The answer to the housing crisis is here, all thanks to – an architect? How a simple throwaway line blasts away 200 years of politicians lies.

We have finally found our answer to the housing problem.

And it’s all thanks to a professor of architecture! If you can believe that.

Perhaps Australians, in our recent elections, where housing was such an important topic, should have voted this person into power instead?

But for me, that very statement is a damning indictment on the standard of politicians globally.

So, what has this professor discovered?

Why aren’t our politicians listening? And finally, what precisely did she say?

It seems like the best place to hide something is in plain sight.

And by the time you finish reading this, you won’t believe just how easy our housing crisis is to solve.

We go today to Australia’s fastest growing city – Melbourne. And as an example of how the turning of the real estate cycle sees the final push higher for land prices to occur out on the margins, you’ll not find much better.

This very behavior is occurring globally right now. Simply because it’s on the margins where the only remaining affordable land exists.

And as far as Melbourne goes, its layout of hundreds of miles of flat land in all directions gives the opportunity for massive urban sprawl to happen.

But this is a specific kind of sprawl – residential housing. No infrastructure, no vast shopping malls, schools, railway stations, markets. Just house after house after house.

Now, in normal times there isn’t much at all to make such a location a desirable one to live in. But when we are this late into the current cycle, if you really want to own your own home, this is the only way.

And so, people sacrifice their time in endless travel to and from all the modern amenities we take for granted to achieve that fabled step onto the property ladder.

However, there appears to be another sacrifice going on. One that these same homeowners are partly responsible for.

From the above article:

It was once ranked the world’s ‘most liveable city’ for seven years in a row, but now a darker side to Melbourne will be put under the spotlight on a global stage. As the city’s population swells, so too does the need for housing, but experts are warning the urban sprawl is taking a devastating toll on the environment.

And it’s here that we turn to Professor Louise Wright, Architecture Practice Professor at Monash University.

She was interviewed for the above Yahoo article. She both highlighted precisely what this environmental cost is but inadvertently explained the answer to the housing crisis in Australia, let alone Melbourne.

According to Wright, there are 27 new greenfield sites (bare, undeveloped parcels of land) planned for development over the next decade by the Victorian government. That equates to a lot of vacant land.

“At times like this where we have a housing crisis, it seems like there’s extra permission to pursue this greenfield approach because it’s quicker and easier. It’s obviously also politically better, but it’s just such a high environmental price. And I think ultimately, it’s probably not great socially.

“The fact that we don’t put those two together, I think is a problem — that we don’t see that how we treat the environment is completely tied to how we live, you know, socially and just as a community and how we do things.”

So, you see, not only is there a social cost to high land prices, but also an environmental one too. Not something that gets spoken about much, but for me it is equally important.

It speaks of the irreparable harm the chase for the economic rent truly is.

The grasslands in outer Melbourne are home to a huge array of wildlife, and an important component of the surrounding ecosystem.

“We see this sort of grassland as just grass, but actually it’s a highly diverse ecosystem that is endangered,” she (Wright) said. “So less than one per cent remains in Victoria. It’s a pretty terrible statistic.”

It gets worse. The insatiable search for land now means residential blocks are either extremely close to, or indeed built over, sacred Aboriginal land once used for ceremonial purposes. This is the history of this country, far earlier than the English rent-seekers settlers of Australia.

Fact is, I cannot in good conscience blame those seeking a decent roof over their heads. They are in large part blissfully unaware of all the above.

But you’d think the people who should know, the government, would actually intervene?

Thanks to someone like Professor Wright, however, at least our environment has a voice. It is what she was quoted as saying next though that’s truly eye opening.

I’m unsure if Louise Wright realized just how profound her next words are from this article.

However, I’ve not heard a single politician or economist say them aloud. And that alone is damning.

Bolded text is my own.

“We can’t keep losing land this way,” she said. “It’s a complex problem because it would be better to densify the areas we have already used rather than use greenfield land. The best thing, in my opinion, would be to use buildings we already have.”

Wright says there are “tens of thousands” of buildings sitting empty across Melbourne but turning them into housing could be complex and time consuming, which is why it’s “easier” to simply “cut up a piece of land”.

Bingo.

And it’s this obsession that leads to development like this.

Want to take a guess as to how developers intend to subdivide that vacant land you see on the left side of the above image? Pretty much in line with the right-hand side I would suggest.

If you had an aversion to walking on bitumen, then you’d love this location. Simply walk where you need to across these roofs instead. Frankly, this is the future of real estate everywhere.

Take a closer look above. Can you see any substantial front yards, back yards, verandahs, pools? These are the things sacrificed to afford to buy on the margins.

Even more importantly – why did it take an anonymous article that quoted an architecture professor to identify the true culprit here? The truth is this. Society does have all the housing it needs right now.

Sounds incredible, but it’s correct. Not that any politician worth their salt will ever be heard presenting such facts to their voters.

Because we are hard-wired to get something for nothing, we chase the unearned gains of land, and we pay for it by borrowing copious amounts of credit. It is even better if you can find someone else to pay the bank back for that same credit.

The final few speculative years of the real estate cycle sees a different behavior emerge. One that sees local and international investors buying up apartments and houses and then simply leaving them empty. And why not? There are no laws against it.

No penalty to mis-use prime locations. Just sit back and take the gains. Well, there is a penalty for allowing this to happen.

It’s cookie-cutter housing way out on the margins of society. It’s the destruction of vital habitat for our wildlife. It’s bulldozing our own history.

And then, there’s the final act.

Because when things can no longer go up, they come down. And for real estate globally, that is almost about to happen.

Have you stopped and asked yourself “What happens when tens of thousands of empty properties suddenly hit the market for sale – all at the same time?”

Historically, such an event portends the end of the real estate cycle. And ensuing financial catastrophe. It’s too late then to ask what you should do.

Avoid that fate and become our newest Boom Bust Bulletin (BBB) member instead. Let the BBB guide you on the inherent timing of the economy only knowledge of the land market can give you.

Each month this history and knowledge will be yours via monthly written editions and video postcards that will help explain the real estate cycle like never before.

If we want to fix this, and give people a fair go at home ownership, then it is up to us to make our politicians accountable. And we can if we aren’t divided by selfish ambition. But instead realize the stark truth staring you in the face.

You need to educate yourselves about the real estate cycle so you can educate our leaders.

But also, for the fact you need to get ready – now.

To be able to heed the signs that the end has arrived. And know what to do, and when to do it.

As you probably realized now, you can’t trust the government to get this right, not now, so late in the current cycle.

Only you have the power to be ready and prepared.

So, use it.

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