Social housing has big payoff

The housing sector should be front and centre when it comes to the way governments view productivity and growth, say leading economists and housing experts.

In a survey for the UNSW City Futures Research Centre study, 84% of expert respondents agreed that Australian governments pay too little attention to how housing outcomes also affect productivity and growth, while 80% agreed that rising mortgage debt poses an economic stability risk.

“The vast bulk of housing experts and economists surveyed are concerned that ongoing Treasury dependence on ‘cheap money’ policy will further ratchet up house prices and widen the gap between rich and poor,” says professor Bill Randolph, from the City Futures Research Centre. “From a purely economic perspective, the informed expert view is that this will undermine productivity and economic growth.”

Randolph says one of the best ways to boost the economic recovery would be a large-scale housing program. “Minimal construction for most of the past 25 years means that national social housing supply has effectively halved since the 1990s.”

Kate Colvin, spokesperson for affordable housing campaign Everybody’s Home, says a $7 billion investment in social and affordable housing would stimulate over $18 billion in economic expansion and create 18,000 jobs over four years.

“Longer term this would also boost productivity, by allowing people better access to jobs,” she says. “A better-balanced housing system is the right thing to do. It also happens to be the smart thing to do.”