IN THE UNITED NATIONS DECLARATION OF HUMAN RIGHTS, ARTICLE 25 INCLUDES THE FOLLOWING: “EVERYONE HAS THE RIGHT TO A STANDARD OF LIVING ADEQUATE FOR THE HEALTH AND WELL-BEING OF HIMSELF AND OF HIS FAMILY, INCLUDING FOOD, CLOTHING, HOUSING AND MEDICAL CARE AND NECESSARY SOCIAL SERVICE.”
A report by the McKinsey Global Institute estimates that 330 million households worldwide live in inadequate or unsafe housing. That number expected to jump to 440 million, or 1.6 billion people by 2025 and Western Australia is not immune to the problem.
The McKinsey report – A Blueprint for Addressing the Global Affordable Housing Challenge – was released late last year and identified four approaches to address the issue, including unlocking land in appropriate locations.
From an economic perspective the report makes sense because the provision of affordable housing can unlock labour mobility, raising income which contributes to GDP growth. It is a challenge of global proportions but the solutions are a combination of local, State and national policy settings. Ironically, it is not about dollars being contributed by the government, rather certainty and speed to market for the development industry that reduces prices. The report says that one of the most important contributions of government is to ensure that “permitting and other development-related regulatory processes do not get in the way.” Predictability is what drives affordability. Uncertainty creates risk with higher profits being the compensation sought by investors.
The report regards unlocking land supply as fundamental. This is not an invitation to unfettered development, rather an audit of possibilities. The first is obvious – unlock land around public transport. The problem in Perth is that, with the exception of extensions to the rail line, many key train stations are surrounded by fragmented, privately held land. Core to releasing the opportunity is to incentivise land assembly, which encourages people to negotiate with their neighbours and potentially make their property concurrently available to the market. This land-assembly process can make bigger-scale developments practical. Instead of developing a single lot, a site might achieve four – six storeys with high quality design appropriate for the neighbourhood.
While global in nature, the report is one of the better ones exploring this complex global issue with both logical and controversial recommendations which should be explored.