From crisis to crisis: understanding changes to Victorian rental housing policy from the global financial crisis to COVID-19
Creators: name: Davies, Liam
Publisher: name: RMIT University
Year: 2024
Subjects: classificationCode: 440714
subject: Urban policy

description: This thesis investigates how affordable rental housing is now being provided in Victoria and why it has taken this form. Melbourne, along with every major city in Australia and many internationally, has been grappling with housing affordability in recent years. Housing costs have risen, reducing affordability, and pushing many households into financial stress. Average house prices in Melbourne have risen from 3.3 times the average annual wage in 1980 to 11.9 times in 2019. This disproportionate increase in house prices has led to decreased housing affordability, with most low-income households in the private rental market now experiencing Housing Affordability Stress, and over 1.3 million now receiving Commonwealth Rent Assistance. The tenure profile of metropolitan Melbourne has also radically changed, with renting now at the highest level since the late 1950s, and homeownership rates decreasing. At the same time public housing levels have stagnated since the mid-1990s, with the only growth in social housing being within the community housing sector. State and Commonwealth Governments have been reticent to fund public housing, relying increasingly on private and not-for-profit housing solutions. However, these have come at a great cost.

A regulation theory approach, informed by concepts of financialisation, rentier capitalism, and neoliberalism is used to answer the research question of: how is affordable rental housing now being provided in Victoria and why has it taken this form? Documents and interviews are analysed in a case study approach informed by regulation theory. Three case studies are undertaken, investigating public housing, community housing, and private rental housing, to understand the changes which have taken place in each of these sectors of the Victorian rental housing system. A detailed assessment of financial documents is also undertaken, revealing the cost of policy choices, and where government funding has been directed in the last four decades. Lastly, a cross-case synthesis is undertaken, revealing the interwoven nature of housing policy, and explaining why certain policy choices were made.

This thesis has several key findings, which are relevant not only to the Victorian housing context, but also to the Australian housing context and public policy more broadly. Firstly, the state has increasingly turned to the not-for-profit and private sector to provide affordable rental housing, and turned away from direct provision through public housing. These actions have reflected and supported a financialised regime of accumulation. Secondly, housing affordability issues have worsened, with more households renting for longer periods of time, paying increasingly more in rent. Thirdly, this shift is consistent with a neoliberal mode of regulation, which seeks to expand private markets and shrink the level of state provision. And lastly, state support for rental housing has not decreased, nor has the role of the state shrunk, but rather the level of financial support has increased, and the role of the state has become larger.

This research reveals that Commonwealth support for rental housing was around $12.5 billion in 2017-2018, with only $2 billion being directed towards social housing. This contrasts with 1984-1985, where support was at $1.3 billion, with $1 billion being directed towards social housing. The growth in Commonwealth support has been disproportionately aimed at private market housing, rather than social housing. This thesis also reveals that many popular conceptualisations of public housing are not true in the Victorian context. Total government support per private rental dwelling exceeds the total amount of government support per social housing dwelling. That is to say that a private rental dwelling in Victoria receives more Commonwealth government funding per year than a public or community housing dwelling. It is also revealed that in Victoria, public housing rents exceed the costs of delivering public housing, meaning there is an effective operating surplus. The shift away from state provision towards market provision appears consistent with neoliberal forms of regulation, which promotes the role of markets over provision of government services, while simultaneously being supportive of financialisation. However, this shift has been accomplished by increasing government spending and the role of the state. This is contradictory to the supposed logic of neoliberalism, in that market provision has occurred as a direct result of state intervention, not from a withdrawal of the state. Simultaneously, the supposed choice of markets has left renters no better off.