4 COMPARING HOUSING POLICY STRATEGIES IN AUSTRALIA AND THE NETHERLANDS, 1945-1980 4.1 Introduction The two previous chapters have described the structures and logical range of actions through which state intervention in housing may (or may not) occur, with a focus on the potential impact of different policies on the affordability of housing for low income households. Theoretical accounts of how distinctive national housing policy strategies arise and develop in the context of broader economic, political and social processes have also been discussed. Chapters 4 and 5 draw on this framework to examine the first research question: “How have the Australian and Dutch governments intervened in their respective housing systems over the second half of the 20th century to help provide more affordable housing?” These chapters compare the post 1945 history of housing policy intervention in the two countries, drawing out similarities and differences in goals, forms, intensity, duration and paths of intervention. The analysis of the policy strategies in each country is divided into two periods - before 1980 and after 1980. As will become apparent in this and the following chapter, 1980 is a convenient breakpoint between identifiable phases of expansion and review of housing policy strategy in each case.1 To situate the policy analysis in its wider context, section 4.2 gives a short comparative overview of relevant aspects of the two societies in which housing policy unfolded from 1945 to 1980. Using the framework in figure 3.1, the following sections then analyse different arenas of intervention in turn. Section 4.3 considers policies impacting on the production and supply of housing. The impact of broader urban policies on the residential sector is then compared in section 4.4. Section 4.5 focuses on policies directly or indirectly affecting the financing of housing investment and exchange. The next two sections (4.6 and 4.7) are concerned with policies connected with housing consumption - allocative and delivery processes, and with income support for housing. The final section draws together the policy elements to provide a comparative picture of the similarities and differences in the overall national housing policy strategy of each case study until around 1980. 4.2 The general context in comparative perspective 4.2.1 Demographic factors influencing the housing system In both countries, very rapid population growth and even higher levels of household formation drove a high need for housing in the postwar period. Population increased in the Netherlands by 41 per cent from 1950 to 1980, the highest rate in Western Europe (Boelhouwer and van der Heijden, 1992; MVROM (various)). In Australia, the rate of growth was double that of the Netherlands over the same period (Foster and Stewart, 1991). The population explosion was most rapid in the 1950s and 1960s in both countries, levelling out by the end of the period. By 1973, Australia’s population exceeded that of the Netherlands for the first time (OECD, 1998). 72 A central factor in Australia’s massive expansion across the period was the extent of overseas immigration, which comprised about half of all growth (Stilwell, 1980). In 1947, nearly 10 per cent of the population were foreign born. This share rose to over 14 per cent in 1954 and reached nearly 21 per cent in 1981 (ABS, various, cat. no. 1301.0). Immigration was less significant in the Netherlands and for much of the early part of the period was offset by emigration that was triggered by austere conditions. Apart from repatriation of the Dutch from Indonesia and Indonesian immigration after the end of the Second World War, the main wave of in-migration did not occur until the 1970s. In 1985, about 4.5 per cent of Dutch citizens were foreign born or non-Dutch nationals (Mik, 1991). In both countries, the vast majority of foreign citizens settled in the largest cities (Dieleman and Musterd, 1992; Frost and Dingle, 1995). Household formation rates exceeded population growth in both countries. The number of Australian households grew by 151 per cent from 1947 to 1981; the number of Dutch households by 134 per cent over the same period (MVROM, various; Neutze, 1981). The greater rate of household formation in the Netherlands meant that the level of underlying demand for housing was closer in the two countries than suggested by population data alone. A combination of demographic, social and economic factors contributed to rates of household formation exceeding those of population growth in both countries, although in each case the impact of particular factors varied. In general (and in keeping with most advanced Western societies in this era), both countries experienced a falling birth rate and a trend, encouraged by economic prosperity, towards young people leaving the family home earlier than in previous generations. Later, a higher divorce rate and changing opportunities for women, which increased their financial independence, also became factors contributing to household formation rates. The gradual ageing of the population and longer life expectancy also sustained the total level of demand for housing. The impact of all of these factors is reflected in a decline in average household size. Australian households dropped from an average of 3.7 people per household in 1947 to 3.1 in 1981 (Kendig and Paris, 1987). Similarly, average household sizes of 4.7 in 1950 in the Netherlands fell to 3.0 in 1980 (Feddes, 1995; Needham et al., 1993). In keeping with a major shift in the employment base of both countries from the rural to the manufacturing sectors, an increasing rate of urbanisation accompanied the rapid growth. In 1980, 88 per cent of the population of the Netherlands lived in an urban centre (Needham et al., 1993). In Australia, the proportion reached 86 per cent in 1976 (Stilwell, 1980). In Australia, the metropolitan dominance of settlement, focused on Sydney and Melbourne in particular, became more marked over the postwar period to 1980. (Locations in Australia and the Netherlands referred to in this study are shown on figure 4.1a and b, respectively.) From 1947 to 1976, the population share of the five mainland state capitals rose from 54 per cent to 61 per cent (Neutze, 1974). The orientation of most newly-arrived migrants to either Sydney or Melbourne meant that those cities’ share of population alone rose from 36 per cent to 43 per cent (Frost and Dingle, 1995). This 73 growth increased the pressure on their housing markets relative to other regions and, by the 1970s, land supply issues, especially in Sydney, were becoming a more significant factor contributing to deteriorating affordability (Neutze, 1981). However, by that time other forces were also at work influencing patterns of housing demand - notably, the decline in manufacturing jobs, which had been widely distributed throughout the major cities, and the concomitant shift in employment to the services sector, which was more concentrated in the CBD and a few suburban nodes. The primary concentration of population in the Netherlands is in the West of the country in a poly-nucleated urban region, known as the Randstad.2 This region comprises a series of old central cities (the largest being Amsterdam, Rotterdam, Utrecht and the Hague), surrounded by suburban development that occurred from the 1960s. The period under review in this chapter was characterised not only by expansion but also by a marked re- differentiation of the residential structure of the Randstad. As they became increasingly characterised by single person households, the old central city areas lost population to the surrounding region. Many inner city neighbourhoods had large numbers of economically inactive households (including the elderly, the unemployed, single parents and people with disabilities) and ethnic minorities. The suburbs, on the other hand, became the home of an expanding number of middle class families and higher income groups. As the account in this chapter will go on to show, local housing and planning policies combined with the demographic pressures and economic opportunities of the time to bring about these transformations (Jobse and Musterd, 1992). 4.2.2 Economic conditions Until the 1970s, economic conditions in both countries were generally favourable, providing for increasing prosperity and rising living standards. Annual gross domestic product (GDP) rose consistently throughout the period in nominal and real terms but the rate of growth slowed after the economic downturn (see below). The average nominal growth in GDP from 1950 to 1985 was identical (being 4 per cent per annum (Feddes, 1995; Foster and Stewart, 1991)) and per capita GDP in both countries has ranked consistently near the average for all OECD countries (OECD, 1998). In the 1950s and 1960s, employment grew faster than population in Australia (Berry, 1999). While the period was also marked by a small amount of inflation, average (male) wage levels generally exceeded inflation and increases in housing costs, until the first half of the 1970s. Female participation in the workforce hovered between 45 and 50 per cent from 1964 to 1980 and the unemployment rate was low (Foster and Stewart, 1991). In the Netherlands, wages growth was initially restricted but, by the end of the 1950s, wage controls were breaking down and strong wages growth ensued, while rents remained low (Harloe, 1995). However, female participation in the workforce had only reached 40 per cent in 1983 and the share of jobs that were part time was at a higher level than in Australia (Becker, 1999). Generally, in both countries, favourable conditions encouraged new households to form, promoted consumption expenditure and reinforced and extended demand trends arising from the demographic factors already discussed. The Netherlands achieved a 72 per cent increase in its housing stock from 1961 to 1980, the highest in Europe and North America (van Fulpen, 1986).