Industrialised, Integrated, Intelligent sustainable Construction - I3con

HANDBOOK 2 SUSTAINABLE CONSTRUCTION
shops with transport nodes. State Governments in Victoria and South Australia have also mandated
affordable housing targets in new urban estate developments that demand that a certain proportion of
all new developments are deemed to be affordable. In South Australia, for example, 15% of all new
housing in estates under development must be affordable. Likewise Housing SA, the state housing
authority responsible for social housing builds homes that can only be sold to low income earners.
However such measures have only a minor impact on the supply of affordable housing and have little
effect on the supply of rental properties. As Yates and Wulff (2005) note, the private rental market
cannot be relied upon to provide affordable housing opportunities when the supply is inadequate and
the limited stock is poorly distributed.
Moreover, such policies do not negate the pressure on land prices presented by urban growth
boundaries, as observed by Forster (2006). Day (2005) argues that urban consolidation policies have
driven up the price of land in Australian cities while the cost of constructing a home has largely
remained the same since the 1970s. Housing affordability has also been affected by asset price
inflation triggered in part by the introduction of a First Home Owners Grant to new home buyers by
the Howard Government in 2000, and rising incomes associated with the economic boom in Australia
that began in the late 1990s and continued until the global financial crisis in 2008. The First Home
Owners Grant has been supplemented by grants to first home owners by State Governments and in
some states, tax concessions on stamp duty and associated costs of home purchase.
Merit goods
An Australian cultural milieu that places a social premium on home ownership but in an environment
where affordability is in decline has been encouraged by significant support from the Australian and
State Governments for new home owners, which has feared that markets will not supply housing that
is sufficiently affordable to the majority of the population. In this sense home ownership in Australia
might be considered to be a merit good that should be provided or at least strongly encouraged by
governments. Merit goods differ from socially desirable public goods such as law and order, parks,
street-lighting, defence etc., which are generally provided from the general revenue because the
market cannot efficiently provide and distribute non-excludable goods through the price mechanism.
Merit goods while similar to public goods are those that are deemed socially necessary but can be
provided by the market but not necessarily in the right quantity or at an affordable price. Education is
generally considered to be a merit good and in some countries, health care. Such goods if left to the
market might be unevenly distributed in the community. For example, people who cannot afford to
educate their children privately will not do so, or choose not to do so if there are other matters that
they wish to prioritise.
Home ownership in Australia is considered to be highly desirable by governments and the community
alike as it is held to provide social equity and is bound up in Australia’s cultural identity (Gleeson
2008). Australia’s identity as a suburban home owning nation is referred to by Gleeson (2008 p 2655)
as ‘The Great Australian Dream’, which is under challenge from a poorly grounded critique of
‘sprawl’ perpetuated by urban planners. This critique warns that unless higher urban densities are
achieved Australians will be condemned to obesity, poverty, loneliness and many other maladies.
Concerns over ‘sprawl’ have influenced the imposition of urban growth boundaries and other
measures that place upward pressure on the cost of land and hence undermine the cultural aspirations
of Australians to ownership of a detached house on a quarter acre block. As Forster (2006 p.180)
suggests, such policies ‘reduce the affordability of conventional housing, while forcing increasing
numbers of households into higher density dwellings that they show little sign of actually desiring’.
The Dream remains but it is becoming increasingly unattainable, placing political pressure on
governments struggling to find new ways to provide a merit good that is culturally tied to Australian’s
concept of themselves as a home owning nation.
The critique of the Great Australian Dream is allied to more grounded concerns over the sustainability
of our cities in relation to pressing debates over climate change. The Stern (2006) and Garnaut (2008)
reports have drawn attention to the unsustainability of doing nothing about climate change and other
environmental issues. Australian Commonwealth and State Governments have begun to mandate
51