The Property Council and our tame media are obsessed on property prices. Are prices up or down this month? They see property as a commodity for wealth creation.
Housing policy should be about housing as a human right and for use, where in homes we raise families, entertain friends and where we can close off from markets and business.
It is no accident that Scott Morrison was a senior executive in the Property Council. So it is no surprise that the ‘housing minister’,Michael Sukkar is not even in the Cabinet. He is in the ‘Outer Ministry’. That demonstrates to me more than anything that Morrison regards property as a commodity to be traded in the market and not a social good like education or health.
We need major reforms in our health and education sectors but the failings in our housing sector tell me that housing and particularly social housing for rent is of the highest priority.
Housing policy should be based on three important principles. First, we should value housing for its use-value, not its exchange-value. Second, housing policy should be part of community and neighbourhood building. Third, housing policy should promote social mixing and sharing, rather than stratification.
Let’s unpack the guiding principles that should apply to both house ownership and rental?
The first is that we should regard housing for its use-value. Too often we value housing for its exchange-value. We need to decommodify housing. We must build houses to provide ourselves and others with shelter, comfort, a place where we can grow as individuals and a base from which we can develop as full members of society. We must avoid regarding houses as instruments of exchange as is so often the case today with taxation incentives for investment in housing for short-term capital gain. Housing policy should not be influenced by the quest for wealth accumulation.Older people like me have benefitted from increased property values through no particular virtue on our part. But in the process we have frozen new home buyers out of the market. A fall in property values would be socially very desirable. But the media keeps us focussed on how we must protect our unearned property gains.
In the iconic film ‘The Castle’ Darryl Kerrigan put it this way: ‘I’m really starting to understand what the aborigines feel. Well my house is like their land. Their land holds their memories, the land is their story, it’s everything, you can’t just pick it up and plonk it down somewhere else.’ Kerrigan added ‘It is not just a house, it’s a home. A man’s home is his castle. … This is as clear as day. It is right and fair that a family be allowed to live in their own house. That is justice..’
Robert Menzies said in 1942 ‘One of the best instincts in us is that which induces us to have one little piece of earth with a house and a garden which is ours so that we can withdraw and in which we can be amongst our friends and into which no stranger may come against our will.’
It is an important principle that everyone should be able to live in a house or apartment appropriate to their needs. Good housing is a human right, just like the right to a good education and good health care. Housing, health and education must be part of a social wage for all.
Housing is not a commodity or a market transaction. It is where we develop as members of a family and community.
The second principle is that housing must be part of a neighbourhood.
We are more than individuals linked by market transactions. Meaning in life comes from relationships both personal and communal. Our life in the public sphere is no less necessary than our private lives. As citizens we engage and contribute to the common good. It is in communities and neighbourhoods that we learn respect for others. It is where we abide by shared rules of civic contact. It is where we build social capital, networks of trust with our neighbours. We need to behave in ways that make us trusted members of our neighbourhood.
Unfortunately many housing developments are sterile and hostile to the building of strong neighbourhoods. They promote exclusion rather than inclusion. More and more of our physical and metamorphic space is being enclosed by the market. This alienation from neighbours takes many forms in gated enclaves – high walls, roller doors, CCT cameras, private entertainment, which all have the consequence of avoiding contact with neighbours and hinder the development of community. Good housing policy should be about building strong and vibrant neighbourhoods and not just isolated houses or units.
The third important housing principle should be the promotion of social mixing and sharing. It should be a basic requirement of good housing policy to avoid stratification or ghettos whether on the basis of income, employment, religion or other grounds.
Our health service is increasingly discouraging social mixing through the massive $12b pa subsidising of private health insurance which is separating out services for the more wealthy. Our schools are becoming more stratified with wealthy parents aided by enormous government subsidies, sending their children to separate private schools.
Housing policy and programs must support social mixing through for example setting minimum and substantial levels of social inclusion in all major new developments.
In the post-war years, there was always a senior Commonwealth minister as Minister for Housing. That is no longer the case. We need to reassert appointment of a senior minister as Minister for Housing along with Ministers for Education and Health. Appropriate housing, education and health facilities are important human rights for everyone.
Housing policies and programs must be anchored in key principles; use value and not exchange value; building communities and neighbourhoods and social mixing and sharing.
Society is more important than markets. Markets must be the means to serve society.Unfortunately we have allowed the commodification of housing at the expense of social needs,particularly the needs of low income people, and essential workers like nurses having to live a long way from their workplaces. Older single women are facing dire housing problems.
I will be writing further about the need for a social housing push as we recover from Covid-19. The social and economic dividend s would be substantial.
But it requires national leadership from the Morrison government. That means Scott Morrison will need to break from the Property Council and the property lobby that see property as a commodity to be bought and sold .
We must value housing for its use value, not its exchange value.
John Menadue is the Founder and Editor in Chief of Pearls and Irritations. He was formerly Secretary of the Department of Prime Minister and Cabinet under Gough Whitlam and Malcolm Fraser, Ambassador to Japan, Secretary of the Department of Immigration and CEO of Qantas.
Comments
11 responses to “Houses are becoming commodities to buy and sell and not homes.”
Many Australian property owners and investors would pause for thought, on their prosperity gospel, if they knew the difference between nominal prices and real value…
Good topic thank you!
It reminds me of a statement by Antonio Gramsci’s and his understanding that when capitalists have surplus capital and labor they use mass culture and ideology, in this case neoliberalism, to reconfigure the habits of a society to absorb the surpluses.
The neoliberal theory a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms. So the home now becomes a house of investment.
We have made the market place the only governance in the neoliberal world.
A world like Alice in Wonderland neoliberal object is to spread confusion while they increase levels of exploitation.
Lewis Carroll wrote. “The cat asked, ‘Where do you want to go?’ ‘I don’t know,’ Alice answered. ‘Then,’ said the cat, ‘it really doesn’t matter, does it?’ ”
As as society we need to know where we are going!
The first principle is that profits in the economy, including government subsidies always gets capitalised back into land. Unless the economic rent is collected by society the gain goes to the land owner so that those who own land get richer whilst everyone gets poorer. Happy to be proved wrong!
Thanks John, very thought provoking!
If I may offer perspective from the ‘design’ side of things, as a Structural Engineer, working predominately in housing.
Regarding housing that feeds into the category of “housing for its exchange value”, whereby the designs themselves won’t be for any specific person or may not even make sense within the context of the site, and the end goal is returns.
A problem is volume building. In which you can mass produce housing, using cheaper construction methods (i.e. Waffle slabs) with little regard for longevity, functionality, site or sustainability.
These Americanised suburban homes do not necessarily make sense within the Australian landscape and climate. They are contextless rapidly produced buildings that add nothing to the Australian vernacular that are made with the sole purpose of making money
Far too often we have both values and purpose back to front. Value should be seen primarily in human beings not monetary assets. We need to change and work on the basis that the purpose of economic activity is to further human needs not that the purpose of human activity is to further “the economy”.
On home ownership it might surprise that the level is far higher in China than in Australia (and that a very high percentage is mortgage free) – see Forbes article https://www.forbes.com/sites/wadeshepard/2016/03/30/how-people-in-china-afford-their-outrageously-expensive-homes/#262da50aa3ce
Yukon Huang deals with the same matter in explaining why “China’s debt problem” is actually not such https://www.youtube.com/watch?v=XepCi0I_g6I [also interesting for much more]
I would suggest the headline should read housing HAS become a commodity. To me the primary issue is we now have an economy built on domestic property values. As required, the governments of the day will talk about the need to bring the cost of housing under control, but then back track and implement policies designed to retain and increase property values. At some point it has to crash, but there is now an inbuilt mentality that this will never happen.
All very valid points, but fails to address the heart of the problem.- Cost of housing, a basic human right we all agree.
The fundamental flaw that will eventfully destroy western capitalism, is the failure by society to capture the economic rent. If a land tax was levied equivalent to the economic rent the cost of land would remain at almost zero. The cost of the home would be the cost of the building. Canberra set off on that noble concept with the building of our national capital, but the rent paid on the land owned by the government has fallen behind the economic value. But at least we have a model in this country we could aspire too. Failure to collect the economic rent is the route of all booms and busts. Current public policy in Australia is fueling another asset boom and one day in a few years when it busts no one will have seen it coming!. Henry George the American economist said it all in the 1880s, no doubt influencing our founding fathers when Canberra was created! We could all do no better than go back and read Henry George, particularly his great thesis “Progress and Poverty”.
Mr Menadue: exactly right.
something is badly wrong when reporting and discussion about ‘the market’ is universally known to be about house prices.
and there is no consideration in that about homes.
great post.
thank you
I arrived in Melbourne from the UK in 1965.
Then, and subsequently, the merchandising of housing as a trades good was very apparent.
It was a shock to a young and impressionable youth to be bombarded with incessant and invariably crass advertising for much of everything else which could be described as basic necessities.
From promotions of health funds, to adverts for medicines and appeals for charitable funds to provide help to people who should have been assisted by government bodies, the lack of organised and fundamental social services was quite a culture shock.
SInce then, as we well know, the privatisation of almost everything of those kinds in the UK has been dramatically detrimental to the whole of British society (“There is no such thing…” said the Iron Lady Mrs. Thatcher.)
Some of my Australian “true blue” work associates, in what was a well paid government departmental employment, seemed to spend as much time on their Real Estate ‘side hustles’ (as they are currently referred to) as they did on attending to fundamental tasks of their actual employment.
My impression of Melbourne society at the time was “crass, commercial and clannish”: On being introduced to committee members of the RACVic I was first asked about my job, my family background and social connections, and then immediately assailed with several ‘business propositions’. All in the first hour of conversation!
This was all a bit of a shock for a naïve lad from a then very socialist country where this builders’ labourer’s son could attain a Military Commission on pure merit.
I completely agree and am pleased to see this in writing. I hope Mr Menadue can at least get Labor on board (I suspect an uphill battle with the incumbents).
“First, we should value housing for its use-value, not its exchange-value”. I am so glad not to be facing a usurious property market, high priced education and the desperate shortage of jobs that are young have to contend with. In whose interest is this?