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The Rental Crisis. Submission to the Senate Community Affairs Committee

Rents are too high. This leads to homelessness, rental stress, long commutes, overcrowding, and a host of other social problems. The fundamental cause is that planning restrictions limit supply, driving up the cost of housing. It is important to be clear about this, and for it to be a focal point in public discussions.

As yet, it is not well understood by the public. So opponents of housing developments do not realise the harm they do. Moreover, misguided policy proposals dominate public discussion. These are major obstacles to better policy.

The submission concludes that planning restrictions mean that rents are too high. Solving this problem essentially involves getting state and local governments to stop saying ‘no’ and start saying ‘yes’. Making federal grants and expenditure on infrastructure conditional on housing reform would also help to make housing more affordable.

More fundamentally, we need a change in social values. As a society, we need to be more accepting of higher density. We need to put more weight on the interests of renters and future home buyers and less weight on the interests of nearby residents.

Photo by Sergio Souza.