Found this interesting comment under the forementioned article:
10 Steps to a Housing Disaster
Starting with only 21 million people and a giant island with 100 acres of land per person, how could we engineer some of the least affordable housing on the planet?
Here is a recipe to make housing unaffordable:
Step 1 - CHOKE NEW CITIES
Divide the island into 7 states and create one giant city per state. Force almost all the people into the giant cities with policies such as:
* All business zoned in the centre of the city
* All government departments must be in the capital city
* Non-giant cities given terrible infrastructure
With decent transport this gives 7 areas with 40km radius, approximately 1700 square metres per person. Still too much land to create a crisis!
Step 2 - CHOKE TRANSPORT
Neglect the transportation system so that it is not practical to live more than 20km from the city centre. This cuts us back to 400 square metres per person. Still plenty of space on average, but the largest cities will need some high-rise housing to get by.
Step 3 - CHOKE HIGH-RISE
Refuse permission for high-rise in many cases. Old suburbs must be preserved for the old people who still live there. No extra housing to be built for young families.
Step 4 - CHOKE LOW-RISE
Much land within range of the city to be kept off the market in the form of national parks, government land and farms without permission to subdivide. If you have 5 acre or 25 acre farms within reach of CBD then declare the area semi-rural and don't allow extra housing there. With policies like this even low-population cities like Darwin and Hobart can have a housing crisis!
The first four points will choke-off all avenues of extra housing supply, so now let's increase the need for extra houses - one house per family - by increasing the number of families.
Step 5 - HAVE LOTS OF BABIES
In 20-30 years they will leave home to start extra families.
Step 6 - INVITE IN MANY IMMIGRANTS
Why not increase the immigrant intake to record numbers?
Step 7 - DIVORCE IN RECORD NUMBERS AND LIVE LONGER
This will result in a declining number of people per household. We need more dwellings for a given number of people.
Now with the supply of extra houses choked and the need for extra houses increased, price will race upward, as the poorer families are priced-out of housing. Now let's goose the price even more with idiotic economic "demand side" techniques
Step 8 - LOWER INTEREST RATES AND LOWER LENDING STANDARDS
Instead of paying off a $100,000 house at 13% interest, why not service a debt of $500,000 at 7%. Why not use 80% of two incomes and eat poverty food for the rest of your life?
Step 9 - FIRST HOME BUYER'S GRANT
It won't create a single extra house, but it might drive existing house prices up.
Step 10 - TAX ADVANTAGE TO SPECULATORS
With prices racing up, beyond the reach of first home buyers, give more money to those people most capable of driving prices even higher. Use government tax money to encourage rich people to borrow money and buy existing housing to rent-out to poor people. We can pretend that this creates extra cheap housing and is good for the poor people.
The Claw | Sydney - October 11, 2011, 1:23PM
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