What We Talk About When We Talk About Housing


An auction crowd gathers around the front gate of a house, in a circle around where a man or woman stands, holding a hammer, shouting numbers, and pointing at the few people in the crowd who, nervously, one after the other, raise a hand. It's the spectacle of the market at its most primitive, bared down to the essentials. Like the theatre of the pre-computerised stock market, it's a fundamentally human and social ritual surrounding the negotiation of a price.

In theory, it's the simplest thing in the world, something a child could understand: if you want to buy, you offer more money, with the last bidder setting the value of the purchase. All other considerations — merit, need, affection, sentiment, and so on — are not part of the necessary amorality of the market. The auctioneer reports the all-important price, and even the language is abbreviated. “Seven? Eight? Over one?” We assume the zeroes.

It's not always as simple as theory, as any losing bidder knows. In early April, the Foreign Investments Review Board vetoed Zhixiong Hua's bid to buy a 1920s bungalow in Strathfield. The Federal Government's involvement in decisions about who gets to buy houses where isn't new; the Rudd Government famously established a 1800 “dobbing” number to deal with complaints about “foreign persons, who need approval to acquire an interest in certain types of real estate”.

The Federal Government, famously, has expanded the rather narrow remit it had in 1901, into income tax, welfare functions, support to schools, local government funding, and across the spectrum of things a nation-state can concern itself with. In 2014, it seems, they are also the umpire to whom buyers pipped at auctions must throw their hands up in appeal. Was a bidder not actually entitled to buy a house in a nice Sydney or Melbourne suburb? “Howzat!” The refused buyer must trudge, auction bat underarm, back to the pavilion.

What is going on here? The auction, which was supposed to have been a beautifully pared-back establishment of price information between a buyer and a seller, is suddenly a dirty political battleground. All of a sudden, we need to ask questions: Is the buyer a resident? What makes a resident? What do we mean by an "interest" in a property? What prices are fair prices? Who should be buying nice houses in the suburbs of Sydney and Melbourne? Are we pricing a generation out of housing? Is there too much Chinese money flooding in?

These aren't market questions any more, they're political, ethnic, moral, messy ones. They're questions for which we've got an insatiable interest, driving the local Fairfax paper or local weekly's news, and providing the landscape for any number of quasi-pornographic lifestyle real estate television shows, where good-looking couples use hardware, make a mess, and make slightly obscene noises at each other for money.

Housing is the ultimate exclusionary good. The whole point of buying or renting a place to live is being able to close and lock the door, and keep the world out. Housing also has an interesting demand quality: one of them satisfies just about anybody's needs, no house is a disaster, and more than one is a problem for an accountant.

For different conservative tendencies, housing is either the ultimate bulwark of individualism, or a physical centre around which stable families and households happen. What's increasingly obvious though is that as citizens — residents of cities, and of nations — we're also very concerned about how the whole housing system works, who's benefiting, and who's losing. A house isn't just a house, it's a stake in a city, and increasingly, a side in its civic battles.

Matt Cowgill and Godfrey Moase had a much more civil and informed discussion than you see almost anywhere, on Cowgill's blog. When you buy into a neighbourhood, how much right does that give you to the environment with which you've surrounded yourself, and just how exclusionary does the housing market have a right to be? May we object to ugly unzoned development, to profiteers, to pollution, to the poor, to foreigners? The reason these are such critical questions is because our housing is far more than a cash transaction — where we live, and how we own it, defines us as who we are and what stake we have in society.

Pat Troy's History of European Housing in Australia describes the broad pattern of Australian suburbia. In the post-war our cities went outwards, responding to the population and economic explosion, with housing and housing development taking on more and more of a central economic role. The Australian pattern of home ownership and housing investment is the framework for banking: to a great extent Australian banks have been shaped by urban planning, and the need to lend for housing, rather than the other way around.

Ownership of housing has been by far the dominant means by which Australians in the post-war have saved capital. The bizarre and unique features of our financial system, like negative gearing, first home owners' grants, and stamp duties, not to mention the manifest inadequacy of the superannuation system, are powerful evidence of the dominance of home ownership over the political imagination. Homes — as many of them as you can bid for — blend twin desires for financial security and for the powerful identity that comes from place.

The end result, of course, is that the exclusionary nature of housing has made saving for ordinary people a similar zero-sum game. Not only are we in the position that we're making housing itself increasingly unaffordable, we're in the position of actually turning money away from the housing market because of the nationality or skin colour of the investors. This doesn't need to be the case.

Let's move the arguments about cities away from the technocratic, away from thinking about tax systems, supply incentives, planning restrictions, NIMBYs and developers. Let's start with what ought to be common ground: universal housing, on one hand, and universal financial security. Two very different things.

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