In the midst of a deepening housing affordability crisis, this year’s federal budget rolled out another policy package more focussed on enriching existing homeowners than tempering ever-rising house prices. Policy labels such as the New Home Guarantee or the First Home Super Saver Scheme belie the fact that the government’s default response is to decoy voters with schemes that further stoke house prices, maximise mortgage debt and deepen housing inequality in Australia.

Despite Covid-19, Australia’s house prices are currently growing at their fastest rate since 2003. The reality for Australians is now either a lifetime of mortgage stress or, alternatively, a lifetime of rental stress – with the associated cascading effects of insecure tenure, frequent displacement, exposure to unhealthy housing, energy poverty and economic insecurity.

This is by no accident. Political short-termism has ensured that house prices keep rising to the benefit of a consolidating few, at the expense of the economic security and health of many. The social and economic consequences of this are increasingly apparent, yet the direct link between high costs of housing and climate vulnerability is often overlooked.

Households across Australia are facing increasing climate risks and have limited capacity to adapt. 

Recent heatwaves, bushfires, floods and coastal erosion have exposed the depth of Australia’s climate change vulnerability. Covid-19 revealed the breadth of economic fragility, with many households unable to absorb a significant shock.

To add fuel to the encroaching flames of system failure, inflationary housing policies are a leading cause of vulnerability to the effects of climate change. Poor quality, insecure, unaffordable and marginally located housing significantly increases occupants’ vulnerability to health risks arising from climate change. The effects of climate change are already having and will continue to have a disproportionate impact on the most vulnerable in our community.

Australian households are directly responsible for 20 per cent of Australia’s carbon emissions. Yet the persistent focus on individual responsibility to reduce our carbon footprint ignores the fact that most Australians have little to no control over the biggest contributor to household emissions – the energy efficiency of their homes.

Housing quality

Residents who have limited ability to make modifications to their dwellings – such as increasing insulation and tree canopy, installing shade structures and water efficiency measures, integrating renewable energy generation and storage and removing gas cooktops – experience an increased exposure to extreme heat, dampness, mould and indoor pollutants.

The majority of housing in Australia is poorly orientated, poorly insulated and poorly constructed. The average energy rating of Australian housing is 1.8 stars and it is estimated that most apartments in Australia would fail international health standards if the power went out in a heatwave. Four in five homes in Australia are still being built to the minimum sustainability standards, making them expensive to cool in summer and heat in winter. Research published by Swinburne University found that improving energy ratings of housing to just 5.4 stars would reduce heat-related deaths by 90 per cent.

Homes that are unable to regulate a consistent comfortable temperature have significant physical and mental health effects for residents. It is estimated that 2.5 million Australians are living in unhealthy housing, with research conducted by Sustainability Victoria in 2020 finding that 45 per cent of Victorians living in public housing reported having to leave their homes during extreme temperatures due to thermal discomfort.

Cooking with gas has been likened to living with a smoker. Damp and mouldy housing is said to increase the health costs of respiratory and cardiovascular disease three times more than sugary drinks in Australia.

The burden of operating and living in poorly built housing is often placed on lower socio-economic groups and the most vulnerable in our society. Australia’s worst performing homes are typically rented and tenants are often the most impacted by unhealthy housing, with no clear statutory requirement for landlords to disclose the energy efficiency of housing and no incentive for landlords to improve it. Meanwhile, tenants pay the high operational energy costs and unwittingly contribute a disproportionate level of emissions.

Housing location

Residents who have limited ability to choose the location of their dwellings are further vulnerable to the link that spatial inequality has with health and climate risk. Housing that has poor connectivity to active and public transport links and community infrastructure such as health services, air-conditioned libraries and swimming pools experience an increased risk of social isolation, car dependency and an inability to seek relief from extreme heat events.

How did we get here and what needs to be done

The high cost of housing is limiting Australians’ ability to curb our carbon footprint, adapt our dwellings to climate change or access relief from extreme weather events. An inflated housing market is immobilising Australians and binding a growing group to poor-quality housing in poorly serviced, increasingly uninsurable locations, compounding residents’ exposure to climate and health risks.

Housing stress is a policy choice. Federal and state government manipulation of the housing market has created profound disparities in housing experiences: for some, it is a source of meteoric increases in private wealth. For others, it entrenches poor health outcomes and exacerbates climate risk.

Decades of destructive housing policy have entrenched a lack of housing accessibility across the country. Inflationary measures fuelled by cheap debt and tempered by insecure work, flat wages, low pension rates and poverty-line social security rates have ensured that our income is disproportionately absorbed by housing. We are overleveraged by debt to feed banking, real-estate and construction-industry profits in exchange for economically unproductive assets, which are often ill-equipped to provide the basic function of safe shelter from a rapidly changing climate.

Housing is essential public infrastructure and a determinant of our economic security, public health and our ability to mitigate and adapt to the effects of climate change. Coordinated national policy that meaningfully expands access to connected, secure, affordable dwellings that exhibit high environmental performance is critical to addressing housing equity, public health and climate resilience. Healthy, energy-efficient housing with minimal energy bills cannot just be the domain for the wealthy if we, as a nation, are to meet our net zero carbon ambitions. Deep, structural change to our housing system is critical to ensure that Australia’s government funded wealth gap doesn’t lock in a climate vulnerability gap as well.

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