New Internationalist

Outback In The City

November 1987

This feature was published in the November issue of New Internationalist. To read more, buy this issue or subscribe.

new internationalist
issue 177 - November 1987

(Australian magazine version)
Bankruptcy soars to an all-time peak. Homelessness rockets too. But for most Australians the city dream reigns supreme.
David Moore / Camera Press
Outback in the city
In spite of the mythology of the outback, Australians are
city-dwellers par excellence. But today the cities are in crisis and a
radical rethink is needed. George Fisher reports from suburbia.

The transition made by Australian folk hero Paul Hogan in Crocodile Dundee - from the outback to the city of Manhattan - is matched by most Australians at some stage in their lives. Not as a literal, historic shift from country to city, but as a synthesis of the mythical pioneering spirit with life in the vast tracts of Australian suburbia.

Australia is - and always has been - a nation of city dwellers. Some 86 per cent of its people live in urban areas. Three- quarters of the Australian population live in its six sprawling state capitals; 40 per cent live in Sydney and Melbourne alone.

There has always been a strong sense of the pioneering spirit - if not the myth - in the Australian mind. We have venerated our heroes and heroines because at least they knew how to overcome the fear of the great outback. Even a quick glance at a map will show how readily Australians cling to the 'temperate and hospitable' coastal zones. The 'quarter-acre block', which combines elements from rural conquest and urban amenity, continues to be seen as a person's basic right. Every other mode of living is seen at best as temporary.

Australia's colonisers declared the land terra nullius with respect to its original inhabitants, the Aborigines, banishing them to remote missions or culling them like animals. With the founding of the colony in 1788, all of Australia was claimed as Crown Land, an assumption which has only recently been seriously challenged.

European settlement occurred at the time that the industrial revolution on the other side of the globe was in full swing. From the early days of the colony, urban- isation was a ruling force. There was no progression from rural hamlets to villages or larger towns which characterised much of Britain and Europe. Australia's rural population in fact grew much later, and never came to match the capital city dominance. In 1911, for example, both Sydney and Melbourne were larger than any European city other than Paris, Berlin, Moscow and London.

Migrants were lured with the promise of attaining their share of the enormous tracts of land available for settlement, and this, coupled with a climate which invited out- door living, added to the outward spread of the suburbs. What developed, particularly in the early to mid-1900s, was a series of mass-built, poorly serviced housing. Vast areas of land were cleared of their native shrubs and trees. It looked horrific, provided no shade for the scorching summer months, but made sub-divisions and housing construction much more profitable.

Today, the cities are clearly not coping. Homelessness, while not a new problem, is growing rapidly. An estimated 40,000 people sleep on the streets or in crisis refuges each night, and a further 60,000 are on the verge of literal homelessness. The number of those people waiting for public housing is expected to reach 250,000 by 1990. There is a severe shortage of rented accommodation. When rental controls are weak and market forces are allowed to have a free reign, rentals rise rapidly. Over-crowding is one common result. Today, cost-renting is still unable to compete on equal terms with private ownership.

Australians, more than most other peoples, have shown a marked preference for separate, free-standing dwellings surrounded by private space. Around 80 per cent of dwellings are of this type. Home ownership has become a national ideology, and one based on a class-divided tenure system. Challenges to this way of thinking are rare. However, there are always small rays of hope filtering through the suburban shadows.

One such example exists in Brisbane, where small groups of people have decided to house themselves within a system known as common equity rental housing co- operatives (CERHCs). The CERHC tenants are opting out of both public and private rental, the latter due to the unethical behaviour of many landlords and the former because it is cruelly stigmatised and often the target of neighbourhood protest. These CERHCs, established with public funds, are developing as self-help, community building projects in direct contrast to the State's housing policy. Motivation came from three areas: community workers, welfare groups and local churches.

The Government, meanwhile, continues to encourage home ownership over a subsidised rental system. Sociologists such as Jim Kemeny have argued that an inverse relationship exists between high home ownership and poorly serviced welfare sectors. Australia's welfare and social security systems are among the worst in the world. He appropriately describes this as the 'illfare state'.

Private dwellings and privatized urban structures focus all lifestyle options on the home. The relatively large size of Australian homes indicates the substitution of private space for low levels of public facilities. Backyard swimming pools, rumpus and family rooms become substitutes for play- grounds. The privatized dwelling ideology exerts other strong influences on how people live their lives. At the very least, many political commentators have noted that a 25-year commitment to a mortgage - the dedication to and pursuit of house, garden and car - has a powerful stabilising effect on the population.

The pursuit of such a lifestyle, and in particular the privatization of dwellings, is inseparably linked with the commodity market and consumption. Private ownership has remained an unchallenged myth because of widespread support from marketers, developers and both radical and conserva- tive governments. No one dares to question the national cost of such a pursuit. 'Community' is pursued and idealised through national stereotypes, the 'we' and 'our' of advertisers and politicians alike.

But at what a cost! Bankruptcy from mortgage defaults is at an all-time high. The average mortgage debt for couples under 30 is more than $50,000. This is in addition to the $23 billion national personal debt figure - the equivalent of$3,000 for every worker. The stress this produces is immense. One recent survey found that 80 per cent of marriage breakups related to mortgage and credit bankruptcy. But the unenlightened treadmill of demand rolls on. And it is more powerful than the individuals who are caught in its path.

Meanwhile the run-down poor suburbs of Sydney and Melbourne, as well as the inner cities, have come to the attention of speculators. Gentrification is rife, as younger professionals value proximity to the city. As this process continues renovated houses place an upward pressure on local rent levels.

High-income groups are of course able to bid the prices of houses far beyond the reach of the traditional occupiers. Factory workers, in search of lower rents, have been forced to move to the more distant suburbs. Many, of course, have no option and have then to contend with poor facilities and much lower degrees of choice in terms of employment. The new, pragmatic rich are then left to do battle with the young, idealistic students who occupy the poorer dwellings in these regions, often squatting in condemned or partly demolished houses.

As the factors which dictate 'fashion' seem as arbitrary as those which dictate 'pragmatism', it is no doubt only a matter of time until the gentrification process chooses new targets to dislocate.

George Fisher is the NI's Australian editorial consultant based in Sydney.

(UK magazine version)
Home on the Range Rover
Booming property prices. Fast bucks. Short memories. Increasing
homelessness in Britain and council houses selling like hot cakes.
Where is the dizzy spiral taking us? Michael Ball investigates.

The housing market in Britain is like a giant, unfair game of Monopoly. Lots of money and good luck are required to get on the trading-up ladder - and a good bloodhound for spotting the bargains might help too. How else can anybody afford to move to southern England given the astronomical level of house prices there, especially in the London region?

If you've got the money, perhaps from the proceeds of a previous house sale, and can take out a big mortgage, home ownership seems to offer limitless financial gains. If you are not so lucky, dismal housing prospects await you - either in the form of crippling mortgage repayments or escalating council and private-sector rents. And the quality of the housing you get is often abysmal.

High-tech professionals, City dealers and every other brand of the ubiquitous Yuppie have been blamed for pushing up house prices in southern England in recent years. The quality press stacks its pages with endless information for the well-heeled on the latest trendy areas and mortgage gimmicks.

Without a doubt the current systems of providing housing in Britain create and reinforce inequalities. They also cause inflationary bottlenecks in places where jobs are available but where ordinary people cannot afford to live. But there is far more to contemporary trends in housing than booming prices and shortages.

Housing is a key political issue - especially so for Mrs Thatcher. Not in terms of providing decent, cheap housing for everyone, but as a weapon with which to smash her embodiment of socialism: the Labour Party.

Council-house estates have always been a bastion of Labour Party support. To remove that support is the Tory dream, and what better way of doing it than to remove as much housing from the council sector as possible while marginalizing as poverty ghettos what remains?

Pushing up council rents, delaying on repairs and offering large discounts, has made it more attractive - and actually cheaper - for council tenants who can afford it to buy rather than rent their homes. Council house sales have now passed the million mark and it is estimated that half the remaining stock will be disposed of in the next five years - making for one of the greatest transfers of real property in Britain since the dissolution of the monasteries in the sixteenth century.

There is little social or economic logic in such policies. Money lenders will do well. Uncertain gains are offered to tenants who choose to buy, but at enormous financial and social cost to remaining council tenants and the population as a whole.

Most of the gains to buyers depend on rising house prices. So far, on that score, Tory strategies have been remarkably lucky because house prices have been rising since 1982, reaching a peak annual rate of nearly 30 per cent in London in late 1986 to early 1987. There were signs that by summer 1987 some of the steam was going out of the boom. But this has done little to dampen the rekindled myth that no-one loses from home ownership. Disgruntled tenants might well be wondering when they are going to get their share of the increased value of housing - which helps to set the scene for a further carve-up of council housing.

The selling of entire council estates has only been made possible by a revolution in mortgage finance during the past five years. Previously building societies were virtually the sole lenders of mortgages. But now a wide variety of banks and other financial institutions are keen to get in on the act. Most raise their funds on the wholesale money markets, so overseas money is now flowing into British mortgages.

The result has been an astronomical increase in mortgage debt in the four years between the end of 1982 and 1986, it doubled to £153,000 ($244,800) million - equivalent to almost half of total UK national income in that year. During the same period mortgage defaults grew dramatically. Repossessions by building societies rose almost fourfold and serious arrears in repayment doubled.

Lending for house purchase in advanced capitalist countries has become a fashionable area for international finance capital in the 1980s in the way Third World Debt was in the 1970s. No one believes housing markets can turn sour while the margins are so profitable. Few banks and building societies are bothering to find ways of limiting their risk, so large-scale mortgage default could create severe problems for them.

New competition in the mortgage market should mean a fairer deal for consumers but it does not Building societies had already pushed up mortgage rates well above prevailing market levels of interest in the early 1980s which was precisely why other institutions wanted to move into mortgage lending. In the subsequent boom, no institution has wanted to rock the boat and cut into their own profits by lowering the interest rates to more competitive levels. So house purchasers have ended up bolstering the profits of the major financial institutions.

We have come a long way from the 'it's the Yuppies' explanation of rising house prices and shortages. House prices in Britain have risen because some people have had more money to spend, albeit with sharp regional differences. But it is the financiers who fix mortgage rates, the builders who set prices for building new
houses and the landowners who reallydetermine housing costs. Whenever demandrises these three groups all know that they can push up their prices and make money while the boom lasts. And it is consumers with the greatest purchasing power who arebest catered for by the institutions of the housing market First-time buyers and low-income groups get short shrift.

Memories tend to be short during booms. The British housing market is punctuated by a series of booms and slumps - three since the early 1970s. In the worst years, between 1973 and 1977, real house prices in Britain fell by 30 per cent at that time, though, inflation did most of the work of readjustment, eroding consumers' mortgage debt and house-builders' and building societies' over inflated assets. Few, apart from reckless house-builders, suffered unduly. But the late 1980s are different inflation is low and real interest rates are high. Many people's housing budgets are stretched almost to breaking point the end of the boom could be exceedingly painful for some.

Other Western European countries, such as Holland and Germany, have experienced major collapses of their owner-occupied housing markets in the 1980s as a result of earlier frantic activity. The Thatcherite strategy for housing could well be doomed by similar economic forces. Radical reform to provide decent housing for all, outside the operations of the free market, will be back on the agenda. Until then, profit-taking and growing inequality will continue. But who cares when a second mortgage on your London home can get you a Range Rover?

Michael Ball is a London University economist, journalist and author of Home Ownership - A Suitable Case for Reform.

Help Yourself

A woman dressed in a boiler-suit is calmly drilling holes into a steel door. Another steadies a ladder as a man in a paint-splattered dungarees tries to prize open an upstairs window.

It's 8.30 in the morning. Rush-hour commuters pass by, paying little heed to this workaday scene. Once inside the empty building the squatters will set about their lives unobtrusively. Going to work - if they have jobs. Taking the kids to school. Paying the gas bills. If they keep quiet they will be able to stay there six months, maybe more, before the bailiffs arrive with a repossession order. And the search for another squat begins.

This is squatting 1980s style. No banners. No protest. No anti-capitalist slogans. No politics - or not much anyway. That belongs to the 1970s when squatting was as much a political statement as a way of getting a roof over your head. It drew public attention to the fact that in spite of growing homelessness both private landlords and public authorities were deliberately keeping buildings empty. New laws to give rights to squatters were passed. In Britain it became illegal to evict squatters from uninhabited without a court order. Other countries such as Italy and Portugal saw similar recognition - or re-recognition - of squatters' rights.

For squatting is, of course, the oldest form of land tenure. We are all descendants of squatters. During the Middle Ages in Europe it was widely accepted that if a person succeeded in erecting a dwelling on common or wasteland between sunrise and sunset and lit a fire on it they could not be lawfully dispossessed. There were even laws protecting squatters on privately owned land.

Today, in the frosty climate of the New Right such notions of primitive rights to shelter tend to wither. Now local authorities of all political colours are quite openly hostile towards squatters whom they view as 'queue pushers'. They are also embarrassed by them, for they show up the authorities' inability or unwillingness to make use of housing resources in a socially responsible way. 'Our main task' explained a spokes person at the London Advisory Service for squatters, 'is not trying to push through new legislation. It's just trying to stop the authorities from breaking the existing laws.' This can take the form of falsely stating that empty council property is already allocated, thus making it illegal for squatters to move in. Or, more drastically, vandalizing their own council properties to make them uninhabitable. Pouring cement down the toilets is a favoured tactic.

As a political hot potato squatting has become somewhat cold and soggy in many countries of the West these days. It is almost as though people have forgotten that squatting gives power to the swelling ranks of the homeless. The contrast with what has been happening in some areas of the Third World is dramatic.

The sand-blown squatter settlement of Villa el Salvador, Lima's largest, is a living testament to what can be achieved. With its street lighting, children's playgrounds, drinking water and blooming sunflowers it looks almost like a planned city. In a sense, it is. But that is only because of the political energy of it's people. The first 200 families got off to a good start by invading the land during preparations for an international development conference hosted by the Government in the Peruvian capital. Next they erected national flags - surely no truly nationalistic soldier or policeman could attack a shanty-town shack flying the red and white emblem? A flood of almost 9,000 additional families followed, spilling onto adjacent, privately owned land. But then the trouble began. Armed police tried to evict the squatters and two people were killed. The Archbishop of Lima protested and was duly arrested - much to the embarrassment of the Government which professed a policy of support for local action.

The authorities found they had to bend over backwards in order to save face. The squatters were offered an alternative piece of land large enough for 40,000 families. On it they established their own council and set about creating a new suburb. Since then they have worked steadily in conjunction with non-governmental organizations, church groups, UN agencies - even the Peruvian Government - to get electricity, running water, schools and health clinics. As a local priest put it to me, the community spirit that enabled the squatters to create Villa out of desert sand and bits of rush matting simply grows stronger.

But when it comes to making squatting a political issue the politicians can't afford to ignore, the Venezuelans should perhaps get the Gold Medal. Land invasions there now get the backing from different political groups to such an extent that electoral politics have become a more important consideration for the authorities than protecting the land of the wealthy. Furthermore, the owner's efforts are directed not towards evicting the squatters but towards negotiating a deal with the Government for compensation on the grounds that the land has been 'expropriated' in the public interest.

It is hard to imagine such a solution being transported to the conservative rich world. But the principle remains the same: without political organization ad solidarity the rights of the homeless will continue being eroded, quietly and steadily. Squatting may only be a temporary solution but it exposes the injustice of homelessness in a way which the authorities cannot ignore - if only because it annoys them so much.

Clara Czerny, with new case study material by Bertha Turner from her forthcoming book Building a community: A Third World case book (Habitat International Coalition).

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