URBAN ECONOMIC CHANGE AND HOUSING 4
Housing policy has largely been viewed as the governmentintervention in the provision of decent housing to its citizens. Thisintervention by the government has been viewed as having an economicobjective for the country involved. This is done through theregulation of some fields, which are outside the housing mainstreamsector such the housing finance markets. This in turn affects thenational economy of the country. This is a slightly difficult aspectto define, considering the various approaches that the governmenttakes. Since 1945, the Australian government has been tasked with theresponsibility of offering public housing through the federal, stateand local governments. The government established the CommonwealthState Housing Agreement (CSHA 1945), to deal with the shortage andlow quality housing. The federal government policy since 1945 hasbeen to provide huge loans to state governments, which in turn canorganize public housing programs for their areas. In addition, thefederal government’s policy has been to have one national publichousing program where houses are availed to the public at low pricesand in abundance.
Due to the increased demand for houses and the high cost of buildinghouses for the public, the government changed its priorities. It wasapparent that the government stopped from offering public housing,and turned to offering welfare housing. The low income members of thepublic who could not afford decent housing became the focal point forthe government. It is vital to note these changes in priorities wereexperienced both at the federal government and at the state and thelocal governments.
The Australian federal government has a huge role in determining howthe policies affecting housing are utilized. It is the federalgovernment that offers funds to state and local governments todevelop housing programs. As a consequence, the federal governmenthas immense control over the policies developed to deal with thehousing problems.
Housing affordability has been on the decline in Australia in thepast few decades. There are various factors that have led to thedecline in housing affordability in Australia. According to Yates,there has been an increase in the prices of houses hence making themunaffordable. Immigration into the urban centers has also increasedthe urban population immensely, hence increasing the demand forhousing. This demand has led to huge decline in the availability landhence making such resource extremely expensive. This has a directeffect of high valued houses which are less available.
The purchasers of homes have been the central point of focus groupthat seems to be affected by the house affordability problems.However, the households who rent houses seem to be forgotten. It isevident that these group also suffers immensely from the problem ofhouse affordability. The housing affordability crisis has led to anincreased household costs in terms of payment for houses and rentals.Interest rates for the payment of mortgages may increase due to thestress of repayment as a result of increased housing costs.Underperformance by workers in the urban labor market could beprevalent due to the housing affordability problems. Workers might becoming from long distances to work and this would affect theirperformance. In the long term, this would have tremendous effects onthe economy of the country.
Yates proposes that the demand aspect of the housing must addressed.The attractiveness that comes along with housing has increased theirdemand hence making them unaffordable. This attractiveness must bereduced where the houses can be viewed as shelters and not asinvestment assets. Yates also proposes that the taxes on land wherehouses are constructed only works to increase the prices of thehouses. The reduction or the elimination of these taxes would lowerthe cost of housing significantly. Although these policies might bedifficult to implement, it is evident that they would worksignificantly well in addressing the problem of housing affordabilitycrisis.