THE one issue all Governments say needs correcting is housing.

When we mere mortals look at the realities of the present housing crisis, we must be reminded of a well-known statement: “To steal ideas from one person is called plagiarism but to steal from many people is called research”.

Finding possible answers for the housing crisis is an incredibly complex problem.

The throw away sentence to solve the crisis is to build more homes.

An obvious solution, however so far no one has come up with any credible way of achieving this.

Applications to build new dwellings are reported by most Councils to be declining.

The number of home builders is also declining, as many are just shutting shop or moving into bankruptcy because they can’t achieve a profit.

Homes to be built on a fixed price contract are simply not profitable business for the builders due to the rapidly rising cost of materials plus the shortages of labour.

Both are being outstripped by the speed and size of price increases, plus the demonstrated shortage of materials, all of which lengthens the time of the build and limits the ability of the client to fund their project.

Unfortunately, it all gets even worse, because the political push is for public and affordable housing.

We assume that public housing is mostly for people who use part of their social security income to pay the rent.

The best outcomes we hear publicised in the media say a minimum of 35 percent of that income is used to pay the rent but, in many cases, this becomes well over 50 percent of their income depending on location.

Whereas public housing is provided by Governments, affordable housing is provided by investors, who obviously don’t do it for free.

They need to make a financial return on their investment, which is most often funded by bank loans.

So how do these investors achieve a return for risk on that investment? They need to obtain a rental figure that not only covers their bank loan repayments but provides an amount for necessary repairs and maintenance plus any down time when the premises are empty or under repair.

Increasing costs equate to higher establishment prices, which then require higher rates of return in order for the investment to make financial sense. Obviously, this isn’t of any advantage to the renters who are already stressed with their present situation.

So, new and more costly homes are simply not going to help these people in need, even if that could increase the overall supply.

With Governments already providing social security income for many public and affordable housing clients, it is easy to imagine their reticence to subsidise the construction and maintenance of low value, higher priced but necessary housing.

Governments’ interest in supplying more of these dwellings is already being met with public push-back from existing residents who do not want so-called socially or economically challenged people moving into their neighbourhood.

Yes, it is confusing.

So far no one has been able to explain how public and affordable housing can be achieved in the present or future time.
No one knows how to find more builders and staff for construction.

We all hope that materials will become more available when transportation issues are resolved.

The financial implications for funding these activities are not obvious without more subsidies and I don’t know if the taxpayers want to contribute more funds from their already meaningful tax burdens in order to fund them.

By John BLACKBOURN