Negative-Gearing Changes Bring Life Back To Eerily Quiet
While there is much debate about who will win and who will lose life with major changes to negative gearing and who should be the winner, attention must also be paid to which Australian suburbs are most at risk.
Australian Financial Review recently spoke out about the “Top 10 Suburbs that will be affected by negative gearing plans. This scare campaign was quickly joined by the Australian. Mandurah, Western Australia, was where I spent a weekend recently, is now on the AFR’s List.
This was the inlet at the entrance to an inlet when I was growing up. It is now one of Australia’s fastest growing suburbs and has a 50-minute train link to central Perth. A cluster of mixed-use, medium-density developments are located within walking distance from the town center. There are many opportunities to kayak, boat and swim with dolphins and crabs.
Contrary to most suburban developments, this housing is dense. It’s mostly four to five stories high with a few blocks reaching ten stories. It is a walkable neighbourhood with plenty of public space. Many shops and cafes can found on the ground floor.
Built Density, But Not Intensity
This is a great example of the type of urban development that we need in Australian cities. Places that encourage walking to work, shopping, and recreation. Where densities are high enough for a variety of public transport and shopping.
This is the main problem: despite the high built density, the population density in your average suburb is much lower than it should be.
According to AFR, this is the type of place that is set up to suffer. Yet these areas of Mandurah already have an occupancy rate of 20%. This has led to a rise in empty housing, vacant shops and offices, empty streets, parks and poor public transport.
Public space lacks vitality and safety. Even on a sunny February weekend, beaches, parks, and walkways are often empty. There is a lot of built density but very little public life. There are many empty shops that serve as billboards for financial services and real estate along the streets.
Although most of it is vacation housing, it can be commutable to major cities. Is it going to go waste because the owners can make a profit by making a loss according to current negative-gearing rules.
Housing For The Homeless On The Market
Although curbing negative gearing may reduce house prices in the short-term, it will also help in the long-term as it will bring many of these vacant homes onto the market. Then, the synergies between higher-density mixed use development and good public transport will start to play.
More amenities will be possible as more people live within walking distance. More people will be able to cycle or walk, which will improve their health and transport outcomes. This is the type of city that we need to make more walkable. It’s a place where we can live great lives and less dependent on cars.
Because of the high wealth disparities and neoliberal market, it is difficult to estimate how much empty architecture is cause by negative gearing. The curbing of negative gearing can have a significant effect on getting vacant housing onto the market. This could help reverse the cycle of emptiness and bring life back to shops, offices, streets and parks.
Positive Gearing Across Australia Life
This is more than a benefit for places like inner Mandurah. This applies to empty suburbs as well as high-density inner city neighborhoods. As places where density is not important, Docklands and Southbank in Melbourne are two examples.
Negative gearing results in underutilisation of urban space. It is important to reduce it for the future success of Australian cities.
This raises another question: why not tax the underuse of urban space? Why not tax the misuse of urban space if we want to generate new tax revenue that can be use to balance the budget, reduce CO2 emissions, and boost the productivity and vitality in cities? It could be call positive gearing.