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The Road to Homelessness

June 24th, 2013 by Viv

By Viv Forbes, October 1990. First published in Business Queensland, 1990.

Those who drive forever on the road to hell must surely get there.

For over two decades, governments from both sides and at all levels have kept the housing industry on the road to homelessness. More people can now see the park benches at the end of this road. Changing speed on the same road will not help – what is needed is a swift U-turn in housing policies.

Few industries have had more interference from politicians than housing. Local, state and federal governments have enlisted expensive mercenary armies of bureaucrats, clerks, planners, officials, consultants, experts, committees and task forces whose mission is to plan, zone, regulate, investigate, inspect, prohibit, condemn, tax, subsidise, licence, register, encourage and discourage the housing industry.

Almost none of these people build houses. Instead, they have produced rental bond boards, fair rent tribunals, residential tenancy acts, flat registration fees, development levies, tenancy tribunals, gazumping laws, land banks, home owner grants, miles of unnecessary rat walls, house removal bonds, builder registration boards, planning schemes, environmental controls, building permits, demolition permits, land taxes, bed taxes, green levies, differential rating schemes, ministerial rezoning, rent control, foreign investment control, interest rate ceilings (and floors), federal grants, state grants, capital gains tax, prescribed payments tax, on-off negative gearing, heritage legislation which prohibits demolition of buildings which appeal to the bureaucrats and resumption powers which allow them to demolish buildings which get in their way.

Aren’t we lucky we live in a free country?

Each year sees the emergence of more problems caused by previous government interference. So each election produces a crop of new promises whose goal is to buy votes from disgruntled electors. Luckily, most promises are promptly forgotten once the votes are harvested, but there are always a couple of well-meaning zealots who insist on accelerating down the road to homelessness. And to divert attention and spread the blame, we have our regular enquiries into housing, culminating in the fatuous “Housing Summit” which did not produce any houses.

It was appropriate for governments to organise “The Year of the Homeless” – government interference has created more homeless than cyclone Tracey and the Charleville flood combined.

The problem starts at the land development stage where the maze of regulations and the ponderous decision making process delays every constructive activity. For most building projects, the paperwork takes longer than the construction. And to receive the blessing of the building bureaucrats, everyone must conform to rigid and boringly uniform standards that an increasing number of homeless Australians do not value or cannot afford. Moreover, the officious insistence on minimum sizes for housing blocks has force-fed urban sprawl and increased the cost of water, roads, sewerage, power, transport and land for all home owners.

Should the poor home buyer get to the building stage and need finance, he finds that the money well has run dry. If he had the time to investigate the reason, he would find that other committees of bureaucrats had already stolen community savings to build cultural monuments, pay bureaucrats, cover the losses of their “business” activities or make generous donations to foreigners. He may also find that the Treasurer (who already has a nice home or two) has decided that high interest rates are needed to attract hot funds from overseas to prop up an increasingly valueless currency.

Should he be so lucky as to get his house plans and his finance approved, our homeless one is forced to use only the high-cost builders and lawyers who are licenced by the government.

Should he decide to buy an existing home, he has to find thousands of dollars in stamp duties for which no recognisable service is received.

(Public profiteers in the land tax and stamp duty offices see rising property costs, not as a problem for the homeless, but as a source of windfall profits for them.)

And it is no use for our homeless regulation refugees to try to rent a home. There are battalions of bureaucrats ensuring that few rental properties reach the market. The unfortunate landlord is hit with a bevy of taxes, rates, fees and inspectors and is also forced to contend with an avalanche of hostile legislation designed to “assist tenants”. The poor returns, the biased legislation and the loss of control of his property has convinced many landlords to quit the business. Since when are tenants helped by harassing landlords out of the business?

Governments have also reduced the number of home builders, particularly of low cost homes, by enforcing restrictive licensing laws, condoning union harassment, discouraging sub-contracting, making welfare more attractive than work and driving down profits with unfair competition from subsidised public land and housing development.

Those with plenty of money and those who already have a home are not greatly affected by the high costs, unnecessary delays and utopian standards enforced on our housing industry. For the poor and homeless, however, their own home is just a mirage which, for most of them, moves further out of reach with each government initiative.

The road to homelessness is paved by politicians. We must tell them that more laws, more regulations, more officials and more taxes do not produce more houses – they produce less. We must also insist on speedy sale of their huge portfolios of public land and housing which are increasingly left idle or utilised by people who are far from needy (At least one Senator and one MLA, both on plush salaries, have been revealed as living in subsidised Housing Commission houses.)

In the long run, everyone in the housing industry benefits from a stable, predictable, equitable and minimal framework of laws and regulations within which they can operate and plan with confidence. These laws should not attempt to impose the costly standards of pampered politicians and tenured officials on people who have other priorities. They should be limited to providing consistent protection of the rights of all, be they the property rights of landlords, the contract rights of builders and home buyers, or the lease rights of tenants.

Complex red tape, excessive taxation, discriminatory laws or legislative instability harm everyone, especially the homeless.

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