Inside the Greens' plan to create a public property developer

In introducing the policy, Chandler-Mather put much of the responsibility for the current housing crisis on the shoulders of private developers, selling his party’s policy as a counterpoint to private companies’ methods that he says have made “massive profits while driving up the cost of housing by deliberately restricting supply, sitting on vacant homes and blocks of land approved for development”.

“Relying on private developers to tackle the housing crisis is like relying on Coles and Woolworths not to rip you off. They helped create the crisis in the first place, and have no interest in fixing it,” Chandler-Mather said.

Sitting within a dedicated federal housing department that the Greens propose to call the Federal Department of Sustainable Cities, Development and Housing, the public property developer would be tasked with building 360,000 good-quality homes over the next five years and 610,000 homes over the decade.

One-third of the homes would be sold, while the remaining would operate as rentals. What separates this plan from traditional public housing is that the homes would be available to any renter or first home buyer, with 20 per cent of the rentals allocated towards the bottom 20 per cent of earners, with priority given to families who have a connection to the local area.

The party is proposing offering the homes at sale prices that are just over the cost of construction to first home buyers, while rents would be capped at 25 per cent of household income.

A cost analysis conducted by the Parliamentary Budget Office estimated that tenants are likely to receive a 19 per cent discount on rent, equating to a savings of $5,200 a year, while buyers would spend roughly $260,000 less than they ordinarily would on a home, or 33 per cent less than market value.

The net underlying cash balance cost to the budget would be $27.9 billion over the decade; calculating for the cost of construction, land, and the interest on debt and rental and sales income, the headline cash balance impact would be $285 billion over 10 years.

Along with this plan, the Greens would push forward with changes to negative gearing and the capital gains tax discount to contribute funding to the program.

Housing organisation Nightingale serves as a model for the proposal, with Chandler-Mather stressing that the program would prioritise “sustainable urban design” to “help build a sense of local community, ensuring that people’s homes are at the centre of a community that they would like to live, work and relax in”.

“Normally a private developer pockets a big profit, but the public developer would put that profit back in the pockets of renters and first home buyers in the form of lower house prices and rents,” Chandler-Mather said.