The Government Can Build Quality Housing for Everyone

In Australia today, public housing is seen as an option of last resort for poor families only. But the South Australian Housing Authority spent decades building affordable, quality homes for all. We can do the same now.

South Australia Housing Trust cottages from the late 1940s just outside Adelaide. (Wikimedia Commons)

Today, only socialists seem to advocate for high-quality, affordable public housing. In the mid-twentieth century, however, a state government led by South Australia’s Liberal and Country League (LCL) developed one of the world’s most remarkable public housing agencies, the South Australian Housing Trust (SAHT).

The government of South Australia (SA) established the SAHT in 1936. Over the course of its life, it built 122,000 high-quality homes for hundreds of thousands of workers. The SAHT was a product of a different era in the history of capitalism. SA’s need to industrialize, combined with high rates of economic growth, and a strong and organized working class, created the conditions for a pact between industrial capital and the state.

The SAHT emerged out of this corporatist arrangement. Building infrastructure and providing quality housing for workers was a way of lowering labor costs by reducing the cost of housing for the working class, making it cheaper for capitalists to invest.

We can’t simply replicate the experience of the SAHT under the very different conditions of today. But studying its history can give us a valuable insight into the way that Australian capitalism has transformed over the past eighty years. And it also demonstrates that the state can provide decent housing for workers — when capital deems it necessary.

An Unlikely Advocate for Social Housing

In 1937, the Victorian Housing Investigation and Slum Abolition Board released a report painting a Dickensian picture of housing in the aftermath of the Great Depression. Most lodgings were poorly built and badly lit. Kitchen facilities were rare. A third of dwellings had no bathrooms or outhouses, while a quarter had no electricity, gas, or running water. In 1942, John Curtin’s federal Labor government estimated that there was shortage of at least three hundred thousand houses.

Thomas Playford, 1938. (State Library of South Australia / Flickr)

Remarkably, however, the SAHT was not the work of a reforming Labor premier. Rather, South Australia’s greatest champion for public housing was Sir Thomas Playford IV, an emphatically bourgeois, anti-union politician who served as premier from 1938 to 1965.

It’s unthinkable that a public housing advocate like Playford would lead today’s South Australian Liberal Party. In the mid-twentieth century, however, Australia’s ruling class was seeking to build a competitive, modern nation-state and Playford’s approach fitted into this wider pattern. In addition to building up the SAHT, he nationalized public resources, implemented price controls, and, as historians Paul Sendziuk and Robert Foster put it, “pursued industrialization with a zeal usually associated with the … five-year plans in Stalinist Russia.”

When Playford came to power in 1938, SA’s economy was still largely based around agriculture and grazing. With a few exceptions, SA had failed to attract capitalists willing to set up prosperous company towns.

Playford argued that to industrialize, SA needed to attract capital investment by offering two competitive advantages: low wages and infrastructure. To provide the first incentive, Playford lowered the cost of living through a regime of price controls, state-owned utilities, and public housing.

In turn, this would make it possible for the industrial arbitration court, which had a shared interest in the continued existence of competitive firms, to justify reduced wages. Coupled with major infrastructural projects, Playford believed this could make South Australia an attractive destination for industrial capital.

There was another reason why SA’s capitalist class backed public housing so wholeheartedly. They believed that homeownership would inoculate workers against socialist and communist radicalism by tying them to property ownership. As Ernest Anthoney, a member of the LCL, cynically put it: “What better insurance can we have against the growing menace of Bolshevism than a proper housing scheme?”

Housing, Capital, and Labor

The SAHT was born in 1936 as a statutory authority, not a welfare agency. This meant that it operated essentially as a state-owned company and the de facto planning and development authority for SA. Importantly, this expanded the Housing Authority’s remit to providing housing suitable for the majority of the population, not just those in direst need.

The SAHT operated on a scale that is almost inconceivable for a public housing authority today. In 1954, for example, the trust built 47 percent of new residential dwellings. Between 1945 and 1970, it constructed a third of all South Australian homes.

The Housing Trust did not simply build houses. It also built roads, factories, transport infrastructure, leisure amenities, green spaces, schools, football ovals, shops, and cultural venues. It planned and built Adelaide’s satellite cities of Elizabeth and Noarlunga, and even produced films to convince migrants to move there. The trust envisaged a future in which all workers were men of property — lords of their quarter-acre castle.

At its peak, the SAHT was South Australia’s biggest developer and landlord. Instead of letting the market set rents, the trust set “economic rents” as a proportion of income — usually a fifth or a sixth of workers’ earnings. This revenue covered production and upkeep costs while the SAHT turned a profit on sales of their non-rental stock.

In 1945, Ben Chifley’s Federal Labor government passed the Commonwealth State Housing Agreement, which delivered federal funding to state housing authorities, the SAHT included, to build low-income public housing. As a result, the trust was able to expand by building and leasing more facilities to the private sector. Thanks to this and the trust’s business model, as SAHT board member and historian Hugh Stretton noted, the SAHT’s first four decades “cost the taxpayers nothing.”

Disciplining the Market (and Workers)

The trust took quality very seriously and employed inspectors to ensure that the production process met high standards, ensuring its housing stock would preserve its value over the long term. In light of recent scandals centered around private developers, this level of forethought seems unthinkable today.

The SAHT also refused to build endless, under-serviced red-brick housing estates, thus avoiding the poorly planned suburban sprawl that characterizes outer Melbourne or western Sydney today. Instead, the trust adhered to an urban planning model that ensured employment, amenities, transports, shops, schools, gardens, and all other essentials.

As the SAHT’s official historian Susan Marsden pointed out, by providing both a stock of quality rental houses and houses for sale, the trust was able to “discipline the private housing market.” While this diminished the power of property-developing capital, it was a necessary part of Playford’s plan for lowering labor costs to woo industrial capital into South Australia.

For similar reasons, the SAHT would screen for “morally upright” working-class applicants and maintain regular contact to ensure they kept a “proper home.” The idea behind this disciplinary surveillance was to try and recruit the kind of labor force that would comply with the demands of management.

SA Housing Trust home in Rosewater. (State Library of South Australia / Flickr)

Essentially, the trust was a corporatist institution, designed to closely integrate the state, capital, and labor. This was reflected in many of its projects — most clearly in Adelaide’s satellite city of Elizabeth.

Previously, Elizabeth was a small farming community and part of the township of Salisbury. From 1954 to 1965, the trust transformed Elizabeth’s brown paddocks into a city of over ten thousand trust homes and 41,141 people, filled with civic and cultural amenities, transport, ovals and sporting facilities (including an Olympic-sized swimming pool), and over eleven shopping centers.

The goal was to attract investment from major firms (especially General Motors) by ensuring a workforce that was both local and compliant. This dynamic was repeated in other suburbs developed by the SAHT, including Mitchell Park and Tonsley, which were built to house the new Chrysler factory’s workers.

In their own terms, these initiatives were a success. From 1939 to 1965, in partnership with industrial capital, the trust increased manufacturing employment alone by 168 percent. At the same time, South Australia’s population almost doubled as migrants moved from overseas and interstate, seeking homes and job opportunities.

The End of the SAHT

Beginning in the late 1970s, Australia’s economy went through a dramatic restructuring. Manufacturing firms in particular relocated overseas to take advantage of newly opened, cheaper labor markets. Despite the trust’s success, this meant that South Australian manufacturing could not compete, dissolving the mutual benefits upon which the SAHT’s corporatist arrangement depended.

It was the SA Labor Party, however, that did the dirty work of dismantling the trust. The Labor government headed by Don Dunstan, in office from 1970 to 1979, began the process by limiting the trust’s ability to produce sales stock. Instead, Dunstan redirected the trust’s resources toward building and maintaining rental stock for welfare recipients, rather than workers.

When the Australian Labor Party embraced neoliberalism at the federal level under the leadership of Bob Hawke, Labor’s approach to public housing changed sharply. John Bannon’s SA Labor government (1982–92) replaced a social-democratic commitment to public housing as a social good with a new orientation to the free market, which could supposedly provide better, cheaper, and more plentiful housing, if unhindered by competition from the trust. Private developers agreed, and heavily lobbied the state government to “reorient” public housing, making it available only to the poor.

In the 1980s, the SAHT ceased to be SA’s biggest housing developer. In 1991, Bannon’s government passed the South Australian Housing Act, which began the process of finally transforming the trust into a standard welfare housing agency.

As the SAHT built its 122,000th dwelling in 2007, Mike Rann’s Labor government landed the fatal blow. Rann divided the trust in two: Housing SA and Disability Services SA, and assigned the SAHT’s name to an agency underneath Housing SA for “icon/heritage” purposes.

Beyond the SAHT

By the time of the SAHT’s demise, it had built one-fifth of all homes in SA. However, once capital had lost interest in developing a local workforce, the state lost interest in developing houses for workers.

The SAHT provides a fascinating case study on how the state can intervene in markets to create winners and losers. As inconceivable as it may seem today, private developers lost out while industrial capital and workers won.

Today, the Australian economy is built on housing instability, the result of decades of government support for property developers and investors. In the absence of large-scale public housing, private developers, landlords, and investors have driven Australian housing prices and rents to historic highs, making homeownership increasingly inaccessible to many. This also helps explain why both Labor and the Liberals would find institutions like the SAHT anathema today: lowering housing prices would disrupt Australia’s entrenched economic model.

That doesn’t mean we should be aiming to simply reproduce the SAHT today. The negotiated wage constraints that went along with SAHT programs were not a good thing, but they were at least limited by the strength of an organized working class. Keeping wages down in the context of rampant precarious work, stagnant wage growth, and a fragmented labor movement would be even worse now than it was mid-century.

The corporatism of the SAHT also had other limitations. Unlike welfare and social housing today, housing application questionnaires focused on the values, sentiments, and worldviews of potential tenants. In short, the SAHT wanted to provide homes only to respectable, nonmilitant workers.

There are better, genuinely socialist models for public housing out there which are built around the interests of workers and not those of capital. But what the trust demonstrates is that capital and its political representatives will only favor public housing when it suits their economic interests.

During an era when it was common for workers to stay at one firm for decades, the SAHT aimed to provide lifelong housing. Today’s service-driven economy treats workers as disposable. No faction of capital has much concern for where workers will live in a decade, or even a few years’ time.

As Susan Marsden put it, the SAHT was a mixture of “business, charity, and sentiment.” Today public housing in Australia is seen as purely a matter of charity and sentiment.