The housing crisis makes everything worse

Where and how we live affects almost every aspect of our lives. When there is too little housing and the prices of homes skyrocket, there are obvious consequences like homelessness and housing stress. But the housing crisis directly affects several other major issues too, like employment, health, inequality, climate change, and declining fertility rates.

Employment

You may have noticed the recent flurry of stories in the news about regional Australia suffering labour shortages. Though there are people with the skills and willingness to fill these jobs, there is simply nowhere for them to live. The supply of rental properties has dried up, and homes to buy are prohibitively expensive. Staff shortages have forced businesses to reduce operating hours, which in turn affects the overall economy of our regions.

Housing shortage likewise affects employment opportunities in cities. The story of the little guy moving to the big city for a better life is a well-worn cliché, but cities tend to be highly productive places and sites of innovation. Historically, people of all income brackets have been able to move to cities to for better opportunities.

But when housing in our most productive places is too scarce and too expensive, it limits who can participate. People will, quite reasonably, turn down a better-paid job more suited to their skills if they cannot afford to live where that job is based.

The end result is that we all lose. By stopping people from going where they could be most productive, we kneecap our own economy and make ourselves poorer. We also stifle innovation, which happens when people mix and share ideas – it's why Pixar's offices are famously designed to encourage interdepartmental interaction. We will never know how many innovations we have missed out on because people with complementary skills and knowledge didn't have the opportunity to mix.

Health

Housing plays an important role in human health. When there isn't enough housing to go around, people are forced into unsafe situations: overcrowding, which increases transmission and mortality of infectious diseases; living in dwellings unfit for human habitation; having to choose between homelessness or staying in a domestic abuse situation.

But the link between housing and health isn't just a matter of individual houses and households. The shape of our neighbourhoods affects health as well.

The policies that restrict housing supply create an urban environment that is sparsely populated with strictly separated land uses. This means that people rely on cars to get around, rather than active transport such as walking and cycling. This is in turn leads to increased risk factors for chronic disease such as obesity and hypertension.

Commuting itself is bad for our health. It causes back and neck aches, joint problems, poor sleep, and higher blood pressure overtime. It increases stress and reduces life and job satisfaction; people who commute more than two hours a day are more likely to quit or lose their job within a year.

Our housing shortage affects our mental health too. An undersupply of housing places enormous stress on people to both find a home and then keep up with the mortgage or rent. Furthermore, studies have found that living in housing disadvantage can cause mental illness even decades after a person's situation improves.

Scarcity of housing forces important support networks such as family and friends to disperse in the search for affordable homes. We have to travel further to visit existing relationships (provided you have access to transport and travel restrictions don't apply), while our car-dependency reduces opportunities for forming new ones. All this increases social isolation and loneliness.

Inequality

Housing scarcity is making Australian society more unequal. Houses, not wages, are the driving force behind wealth inequality in Australia.

In Australia, financial security in old age is highly dependent on wealth tied to home ownership; this leaves life-long renters at a significant disadvantage. But you need wealth to enter homeownership to begin with. As house prices become more expensive compared to incomes, home ownership increasingly relies on financial assistance from parents. Again, renters and people from poorer socio-economic backgrounds are disadvantaged. This further embeds the divide between "haves" and "have-nots".

The housing shortage also leads to displacement of poor communities. People on middle incomes who in previous generations could have afforded to purchase a home now compete for cheaper homes and rental accommodation with lower income earners, thus raising prices. Building more housing – even market-rate housing – prevents displacement because there is more supply to meet demand.

Climate Change

The housing crisis also affects climate change. Just as a sprawling urban form affects human health, it's not good for the environment either. Counter-intuitively, cities release less carbon than suburbs.

When housing is denser, it supports the infrastructure for people to walk, cycle or use mass transit for their everyday needs instead of relying on a private car. Plus, it means we don't have to continue clearing undeveloped greenfield land for housing.

In addition, dual and multi-occupancy homes take less energy to light and heat per dwelling than single occupancy homes. This is because each dwelling has fewer external walls from which heat can escape.

If you want to learn more, we have an article dedicated to how our decisions around housing affect the environment.

Families

One of the biggest decisions a person can make is to add a child to their family, and housing plays a huge role in that. If you're already spending a huge amount of your income on housing, does that leave you with the financial resources to care for a child? Is a home large enough to accommodate an extra child beyond your means. One study suggests that a 10% increase in house prices in England had the net effect of a 1.3% decline in birth rates.

Australia's average fertility rate is 1.7 births per woman; however, this low birth rate doesn't seem to be for lack of wanting children. On average, Australians over 40 have 1.5 fewer children than they would like.

While an aging population will undoubtedly have huge societal consequences in decades to come, the simple human cost of losing out on potential meaningful parent-child or sibling relationships shouldn't be ignored.

Other

The housing crisis affects a host of other issues. It's thought that the housing crisis is linked to the rise of populism. People from economically depressed areas in Britain and France where house prices were stagnant were more likely to vote for Brexit and the National Front, respectively. In Ireland, Sinn Féin capitalised on the country's housing crisis to capture the youth vote.

The housing crisis is also terrible from an animal welfare perspective. Pets are being called the "forgotten victims of the housing crisis"; shelters across the country are seeing a record number of beloved pets surrendered because their owners' housing situation has changed.

Solving the housing crisis is going to take a lot of effort and a drastic change in the way we do things. But it should be clear by now that the cost of doing nothing and continuing as we are is far higher.