Australia
Australia faces challenges in housing affordability in the 21st century. It is a problem that reduces the ownership of houses and stresses rental households. The most affected individuals are low-income employees in the housing economic market. Dwelling prices are on the rise due to the economic housing global trends. Notably, there was a decline of ten percent in ownership rates of individuals between the ages of 24 and 35 years from 1981 to 2011 (Groenhart and Burke, 2014). The narrative mentioned above shows that young people today are not in a position to own their houses. In Australia, older people above age fifty are known to hold more houses compared to young people. Arguably, addressing the housing affordability challenge in Australia requires understanding the housing market pressures that lead to adverse effects such as inadequate access to rental houses or ownership. Thus, this paper provides a comprehensive analysis of housing affordability in Australia, key players involved, planning changes, tax, changes, and alternative policy approaches.
Housing policies support households’ ownership, and the government plays an essential role in determining honoring ownership of houses in Australia. The government has been the primary key player in establishing housing policies that benefit citizens in Australia. For instance, the post-war housing policy initiated the idea of tenure of choice in homeownership and affordable and long term income for low-income consumers in housing (Yates and Milligan, 2012). Since then, the Australian population has been on the rise, and private rental housing has transitioned and embraced by the youth. With the increase in private rentals, housing affordability has been a challenge to most low-income earners as dwelling prices also increase in the process (Hulse et al., 2012). Notably, an increase in dwelling prices facilitated the initiation of other key players. The players incorporate the Nation Building Economic Stimulus Plan (NBESP) and the National Rental Affordability Scheme (NRAS)
The relevant housing process’s urgent attention requires the National Rental Affordability Scheme (NRAS) in incorporation with the Housing Industry Association (HIA). The players mentioned above have an interest in housing affordability within a community. According to Out Of Reach? The Australian Housing Affordability Challenge (2015), the housing processes should involve two categories in a society that would increase homeownership access, rental housing affordability, and accessibility. The categories include people with unacceptable outcomes and private rental owners. Individuals with unacceptable outcomes are mortgage owners, and private rental owners are people living through accommodation services. Private owners, in most cases, are low-income earners. The interests of the players mentioned above tend to address the decline in affordable housing in Australia.
The Nation Building Economic Stimulus Plan (NBESP) stakeholders tend to follow the market’s contemporary trends in matters concerning housing in Australia (Yates and Milligan, 2012). Incorporation with the Department of Social Services (DSS), the players in this context establish interests in the political and economic feasibility of housing markets in Australia. In most cases, the stakeholder stabilizes land taxes to encourage private sectors to invest in affordable rental housing. Such players help in curbing housing problems in Australia. The players also help create awareness for the disadvantaged people in the community who cannot have affordable housing in the country. For example, the DSS engages in public programs and policies that improve housing affordability to different people. In essence, a house’s complexity determines financial capabilities from other people despite one’s race, religion, gender, or difficulty.
The affordable housing policy challenge in Australia requires planning changes. Social, economic, political, environmental, and political implications facilitate planning changes in achieving affordable housing for everyone. In this prospect, economic effects such as low income, unemployment, and the stock market increase the affordable housing policy problem (Yates and Milligan, 2012). In this regard, the need for planning changes would help positively improve the policy. Consequently, the primary requirement for planning changes incorporates a principality in supply constraints. In light of Out Of Reach? In the Australian Housing Affordability Challenge (2015), the MBA argues that “Problems that need solving have an issue with the supply or lack thereof.” The notion depicted above describes the idea of demand and supply-side consideration. The Housing Industry Association (HIA) also affirms the same analogy because the affordable housing policy issue results from imbalance growth between demand and a slow supply rate. In essence, the economic housing stock market affects the planning changes in place due to demand and supply considerations.
Tax changes play an essential role in the affordable housing policy problem in Australia. Young people are the most affected individual in the country because they live in a transitional era that embraces private rental housing. The country faces a lack of agreeable housing affordability due to frequent tax evaluation. The Department of Social Services (DSS), in conjunction with the government, play significant roles in facilitating tax evaluation in Australia. In determining house affordability policy concerning taxes incorporated by stakeholders, a thirty percent rule comes into perceptive. According to Out Of Reach? The Australian Housing Affordability Challenge (2015), the rule states that the consideration of occupying a housing facility takes thirty percent less of an occupant’s gross income before the administration of the regular tax. The thirty percent rule is a taxation rule that establishes the affordable housing police problem in Australia. Taxation changes such as the change to the 30/40 rule state otherwise and releases low-income earners from the burden of paying expensive rental housing or arrears. The 30/40 tax rule depicts that a household is entitled to spend 30% less of his or her gross income only if he or she is at the bottom 40% of the income wage (AIHW, 2020).
Affordable housing policy has public policies that incorporate roles and responsibilities in Australia. The general policies include homelessness, zoning, land taxes, migration, and financial service in indigenous policies. Besides, the National Rental Affordability Scheme (NRAS) helps regulate the above-mentioned public policies that lead to affordable housing policy problems (Yates and Milligan, 2012). Arguably, given that housing is unaffordable for ordinary Australians, this context advocates alternative policy approaches to curb the affordable housing policy problem. The alternative policy approaches include adopting marginal first home buyers, encouraging social housing, and continuously affordable housing across the nation (Yates and Milligan, 2012). In most cases, Australians have problems when they want to become first home buyers. The alternative approach towards curbing first home buyers’ issues entails expanding hybrid tenures, increasing affordable housing through zoning, and reducing land rates. For instance, expansion in hybrid tenures involves aspects such as home-grown co-ownership of rental houses.
Encouraging social housing policy also incorporates guaranteed funding from financial institutions, an increase in entitlement to public residents, and increased mobility within the housing system (Yates and Milligan, 2012). The above mentioned alternative policies cover tenancy management and regulated housing planning that previous policies do not cover. Also, continuous affordable housing across the nation brings out equality when it comes to homeownership. The policy does not discriminate between age and gender. Arguably, a young person is also entitled to own a home at a better purchase rate, just like an aged individual. In most cases, older people get the privilege to own such houses compared to younger individuals. Likewise, men are most owners compared to women. Therefore, incorporation of competition in the private housing market would help facilitate consistent, affordable housing policy despite age or gender hence leading to integration and dropping the rising pressures on rent (Jones, Phillips, and Milligan, 2007)
Advocating for social and affordable housing has various benefits that affect most tenants and homeowners. The importance of the analogy mentioned above is that affordable housing leads to the purchase of homes from both young and old individuals hence increasing the capital value in stock market housing. Affordable housing also provides easy access to rental services that are bearable with minimum price and wage. On the other hand, social housing also leads to investments in public houses from the private sector. Social housing also leads to rental pathway programs and tenancy that support adequate, affordable housing policy. Therefore, it is essential to note that this paper emphasizes the affordable housing policy problem, key players involved, tax changes, and alternative approaches, among other issues. The primary goal of the initiative, as mentioned above, is to create awareness of the affordable housing policy problem and make the necessary changes in Australia.