JOHN MENADUE. Housing for use value or exchange value

In this election the Coalition and the property industry with the help of the media have obsessed on the financial value of property,property as a commodity and property for wealth creation. Surely housing policy should be about housing as a human right where in homes we raise families, entertain friends and where we can close off from markets and business.

My grand children’s generation is unlikely to have fair access to the housing market unless my generation is prepared to accept, indeed welcome, a steady and substantial reduction in property prices.My wife and I have done nothing to earn or deserve the large increase in the value of our home.

Housing policy should be based on three important principles. First, we should value housing for its use-value, not its exchange-value. Second, housing policy should be part of community and neighbourhood building. Third, housing policy should promote social mixing and sharing, rather than stratification.

Too often property advocates and vested interests  see the issue of housing as a technical problem concerning debt, prices and ‘bubbles’. Technical and management issues are important but there is much more at stake. What is really needed is that the policies in these areas reflect the sort of society that we want to live in. ‘Housing’ policy is not an end in itself. It needs to serve certain values and principles.

What are the guiding  principles that  should apply to both house ownership and rental?

The first is that we should regard housing for its use-value. Too often we value housing for its exchange-value. We need to decommodify housing. We must build houses to provide ourselves and others with shelter, comfort, a place where we can grow as individuals and a base from which we can develop as full members of society. We must avoid regarding houses as instruments of exchange as is so often the case today with taxation incentives for investment in housing for short-term capital gain. Housing policy should not be influenced by the quest for wealth accumulation.Older people like me have benefitted from increased property values through no particular virtue on our part. But in the process we have frozen new home buyers out of the market. A fall in property values would therefore be socially very desirable. But the media keeps us focussed on how we must protect our unearned property gains.

In the iconic film ‘The Castle’ Darryl Kerrigan put it this way: ‘I’m really starting to understand what the aborigines feel. Well my house is like their land. Their land holds their memories, the land is their story, it’s everything, you can’t just pick it up and plonk it down somewhere else.’ Kerrigan added ‘It is not just a house, it’s a home. A man’s home is his castle. … This is as clear as day. It is right and fair that a family be allowed to live in their own house. That is justice..’

Robert Menzies said in 1942 ‘One of the best instincts in us is that which induces us to have one little piece of earth with a house and a garden which is ours so that we can withdraw and in which we can be amongst our friends and into which no stranger may come against our will.’

It is an important principle that everyone should be able to live in a house or apartment appropriate to their needs. Good housing is a human right, just like the right to a good education and good health care. Housing, health and education must be part of a social wage for all.

Housing is not a commodity or a market transaction. It is where we develop as members of a family and community.

The second principle is that housing must be part of a neighbourhood.

We are more than individuals linked by market transactions. Meaning in life comes from relationships both personal and communal. Our life in the public sphere is no less necessary than our private lives. As citizens we engage and contribute to the common good. It is in communities and neighbourhoods that we learn respect for others. It is where we abide by shared rules of civic contact. It is where we build social capital, networks of trust with our neighbours. We need to behave in ways that make us trusted members of our neighbourhood.

Unfortunately many housing developments are  sterile and hostile to the building of strong neighbourhoods. They promote exclusion rather than inclusion. More and more of our physical and metamorphic space is being enclosed by the market. This alienation from neighbours takes many forms in gated enclaves – high walls, roller doors, CCT cameras, private entertainment, which all have the consequence of avoiding contact with neighbours and hinder the development of community. Good housing policy should be about building strong and vibrant neighbourhoods and not just isolated houses or units.

The third important housing principle should be the promotion of social mixing and sharing. It should be a basic requirement of good housing policy to avoid stratification or ghettos whether on the basis of income, employment, religion or other grounds.

Our health service is increasingly discouraging social mixing through the massive $12b pa subsidising of private health insurance which is separating out services for the more wealthy. Our schools are becoming more stratified with wealthy parents aided by enormous government subsidies, sending their children to separate private schools.

Housing policy and programs must support social mixing through for example setting minimum and substantial levels of social inclusion in all major new developments.

In the post-war years, there was always a senior Commonwealth minister as Minister for Housing. That is no longer the case. We need to reassert appointment of a senior minister as Minister for Housing along with Ministers for Education and Health. Appropriate housing, education and health facilities are important human rights for everyone.

Housing policies and programs must be anchored in key principles; use value and not exchange value; building communities and neighbourhoods and social mixing and sharing.


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3 Responses to JOHN MENADUE. Housing for use value or exchange value

  1. Frank O'Connor says:

    Mmmm … great artcile.

    We got sold a pup when they told us our houses were an investment. As you say, for most of us they are a home, and all we need is fair competitive value/pricing when we sell so that, naturally, we can buy a new (replacement) house to live in and make our lives.

    For investors, with multiple houses, the rental market is probably the purest investment indicator … but negative gearing and capital gains exclusions warp the market unjustifiably despoiling it for those of us who are simply interested in a house as a home.

  2. ANDREW FARRAN says:

    Critical issues for a well balanced society. Homes are becoming too much like mini-fortresses, shutting out the world. Without going back to the 1960s that era had many good concepts for open town planning and community inter-action.
    As to housing being an instruments of exchange, this is pretty unavoidable these days with the breakdown of marriages, with the need for the elderly to down-size and retain wealth accretion from their housing for their adult kids and to meet other complex needs from ageing. The issues go so much further than housing per se. I doubt a Federal Minister for Housing would be much help. Reform if it is to come must come from the States and from some public consensus as to the sort of society they might prefer to live in. What’s happening to Melbourne should be a cautionary tale.

  3. Brian Cabot says:

    A great article. You have summed up the major cause of the decline in lifestyle quality over the last four or five decades. Australians need to change the misconception that ever increasing house prices are an indicator of increasing wealth. In fact the reverse is true – higher house prices divert too much money into a single lifestyle asset, at the expense of wealth creating investments and industries such as tourism, entertainment and education.

    Modern housing subdivisions, with their narrow streets and house fronts that consist of a roller door, a small window and a recessed front door do not facilitate interaction between neighbours. We raised our family in a cul-de-sac that was developed in the 60s, where wide frontages enabled us to see our children playing in the street, and, with cars parked in driveways and garages the street was clear for community activities such as street parties and cricket matches. Urban planners often criticise people like me for wanting to “return to the 50s” (I don’t), but they have in fact returned us to the 19th century, with its terrace houses (completely unsuitable for the Australian climate) and deficiencies in leisure and recreational facilities.

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