"Zoning and planning regulations that limit the supply of new housing increase the price of housing. For instance, Kendall and Tulip (2018) estimate the impact of zoning on housing prices and find that “as of 2016, zoning raised detached house prices 73 per cent above marginal costs in Sydney, 69 per cent in Melbourne, 42 per cent in Brisbane and 54 per cent in Perth”
From
An open secret. So, if we progressively change zoning, then a large part of the synthetic component evaporates? Apartments in NSW are a joke with over 53% needing remediation. So the planning laws don't work to create good housing. What are they really for?
Peter Tulip - J.Walker Podcast Australian Policy series
I think this'll be the same Tulip as referred to in 2018 paper above. People in the crowd sounded so deflated by his incrementalist policy proposals 😂
Interesting discussion. Not sure i agree with his conclusions, he assumes the only way people, (voting population), would allow policy repair is through incremental changes, resulting in minimal effects to house prices.
This isn't far away from Alan Kohler's position. Its a solid position because so much of our economy is wrapped up in our houses, to have a big downturn in house prices could crater the economy, and destroy the banks which would unfortunately be bad for everyone. The poorest most of all.
I understand the perspective. But the negative societal, cultural and productivity effects of a whole two Australian generations are being completely written off to serve the comforts of an older generation and prop up large enterprises.
So i think its time for more radical change, sensible but radical. Its time for the tax and subsidy incentives to be re-oriented from big business to small business, from older people to younger people. A successful large enterprise should be able to look after itself in its own business the only exceptions should be for national defense purposes and government crowding in funding and resources for nationally significant, but specific, projects.
Some of the ideas Tulip puts forward such as zoning should be changed as well, he's quite right on that point. It sounds a nightmare, but this is where his incrementalism i agree with. You can't be revolutionary with peoples communities, unless you have overwhelming buy in.
Some salient input there, thanks. I read the white paper and thought it needs to be more widely known and talked about. I don't have any great ideas for how the medicine should be taken now. I think it should have been addressed a long time ago. Cats out of the bag now. Ive decided it's not my monkey, not my circus. I run a (R&D) business and my solution is to simply move to a country like Japan and side step a 30+ year death pledge.
It is interesting to see how different countries use housing to prop up their economies. It seems to be short term gain, long term pain policy or what I've heard to as car crash economics.
Other nations seem to be putting their efforts into advancing technology. I think that gives a short term pain but real long term gain.
Interesting that you say you've moved your RnD business to Japan. I'd imagine the barriers to movement from Aus to Japan for a whole business would've been huge!
But yeah, the run up in housing might have been sustainable if the wages kept up, but they didn't. And then the Liberals have had a god awful general policy of keeping wage growth low. To have high house price growth and low wage growth is just incongruous, they had to pick one or the other or face the circimstances we're in now.
Aus puts plenty of effort into advancing technology, its the capitalisation on that technology we have trouble with. An exception to that is our mining technology, for instance, its probably world leading. But plenty of other areas where we can't/won't capitalise because mining and care sector suck up so many of the nations resources. Its a choice we've collectively made there, i'm not sure if its correct or not.
But i'd definitely feel more comfortable with a more widespread base of production and competitiveness.
From an ABC article today.
"Independent property economist Cameron Kusher argues there needs to be a "paradigm shift" in the way Australians view housing, "away from one in which you build wealth from buying and holding residential property to one in which it is seen as essential shelter".
Yep, thats more along the lines i'm thinking.
Two ways i can see a political opening for the shift happening,
An argument is put forward that has broad resonance, changing and solidifying the public opinion.
In two or three federal elections the losers of the current system will far outweigh the winners. Assuming our democracy remains as democratic as it is now, or more so, the sheer numbers of negatively impacted will demand action.
Great points. I can't see number 1 bring over the boomers anytime soon. I concur with point number two. But I will be long in the tooth by the time this comes to fruition. Moving to a country that has sensible housing policies side steps the whole issue for me. I understand this isn't an option for everyone, and feel for them being trapped somewhat.
Probably right about the first option, but i feel like more progress has been made with older generations recognising its a particular problem.
I'm interested to find out what Japanese people think of the way their housing system was transformed way back. Have you spoken to any of the older people about the experience?
I can't remember where i saw it explained recently, but apparently it was a pretty authoritive regime they instigated to transform the system.