Australia's federal government recently enacted its first major tax reform in nearly 30 years, a significant step that may signal a turning point in the nation's housing crisis. This moment invites a look back at Australia's housing history within the broader context of social policy, revealing a story of public investment driven by both economic growth and citizen needs.
Historical Public Investment in Housing
Australian governments have a track record of investing in housing, despite resistance from interest groups. This investment, often initiated by Labor governments but also by conservatives, recognized the social and economic value of decent housing and the challenges low-paid workers faced in accessing it through the market. As architect John Sulman noted in 1914, providing housing at a price that "the living wage workers can pay" was an unsolved problem—a truth that remains largely unchanged.
Some early public housing projects were easier to implement. For instance, Sydney's Rocks district saw its first public housing in the early 1900s, built to support commerce and shipping after a bubonic plague outbreak. The conservative state government funded over 100 new dwellings to house wharf labourers needed for round-the-clock work.
Contentious Developments and Citizen Protest
Most housing builds were more contentious, driven by citizen protest and supported by garden suburb advocates who viewed inner-city housing as slums. Daceyville in Sydney's south-east, established after the 1910 election of New South Wales's first Labor government, was a prime example. It followed the demolition of housing for city improvement, displacing over 5,700 people by 1912. Residents, missionaries, and the press petitioned against what journalists called inhuman evictions.
This protest also led to the Strickland Building in Chippendale, the first of four blocks of inner-city flats built by Sydney city council between 1914 and 1927. These flats met resident demand for housing near work, showing how contingent outcomes could be in this high-stakes context.
The 1940s Investment: A New Social Order
The largest public housing investment came in the 1940s, driven by an extreme housing shortage and fear of social unrest after the Depression. Thousands of families lived in boarding houses and temporary shelters. The Commonwealth Housing Commission promised a "new social order" and declared housing "a right" that should "cease to be a field of investment yielding high profits." Between 1945 and 1956, over 96,000 new dwellings were funded through the commonwealth-state housing agreement.
While these investments were insufficient, they eased rental pressure on working-class families more than any intervention before or since. They also helped boost Australia's home ownership rate from 53% in 1947 to 73% in 1966.
Decline and Renewed Efforts
A downside was that sold public stock was not replaced. The Menzies government viewed home ownership as an alternative to public rental, not a complement, so support declined. Between 1958 and 1973, the share of new housing that was public fell from 17.8% to 7.7%, and waiting lists have grown ever since.
In 2007, the Rudd government addressed the gap between low incomes and market rents with a new housing policy. Despite its limits, it enabled thousands of people to access secure housing who would otherwise have been homeless. This investment, part of the global financial crisis stimulus package, showed how such policy can normalize fiscal intervention. It was redeployed early in the Covid pandemic, preventing widespread unemployment, and underpins the government's recent tax reforms.
Australian governments' past housing investments were hard-won. Despite limitations, they made access to housing more equitable by recognizing its social and economic value. Understanding their complexity and purpose can expand the options we now see as politically feasible.
