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The Forum > Article Comments > Restoring first home buyer affordability > Comments

Restoring first home buyer affordability : Comments

By Wendell Cox, published 7/4/2009

Urban consolidation policies place serious restrictions on developing urban fringe land for housing.

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Wendell Cox is still pushing to increase the urban sprawl onto the last of our well watered agricultural land that is better suited to agriculture than land in irrigation areas further from population centres.

Ignoring the loss of fertile well watered agricultural land what about the public transport provision for the urban fringe dwellers?

Transport costs and travel times are the tyranny of outer urban dwellers with many employers of low paid labour discriminating against workers who have long travel times.

would low income home owners be better served by being imprisoned in outer urban suburbs with low capital growth or by having access to low cost apartments closer to jobs, transport etc
Posted by billie, Tuesday, 7 April 2009 10:00:12 AM
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Why is all the talk about supply-side solutions? What about demand? If you stop pumping up the population you will solve the housing crisis (and affordability crisis) in short order. Wendell Cox also does not seem to believe that oil supplies are threatened even though the International Energy Agency now sees serious oil supply issues from 2012 onwards. When the oil shortages hit the urban fringe land will have a much, much higher agricultural value and the people caught on the urban fringe will be severely affected by transport costs. Wendell is the author of "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life". What do you think the quality of life will be Wendell when people out in the sprawl have to choose between spending money to eat or to commute (if they have a job)? Go back to the USA where you belong and where you can enjoy the collapse of the urban sprawl as so vividly desribed weekly by James Howard Kunstler at www.kunstler.com
Posted by michael_in_adelaide, Tuesday, 7 April 2009 10:14:18 AM
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Not enough housing? Too many people!
Posted by Leigh, Tuesday, 7 April 2009 10:26:43 AM
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The US is the land of urban sprawl, go visit some of the major cities in the US to see what state their centres are in is that what we want for OZ. IMO we should be making housing unaffordable in the outer suburbs of our major cities. We have got plenty of land that is not suitable for farming why are we bulldozing market gardens to build housing estates it’s madness
Posted by Kenny, Tuesday, 7 April 2009 12:42:36 PM
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This guy should probably have listened in Economics 101. Does he really think there is a shortage of land? Thousands of hectares are currently land banked by developers who are waiting for the market to pick up to develop housing estates.

Of course land zoned for development is much higher in the UK than rural land. If you allowed more rural land to be developed it would become instantly more expensive as well.

Fool.
Posted by Cameron Murray, Tuesday, 7 April 2009 3:21:49 PM
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Again the incorrigible Wendell Cox complains about restrictions on the OUTWARD expansion of cities, but says nothing about restrictions on UPWARD expansion. I have already dealt with that issue at http://forum.onlineopinion.com.au/thread.asp?article=8259#129611 .

I should note that Anthony Richards has no such double standard. In the speech quoted by Cox, Richards said:

"But it is also the case that supply-side factors matter, and here I define these broadly to include factors affecting the ability to build new housing on the city fringe, factors affecting the ability to expand supply closer to city centres, and factors such as community and transport infrastructure that influence the feasibility and desirability of living in different places."

And later:

"Indeed, perhaps the best chance of boosting housing construction on a sustainable basis may be to seek to reduce impediments on the supply side that are either boosting the cost of building new housing on the fringes of our cities or are constraining the ability to build more housing closer to the centres of our major cities."
Posted by grputland, Tuesday, 7 April 2009 4:10:04 PM
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My maiden. I agreed with the points made in the 5 comments to Restoring First Home Buyer Afforability. The concept of Population Growth Management doesn't seem to rate a mention and since I left the old mans' farm in the '50's as a kid for the city I couldn't understand why only prime agricultural farmland was only ever marked for development. Australia must have one of the longest (prime real estate)coastlines in the world, perfect for a for a type of development that fell out of favour 40 years ago..ribbon development, make the Pacific Highway one way,clock wise, with sealed & guttered left hand turns off it running only 2 or 3 klm. Ergo all the best arable land is saved. At first reading I thought Wendell Cox would have to be representing some land devlopment group . I live on the Sun Shine Coast, sorry Wendell seems the only tree your barking up are dead ones. I enjoyed your article but disagree with it, sorry to say I have no great insight to offer on this complex problem. regards,
Posted by ronk, Tuesday, 7 April 2009 4:44:49 PM
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The survey which the author links includes this amusing quote:

"Unfortunately, most of those chiming in on this debate reflect ideological positions of one kind or another rather than investigating the available data and exploring the causal connections in the data more rigorously."

That should dispatch the comments made so far, but I am not so sure it will prevent the consequences of increased oil prices or lost agricultural land close to the cities.

Still, it's a breath of fresh air to find erudite souls like Professor Angel waxing eloquent about their value-free investigations of the data. A Princeton man, for sure. By the way, did you know that the original Ivory Tower is on the Princeton Campus? In the absence of anything more sensible to read, I recommend that you visit

http://en.wikipedia.org/wiki/Ivory_Tower
for the rest of the story about Ivory Towers:

"In Andrew Hodges' biography of Alan Turing, while discussing Turing's 1936-38 stay at Princeton University, he writes that "[t]he tower of the Graduate College was an exact replica of Magdalen College Oxford, and it was popularly called the Ivory Tower, because of that benefactor of Princeton, the Procter who manufactured Ivory soap." William Cooper Procter (Princeton class of 1883) was a significant supporter of the construction of the Graduate College, and the main dining hall bears the Procter name."

It makes me wonder whether the real estate value of all those tree -studded Princeton campus lawns has changed over the past century, and what their $/ha value might be in these fraught times.
Posted by Sir Vivor, Tuesday, 7 April 2009 4:53:44 PM
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Wendall's reason and logic is cutting through the weeds in the swamp which supports the nimby,selfish,and the greedy lefts mind set.I wonder how many of these so called Australian's would support social and affordable housing construction in their streets? Do I hear a whimper? Can any of these apostles of kindness show that they have made application to deliver housing for someone else except for themselves. Or, as usual, their bandwagon, no development, reduce the population, save the green space(always some others property)really mask their conceited envy,that someone else may build a new home which has a different appeal and their by relegating their abode somewhat outdated, or dare I say obsolete. Now I may be wrong,there may be someone willing to comment on how they have used their funds to supply social and affordable housing for someone else other than themselves! Or is it still rip them down tall poppy cock?
Posted by Dallas, Wednesday, 8 April 2009 1:42:43 AM
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Increasing housing supply is a problem whether the increase is up, out or consolidation within boundaries. It is just plain stupid to bicker about how supplies can be made more affordable or how to reduce collateral damage caused by ever greater numbers of houses being demanded.

The real problem as others have mention is to be found on the demand side (Economics 101 might have something to say about excess demand causing prices to rise might it not Mr Cox?)

Why is that Wendell Cox and so many of his colleagues avoid like the plague the mention of population growth and its role in pushing land prices ever higher?
Posted by kulu, Wednesday, 8 April 2009 2:01:05 AM
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Dear "Dallas",

Would I support social and affordable housing in my street? I sure would, 'cause I'm a renter, and the new housing would compete with my landlord and help to keep my rent bill down!

And if I ever become a landlord, I'll be pushing for an increased height limit on my lot so that I can supply more affordable housing -- and so that my lot increases in value at other landlords' expense! And when other property owners accuse me of selfishness, I'll point out that my selfishness, unlike theirs, is helping renters.
Posted by grputland, Wednesday, 8 April 2009 10:37:32 AM
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It seems in Sydney we go from one extreme to the other. We went from unsustainable 1/4 acre blocks to high rise monstronsities. What about medium density housing as a compromise like much of Europe?
Posted by dane, Wednesday, 8 April 2009 1:26:15 PM
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grputland, Good luck in convincing the local residents and council of your worthwhile desires.
Posted by Dallas, Wednesday, 8 April 2009 6:27:06 PM
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Author Wendall Cox is basically correct in his hypothesis of expanding the supply of vacant land,inevitably leading to lower prices. The pressing problem of urban sprawl is Universal - what is needed is a fearless Leader with honesty, backbone and gumption, to call the shots.

What WC doesn't factor in, is that whilst we have the largest amount of free space per person on the Planet, we are stridently opposed to forsaking our " comfort zone " lifestyles, yet expect Joe Bloggs and his tribe to the initiative and settle down out in the sticks of Whoop-woop ? Is it any wonder most ozziemo's are searching for the Utopian sea-change ! This article is both disingenuous and cynical. It evokes the preception developers and shysters are manipulating the scarcity of residential freehold land to gain filthy lucre, and their altruism profit driven ? State Goverments are notorious for grnating large tracks of land to private interest in the guise of " wild life warriors ", later to revoke the lease in favour of Political expediency, to Mining interest, for a quick buck.

Ideally, everybody want to live within easy access to education, medical facilities, shopping, employment, and bacis needs. Generations, since Governor Phillip's arrival in Port Jackson, have settled in areas along the coastal fringes on the dryiest Continent on Earth. Early settlers soon learned survival depended on the availability of water, arable land and commerce.

As the recession bites and the credit crunch encroaches, people are discarding some of the frivolous things in life, out of necessity. Most households have adopted financial strategies to cope. If predictions are correct, things will get worst before it improves. The Reserve Bank chopped interest rates 1.4% to 3% ( lowest in 50 years) to revive Business, and the Housing Industry particularly. The plight for first home buyers has not significantly eased. Affordable housing remains increasingly scarce and CBD dwellings are like hen's teeth. While consumer confidence plummets, and finance harder to obtain, the four pillar Banks have exacerbated the impost by refusing to pass on the interest rate cut, despite dire exhortations
Posted by shellback, Friday, 10 April 2009 9:51:33 AM
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and futile hand-wringing by dynamic Faulty Tower's comedy trio Rudd, Swan and Tanner. Govt rock-solid facetious commitment to indemnify the Banks, extend credit, and absorb bad ( Ponzi, Sub-prime,Hedging ) loans, notwithstanding. Plans to torpedo the $21,000 Housing grant will undoubtably fuel the debate. The averacious Banks have, under the pretext their sharholders are suffering a 30% fall in dividends, and falling ASX share prices,have inadvertently increased charges to make up the shortfall. Many enjoying the home grant may find themeselves worst off in the short term. Realistically, if couples find it impossible to save for a deposit, the likehood of servicing a $ 350,000 mortgage over 40 years is indeed fanciful. Axiom: there is no such thing as a free lunch. Shopping for cheaper loans by playing the Banks against each other is fallacious nonsense. TV current affairs programs are propagating insidious visceral lies. Ultimately, the Banks decide if you are worth the inherent risk, and whether your over exposed Parents are prepared to put up their homes as collateral. The Fix term loan negates the RBA relief cut. The traumatic exercise is a mine field to the uninitiated. Paradoxically, the Rudderless charade, stimulus package is aiding and abetting wannabe defaulters.

In future, we will see more Housing Estates being developed by Govt's, State's and Municipalities to house communities hitherto living in single houses. All over the World, multi-story apartment towers are replacng shanty-towns, run-down neighbourhoods. Ghettos. Once, the luxary of 14 perch blocks in prime areas was a deceitful ploy by local Council's, until it was unceremoniously abolished.

To overcome demographic population growth, economic,social and under privileged upheavels, areas are being bull-dozed to make way for satellite cities to alleviate congestion of low cost development estates, lacking proper infrastructure planning. These newer estates are replacing older ones, with modern conveniences and 21st century wizardry. As technilogy improves these satellite cities will cater for every taste and whim ie shopping arcades, recreation, child-minding etc. Infrastructure costs are, over a period substantially diminished, as the area appreciates with Business and Commercial investment, leading the way ie Scandinavia, Beijing, Brussels etc.
Posted by shellback, Friday, 10 April 2009 10:51:32 AM
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"the left" is not so nimby selfish and greedy as to save all the selfishness for itself, Dallas.

You say:
"Wendall's reason and logic is cutting through the weeds in the swamp which supports the nimby,selfish,and the greedy lefts mind set.I wonder how many of these so called Australian's would support social and affordable housing construction in their streets?"

It's a moot point. I wonder, myself. I also wonder whether Wendell Cox or his Princeton Professor, or the worldwide (but more pertinently Australian) myriads of Real Estate agents, developers (including maybe a few wannabee Bondies)are more interested in living next to public housing than in a gated community, or at least a "nice suburb, say like Vaucluse or Double Bay in Sydney, or Lower Sandy Bay, in Hobart (even Sandy Bay is going to the dogs these days).

How about yourself? Maybe I do you an injustice. Maybe you are one of the unsung social commentators trapped on the 17th floot of Alexandria's high-rise monuments, fed up with the view into the window across the way, your few escapes remaining: into the urban jungle to collect your pension, or through your magical monitor screen, or watching DVD's of Dallas?

As for Wendell's logic, it is based on "free market" assumptions that only work with taxpayer subsidies. It's a shame folks like you can't tell left from right.
Posted by Sir Vivor, Saturday, 11 April 2009 8:10:46 AM
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"Why is all the talk about supply-side solutions? What about demand? If you stop pumping up the population you will solve the housing crisis (and affordability crisis) in short order."

Bingo.

Housing prices depend on supply and demand. Both are variable, although real estate 'experts' talk as if supply of land for housing was the only variable we have any control over, while treating the demand caused by rapid immigration-driven population growth as a given. The Federal Government talks that way too. On one hand, it pretends that it helping to solve Australia's chronic housing shortage and result housing affordability crisis by offering band-aid supply-side 'solutions', while on the other hand, it continues to import hundreds of thousands of extra people each year, all of whom need to be housed.

Once the real estate and building lobbies have successfully lobbied government for higher levels of immigration and demand for housing starts running ahead of supply, a real estate 'boom' is essentially guaranteed. This is particularly noticable in our capital cities where the vast majority of immigrants end up.

With record numbers of immigrants streaming into our largest cities, any attempts by councils, planners or governments to limit the scourge of urban sprawl is politically risky. The reason is obvious. To set limits on where developers may build restricts the supply of land. Prices rise and a chorus of self-interest demands the 'release' of more land to address the crisis. Nobody ever bothers to point out that it is these same vested interest groups and their lackeys in government who created this pressure-cooker situation in the first place.
Posted by Efranke, Monday, 13 April 2009 7:15:22 PM
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