Canberra’s innovative Land Rent Scheme has been singled out in new research from the Australia Institute and Prosper Australia that shows if applied nationally, Government could significantly reduce the cost of secure long-term housing.
Currently the scheme sees over one-thousand Canberra households saving more than $9 million in housing costs per year, at no cost to the ACT budget.
The report shows that the government can create more secure long-term forms of residency, insulated from changes in market prices, for less than the cost of renting at market prices by utilising the ACT’s public land rent scheme, along with private community land trusts.
- The ACT’s Land Rent Scheme is a publicly-run housing system that ensures residents get a discount on the market price of land, while providing secure long-term tenure, just as with private ownership. These owners can save 37% of their housing costs over ten years compared to renting.
- Community Land Trusts are privately-run housing schemes that provide secure long-term housing below market prices. These owners can save 52% of their housing costs over ten years compared to renting.
“If we were serious about making secure housing cheaper we wouldn’t be talking about first home buyer grants or rezoning in an attempt to increase supply,” says Dr Cameron Murray, Economist at the Australia Institute and author of the report.
“At best these standard policy ideas reduce housing costs by 5-10%. We should instead be enacting policies that can immediately reduce the cost of housing by half.
“Unfortunately, relying on private property markets to deliver affordable housing is like relying on the fox to watch the hens.
“Private property markets that provide access to land and housing through competitive pricing are the problem, not the solution, when it comes to providing cheaper housing options.
“Public land rent schemes that provide discounted land access to owners, and private Community Land Trusts, are proven ways to ensure that subsidies reduce costs for homeowners.
“Establishing Land Rent Schemes or Community Land Trusts should be a priority over privatisation of government land for housing development.”