ed! (hysterical laughter) It’s not a thing.”

It’s the conversation Australians never thought we might be having 20 years ago. Now, it’s the saga that keeps our young adults awake at night and with their parents stuck at home.

Australia’s housing crisis is the story of a generation. From all its initial challenges to the innovations that claim they are the future, the crisis has become a complex lesson in building the affordable tomorrow. In Sydney alone, the experts say that even millennials need to earn nearly $190,000 a year just to live comfortably. For the nation’s tomorrow, that is a hard pill to swallow.

The opening lines of this story belong to Tess Connery – a 22 year old “avocado loving” radio host who has just recently finished her degree and landed a breakfast gig. After leaving humble beginnings on the NSW North Coast, she moved to Sydney to chase her aspirations of working in the press. For her, it was the only option if she wanted to make her dreams a reality. Yet even at a young age, she was idly aware that Sydney was seeding the problems we have now.

“I’d heard the words,” she says as she hesitates slightly. “You hear it in the background…but when it doesn’t apply to you, I didn’t digest.”

However, no millennial housing experience is the same. Even Tess’ pessimism on reaching the home ownership goal is not shared by other millennials.

Take Isaac Nellist, 20 years old and a newly minted independent. He’s been paired to his girlfriend for so long that recently, they decided to move out of home. As a Sydney born and bred, he has seen the housing sprawl around him.

But it’s the home hunting experience that has changed his outlook on life as a student.

“[It’s] a constant state of disappointment and acceptance,” he admits.

Nellist has been paying $380 a week to prove his independence.  Nonetheless, he’s a little more optimistic on reaching the end goal.

Hans: “Is the home ownership dream dead, Isaac?”
Isaac: “Nearly, unless you come from a rich family. But I think we can save it.”

Tess and Isaac are just a microcosm of Australia’s greatest social policy crisis. Housing is considered an essential human right, with Australians of all ages hoping that they will one day achieve the elusive home ownership dream. However, the path to becoming an esquire is most difficult for young Australians as their low incomes are stacked against the same tall property ladder. And with places once considered to be affordable in Sydney’s west and Melbourne’s north now regularly fetching seven figures, the geographical hurdles are worse than ever.

It’s got so bad that renting is starting to look far more permanent than everyone originally anticipated. Yet in all this negativity, the initial question persists.

What does the final solution look like?

Many young people don’t think there will ever be one but industry experts are more optimistic. Here, the common consensus is that defeating the current housing crisis will take more than just sprinkling some subsidies in the Budget or supplying more houses. The experts have developed the multi-dimensional buzzword – in other words, getting the solution will need to harness a variety of ideas.

To get there, the inspiration is increasingly going global. One such story is the return of the pre-fab home, or as the industry now call it – the modular home. Imported from Scandinavia and Canada, modular homes aim to reshape the concept of the house to land ratio.

In Vancouver, modular buildings are solving both the city’s cost of living woes and its rampant homelessness problem. In New York, modular apartments are increasingly appearing in the boroughs to help alleviate its multi-million dollar renting crisis. And modular homes are expected to get a trial run in extremely crowded Hong Kong as early as next year.

Here in Australia, the waiting list is already attracting buyers of all ages.

Proponents of the innovation have good reason to be excited. These buildings are more environmentally friendly than their on-site counterparts. As modular homes are made in a factory, there is more control over material wastage. In addition, builders claim that their homes are created with “carbon wise” processes to be more energy efficient. Melbourne based Anchor Homes even claim that their “passive design principles” allow them to go one better and create an optimum interior living experience.

However, constructors are quick to remind prospective buyers that this innovation is not just another portable home. These houses are more permanent solutions, only moved by truck if they need to be. This isn’t so much an issue if you have your perfect land block already.

 

If.

 

However, it’s in the back pocket where buyers are most excited. Modular homes consistently beat on-site constructions on cost depending on the structure of the house. Builders in the UK claim that they can save up to 25% on the cost of an on-site build. But with Sydney continuing to oversupply – particularly in the North and Inner West, buyers also now demand a home that can be built quicker. Modular companies claim that they can assemble a mostly factory-built home on site in less than three days. This makes it easier for families to keep their regular daily habits while a new home takes shape. For these reasons, modular housing is gaining faster traction than any other housing innovation in Australia.

For now, only 3% of all homes in Australia are modular with very few examples in the key property hotspots. But it hasn’t stopped the sprouting of no less than 200 modular-based construction companies in Australia alone in less than five years. And it hasn’t stopped predictions that 1 in 10 homes could be modular by 2030.

So what do Tess and Isaac think about this idea as a future home?

“Yeah I’d be on board with that,” Tess says.

This optimism is a surprise considering it comes from a lady whose friends all have full time jobs and yet say that “there is no way in hell” they will get to live in Sydney without going financially underwater.

Tess thinks that it’d still be cheaper to buy a modular home and land rather than complete the traditional on-site build. As long as you find the land first.

“If you’re under a million bucks, you’re ahead!,” she quips.

 

If.

 

In contrast, Isaac’s friends are mostly not moving out of home yet. For those who have, they are learning that the price of independence is costing them an arm and a leg.

“I don’t know how long it will be until I get desperate,” Isaac laments. His options now are so narrow that buying a “crappy house” is looking good.

Both of them said they wouldn’t mind being on the waiting list either – despite how long it is and who they could be competing with.

 

However, not everyone thinks that reshaping the kind of housing we use will solve the housing crisis.

Laura Wynne is a planning academic with the Institute of Sustainable Futures who says new is not always better. She agrees that the government’s position on housing is absurd. Increasing supply, according to her, is “pointless” and that political intervention has been begging for a long time.

“The government, I think, doesn’t care about affordability,” Laura says sceptically. “I think you need to question the government’s motives”.

However, she is not as enthusiastic about new innovations like modular housing. Her solution is a nod to history – resurrecting public housing.

Unlike modular housing, public housing has been a reframed debate throughout Australian history. Since it was first introduced in the 1940s as a “national housing scheme”, public housing has been a policy thorn in almost all federal governments. When it was first introduced, Canberra set the price and the subsidies. Since then, the burden has shifted to the states. However, the figures show that providing it is not the priority it once was. In 2016, public housing made up just 4% of all households – the lowest levels in 35 years. That’s only 1% more than modular housing.

“Public housing was an excellent response to the housing crisis of the day,” Laura remarks.

So why does Laura believe that innovation won’t beat the original solution?

“Our housing typology isn’t really the problem.” She says that these innovations don’t attack the real source of the problem – where the costs are too minor to make a big difference.

She’s also convinced that no private firm would be willing to give Australia’s youngest and hardest hit a fair go, hence her backing of the public housing movement. And her opinions are not just hers – many academics share the view that a rent-dependent market can be alleviated by public housing strategies. The idea among them is that a government who can build new houses at a rate that exceeds population growth will do us all a favour.

Former Prime Minister Bob Hawke was public housing’s biggest cheerleader – he increased public housing funding by 50% during his tenure. Yet in 1989, he noted that even with his increased attention on public housing, “too many people even, tragically, including young teenagers are sleeping in the streets”. He wanted to see the development of a “uniquely Australian solution” – which would rule modular and its international roots out.

 

So are our young Australians as receptive of the old idea as they are of the new?

“I think the government should definitely invest in some public housing,” Isaac says, adding that it would be a great “safety net” if the idea ever came back to life.

Tess also likes the idea – but with a precondition to approval.

“I would love to see more public housing projects…the question is where,” she says. She’s had enough of the state saying that public housing should only be limited to areas far from the CBD.

“It will only be really successful if options are available all around the city.”

 

Both Isaac and Tess would admit to something that many other young Australians face – the air of desperation. They are acutely aware of what older Australians continue to rebuke in the background. “You can’t have everything you want, when you want it,” so goes the cliché. But they are also tired of losing – and their desperation is trying to remain inhibited as much as possible. Around them, they see their local streets shattering seven figures where new apartments pollute their once leafy neighbourhoods.

However, in the spirit of multi-dimensional, there are always other options. Changing the negative gearing laws is one highly publicised option. Giving young people a subsidy is another. As is a new proposal to block foreigners from buying any houses not off the plan. Any of them could possibly work – even all of them. Whether the nation’s leaders genuinely take those potential solutions with a grain of salt is a whole other debate. And the youth of Australia would have many diverse opinions on answering that.

Either way, the literature and commentary on this issue is heavy. Everyone thinks they have an answer to the housing crisis – and of that everyone, many would claim they know that the government has the means to make finding a roof a much more viable and affordable reality. But the reality is that housing right now remains unaffordable – and that our youngest adults are being thrown into the deep end of this market.

Bob Hawke once infamously envisioned that “no child will live in poverty”. That promise – he hoped – would be achieved in 1990. Thirty years on and most young Australians are at risk of a housing poverty. It is an axiom that when nothing is done for longer, the more Australia’s future suffers. But with innovations like modular housing, some long term thinking and steady hands, it is possible that 20 years from now, we won’t have to worry about this discussion for the next generation.


 

Written by: Hans Lee

Hans was most recently a newscaster and economics reporter with 2SER Radio in Sydney. This piece is automatically protected under Australian copyright law.