Why homelessness is getting worse

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By Leith van Onselen

The ABC has released a report explaining why Australian homelessness is getting worse:

Australia’s homelessness figures are going in the wrong direction, and housing experts warn we’re about to recommit to a failing policy.

Last month’s census data revealed that after a long period of stability, homelessness in Australia has gone up 14 per cent nationally, in the past five years…

Rough sleeping — a term which refers to living outside or in a car — has gone up by 20 per cent since 2011…

Policy experts agree one of the main culprits pushing up homelessness is the housing affordability crisis.

Mr Eslake said people like Ms Israel who need affordable rentals, have too much competition.

“We’ve had pressure on both the demand and the supply sides of Australia’s housing markets,” he said.

“That in turn has increased the competition that low-income households face seeking to get rental accommodation at rents they can afford.”

A parallel shortage of social housing has meant those who have been pushed out of the lower end of the rental market have nowhere to go.

Mr Eslake blamed a lack of investment.

“Apart from a period in 2010 through 2012 … the amount of money that has been provided by successive [federal] governments to the states, for the construction of new affordable social housing, has declined over time,” he said…

Mr Eslake has a theory as to why growth in social housing has dried up — there are simply no votes in it.

“The Coalition thinks that social housing is predominantly located in safe Labor seats, and people who require social housing … are traditionally left-of-centre voters,” he said.

“The Labor Party also regards the votes of people living in social housing as more or less locked in.

“So this is an area that very easily falls into the cracks.”

Righto, so the housing affordability crisis is the primary driver behind the surge in homelessness and overcrowding. And values have soared by far the most in Sydney and Melbourne since prices peaked in 2010 (values in the other major capitals have fallen in real inflation-adjusted terms):

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And this surge in property values in Sydney and Melbourne has occurred on the back of mammoth population growth into these two cities:

Which has been caused primarily by Australia’s mass immigration ‘Big Australia’ policy:

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Obviously, the soaring population numbers have put immense pressure on the rental stock as well.

So why won’t Saul Eslake and company admit that Australia’s population Ponzi is also a key ingredient behind the rise in homelessness, overcrowding and poverty, and therefore lobby to have Australia’s immigration intake reduced back to sensible historical levels of around 70,000 people a year?

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Does Saul Eslake genuinely care about the welfare of Australia’s working classes who are being thrown under the bus to feed the ‘Growth lobby’? If so, he needs to address the population elephant that is driving much of the undersupply of affordable housing.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.