Fix Housing

Solving Melbourne's Housing Crisis

A Plan to Fix Housing Affordability

The Greens are fixing our rigged housing system so that everyone can have a home.

While Labor is content to tinker around the edges, the Greens have the courage to tackle the real drivers of housing unaffordability.

  • Fixing the rigged tax system

  • Controlling rents

  • 30% minimum affordable housing in big new developments

  • Minimum standards for rental properties

We all need a home, but our housing system isn’t working for us. For years the old parties have prioritised private developers and super wealthy investors over ordinary people who just want a safe, secure place to live.

The Greens have a plan to fix the rigged housing system:

  • Removing unfair tax breaks from super wealthy investors will level the playing field for people who want to buy their first home.

  • Rent controls will stop rental prices ballooning beyond inflation.

  • Mandatory affordable housing in new large developments will ensure we put people, not property developers, first.

  • Minimum rental standards will ensure everyone has a safe, warm and energy efficient place to live. 

 

End the Rigged Housing Tax System

The Greens will remove one of the greatest drivers of housing affordability – the unfair tax breaks that only benefit the wealthy. Negative gearing and the capital gains tax discount encourage wealthy people to invest in a house to increase their wealth. Inequality in Australia is now driven by the distribution of assets like houses, not income. Asset inequality is at least 14 times worse than income inequality in Australia.[1]

Nationally, negative gearing and the capital gains tax discount cost us about $7.7 billion per year in lost tax contributions. More than half (56 per cent) of the tax benefits from these tax breaks goes to the top 10 per cent of households. Just four per cent of the benefit goes to the bottom 20 per cent of households. This is a regressive, not a progressive, tax system.

The Greens will

  • progressively phase out the 50% capital gains tax discount for trusts and individuals for capital gains realised on or after 1 July 2018, by a reduction of 10% each year for five years to be phased out entirely by 1 July 2022; and
  • remove negative gearing for all non-business assets purchased by individuals, funds, trusts, partnerships and companies on or after 1 July 2018, with assets purchased prior to this date grandfathered.

 

Rent Control

Rents are skyrocketing. The latest June quarter Rental Report of the Department of Health and Human Services show rents across Metro Melbourne have had an annual increase of 4.2%. Rent increases in the electorate of Northcote are in most cases even higher. For example, rent increases for a three bedroom house in the suburbs Northcote (4.9%), Thornbury (7%), Preston (4.1%), Fairfield (6.9%).

The Victorian Greens will amend the Residential Tenancies Act 1997 (VIC) to cap annual residential rent increases at 2.5%.

This will bring rental increases into line with the Reserve Bank’s 2.5% target range for inflation. Inflation over the last decade has averaged 2.4%. Tying rent increases to inflation will stop people who rent from being priced out of the homes and communities in which they may have grown up, or have lived in for many years.

Rent control operates in many jurisdictions around the world, including New York, Germany, Sweden, the Netherlands, and parts of Canada.

 

Building Affordable Homes with a 30% developers target

Victoria is facing a chronic shortage of affordable housing. The current housing system encourages property developers to maximise profit, and they do so by building housing that is not affordable to low-income earners.

The Greens will introduce a mandatory 30% affordable housing threshold in all new large developments, which will guarantee that our cities and towns are made of up affordable housing for years to come. It will apply under the following rules:

  • the 30% affordable housing threshold will apply to all new developments greater in size than 20 units
  • if the project is not viable at the 30% affordable housing threshold, developers will be required to build the maximum percentage of affordable housing at which the project remains viable. Planning applications that do not meet the minimum 30% mandate will be subject to a viability test, which will determine the maximum percentage of affordable housing that can be built as part of that development, while maintaining the viability of the project.

The viability test forms a central component of this policy initiative. It will provide significant incentive for property developers to meet the affordable housing threshold, so as to gain certainty and the opportunity to avoid potentially lengthy planning negotiations.

Similar affordable housing mandates, sometimes called inclusionary zoning, have been implemented in cities around the world, including London (where there is a mandated 35% affordable housing in developments over 10 units) and San Francisco. They have been in force in parts of Washington since 1974, where, in 30 years, over 11,000 new affordable homes were built in just one county.[2]

 

Minimum Rental Standards

Renting is the only option for more and more people; the share of households renting for more than 10 years has more than doubled since the mid-1990s.[3] Often, people who rent privately are more likely than any other group to be unable to heat their homes, or pay their bills on time, but they cannot make the improvements to their homes needed to address the problem.

The Greens will introduce minimum standards for rental properties to ensure that they are livable. Included in these minimum standards, to be set by the Minister, will be:

  • heating
  • insulation
  • lighting
  • adequate plumbing for sanitisation
  • security measures

Minimum standards will ensure that homes are habitable, protecting the health and wellbeing of people who rent. They will also dramatically reduce the cost of living. Minimum efficiency standards in insulation, draught sealing and lighting alone can save people who rent $850 a year.[4] It will also have a dramatic and fast impact on reducing Victoria’s climate pollution and reduce demand during peak periods. [5]

This policy initiative will support 4000 jobs over 5 years, and an estimated 1600 jobs on an ongoing basis. [6]

 


[1] Richard Denniss and Charles Richardson, 2014, The Australia Institute

[2] Policylink 2003, Expanding Housing Opportunity in Washington DC: the case for inclusionary zoning. www2.oaklandnet.com/w/OAK036351

[3] http://environmentvictoria.org.au/wp-content/uploads/2017/09/Bringing-rental-homes-up-to-scratch-Sept-2017-online.pdf

[4] http://environmentvictoria.org.au/wp-content/uploads/2017/09/Rental-report-fact-sheet.pdf

[5] http://environmentvictoria.org.au/wp-content/uploads/2017/09/Rental-report-fact-sheet.pdf

[6] http://environmentvictoria.org.au/wp-content/uploads/2017/09/Rental-report-fact-sheet.pdf



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A Campaign of The Victorian Greens
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