Today’s Sydney Morning Herald article on Empty Dwellings in a City Desperate for Places to Live has exposed the raft of vacancies prevalent when land banking trumps housing affordability.
It quotes how 122,211 sites were vacant in the 2006 census, reminding us of the findings from the I Want to Live Here report. Negative gearing is blamed. An inaccurate solution is offered in charging a differential rate on vacant property. This increases administrative costs. Far more effective would be to raise the overall Council Rates and use this finance to offset inefficient indirect taxes like GST and payroll taxes.
The article goes on to report:
The elderly Vaucluse couple, arts patrons and former darlings of the social pages, have accumulated 15 properties across Pyrmont and the city centre, a portfolio estimated to be worth more than $75 million.
All their buildings and land are vacant, except for the Harris Street headquarters of their company, Citilease – and the ground floor of that is empty.
This is what happens when a vested interest lobbies the government to suit themself. Fat Cats get lazy. The capital gains over the last decade more than outweigh the minimal charge in council rates. These capital gains enable larger loans to be directed towards those already owning property to buy more property. Thus the rich get richer. Those interested in this issue must read Ricardo’s Law, found in our bookshop.