Thursday, June 28, 2012

Modern families: fact from fiction

I sometimes struggle with our willingness to look straight through evidence to see only what we want to see, or what we believe we should be seeing. Some recent interpretations of the Australian census and conclusions about housing form and consumer choice regrettably fall into this category.

Early results from the Australian census may have disappointed some boosters who have actively promoted the view that the typical family household is a thing of the past. The argument has had many forms but usually includes one or more of the following: that single person households are the fastest growing household type; that lifestyle choices mean that more people want to live closer to city centres; that the suburban housing block is an environmental calamity and is no longer even suited to what households want; that high density, multi-level housing with high reliance on public transport is a preferred housing model for the ‘new’ generation of family types. And so it goes.

Sadly for the promoters of rapid social change, the census reveals that the facts aren’t on their side. Indeed, in terms of housing form and family type, nothing much has really changed. There have been movements at the margin and movements in both directions, but nothing I would interpret as conclusive evidence of fundamental social change.

Housing form

Across Australia, 73.8% of us live in a detached house. In the last census, it was 74.3%. Hardly a seismic shift. In 2011, 14.6% of us lived in apartments compared to 14.7% five years earlier. Townhouses account for 9.9% of households versus 9.3%.  Don’t hold the front page, nothing much has changed.

There are regional differences. In Sydney, detached housing is at 58.9% from 60.9% while apartments represent 27.6% of households against 26.4% five years earlier. This higher proportion in apartments comes as little surprise given the highly restrictive planning policies of NSW in that period and prior (which included a virtual prohibition on suburban expansion), combined with the long established tendency of Sydney to accommodate more people in apartments than other capitals. But for all the hype about Bob Carr’s ‘brawl against sprawl’ and subsequent planning regimes, the actual change in housing has been minimal. (Instead, what happened is that the industry stopped supplying much of either).

In Melbourne by contrast, detached housing represents 71.1% of housing from 71.6% five years earlier. Apartments are 16.6% versus 16.4%. Melbourne, and Victoria generally, has had a less deterministic approach to planning whereby detached suburban expansion hasn’t been as vigorously opposed, so the higher dominance of the detached house is no surprise. But it also shows little change over recent times, which doesn’t support the view that a majority of consumers would prefer higher density over lower.

In Brisbane, detached housing is at 77.6% versus 78.7% five years earlier, which is a very small change and also one of the highest proportions of households in detached housing in the country. Once again, the evidence isn’t pointing to massive social change. It isn’t even pointing to modest change.

Family type.

Also regrettable for the promoters of widespread social change has been the fact that family types have remained largely unchanged. There are 43% of people living as a couple with children (it was 43.3% five years earlier) and there are 39.5% living as couples without children.  Remember also that ‘couples without children’ includes couples in the pre-family formation stage (young, and starting out in life in the main) and also ‘empty nesters’ (parents whose children have left the family home). A further 16% are single parent families. 

The Census this time also went into some detail about same sex couples. But set aside the media and political hype and the facts show that the proportion of same sex couples across the country is 0.7%. There’s been a lot of media comment and public policy attention recently about that 0.7%

The inevitable conclusion from this evidence is simply that the overwhelming majority of people in Australia remain families who either have children, who plan to have children, or who have had children who have left home, and that this proportion hasn’t changed to anywhere near the extent promoters of social change might have wished.

This also has implications for housing choice and style. There will be a market for higher density, inner city housing but our policy makers need to keep in mind that the detached home remains the overwhelming preference for families as a place to raise children. That also includes couples planning to raise children (not all of whom live in apartments until the first child comes along – many prefer to plan ahead) and it also includes couples with children who have left home but for whom a third or fourth bedroom is needed for grandparent child minding or children returning to the family home.

However, the evidence hasn’t stopped some sections of the media or social commentators from reaching entirely different conclusions. “Up not out for housing” declared one writer who wrote: “Australia is increasingly favouring higher density living, according to the 2011 census.” Really? Based on the same evidence above? You’d be seriously pushed to draw that conclusion. Add to this that supply side policies have restricted the choice of detached housing in preference to the promotion of higher density, which means that increasingly housing choice has been restricted, and what there is of it, much more expensive. To conclude anything about ‘favouring’ one type of housing or another, without assessing the supply side policy constraints which limit choice, is a bit like saying more people prefer mangoes in summer than in winter. Duh.

The Grattan Institute is another that seems committed to turning the evidence on its side to support pre-determined points of view. In this opinion piece, Grattan Institute cities program fellow Peter Mares concluded that: “that despite paying significantly more to put a roof over their head than they were five years ago, many are not ending up in the kind of housing that best matches their preferences.”  Describing the “popular view that we are wedded to the suburban block” as a mismatch, the conclusion is that ‘we’ (being, I presume, the unelected policy makers)  need to have “ a serious, if difficult, conversation about what type of housing we should build and where it should be built.”

Well, that would be difficult if it means imposing a form of housing on a population that might prefer to make its own choices about what type of housing it ‘should’ have and where they ‘should’ be living. 

These aren’t the only examples and as more Census data becomes available, plenty more commentators will seek to extrapolate minor changes at the margin into claims this represents evidence of fundamental social change. It doesn’t and we can only hope our policy makers know the difference between evidence and a sitcom.

Wednesday, June 13, 2012

Out of touch, lost the plot and just plain dangerous.

Common sense reforms to housing policy which might make new homes more affordable for young families are under attack. That attack is coming from sections of academia and also the Labor Party, both of which are proving their fast diminishing value in public policy and confirming their colours as inner city elites, dismissive of the aspirations of working Australians in suburban environments.

“Just because the cost of the house itself is cheaper does not mean the property becomes more affordable.” Now, which particular species of public policy commentator do you think was responsible for this little gem? It may not surprise you to learn it was a quote (AFR, 25 May) from RMIT planning professor Michael Buxton, arguing against reductions of infrastructure levies in Greenfield areas in Victoria.  

The brilliant Professor Buxton’s slim grasp on household economics 101 is a bit of a worry, especially if he’s responsible for teaching and grading the next generation of university graduates. (His background “includes 12 years in senior management with [former] Victorian Government Planning and Environment agencies, and with the Victorian Environment Protection Authority. He formerly headed the intergovernmental process for developing Australia’s National Greenhouse Strategy, and the group responsible for the development and implementation of environmental policy in Victoria.... He is former chairperson Premier’s Green Wedge Working Party which advised the Victorian government on the introduction of a legislated urban growth boundary.” Say no more).

To make such a blatantly silly statement highlights just how far from reality sections of the academic profession have drifted. Housing affordability is a chronic problem for a generation of young Australians. One third of the price of new homes is now tax and regulation. This wasn’t the case when Mr Buxton was young (which was several decades ago judging by his pic) nor was there then a planning policy dogma which promoted centralised density over the suburban form, accompanied by a form of anti-suburban snobbery which views suburban family living in detached houses as an inferior life form.

But affordability is the reality now and as Liberal governments in Victoria and New South Wales announce significant and very welcome policy changes to address those problems, the chorus of criticisms from the elitists is getting louder.

In Victoria, the state government has announced the release of an additional 35,000 lots around the Melbourne fringe, to stimulate the supply and choice of new housing and to reduce price pressure from limited supply. In NSW, the government has announced a range of tax and planning measures which include increases in grants and reductions in stamp duty for first time buyers of new housing along with planning measures which will stimulate urban fringe supply. Similar announcements will hopefully also be in the minds of the new Queensland government, once it works out how to deal with the issue of the state’s significant debt legacy. 

The changes announced recently are long overdue and reveal a stark contrast between the policy approach of the Liberal governments which have introduced them, and their Labor predecessors who opposed them.

Victoria’s Labor spokesperson for planning, Brian Tee,  warned of ‘semi rural ghettos on Melbourne’s fringe’ and trotted out the tired (and false) allegation it would lead to more congestion and ‘parents stuck in traffic for longer rather than at home with their kids.’ Well Mr Tee, there are two problems with your claim. First, is it at least preferable these families have homes they can afford to own? Second, with less than 10% of Melbourne’s employment in the CBD, precisely how will your congestion nightmare eventuate? Do you envisage the majority of factory workers, shop assistants, tradies, teachers, suburban professionals and other jobs being arbitrarily relocated into the CBD?

Tee’s ignorance of economic reality could be based on a paper by his Federal Labor colleague, the Hon Tony Burke – Minister for Population (a subject on which he’s had precious little to say). According to Burke, families on the urban fringe risk psychological damage:

“Increased congestion and  longer travel times place the populations in outer suburbs at clear disadvantage in terms of access to employment opportunities and services as well as having a detrimental impact on the psychological, social and cultural wellbeing of the populations” his Sustainable Australia-Sustainable Communities report says. (See AFR, 14 June for its excellent coverage of the issue).

What’s so remarkable about these sorts of comments isn’t just that they defy available evidence and consumer preference, or that they are based almost entirely on ideology, but that they also avoid any mention of their concerns for housing affordability.  It would seem that it is now acceptable for Labor party spokespeople and ministers to parrot planning ideology which has demonstrably increased new housing costs, particularly in new suburban locales, and to disregard the impact this is having on a constituency which Labor once claimed as their heartland.

Housing costs on a professor’s wage or on the income of a highly placed planning mandarin in a government department aren’t really a problem. These people can afford detached homes in which to raise their families (yes, they invariably live in the type of housing form which is opposite to the density prescription they preach) and they can afford them even in established inner city areas. But if you’re a school teacher, policeman, fireman, ambulance man, child care worker, retail assistant, factory worker or similar, and your average individual income is under $60,000 or under $80,000 combined, housing costs are an issue. This demographic still prefers the detached home in a suburban environment if they plan to raise a family but that choice has been increasingly demonised by elites.

Those elites, it seems, are now clearly also the Labor party, which is attacking the legitimate aspirations of young families by adhering blindly to policy mantras which are proven failures. One look at the dismal figures for new housing construction in many states of Australia ought to be sufficient reason to conclude that the policies which got us to this point simply don’t work and have failed an entire generation.

What’s been proposed in NSW and Victoria is nothing more than a fresh look at stimulating new home construction and making it easier for low to middle income workers to afford the types of homes they want, in locations they prefer. All that’s been proposed is the return of choice and balance and equity to the housing markets in these states. It does nothing to prohibit high to medium density projects in established areas nor to deter them. It simply removes some of the heavy obstacles currently attached to the supply of detached housing and land, in newer suburban locations. This is hardly revolutionary stuff. It’s certainly not worthy of the vehement criticism it has attracted from Labor spokepeople or from sections of the academic community. 

Little wonder there has been such widespread change in political fortunes across the states in recent years. It is equally little wonder the community waits with such fervour to meter out the same punishment to a national Government which is completely out of touch with the people and which continues to draw comfort from policy mantra and irrational, illogical academics, social engineers and the inner city pseudo literati set.