Artists sick of living on borrowed time & borrowed land

Casey JenkinsCommentary1 Comment

The Anti-Gentrification Festival, held in conjunction with Craft Cartel, kicked off on Sunday at The Birmy. Highlights included a talk from Earthsharing’s Karl Fitzgerald about land tax reform, a highly professional lagerphone making workshop directed by Alica Bee (she was colour coordinating the bottle-caps, this lady takes her lagerphone making VERY seriously) and a surprise performance by legendary poet Pi-O.

Pi-O delighted us with two awesome poems while I donned the magnificent Tote carpet dress crafted by Kathryn Jamieson

The festival sparked a fair bit of media attention, most objective and/or supportive such as our interviews with 3CR’s DIY Arts show, ABC 774’s Derek Guilles & Radio National’s Life Matters program and Dewi Clarke’s piece ‘Fitzroyalty snubs gentrification’ in The Age, some rather less than positive like Marcus Westbury’s article ‘Artists kick-start gentrification’, also in The Age, & some down-right hostile such as this blog post by a bloke called Brian.

We were happy with all of these responses,  feeling quite proud that our festival has given the media a chance to address the issues of housing affordability and community displacement WITHOUT causing mass nap-attacks. We would have liked to have discussed the fest with Marcus first, though, & because this didn’t happen, we asked The Age if we could write a response piece. They turned us down, but we’ve decided to just publish it here anyway.

Here it is:

Artists sick of living on borrowed time & borrowed land

The cycle of artists moving into areas, establishing desirable communities and then being displaced by the wealthy repeats like a stuck record and most people are familiar with it. So depressingly familiar that we’ve grown used to meekly following its flow and moving further & further out into the ‘burbs with hardly a complaint.

Many will tell you this process is unavoidable, but in fact, it doesn’t have to be this way!

It’s true that we’re not the first artists to complain about being kicked from our stomping grounds. We’re quite pissed off about it. It may come as a shock, but as crafters and activists we’re poor (in Aussie terms). Generally this is okay as there’s not much we want for that we can’t craft but we have yet to devise a way to craft land and we’re getting pretty sick of the rich not wanting to share it with us and of the Government facilitating their greed.

This does not mean that we want our communities ‘preserved’. Artists by definition are creative and the prospect of living in static suburbs is unbearably restrictive. We don’t want our homes and communities to stagnate; we want the right to be involved in their evolution.

Artistic communities aren’t the only ones being displaced, of course. Even in a world with no artists (visualise Perth if you find this concept hard to imagine…) the gentrification process rolls on. Under a system that encourages inflated land prices in prime areas, all low income groups are eventually pushed out to the fringes of society. The problem isn’t about individual landlords and wealthy people acting like bad guys – it’s about the Government tax policies encouraging this behaviour.

As a centrepiece for the festival we ripped up the old Tote carpet, chopped it into doormats and branded them, ciggie-style, with a branding iron of the pub logo. The carpet reeks of community history (literally), so yes, the festival has elements of nostalgia, but the point is, people didn’t collect pieces of the Berlin Wall because they wished it still stood, they collected them because the falling of the wall marked a seminal time in their history.

The carpet itself is stinky and revolting. We’d much prefer some deep plush pile, thank you very much. But it is symbolic of a seminal time in the history of Melbourne’s artistic community, when thousands marched in the streets to protest the closure of yet another inner city artistic venue, displaced by gentrification.

There’s nothing wrong with reflecting on times gone by and getting a bit nostalgic now and then but the thing we find sad is not the loss of our past in these areas – it’s the loss of our future. We are aware that there is only one Earth and we’re going to have to share it. We don’t want to close the good bits off to others; we just don’t want to be pushed out of them ourselves.

Many will say that resisting the gentrification cycle is futile because government policy is set up to encourage it. This is true but whatever happened to system overhaul big picture thinking? We’ve gotta stop being wussy and start lobbying for some real reform.

After thousands marched the Tote is once again opening as a band venue – a welcome stall in the process of the displacement of a community but, unless government tax policy is changed to encourage the opening up of land in prime areas to people of all economic levels, there will very soon be no locals of the type it caters for (low income artists) to visit it.

The truth is that there is a lot of underutilised land in the inner-city. A recent Earthsharing report showed that the vacancy rate was 6.9% overall and as high as 29% in Carlton South! Housing supply and affordability in the inner-suburbs is a problem because our tax structure encourages speculative land vacancies. Land transactions and developments are taxed (stamp duty etc.) but land holding is not. There is no motivation for landlords to make their properties available for rent or development so supply falls behind demand, prices rise and less people are able to live in communities than could be easily accommodated.

If land value was taxed, the profits from community resources we create would return to our communities, speculative land hoarding would be discouraged, more properties would come onto the market, land prices would fall and more people would be able to afford to live where they want to and where the infrastructure is best. Challenges relating to how the denser communities could co-exist harmoniously would inevitably arise and ideas flagged for discussion at our festival to cope with these challenges include the introduction of art zoning and increased social support services.

We’re holding this festival to encourage the community to brainstorm practical solutions like these. Gentrification is by no means unavoidable and we’ve decided to stand our ground. Because it is our ground too.

Check out upcoming festival events at The Workers Club

What Can’t Be Hidden from Revenue

Karl FitzgeraldHot Issues, MultimediaLeave a Comment

Phillipe Legrain

First published in The Times as Tax land: it can’t be hidden from the Revenue

Filling the gaping hole in the Government’s finances is, in George Osborne’s words, the “great national challenge of our generation”. Unwise spending cuts and tax rises could sap economic growth; unfair ones provoke political unrest; inaction a market panic.

Faced with a national crisis, who better to turn to for advice than Winston Churchill? A century ago, the great man — who, like the present coalition, was both Liberal and Conservative — advocated introducing a land tax as part of a bold package of fiscal reforms. In his emergency Budget on June 22, the Chancellor should set up a commission to consider how best to implement that recommendation.

Taxing land values would be a fair way to help to plug the budget gap while stabilising — and even boosting — the economy. Land is routinely valued each year as property changes hands. With all the land in Britain worth perhaps £5 trillion, a 0.5 per cent levy could raise £25 billion a year — as much as a five-point rise in income tax.

Neither tenants nor leaseholders would pay a penny; only freeholders and landlords would, with the owner of a large estate paying a higher rate than someone who owns a small suburban semi. The proceeds could be used to cut the deficit and national insurance, creating jobs, boosting take-home pay and stimulating growth. Over time, the aim would be to shift the tax burden off hard-working families and on to idle landlords — as in Hong Kong, where revenues from land taxes keep income tax low, there is no VAT or capital gains tax, and enterprise flourishes.

Read more on Phillipe’s website

Housing Investors Crowd Out Community

Karl FitzgeraldCommentary1 Comment

Sign
Creative Commons License photo credit: fMoya

With auction numbers at record levels, it seems that the pursuit of the greater fool is well underway. Melbourne’s May auction levels were the highest on record and this coming weekend could see almost double the June average of properties up for sale.

Yesterday’s ABS figures on housing lending shows how genuine home buyers are being increasingly crowded out of the market. Peter Martin writes:

New finance figures from the Bureau of Statistics show that while lending to buy homes in which to live slipped a seasonally adjusted 10 per cent in the first four months of this year, lending to real estate investors climbed 11 per cent.

In the past year, lending to investors surged an exceptional 30 per cent nationwide, and by an extraordinary 44 per cent in Victoria.

Why are investors so bullish? Martin reports on the refusal to reform negative gearing and the sharemarket’s rocky road. Let’s hope not too many of these investors are mum and dad investors jumping on the bandwagon after it has left the station.

Concern must be mounting at the underlying health of the economy when you read that without the government’s stimulus, our GDP growth would have been -0.2%.

The pump priming inherent in the school building program is due to finish this Spring. Will many buy a house in the Spring auction silly season to offset this?

Adding to the uncertainty is news that mortgage stress for our sub-prime sector is up 0.19% to 1.44% according to Standard & Poor’s.

With August seen as the next possible interest rate rise, will this push the mortgage stress figures up towards 2%? A rate of 2.5% would spell alarm bells for the property market. Is the RBA setting up a Spring selling season frenzy?

George Megalogenis, one of the nation’s better economic commentators, writes in Property Boom to End:

The total number of men in full-time work is the highest on record, while the total number of home loans approved is the lowest since the GST buyers strike a decade ago. It doesn’t get more counter-intuitive: more people working but fewer people willing to borrow.

Research Officer Gavin Putland believes that we are still 3 – 6 months off any possible calls of a recession. Whilst falling home loans are a proxy for sales, there also needs to be a sustained dip in auction clearance rates for prices to drop.

With household debt at chronic levels, perhaps the panic will be more dramatic and the falls occur more quickly? Whichever way, this Boom Bust 2010 is going to be an interesting one!

Please remind your friends – do not buy now.

If you are a renter and your lease is coming up, double check that it is a monthly lease so you have the ability to move to cheaper locations when the crash kicks in.

We are witnessing a game of truth or dare as housing investors kick back in the knowledge that with every interest rate increase they can put their hand out for greater negative gearing write offs.

With immigration rates having dropped off in recent months, will investors hold their nerve and keep this ponzi game alive? Or will more and more opt for the exit door over the coming weeks to beat the Spring sellout?

The risk inherent in housing investment credit is a boon for the banks and a daring game of chance for the investor. In terms of economic output, this is dead money and should be deterred with the Henry Reviews preference for greater sharing of the spoils from land and natural resources, and less taxes on those who provide the majority of our jobs.

Community Radio Support!

Karl FitzgeraldCommentaryLeave a Comment

It’s Radiothon time and we’d love you to support our radio show – the Renegade Economists.

Visit here where you can donate whilst you write down what a terrific show the Renegades is! We need to raise over $600 to keep the show in prime time drive time.

We’re on the air today at 5.30pm with none other than investigative journalist Kenneth Davidson.

3CR Radiothon TVC 2010 from 3cr on Vimeo.

Earthsharing report reveals staggering 6.9% vacancy rate in Melbourne

Karl FitzgeraldCommentary6 Comments

Casey Jenkins has re-interpreted the‘I Want to Live Here‘ report with some useful graphs.

As you may have read in the original report, we uncovered a genuine vacancy rate five times that reported by Real Estate Institute of Victoria; 6.9% compared to REIV’s 1.4%.

By collating data from Melbourne water suppliers we were able to assess the number of Melbourne properties that are genuinely vacant, as opposed to the number of properties on the rental market. The results were alarming.

The report indicates that just one in five vacant properties are being advertised as such, the rest are being withheld from the market in the form of speculative vacancies. This is very disturbing when you think that government policy is being based on figures that are so dramatically understated.

How can they possibly expect to effectively combat a shortage of affordable housing when they’re not even acknowledging the real amount of housing available?

Other key findings of the report, which identifies suburbs and municipalities hardest hit by speculative land hoarding, include a 29% vacancy rate in Carlton South and a 17.3% industrial and commercial vacancy rate in Melbourne’s South Eastern Suburbs.

The accompanying graphs are shocking for a city supposedly beset by land shortages. Download the report here.

There is a clear need for land tax reform – this would discourage land hoarding by encouraging landlords to focus on rental income rather than capital gains.

If housing is a human right then our tax policies must genuinely reflect this.