Greens promise huge cash splash to build 1 million affordable homes

The Greens will fight for 1 million publicly owned, affordable homes to be built over 20 years if they hold the balance of power after the next federal election.

The cost of the ambitious election policy – which the Parliamentary Budget Office warns is “uncertain and highly sensitive to the speed of construction” – is an estimated $7.5 billion over four years, and $22.9 billion over 10 years.

Greens leader Adam Bandt will unveil the party’s ambitious housing policy on Sunday.Credit: Alex Ellinghausen

The independent PBO also warns in its costings that the per-house cost of $300,000 may not be met because the scheme is so large in scope, while the impact it would have on Australia’s property market “is highly uncertain”.

Under the plan, a new federal Housing Trust would be established to construct and manage the new housing, in partnership with states, territories and community housing providers.

About 125,000 properties would be part of a shared equity ownership scheme, with people able to own between 50-75 per cent of the equity and access a low-interest loan to buy their first home.

When an owner wished to sell the property they would only be able to sell back to the Housing Trust and price growth would be capped at 7.5 per cent per year.

Another 750,000 new public and community housing dwellings would be built to reduce waiting lists and homelessness, while 125,000 so-called universal access rental homes would also be constructed.

Tenants in Trust homes would pay the lower of either 25 per cent of their income or market rent.

Greens leader Adam Bandt will launch the policy on Sunday. He said that with so many people locked out of the housing market “we urgently need the government to act and ensure everyone has somewhere secure to call home”.

“The housing market is broken and the government must step in. As well as slashing public housing waiting lists, the government should build good quality homes in good locations that people locked out of the market can afford to buy,” Mr Bandt said.

“In the balance of power, the Greens will kick the Liberals out and push the next government to tax the billionaires so we can build homes everyone can afford.”

The Greens want to build 1 million new homes that Australians could buy or rent closer to the city.Credit: Rhett Wyman

Labor holds 68 seats in the lower house and the Greens have one seat, which means the two parties would have to pick up seven seats to have a parliamentary majority of 76 seats – a plausible scenario according to recent polls.

The Greens are eyeing inner suburban seats including Griffith in Brisbane and Kooyong in Melbourne at the next poll as potential gains.

The party is billing the homes as being situated “where people want to live” – that is, closer to their workplaces and the inner city.

The Commonwealth would provide about two-thirds of the funding to build the dwellings while states would provide one-third, which could be in the form of handing over land.

The Victorian government last year announced a $5.3 billion package to build more than 12,000 homes within four years in the biggest single spend on social housing in the state’s history.

But in April a proposed social housing development in Melbourne’s north as part of the package exposed tensions between the state Labor government and the Greens-dominated Yarra Council, which knocked back a plan to build 100 new social and affordable housing units on council land.

The PBO notes in its costings of the Greens’ policy that it has “not undertaken any analysis on how and if state and territory governments would contribute to the scheme” and it is an open question whether state governments would be willing to contribute land in inner-city locations that they could otherwise sell for a considerable profit.

But in a sweetener for the states, the Greens’ plan also includes a capital grants fund that would hand state and territory governments $1.5 billion a year for three years and then $2.5 billion over the next seven years to make public housing improvements.

Though implementation of the policy would likely prove difficult, the Greens’ calculation is that having a plan to tackle the high cost of housing will be a vote winner with core constituencies, including young urban professionals struggling to buy into the booming property market.

The Morning Edition newsletter is our guide to the day’s most important and interesting stories, analysis and insights. Sign up here.