Tiny house propaganda mushrooms as housing policy fails

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The sadists at Domainfax have published another propaganda article on how so-called ‘tiny houses’ are an innovative and sustainable solution to Australia’s housing affordability problems [my emphasis]:

Ms Paton discarded many of her belongings before moving into her tiny house, which is just over 20 square metres in total…

Port Phillip Council believes the tiny house in St Kilda is among the first approved as a long-term permanent private residence in an urban setting…

Ms Paton said towing the house through a small laneway to the property was a tight squeeze…

Ms Paton decided to downsize from a two-bedroom apartment to reduce her environmental footprint.

Tiny houses cost less than most houses; they start about $50,000 and range up to $130,000 for a “luxurious model”…

She also plans to build a community garden on the vacant land that was donated to her for a minimum of two years

“This is something that demonstrates a style of living that can reduce emissions, waste and water,” she said. “I think everyone deserves a roof over their head and a place to call home and this is a fantastic way to do it.”

Tiny houses may soon be more common as traditional housing becomes increasingly expensive and inaccessible…

A spokeswoman for the Victorian government said… “Tiny houses and other small transportable homes are just one of the innovative ways we’re tackling housing affordability and homelessness”…

You will note from the above that Ms Paton had the land on which her tiny home sits donated for a minimum of two years.

Thus, tiny houses are not a genuine housing solution because there is no land ownership attached and they don’t address Australia’s extortionate land prices.

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After all, the key limiting factor of home ownership in Australia is the high cost of land, not the cost of the physical dwelling. Therefore, you do not solve a land problem by replacing one form of house with a tiny house.

Ultimately, the only discernible difference between a tiny house and a caravan is in name. That is, the word “caravan” has been replaced with “tiny house” to make it sound trendy and sustainable. It’s a marketing gimmick used by spruikers to down sell the Great Australian Dream and is much easier than tackling the problem of housing affordability at its source via:

  • Winding back tax concessions that encourage property speculation;
  • Cutting immigration to sustainable historical levels;
  • Removing artificial regulatory barriers to land supply;
  • Increasing investment in public housing; and
  • Reforming rental tenancy laws to make them more secure.
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Address these policy issues before cramming young Australians into “tiny house” caravans.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.