PUBLIC HOME OWNERSHIP

 

PUBLIC HOME OWNERSHIP SYSTEMS

A TOOL FOR BOOSTING AFFORDABLE ACCOMMODATION

In Australia, when we talk about public housing we are usually talking about government owned public rental housing systems that provide low cost rental accommodation for low income earners (and public servants who live in remote areas). However, in places like Singapore, public housing can also mean systems that help people on limited incomes buy a home of their own instead of renting.

Done well, Public Home Ownership (PHO) schemes have a number of attractions:

1. Users get the security, freedom to modify and control over decisions about pets etc. that comes with owning a home.

2. Governments don’t have to have the huge amount of money tied up in the system. (PHO users buy the houses from the government. These payments can then be used to acquire more accommodation that, in turn, will be sold to new public home owners and…..)

3. The housing affordability problems caused by private housing being used as an investment can be avoided by insisting that houses bought under PHO schemes can only be sold to the PHO at prices that reflect general inflation rates, not the crazy things happening in the private home market.)

DETAILS:

The following sets out for details for one proposal that might be used in Australia. This proposal involves the setting up of government owned public home ownership corporations (PHO Corps.) A PHO Corp may:

1. Build or otherwise acquire and modify basic, low cost housing.

2. Sell these homes to people who do not own a home. Price will be based on the cost of acquiring and modifying the home. (NOT the private home market.) Government subsidies may be used to reduce the cost to new home owners.

3. Help the home buyer buy the house and obtain loans.

4. Buy back the home when the owner wants to sell. (The buy back price will be based on something like general inflation, not the private home market. (This is a critical part of the policy because it stops the PHO system being distorted by those seeking capital gains.) The buy back price may take account of the cost of some modifications. (However, gold plating the taps won’t count.)

5. Allow an owner to rent all or part the house. (Helps stop housing space being wasted)

6. Offer a maintenance service to reduce the risk of owners being overwhelmed by the cost of large maintenance jobs.

Other important principles:

1. An adult can only own one house if they are part of the PHO system. They cannot apply for public home ownership if they already own a home and must sell one of the houses within X months if they acquire a second home. (NOTE: Each adult in a house will be treated as completely independent in terms of this clause – Among other things this rule provides some protection if partnerships break up.)

2. Those who have waited longest will get first choice when a house becomes available.

3. Houses do not need to be the same design, size or price and, unlike current public housing systems may be spread around a community.

NOTE 1: See other public home ownership systems for details of the Singapore and similar systems.

NOTE 2: Regional first home buyers scheme promised by Labor if it wins federal election.

“Kinstead.)