Cafe Society: Bold solutions to state’s housing crisis

After years studying our housing issues, a UTAS academic shares some harsh words of advice.

Dr Keith Jacobs at Source Cafe, UTAS. Picture: MATHEW FARRELL

IF he weren’t so polite, Professor Keith Jacobs might ram Bernard Salt’s description of Millennials as the “smashed avocado generation” back in the face of the prolific demographer, who coined it to explain why he thought young Australians were struggling to accumulate home loan deposits — because they spent too much on expensive cafe breakfasts.

“This is the pathology that drives me absolutely insane,” says Keith, when we meet at the University of Tasmania’s Source Wholefoods co-op cafe. “It’s a simplistic slogan that tries to portray the housing crisis as the fault of individual young people.”

We are here to talk about the extreme rental squeeze leaving thousands of Tasmanians in what he describes as abject and insecure living conditions.

Keith has chosen this not-for-profit eatery for our meeting to make a point about de-commodification of housing, not cafes. He wants to emphasise there already exists a functional alternative model for the kind of affordable housing some of our most vulnerable older people, as well as our young adults and families, need.

The problem is that we all but jettisoned it decades ago.

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Social housing is an umbrella term under which public (Government-provided) housing falls, and one that we were apparently very good at providing once, in the period following World War II. It’s a simple model in which houses and apartments are built to provide stable homes for people. There is no profit motive. The rent tenants pay recoups the building and maintenance costs over time.

Tasmania’s demand for affordable housing today far outstrips supply, and decades after that last major initiative the state remains hamstrung by the debt it incurred to the Commonwealth to fund it.

Keith is calling for the Federal Government to release Tasmania from that historic debt, better equipping it to provide more housing at this critical time, when a convergence of soaring house prices, a bullish investor market, wage stagnation and greater intrastate population churn is creating unprecedented pressure.

He is also renewing his call for a Royal Commission into housing affordability, believing that only by achieving precommitments from both major sides of politics to implement recommendations will we ever see resolution of an issue he says is a political football. “You get this bizarre Punch and Judy thing with housing, and the consequence is the system carries on as always.”

With winter just around the corner, Keith says Band-Aid solutions are dominating the response.

“The Government is trying to do immediate things to help, and many people in the homelessness space are doing their very best, but it’s a bit like sticking plaster on boils when the problem is blood poisoning.

“Housing issues like homelessness are surface phenomena. This is actually about something much deeper. It is systemic.”

The issue calls for a comprehensive response, he says, including the provision of some grandfathering arrangements as we transition to meaningful tax reform.

“Let’s be honest, if you try to reduce housing affordability costs, the people who will squeal the most will be homeowners. Many people benefit from the housing shortage.”

Keith says the State Government is listening to the wrong advice, from the wrong quarters.

“They are getting advice from people who have a vested interest in seeing the status quo preserved. This is crucial — I have watched this happening over and over.

“The property industry, the real estate industry, develop-ers and the banks are all very good at conveying concern, they do it brilliantly. Everyone can have crocodile tears about what’s going on in Hobart, but the job of politicians is to do the right thing and not simply listen to people whose whole business model is predicated on shortage.”

Keith wants governments to take on board the recommendations he has spent years developing through his role as the director of the housing and community research unit at UTAS.

These include tax reforms that would reward investment in job-creating enterprises and keep speculative investment such as real estate in check. He advocates an end to negative-gearing on investment properties and implementing a broad land-based tax to yield more from wealthy property owners who are expert at minimising their income tax.

A bearded student appears at our outside table, wanting to talk to Keith about “corruption”. The professor cautions the young man against using such terminology in relation to the housing affordability situation, just as he cautions against the use of “crisis” to describe it.

A crisis, he says, infers this is a temporary phenomenon. But it’s not, he says.

Unless we change the system, this is the new normal.