Learning from the Nordics: How Australia Can Achieve Affordable Housing and Reduce Homelessness
Housing in Australia is expensive, but it doesn’t have to be this way. The high cost and limited availability of affordable housing in Australia are largely due to policy choices. By treating housing primarily as a financial asset rather than a basic human need, Australia has skewed its housing market to the detriment of many. However, there are proven solutions that we can learn from other countries, particularly the Nordic nations, which have successfully tackled similar issues.
The Problem with Australia’s Housing Policies
A significant issue in Australia’s housing market is the emphasis on housing as an investment vehicle. Policies like negative gearing disproportionately benefit investors, creating a market that favors wealth accumulation over meeting basic housing needs. Despite a consensus among economists on the need for reform, political will has been lacking due to fears of voter backlash.
The Nordic Model: A Success Story
The Nordic countries—Sweden, Norway, Denmark, and Finland—offer valuable lessons in housing policy. These nations have developed robust systems that provide high-quality, affordable housing while effectively reducing homelessness.
Finland’s Housing First Approach
Finland stands out as a global leader in reducing homelessness. From the late 1980s to 2020, Finland reduced the number of homeless people from over 16,000 to about 4,500, achieving a homelessness rate of less than one per 1,000 people, compared to nearly five per 1,000 in Australia. This success is largely due to the Finnish government’s “Housing First” principle, which asserts that everyone has a right to decent housing and access to social services. This principle, adopted in 2007, has proven radically inclusive and effective.
The Role of Housing Co-operatives
A key feature of the Nordic housing success is the prevalence of housing co-operatives, which provide secure, high-quality homes for both renters and owners. In Australia, housing co-operatives are often misunderstood and underutilized, comprising less than 1% of the housing sector. In contrast, Nordic countries have integrated co-operatives into mainstream housing policy.
Co-operatives in Sweden, Norway, and Denmark
Sweden: Co-operative housing makes up 22% of the total housing stock.
Norway: 15% nationwide and 40% in Oslo.
Denmark: Over 20% of the population lives in co-operative housing.
Co-operatives in these countries operate on a non-profit basis, reinvesting any revenue into maintaining and expanding housing stock. This model not only keeps rents low but also encourages community involvement and democratic management.
Equity-Based Co-operatives
Nordic co-operatives also facilitate home ownership. Equity-based models allow members to purchase individual homes while the co-operative retains ownership of common areas. This reduces the cost of home ownership by about 20%, making it more accessible.
Lessons for Australia
While not all Nordic policies can be directly transplanted, the overarching principles of collaboration and long-term planning are highly relevant. Australian superannuation funds, for instance, could be incentivized to invest in safe, low-return affordable housing projects through co-operative structures.
Moving Forward
Adopting Nordic-style housing policies will not be a quick fix; it requires decades of commitment and collaboration between various stakeholders. Finland’s successful approach to homelessness began with the establishment of a critical organization in 1985, illustrating the importance of sustained effort and institutional support.
Better housing options are within reach. With the right policies and willingness to learn from successful models, Australia can create a more equitable housing market that prioritizes human needs over financial gains. It’s time for policymakers to take these lessons seriously and work towards a future where affordable housing is a reality for all Australians.
