PK, I read the words, but I have trouble with the logic.

>>Pericles, I think that you are wrong to say that government policy cannot assist with homelessness. It cannot completely solve it, but it can help minimise it. In about 1984 the federal government reduced negative gearing on investment properties. The flight of capital was so sudden and the impacts on rents so strong that it was soon obvious that a housing crisis was looming.<<

So how, exactly, would a retention of that policy, and the instigation of a "housing crisis", have assisted the homeless? Please, take me that one step further and help me understand your point.

As I see it, if building houses for rental becomes unattractive, property developers would simply take a long vacation - Aspen, perhaps, or St Thomas - and the stock of housing would stagnate. A proportion of owners, those with negative equity and no chance to recoup, would go bankrupt. Rents would tend to increase, given the disappearance of stock.

You have been adamant that government intervention can assist, but seem to be realistic about the consequences ("housing crisis") that would ensue.

What am I missing?

Well, Pericles I believe you have answered your own question. You acknowldge that if investors leave the market, shortage of supply tends to push up rents. Is it conceivable to you that this might make rents unaffordable to a section of would be tenants? And that homelessness might be the result for at least some of them? Having done some work with homeless, I recognise that there are various causes of homelessness. Housing affordability is certainly one of them, though. An affordability-induced rise in homelessness was a spectre that was enough to spook the government in 1985 to re-introduce negative gearing, and as I recall it, was specifically mentioned in the government's explanation.

This is Alice Through the Looking Glass stuff, PK.

I make the point that the government can only meddle in a way that increases the problem.

You say, no, "I think that you are wrong to say that government policy cannot assist with homelessness. It cannot completely solve it, but it can help minimise it."

When I dispute this, you say "You acknowldge that if investors leave the market, shortage of supply tends to push up rents. Is it conceivable to you that this might make rents unaffordable to a section of would be tenants? And that homelessness might be the result for at least some of them?"

Well, yes, PK, that was rather the point I was trying to make.

But let me try one more time.

In what way can the government intervene in the market, so that the plight of the homeless is ameliorated?

or perhaps

How in your opinion does government intervention, through abolishing negative gearing, improve the lot of the homeless?

or perhaps... you get the drift?

Pericles: Not sure where point of disagreement lies. I have argued that government policy CAN influence the housing market. Negative gearing and relatively low CGT are clearly policies that are keeping investors in the market and these policies are therefore policies that influence the property market and the price of residences, and, I would argue, in an important way. Other government policies increase the supply of affordable housing for lower income renters and this also has some effect on the real estate market and also tends to reduce homelessness. Can we call it quits now?

Great article - three cheers for Damian Jeffree!
I agree that houses are excessively overpriced. So much so that current times are a little Orwellian: everyone is 'equally' worse-off, (rather than equitably), in comparison to mortgage lenders.

Yet even the mortgage lenders are feeling removed and driven by consumer demand for their competitive margins. Like the 'tax-collectors' of Palestine, they are mere managers of an anarchical system, from which they are expected to take profits. Palestine was under the thumb of Roman imperial rule. Taxes were not exactly for the public good; nor did they fulfil claims for private ownership. The same is true today.

The exacting of mortgage-installments is not for the public good, nor does it enable private ownership except on paper. Rather, slavery and servitude to the idols of struggle and over-work are enabled by a mortgage. What will the next generation believe to be their inheritance? They are likely to reject anything less than what will enhance their personal and relational freedom.

Political initiative will not come from politicians. Well at least not until there is enough groundswell of public opinion.
Let us wake up. There is no harm in raising the alarm bells. Our economy is not suspended by a housing bubble.

Rather there is a spiritual economy at stake. The reason for why people have the strength to contend with vast indebtedness is that they believe it is the best way to achieve that illusively empowering space in which to rest and raise relationships of love.