Event_

# The asset economy: inclusion, exclusion, debt

Asset ownership and the new inequality
Young Australians are in danger of being the first generation in memory to have lower living standards than their parents’ generation. Is generational progress no longer guaranteed?

Pre-pandemic, “precarious” was commonly used to describe many Australian’s lives: those balancing the debt required to be in the housing market; those in insecure work; and the future of many young Australians. COVID exposed the fragility of a system has become increasingly short term and precarious.

What is the future of asset-sharing? How is the line of inheritance redrawing our society – are we going back to an old class line – those with property and those without?

### Resources

#### Podcast transcript

Welcome everyone and welcome to this Sydney Ideas event on the theme of the asset economy: inclusion, exclusion, debt.

My name is Lisa Adkins and I'm the Head of the School of Social and Political Sciences here at the University of Sydney. And I'm your host and chair today, and I'll also be talking a little bit later on.

Before we turn to our panel of experts, I'd just like to do a tiny bit of scene setting. Rising house and rent prices; debt-fuelled lives; low wages; generational tensions; and ever widening inequalities of wealth, seem to have become intractable features of Western societies.

What's more, despite all of the hope that our current COVID moment would see a shift to more progressive policies, government interventions and emergency measures seem to be making these problematic features of our societies even worse.

This begs the question of how and why these features of our societies are so stubborn.

Our speakers today will suggest that this is because they are constituent parts of a new kind of society, what we might think of the asset society or what we're calling today, the asset economy.

Our speakers are all parts of the Asset Economy team here at the University of Sydney, as well as myself, and this includes Martijn Konings, Laurence Troy, Sophia Maalsen and Gareth Bryant.

I'm going to turn first to Martijn Konings, who is Professor of Political Economy and Social Theory, and Martijn is going to explain what the asset economy is and how we got here.

As background to Martijn's contribution. I'm sharing a slide with you now, that shows how from the 1980s onwards in Australia, there has been a growing divergence in house prices and wages. House prices have continued to rise, while wages, as you can see, have remained fairly stagnant. Martijn is going to explain what is driving these trends, and how and why they they matter. So over to you, Martijn.

MARTIJN KONINGS

So I want to talk about what it means to talk about an asset economy. So we are quite used to thinking that there is something like a regular or a real economy, and that this is different from a financial sector or an asset economy. And what I want to suggest is that this distinction between a real economy and the financial sector is less and less useful.

The asset economy isn't just this separate sphere of what we used to call high finance. It's something that shapes how contemporary societies work, to their very core.

So, Thomas Piketty's famous book, Capital in the Twenty-First Century, is a useful point of reference here. The book has done a lot to put inequality back on the agenda. And it has also recognised the centrality of asset price growth. But the story that Piketty tells is very much one of the runaway growth of wealth at the very top. It's the story of the 1%, and the 1% phenomenon is, of course, a very real phenomenon. But it's often not clear how this 1% trend is able to continue in spite of growing awareness of it and growing discontent with it.

Piketty's own explanation there is that the past decades have seen the growth of a plutocracy; the concentration of political and policy influence in the hands of those very wealthy, and that this prevents policy change. But of course, that explanation begs key questions like, why do electorates keep voting governments into office that facilitate asset inflation and wealth concentration?

So, the story is more complicated than suggested by Piketty. What we need to understand is a wider, more general transformation of patterns of inequality. And key to this transformation really is the role of housing. What we have seen over the past four decades in places like Sydney, is a sustained growth of property prices, combined with an almost complete stagnation of real wage growth. And that was what was depicted in the chart that Lisa just put up.

In many large urban centres property prices are now at levels that make it impossible to buy a home on the basis of a wage, of employment from – income from employment alone. And in that way, asset prices have now become to function as the lynchpin of a new logic of inequality. Which means that the key element shaping inequality is less and less your employment situation and more and more whether you're able to participate in asset inflation, whether you're able to buy assets that appreciate at a faster rate than both inflation and wages.

Now, of course, income from work remains very important because it's a key factor determining people's ability to serve as a mortgage, but increasingly it's only one of the factors. So because, taken by itself, income from employment is less and less able to serve as the basis of what we tend to think of as a middle-class lifestyle.

And this also has a prominent generational aspect. Increasingly, it's only an inheritance or an advance inheritance that can help people onto the property ladder. So what we're seeing is the growing importance of intergenerational transfers in the determination of life chances and prospects. And it really is the millennial generation that is the first to be fully exposed to this logic.

And then as at last point, I'd like to say that shifting our focus from the 1% to the broader asset economy allows us to understand a little bit better why governments across the – what we refer to as the Anglo capitalist world at least – why governments have stuck with policies that support and prop up asset values. And the reason is that politicians and policymakers find it very difficult not to cater to a constituency of homeowners who have a vested interest in property inflation. So we've seen the emergence of what you could refer to as a policy lock-in, you know, the problems of these kinds of pro-asset inflation policies are increasingly apparent, but we seem unable or unwilling to formulate alternative policies, and unable to get those onto the political agenda. Thank you.

Thanks very much, Martijn. So I'm now going to speak for five minutes as well. And I'm going to concentrate on the social stratification aspects of the asset economy.

So when we think about increasing inequalities of wealth, we've become very accustomed to thinking about the super rich or the 1%. And we're encouraged in all sorts of ways to think about wealth inequalities in terms of that 1% but the logics of property price appreciation and wage depreciation that Martijn has just described, operate society wide and have done so for the past four decades. Over this time period, successive Anglo capitalist governments – Australia included – have encouraged, propped up, and rewarded credit driven residential property ownership. This combination of forces meant that homeownership expanded, and property prices increased, with many property-owning households seeing major gains in their wealth portfolios. There was, in other words, an apparent democratisation of what we might think of as being the wealth effect of asset ownership.

But the very logic of credit driven home purchases push prices up to heights where it became increasingly difficult for people to enter the market. Price inflation over time, has meant that in many large cities, it's now virtually impossible to enter the property market on the basis of an average wage. As a consequence, private rental markets have expanded and rents have risen dramatically.

Renters are not simply locked out of homeownership, but also of the wealth that home ownership now generates. So a rift then has opened out between those with and without housing assets. This entails not just major differences in wealth accumulation, but also in life chances. What has become apparent is that the asset economy has fundamentally reworked what the – what sociologists might term the social structure or patterns of social stratification. And what this means in practice, is that even where people have the same jobs or similar jobs or earn the same wages, deep inequalities can exist between those who own housing assets and those who don't. And this marks a major, major change in the type of society that we're living in, given that life chances were previously tied to jobs and occupations.

Now, these trends are particularly notable among younger generations, where they've given rise to stark new forms of inequality. And in fact, in recent years, there's been an outpouring of publications, arguing that a lockout from asset ownership is taking place along generational lines. According to this story, the millennial generation has been priced out of home ownership, and hence from the benefits of asset appreciation. But what this story misses is intergenerational dynamics.

What distinguishes successive generations today is a difference in modes of access to wealth. While older baby boomer generations were in a much better position to buy property through wages, younger generations are increasingly dependent on the ability and willingness of their parents to lend or give them money for a deposit in order to enter the housing market.

Those who are set to inherit housing assets, or whose access to parental wealth offers a route into homeownership, are distinctly advantaged. By inheritance and wealth transfers, these cohorts are offered participation in property-based asset inflation and capital gains.

Now, of course, inheritance has served historically as a critical mechanism for the transfer of private wealth from one generation to the next and has done so especially for the very wealthiest.

In the asset economy, however, where asset holding is a key determinant of life chances, inheritance and wealth transfers take on a new significance well beyond the 1%.

So first, intergenerational transfers are becoming key mechanisms for across the board social stratification and not just a way for the very wealthiest to pass on their wealth to their children.

Second, in the context of sustained asset appreciation, intergenerational transfers have a distinctive speculative dimension. Inheritance is no longer a passive transfer of money that occurs by default, following someone's passing.

Instead, transfers become a series of strategic decisions regarding how to position one's children in the asset economy. Beneficiaries receive not just a one-off lump sum, but an opening into the wealth effects of asset ownership.

So I'd like now to pass to Laurence – Laurence Troy; he's a Lecturer in Urbanism in the School of Architecture, Design and Planning – for his contribution.

LAURENCE TROY

Thanks, Lisa. I want to begin talking about a concept of social citizenship, which is a term that was coined by a chap called Thomas Marshall in the 50s. And what he was referring to is – typically when we're talking about citizenship, it's we're often talking about rights around voting, freedom of speech, right to legal representation. And social citizenship really suggests that in order to enjoy those rights as a full citizen, to enjoy civic and political rights, you also need to be guaranteed a basic level of economic welfare to secure your own existence. Food, shelter, water, so on.

So this idea became a sort of defining concept of post-war welfare society models across many countries. There are various models, of course, and in Australia, we had somewhat of a unique one some would argue.

Francis Castles called Australia a "Wage Earners' Welfare State" and really what that meant is that an economic existence term, or social citizenship, was secured through ensuring both full employment and high wages – and through these the ability to purchase a home. State income support was kept low in return for higher wages and more secure employment. And there was this sort of compact between labour and capital, or forming part of what Paul Kelly described as the Australian social settlement.

Urban scholar Brendan Gleeson suggests that this social settlement underpinned the expansion of Australian cities, arguing that the resulting suburban settlement reflected this unique social and economic compromise that made Australia a relatively egalitarian nation during the second half of the 20th century.

The Australian dream was really about security of waged employment and homeownership. The suburbs and the housing form were in a sense, the spatial expression of that.

Housing at least until around the 1980s was actually much more of an equaliser whereas today, it's becoming much more of a divider as others are pointing towards.

To illustrate, I guess the significance of this change – and this is the chart that some of you can see – in 1986, the rate of homeownership for the bottom 20% of income earners in the key household formation demographic – the younger generation, 25 to 34-year-olds – was about 60% and that was quite similar across all the income quintiles.

Now by 2016, that had dropped down to around 20%. And so now for the first time, since about World War Two, many young Australian households face the prospect of a lifetime of rental, and I guess an emergence or re-emergence of some of these asset or property-based inequalities.

Of course, this is not just about housing. And this is part of the point I'm trying to make in reflecting on Australia's citizenship model; is, along with these changes have been major shifts in employment, precarious, insecure, casual employment, especially for younger generations, it's become increasingly common.

Non-standard employment now accounts for nearly half of all jobs, with the bigger impact being on women and on younger people. And this precarity is really on now; now on full display as a result of this kind of COVID-led crisis.

In cities like Sydney, the cost of homeownership is prohibitive. For most young people, job security is no longer there. And for many, this means new jobs, new locations frequently, becoming spatially fixed as an employee is increasingly challenging and sort of underlies some of the trends toward inner city proximity to train lines, access to the Global Economic Corridor.

And we have a development sector to match. At present around 70 to 80% of all new dwellings comes in the form of apartments. And at last census, more than 60% of all apartments in Sydney, are owned by investors. All this tells us, is we have a housing industry now that's almost exclusively geared toward delivering housing to an investor market; with the flip side being in the housing industry almost exclusively geared towards producing renter households.

We now have an urban process that's based around precarious short-term working arrangements and a housing system based around short-term precarious living. And yet the politics of all this has barely shifted.

The major policy intervention at the last election was a First Home Buyer deposit scheme, nothing about social housing, nothing about affordable housing, and certainly no effort to redirect to home building sector towards delivering housing, the long-term occupants.

So my call out today, I guess, is to reinvigorate a conversation not just about housing, but about a social model of Australian society. And this is connecting it to this idea of citizenship. This is not about convincing young people that rental is a great option for them, or even necessarily amending tenancy laws to make it more secure. These are all very important things, but the problem still remains, that we have a social and political system that embed property ownership as a centrepiece of the welfare of citizens. And so now I'll hand it back to Lisa.

Thank you so much, Laurence, and I'd like to hand over immediately to Sophia Maalsen, also from the School of Architecture, Design and Planning. And Sophia's going to talk about modes of living in the asset economy.

SOPHIA MAALSEN

Thanks, Lisa. And thank you, Laurence, that's a nice segue there around citizenship. Because I'll be talking about what happens when you can't own a home basically, and how you live.

So, as Laurence has highlighted, in Australia, homeownership is entangled with this idea of citizenship, and especially this idea of being a good and moral citizen. But this is also underpinned by the idea that homeownership is a possibility. So what does it mean when homeownership is increasingly out of reach for a number of people?

Housing affordability pressures don't just affect the home-owning segment, but have flow on effects for the rental market. We've seen a well documented increase in people renting for long term, but there's also an increase within this group of renters. Of those who are actually not just renting individually, but sharing housing; primarily because of lack of affordable housing rental properties.

When we think of share housing, we often think of dysfunctional student households. But share housing is growing across all age groups, from professionals still sharing in their 30s and 40s, to those aged over 65; and this is primarily driven by economic reasons.

Research from the online flatmates site, flatmates.com.au, reported an increase in people over 40 using the site to find share housing. Based on the analysis of close to 64,000 room-wanted profiles, the site reported a 20% increase in the months of January and February between 2015 and 2016, in those aged over 40, looking for share accommodation. The biggest increases were in the 60 to 64 age group with a 43% growth. Alongside the 50 to 54 age group was 31% increase, and the 65 and over age group with 29% increase.

These trends are also reflected in the census. Overall in New South Wales, group housing grew just over 15% between the 2011 and 2016 census. In the Greater Sydney region, where the affordability pressures most acute, share housing increased across all age groups from the 25 year-old age groups and upwards. So this suggests that the usual suspects associated with share housing are changing, with the biggest growth occurring in the 55 to 64 year-old age group, a group that we would normally expect to be seeing living in their own homes.

So this has significant implications for both rental and retirement policies, as well as the type of housing models the market supplies. Creating home means having agency over your own dwelling and a security of tenure. But currently, rental laws do not allow this.

In Australia, tenancy regulations and landlord tenant relationships primarily produced insecure and restricted tenancies, a result of the perception of tenants as flawed citizens, and as rental housing as a temporary transitional phase.

Leases are often short, generally six to 12 months. And despite campaigning in New South Wales to end no-grounds evictions, tenants can still be evicted without cause.

And this doesn't even account for the challenges that many tenants have experience in trying to access rental housing – being discriminated against on age, race, religion, even being a single parent or having pets.

Essentially, this means that many renters cannot benefit from the security and the normal markers of adulthood associated with home, literally the ability to have a pet or to hang a picture on a wall without permission.

There's also the issue of unhealthy and unfit dwellings. It's well reported that tenants are hesitant to ask the necessary repairs for fear of a rent raise in retaliation.

Further, retirement policy in Australia is based on the assumption that people will own their own home by the time that they're retired. As we've demonstrated, homeownership is becoming increasingly out of reach for a growing number of Australians. So we need to ask how we can adequately address the growing number of non-homeowners now, and in the future.

There are some simple actions we can take. Changes to tenancy laws – so laws that offer more security and more agency over the property, and also recognise that we're shifting into long-term rental.

Policy needs to take into account that more people will not be owning their home by when they retire, and needs to accommodate what renting for life looks like.

We also need to support alternative models of housing – multi-generational housing, housing cooperatives and community land trust models are all more successful and popular overseas but have been less supported here.

Now, I'm not saying that these are the only solutions but these are things we can at least consider, diversifying some of our investment into.

So my takeaway points are mainly that, as homeownership declines, we're seeing a correlating increase of people renting privately. Within this, we're seeing an increase in people sharing housing because it's they can't afford to rent by themselves. And with this, we're still renting in the context of existing and quite restrictive rental regulations and laws. And so we need to sort of think about reforming these to accommodate more long-term secure tenure.

We need to think about policies into the future, what it means to be renting when you retire. And we also need to think about investing in a more diverse and secure housing market. And one way to do this is not only to reform the tenancy laws, but to think about different models of housing and what they can offer. So thank you, and I'll hand back to Lisa.

Thanks so much Sophia. And your points about policy, I think chime in really nicely with what Gareth Bryant from the School of Social and Political Sciences is about to say in his five minutes. So over to you Gareth.

GARETH BRYANT

For sure, thanks, Lisa. Yeah, I want to talk about the way that the asset economy lens provides a useful way to understand what the government has and hasn't done in its response to COVID-19. And also what is different about this crisis.

So the Global Financial Crisis of just over 10 years ago now hit right at the heart of the asset economy; the US mortgage market. It showed how the economy faces systemic risks when houses and households cannot keep paying their mortgages.

So before we started seeing the lockdowns from COVID-19, the government's first economic response package looked a lot like the RAD response to the GFC. In March it announce $750 payments to pensioners and other income support recipients, including the unemployed, as a fairly conventional stimulus measure designed to boost consumer spending. Beyond the emergency response measures that I've talked about, Homebuilder, which offers generous government grants for newly built houses and major renovations, is still really the only genuine stimulus package as opposed to those emergency responses that I talked about, that has been announced. And I think that's a really stark illustration of how the asset economy, in turn drives the kind of asset-based politics. And there certainly is a political logic to this – as Martijn hinted at – the Coalition increasingly views homeowners, both owner occupiers and investors, as an important electoral constituency in their own right, no matter what they do for work. The problem here I think, is that this approach risks reinforces those drivers of inequality in the asset economy; so low wages, especially low wages for young people, being coupled with high increasing asset prices that are likely to be even greater after COVID-19. So when we look at the current economic data, treasury is forecasting zero real wage growth for the next few years, which seems realistic, and the RBA is guaranteeing low interest rates that will largely benefit asset owners who are able to weather the COVID-19 storm. As workplaces were forced to close down, it was clear that something different was needed. The standard Keynesian economic response to crisis is all about boosting demand. But normal stimulus wasn't much used in an economy that governments were deliberately contracting for public health reasons. So rather than stimulating demand, what governments I think, look to do in large part, was to shore up the asset economy by implementing emergency measures to keep households liquid and solvent. And they did this in two main ways, which will be fairly familiar. First, they boosted unemployment payments through the JobSeeker supplement, and also subsidised wages through JobKeeper. This helps keep mortgage payments and the rental payments that support them, in the case of investors going. And they supported banks to allow them to offer mortgage deferrals. Currently in Australia, we've got about 10% of mortgages worth almost$300 billion in a state of deferral, which is quite a staggering figure and normally indicative of a serious housing crisis.

So for comparison, at the start of the Global Financial Crisis – sorry, at the height of the Global Financial Crisis in the US, about 10% of mortgages, a similar figure, what you know arrears, and ultimately we saw about 10 million homes ultimately being foreclosed. So what we have now is a situation where what would normally be defined as defaulting on your mortgage is temporarily allowed in the hope of avoiding for sales.

It's probably too early to tell how successful these measures will be in the long run. The Melbourne situation is really highlighting the cracks in the JobKeeper program in particular. Renters have not received anywhere near the same support as homeowners. And if we do see indebted households forced to sell at the bottom of the market, this will only increase wealth inequality.

There are, however, worrying signs when we look at what the government is doing; that they're prioritising those who have benefited most from the asset economy in their post COVID-19 recovery plans.

As ever, and hopefully we can talk about this more in the discussion, there are alternative routes that could be taken to reduce inequality in the asset economy, especially as COVID-19 has arrived, which I just want to quickly flag in my final comments.

First, as Sophia mentioned, governments could rebalance the power between renters and investors. And I think this is important not only to make life better for tenants, but also to chip away at the privileged status of housing as an asset class.

Second, as Laurence mentioned, governments could invest in social housing as a way of building up public rather than private assets.

And third, I think governments could do better to guarantee incomes and employment. Because in the current situation, these policies not only secure people's everyday livelihoods, but they also play an increasingly crucial role in securing household liquidity, which, as Lisa and Martijn opened with, these increasingly underpins the economy as a whole and centres, I think, a new kind of case to make for those kinds of social protection measures, as also a financial stabilisation policy too. I'll leave it at that.

Thanks so much Gareth. And thanks to all of our panellists for their contributions. So I've got some questions too. But I've seen that there's a factual question that's come through for Laurence. And I wondered if you could just answer that please, Laurence.

And the question is, could Laurence please repeat the statistic on investors? What percentage of houses in Sydney are owned by investors?

LAURENCE TROY

So the statistic I referred to was about apartments only. And if you look at – because that's where all the news supply is coming on – if you look at all apartments, it's actually about 65 or just under 66% of all apartments, over three stories in Greater Sydney region, are owned by investors. And about 20% of those are actually not occupied by long-term residents, so the temporary accommodation or unoccupied that census. When you look at all other dwellings, so houses and so forth, the numbers are actually the opposite. So you look at about 30% of all other dwelling types are investor owned. So it's much more of a – an occupier or homeowner occupier space as compared to apartments. I hope that clarifies the statistics there.

Thanks so much, Laurence. So I'll just kick off maybe with a question to Martijn, first of all.

So as we all know, the government – governments not just in Australia, but similar kind of Western or Anglo capitalist governments around the world – very often roll out new schemes to make more housing more affordable. But your arguments suggest that these policies are heavily politically driven. But are they effective in improving affordability and addressing the related problems that you've mentioned?

MARTIJN KONINGS

Thanks Lisa. So, in a nutshell, my answer would be, I think these policies are less and less effective and I'll elaborate on that a little bit.

Basically, I think the declining efficacy of those kinds of policies makes the asset economy an very interesting phenomenon because you can think of a lot of policies that are problematic in some way or other because of the way they exclude groups or privilege some groups at the expense of others.

But you know, those kinds of policies might still be very effective in achieving their objectives. Even if you don't agree with those objectives, you could say that they are problematic in a political sense, but not necessarily in a technical sense.

The interesting thing about the policies that we're talking about here is that they are less and less effective, even in the very narrow technical sense. And the reason is that you know, every attempt to bring home ownership into reach for people who are currently not able to get onto the property ladder, has the effect of driving up house prices, and so raises the bar of entry for others. So what you see is the policies to help people break into the market, like stamp duty exemption, you know, low interest rates, etc. – that those policies are caught in the logic of the policy lock that I mentioned. They provide some short-term targeted relief, but only at the expense of making the underlying problem of growing prices worse.

And people seem to be increasingly aware that there isn't a neat policy solution to the problem. And that, of course, will over time undermine the legitimacy of the asset economy in a more political sense. And I think that's what we may be seeing over the next decade or so.

Thanks so much, Martijn. And that connects really nicely to some of Gareth's points. So if I've understood you correctly, Gareth, your arguments have been that the emergency measures introduced by governments around the world, especially those targeted at homeowners are actually potentially increasing asset inequalities.

And I was wondering if you could talk more about what you see as our kind of post-COVID situation in regard to asset inequalities, and maybe also talk a little bit more about what you see as the alternatives. You raise some really interesting points right at the end. So Homebuilder is an obvious kind of policy that maybe could have been thought through differently?

GARETH BRYANT

Yeah, absolutely right. I think, yeah, what I what I'm trying to argue is that the COVID-19 situation really needs to be kind of read through the housing market, and might be kind of indicative of a new kind of emergency response to capitalism's periodic crises, which are less about shoring up demand, shoring up consumer spending and that kind of thing; and much more about making sure that the payments that underpin the global economy, whether it's rental payments, whether it's mortgage payments and other kinds of payments, keep flowing, even if the kind of rest of the wheels of the economy are temporarily suspended.

I think in terms of looking forward at the prospects for inequality, we saw recently the Productivity Commission released a couple of reports that people might have seen or seen reporting on, which showed the way that the wage stagnation that you and Martijn were talking about, is really been quite differentiated by age.

And what we've seen is that older workers have actually enjoyed relatively reasonable kind of wage increases. But younger workers, those in their 20s and those in their 30s, have had almost declining or stagnant wage increases over the last 20 years. And that's, I think, a big worry when you couple that with the kind of scarring effect of COVID-19 on the labour market for young people.

So if we're expecting zero wage growth overall, for the economy, then things are going to look even worse for young people. And so I think that really risks exacerbating that asset inequality dynamic that we've seen in the last 20 years where, where you've got wages being increasingly not enough, especially for young for young people in terms of reaching those points in society like homeownership, that we've actually currently structured our citizenship and social safety net around.

So in terms of what can be done there? I think there's lots that could be said that maybe on that final point that I made. What I'm talking about here, I think is the way that policies like Basic Income policies, like jobs guarantees, have potentially a new kind of rationale in the system. Because those have historically been won – policies to increase rights at work, increase wages and so on have historically been won by labour movement, has really been about redistributing wealth and redistributing the share of income that goes between wages and profits.

But now I think a lot of those kinds of social policies play an important financial anchor role. And that, I think does create interesting points of political leverage, to be able to rebuild a social protection, a safety net, that is fit for the asset economy. And I'm not necessarily wedded to any particular kind of policy design, whether it's basic income, jobs guarantees; I think they both have a lot of merit. But I think that those kind of policies potentially have quite a new importance in the current situation.

Thanks Gareth. And I mean, this connects really nicely to I think, some of the points that Laurence and Sophia made around thinking about; thinking differently about different modes of living, different kinds of tenure, different policy approaches to housing. So I'm just wondering if I could ask a question to both Sophia and Laurence, because it will be interesting to get both of your responses to this.

I mean, both of your presentations, to me at least, suggested that there's a link between home ownership ideology, restrictive tenancy laws, and a lack of investments in alternative models of housing. So my question is, can shifting our thinking around what types of modes and tenures of living are valued, help us with creating a more diverse and welcoming housing market?

SOPHIA MAALSEN

Thanks Lisa. So I might kick off on that one. I think my answer will probably be slightly different to Laurence's, at least the angle of it.

From my own sort of research and my own experience as a tenant, yeah. I think if we reframe – there's so much about tenancy laws and existing perceptions of tenants that have been basically tied to the idea that everyone will end up owning a home. So, and those who haven't reached this, by whatever age it is you're supposed to own a home, but somehow it's been your own fault. You haven't worked hard enough, etc.

So, for me one of the key steps, I mean, it's not a – you know, solving the housing problem, per se, but it does make at least rental tenancies and the experience of being a renter for much longer term more welcoming and appealing – is to change the laws so that we can read in the way that respects tenants as being responsible adults, give them some agency over what they can do and can't do in the rental property.

And I feel, Gareth made the point in his presentation, which I think was quite important, that the step in sort of making the power relationship between tenants and landlords a bit more equal is one way of actually chipping away at those inequalities generated by the asset class. So for me, that's actually really kind of immediate way that we can that we can shift the housing market to be a little bit more welcoming and accommodating for these longer term tenure changes.

LAURENCE TROY

Yeah, I agree with Sophie that there needs to be (and others) there needs to be a lot more done around the rental tenure space in making it a much more secure form of housing. And there's a lot of work going on around Australia around that.

But I think we also need to connect it to other aspects in our society in that and recognise the importance of housing wealth in the welfare of a lot of people.

And so I guess to illustrate this, Australia has one of the lowest pension – age pension rates in OECD countries. But when you throw in housing asset wealth, we have one of the highest. And anyone who's out there now listening – that may be retired, living in private rental sector – would, you know, recognise just how tough that can be. And we see a lot of older, private renters emerging there. And it's a big issue because you simply can't afford to live in major cities in Australia, on the age pension whilst in private rental. And so there's a connection to, you know, this kind of welfare system that we have, and homeownership.

So we actually need to address some of these other fundamentals about how we ensure appropriate, affordable housing across all parts of your life, not just whilst you're a full, you know, well at least a part wage worker, you know, maybe a younger person, and so forth. So we can't just have that conversation in isolation to these other kinds of inequalities that are emerging around assets and housing in particular.

Thanks, Laurence and Sophia. I can see we're literally, virtually out of time. What I might do, just to wrap things up, is to ask each of our panellists for a kind of one-line takeaway point. Can I start with you, maybe Gareth.

GARETH BRYANT

Well, that, what I mentioned about the income problems for young people, but I didn't mention, of course, which has come up a little bit, is that some of those young people will inherit property or get a gift that allows them to buy a property and others won't. And so I think when we're talking about potential inequality going forward, wealth taxation on both gifts and inheritance I think does need to be put back on the policy agenda, if we don't want inequality to go even further out of control after COVID.

Great. Thanks, Gareth. And Sophia, how about from you?

SOPHIA MAALSEN

I think my takeaway would be that, as homeownership declines, the number of people renting will increase – renting for life. And that means that we need to reform tenancy laws, rethink our policies around retirement and ageing around that as support around homeownership. And also think a little bit more seriously about alternative models of housing.

Great, thank you. Laurence, how about from you?

LAURENCE TROY

Yeah, I think we need to move the conversation about social affordable housing, to recognise that over a very long period of time, governments have supported homeownership. And so predominantly, where government spends a lot of their money, effort and support, is actually in homeowners. And so I think there's a case to be made that some of that should be redirected into supporting the most unequal parts of the system and that's, that's down the bottom, bottom-end,

Thanks Laurence. And Martijn – thirty seconds.

MARTIJN KONINGS

So yeah, my takeaway would be that the asset of the economy is not something that was happening elsewhere in the sphere of like high finance, but the role exposed to its effects for good or bad. And that means that the future of the asset economy is a political question. So they're talking about, you know, property bubbles or whether Sydney home prices are economically sustainable or not. Those kinds of discussions just kind of divert attention from the real question, which has to do with how, at the political level we feel housing as a key institution should be organised.

Thank you so much. And that brings us to the end of this Sydney Ideas event. I'd like to thank our panellists and also thank you the audience, thanks for tuning in. And remember, there's more upcoming talks in the Sydney Ideas series, thanks again.

ANNA BURNS (PODCAST HOST)

Thanks for listening to the Sydney Ideas podcast.

For more information, head to sydney.edu.au/sydney-ideas; it’s where you’ll find the transcript for this podcast and our contact details if you’d like to get in touch with a question or feedback.

If you haven’t already, subscribe to our podcast so you’ll never miss a new episode. Search for “Sydney Ideas” on Apple Podcasts or SoundCloud.

Finally we want to acknowledge that this podcast was made in Sydney, which sits on the land of the Gadigal people of the Eora Nation. It is upon their ancestral lands that the University of Sydney is built.

### The speakers

#### Professor Lisa Adkins, Head of the School of Social and Political Sciences

Lisa is Head of the School of Social and Political Sciences at the University of Sydney. Her home Department is Sociology and Social Policy. She is also an Academy of Finland Distinguished Professor (2015-19). She has previously held Chairs in Sociology at the University of Manchester and at Goldsmiths, University of London. She has served as a member of the Australian Research Council's College of Experts (Social, Behavioural and Economic Sciences Panel), 2011-13.

Lisa’s contributions and interventions in the discipline of Sociology lie in the areas of economic sociology, social theory and feminist theory. Her recent research has focused on the restructuring of labour, money and time in the context of the growth of finance. A book based on this research –The Time of Money – was published in 2018 by Stanford University Press as part of the Currencies: New Thinking for Financial Times series. Along with Melinda Cooper and Martijn Konings, she is currently Directing a Faculty of Arts and Social Sciences Strategic Research Theme on Asset Ownership and the New Inequality. This is one of six Faculty Strategic Research Themes collectively known as FutureFix. Lisa is also joint editor-in-chief of the journal Australian Feminist Studies (Routledge/Taylor&Francis).

#### Dr Gareth Bryant, political economist, Department of Political Economy

Gareth is a political economist at the University of Sydney. He works as a senior lecturer in the Department of Political Economy and as economist-in-residence with the Sydney Policy Lab.

Gareth researches how public policy and public finance can create more sustainable, equal and democratic economies. His research has focused on issues including climate change, higher education, housing, labour and Indigenous justice. This research crosses the disciplines of heterodox economics, economic geography and economic sociology.

Gareth is the author of Carbon Markets in a Climate-Changing Capitalism (Cambridge University Press, 2019). His research has been published in a range of academic journals including Environment and Planning A: Economy and SpaceAntipodeEnergy Policy, the Annals of the American Association of Geographers and New Political Economy.

#### Professor, Martijn Konings, Professor of Political Economy and Social Theory

Martijn's research interests are at the intersection of political economy and social theory, with a focus on money and finance especially in the US context. He has published books on the historical development of American finance; the psychological dimensions of money and capitalism; neoliberalism; and risk and speculation in contemporary financial governance.

Martijn's current research is on the way logics of asset ownership are transforming contemporary capitalism, which is linked to his SOAR fellowship “Towards a democracy of asset-owners?” and the FASS Strategic Research Theme “Asset ownership and the new inequality”. With Melinda Cooper, Martijn is editing a new book series, Currencies: New Thinking for Financial Times, published by Stanford University Press.

#### Dr Sophia Maalsen, School of Architecture, Design and Planning

Sophia is a lecturer and the Ian Fell Post-doctoral Research Fellow at the University of Sydney, where she is researching the role of technology in ‘smart homes’ as a locus to address future environmental and social challenges.

Prior to joining the University of Sydney, Sophia was a postdoctoral researcher on the EU funded Programmable City Project where she investigated the digital transformation of cities and urban governance. In particular, she worked on the development of the Dublin Dashboard, a city metrics indicator designed to provide Dublin City Council and the residents of Dublin with real-time and relevant data on the City’s performance.

Sophia has also worked in the Enabling Built Environments Program at the University of New South Wales, specifically on a project that investigated how and why people with a disability were undertaking DIY home modifications. Her particular expertise is in understanding the intersection of the material, digital and the human and how this effects lived experience.

#### Dr Laurence Troy, Lecturer in Urbanism, School of Design, Planning and Architecture

Laurence is Lecturer in Urbanism in the School of Architecture Design and Planning. His research focuses on urban renewal, the governance or urban change, the economies of housing and urban development, and the role of urbanisation in shaping modern society.

Laurence’s recent research focusses on the role of the higher density multi-unit residential development sector in Australia in driving urban change, funding models for social affordable housing, and the relationship between precarious employment and housing and implications for modern Australian society.

Prior to joining the University of Sydney, Laurence was a research fellow and lecturer in at City Futures Research Centre, UNSW Sydney, where he worked on a range of housing, urban renewal and urban governance research. He was part of a team that was awarded both the NSW (2016) and National (2017) Planning Institute of Australia (PIA) Award for Planning Excellence in Research and Teaching.