This submission draws on applied work in housing policy, including contributions to inquiries on capital gains tax, land rent schemes, planning reform, and the Grounded in Affordability report.
Intergenerational housing inequity in Australia reflects a persistent imbalance in how housing policy distributes benefit and risk across cohorts. Over time, policy settings have enabled gains to be captured early while deferring costs to those entering the system later.
The task for this inquiry is not only to document these outcomes, but to establish the conditions under which they cannot be repeated. This requires a shift from policies that expand access within a speculative system to those that retain value, build a stock of affordable housing, and embed governance mechanisms that protect affordability across generations.
The extent and nature of intergenerational housing inequity
Intergenerational housing inequity is now evident across all tenure types.
Younger households face higher entry prices, longer mortgage horizons, increased reliance on parental support, and greater exposure to rental insecurity. At the same time, existing asset holders benefit from capital gains, tax concessions, and public infrastructure uplift capitalised into land values. Incumbent property owners also benefit indirectly from demand-side subsidies intended to assist new entrants, but which instead are capitalised into prices, as economic theory would suggest.
This inequity is not simply a function of supply. As outlined in prior submissions, housing is increasingly being reallocated rather than newly created. Land banking, staged release, short-term rental conversion, and the concentration of development control all contribute to constrained effective supply.
The result is a system where advantage compounds over time. Those with early access to land benefit from rising values, while those without are forced into higher debt or long-term rental dependence.
This advantage is further embedded through the treatment of superannuation capital. Current SMSF settings allow concessional tax rates to be applied to residential property investment, including existing housing stock. This enables tax-advantaged accumulation of land value by those already positioned within the market, while younger cohorts face higher entry costs without equivalent support. In fact, the support they are given (Stamp Duty Discounts, First Home Buyer Grants, Help to Buy) actively pushes prices higher, acting as a seller’s subsidy rather than a benefit to first-time buyers.
A structural imbalance emerges across generations, where public policy simultaneously inflates asset values and subsidises their acquisition by those already holding capital.
Causes of intergenerational housing inequity
Tax settings
Capital gains tax discounts and negative gearing have played a central role in shaping investment behaviour. These settings increase borrowing capacity and encourage the pursuit of capital gains over productive supply.
While reform is increasingly being considered, including a reduction in the CGT discount, these changes alone will not resolve structural inequity unless the resulting fiscal space is directed toward models that retain affordability.
Temporary subsidy models
Programs such as the National Rental Affordability Scheme and Help to Buy illustrate a broader policy pattern. NRAS delivered approximately 38,000 dwellings at a cost of around $4 billion, or roughly $105,000 per dwelling. After ten years per dwelling, affordability requirements expired and properties returned to market rents.
Help to Buy commits over $6 billion for a program with a limited lifespan. Each cycle repeats the same question: how much can be spent on temporary affordability before it expires?
This raises questions about whether such programs stabilise prices during potential market corrections rather than improve long-term affordability. The consistent increase in average First Home Buyer mortgages suggests the former.
Such programs provide access for some households, but do not create a lasting stock of affordable housing.
Planning and land control
Planning systems enable the capitalisation of public decisions into private land values. Rezoning, infrastructure investment, and development approvals generate uplift that is captured privately, while land banking and staged release constrain effective supply and reinforce scarcity.
Edge-of-town land dynamics and exclusion of affordable models
In many regions, including towns such as Bendigo, housing supply is shaped by these dynamics. Edge-of-town land is often held under option value, with release timing and approval constraints creating artificial scarcity.
Land is priced on anticipated future scarcity rather than current use value. Buyers compete for a limited number of approved lots, and prices reflect constrained release rather than underlying affordability.
Affordable housing providers are increasingly required to compete with speculative landholders through property options rather than accessing land at policy-aligned cost.
The consequence is displacement. Lower-income households are pushed into insecure rental, overcrowding, or homelessness, while access to land for perpetually affordable housing is restricted.
Planning frameworks often prioritise risk avoidance at the parcel level without fully accounting for broader social and health impacts associated with constrained housing supply.
Short-term rental markets and housing allocation
The expansion of short-term rental platforms has reduced the effective housing stock available to long-term residents. Dwellings are reallocated from residential use into higher-yield, short-duration accommodation, particularly in regional and high-amenity areas.
This reinforces a shift from housing as a place to live to a tradable income stream, increasing competition for remaining stock and contributing to price escalation.
Existing policy responses, including time limits (Byron Bay) and levy-based approaches (Victoria) have had limited impact, with short-term rental activity continuing to constrain long-term housing availability.
A cap-and-trade framework for short-term rentals should be introduced, with the total number of permits set locally and reduced over time as long-term rental vacancy rates and affordability indicators stabilise. This allows short-term rental activity to be moderated without abrupt disruption, while progressively returning dwellings to the long-term housing pool.
Licensing fees and permit revenues should be hypothecated to fund perpetually affordable housing, including Community Land Trusts. This links short-term rental activity directly to the expansion of long-term housing supply, converting a source of housing pressure into a funding stream for affordability.
Without intervention, short-term rental growth will continue to erode housing availability and compound intergenerational inequity, particularly in high-demand tourism regions where local housing markets are already constrained.
Data asymmetry and algorithmic advantage
Housing markets are increasingly shaped by proprietary data and algorithmic decision-making. Informational advantage now allows well-capitalised actors to identify and secure future land value ahead of the broader market, creating conditions comparable to insider advantage in financial markets.
When large developers and institutional investors rely on similar data models, supply behaviour can synchronise, delaying releases and reinforcing price escalation ahead of public visibility.
These dynamics are largely absent from national policy frameworks, including the National AI strategy and the National Housing Supply and Affordability Council, despite their growing influence over the nation’s largest asset class.
Data concentration enables early land acquisition and coordinated pricing strategies based on information not yet reflected in broader market signals.
This asymmetry disadvantages younger and less-capitalised households, and raises concerns about the use of these tools to pre-emptively acquire land in areas facing climate transition pressures, including locations vulnerable to displacement. Without transparency, these practices risk entrenching intergenerational inequity.
Greater transparency is required. A national Property Options Register would improve visibility over future land control, while enhanced public data capability, including a “Scarcity Radar”, would help identify where supply is being constrained or pre-emptively captured.
Climate and demographic pressures
Intergenerational inequity is being intensified by demographic and environmental shifts. Younger cohorts face delayed household formation, longer debt horizons, and increasing reliance on intergenerational transfers to access housing.
At the same time, climate risk is being progressively priced into the system. Insurance withdrawal, rising premiums, and infrastructure strain are concentrating risk in outer suburban and regional areas, where lower-income households are more likely to locate. This shifts exposure to those with the least capacity to absorb it.
Current building standards further entrench this imbalance. Energy efficiency frameworks such as NatHERS do not account for embodied energy or material transport, excluding low-impact construction methods such as locally sourced or on-site materials. In a constrained construction environment, this limits innovation and increases costs, while failing to capture full environmental performance.
By reducing land cost and enabling clustered or community-led development, Community Land Trust models can deliver more affordable dwellings per hectare than standard inclusionary approaches, improving land efficiency while lowering both housing and infrastructure costs.
Factors that impede reform
Policy capture and institutional preference
Housing policy settings consistently preference industry-aligned solutions over models that retain public value. Proposals advanced by the property sector are frequently accepted on the basis of asserted supply benefits, despite decades of evidence that increased supply alone has not delivered affordability at the median income level.
In contrast, models such as land trusts, limited equity cooperatives, and other perpetual affordability structures are often dismissed as complex or difficult to implement, despite strong international evidence and clear domestic precedents. This reflects an institutional bias toward familiar, transaction-based models rather than structural reform.
It is notable that retirement village land lease models are well established, legally supported, and widely financed. Yet equivalent land lease structures for younger or moderate-income households receive limited policy attention. This is not due to a lack of feasibility, but a lack of policy priority.
Flows versus stock
Current policy settings largely operate as one-off interventions. They help selected households access an already inflated market, but do little to create a lasting stock of housing protected from speculation. Public expenditure is repeatedly deployed to chase affordability after it has already been capitalised into land prices.
This reflects a persistent focus on housing flows rather than housing stock. Subsidies, grants, and shared equity schemes increase purchasing capacity in the short term, but do not retain affordability over time. Once the initial beneficiary exits, the dwelling returns to full market pricing.
This dynamic underpins intergenerational inequity. Without mechanisms to retain affordability, each generation must re-enter the market at higher price levels, with greater debt exposure.
Misdiagnosis of “housing supply”
Public debate continues to centre on increasing housing supply as the primary solution to affordability. This framing is incomplete.
In practice, new supply is delivered at market prices set by developers operating under fiduciary obligations to maximise return. This results in “just-in-line” pricing, where new dwellings are released at the highest price the market can sustain rather than at a level that improves affordability.
As a result, increased supply does not immediately reduce prices.
Planning and market transparency
Planning systems require tools that move beyond approvals to monitor actual delivery and market behaviour. A Scarcity Radar should provide real-time visibility over indicators such as auction clearance rates, days on market, pricing trajectories, and development pacing.
This would allow planners to assess whether supply is responding to demand or being strategically withheld, and whether public investment is translating into affordability outcomes.
Demographic and structural pressures
Intergenerational inequity is reinforced by demographic trends. Longer life expectancy, delayed household formation, intergenerational wealth transfers, and the increasing reliance on parental support all shape access to housing.
These pressures are intensified where affordability is not retained. Older cohorts benefit from accumulated land value, while younger households face higher entry costs and longer debt horizons.
In a context of ongoing population growth, including migration and potential climate displacement, supply alone is unlikely to keep pace with demand without structural intervention.
Delivery constraints and cost structures
Large-scale housing delivery is increasingly exposed to cost escalation driven by procurement complexity, compliance requirements, and industry structure. These factors reduce the number of dwellings delivered per dollar of public investment.
Community-led and smaller-scale models, including those supported by modular construction, can operate with greater flexibility and lower cost structures. However, the absence of coordinated support and financing pathways limits their ability to scale.
These barriers persist in part because there is no requirement for housing policy to demonstrate how affordability outcomes will be retained over time or protected from erosion. Without this, the same patterns are likely to be repeated.
Effective models and lessons
The most effective responses to intergenerational housing inequity share a common feature: they treat land as a long-term public asset and design systems that retain affordability across ownership cycles.
Community Land Trust models provide a pathway towards intergenerational fairness. By separating land from improvements, they reduce entry costs, lower deposit requirements, and embed resale controls that prevent speculative price escalation. Under Grounded’s affordability lock, this translates into deposit reductions of up to 60 per cent and materially lower mortgage exposure for households. More importantly, these models retain public and community value over time, ensuring that each intervention compounds rather than resets.
A well-designed land trust model can prioritise local participation, giving access to key workers and community members who would otherwise be displaced. This restores agency at the local level and aligns housing outcomes with community need rather than purely market signals. It also delivers measurable economic benefits. Modelling indicates that, across a 20-home project, approximately $308,000 per annum is retained within the local economy compared to a modest for-profit development model, through lower housing costs and reduced leakage of land value.
By lowering the cost of access and enabling delivery on smaller or community-controlled sites, land trust models can also reduce pressure for fringe expansion. This supports more efficient land use and reduces the infrastructure and transport burden associated with sprawl.
This model creates a platform for broader participation. Philanthropy and institutional capital are more likely to engage where there is long-term certainty, transparent governance, and measurable impact. A perpetual affordability framework provides a stable, non-speculative asset class with both social and economic returns.
Independent Living Units and intergenerational transition
Independent Living Units (ILUs) provide a mechanism to improve housing system efficiency while supporting ageing in place. Under a Community Land Trust model, older households can co-invest or relocate into ILU developments at lower cost, freeing up existing housing stock for reallocation to younger households.
A portion of retained value or operating surplus can be recycled into new housing supply, allowing one generation’s housing transition to directly support the next. Over time, ILU-based CLTs can seed fund youth-focused CLTs, creating a continuous pipeline of access to housing. This creates an intergenerational transfer of housing opportunity rather than a transfer of scarcity.
The next phase of housing policy should extend beyond model design to include the systems that govern how housing is delivered and understood.
Digital tools and artificial intelligence are already shaping housing markets through proprietary data and predictive models. The same capabilities can be applied in the public interest to improve transparency, coordination, and accountability.
A priority is the development of public-interest data infrastructure. Tools such as a Master Plan Land Tracker would provide visibility over how master planned developments are actually built out over time, including release pacing, vacant land, pricing trajectories, and alignment with local affordability benchmarks. This addresses a critical gap in current policy, where approvals are tracked but delivery is not.
Such tools shift the debate from theoretical supply to observable behaviour. They allow communities, planners, and policymakers to identify delayed releases, underutilised land, and pricing patterns that contribute to affordability outcomes.
At the community level, digital platforms can support the operation and scaling of Community Land Trusts. These include tools for governance, project coordination, and resource sharing, alongside data systems that match sites to demand and improve delivery efficiency.
The constraint is not capability, but access to land, finance, and enabling frameworks.
The role of government is to establish these conditions. This includes:
• statutory frameworks that enable land trusts and separate land from improvements
• early-stage finance and construction funding pathways
• targeted support for a community-led housing “startup ecosystem”, including incubator funding, technical assistance, and project development pathways
• public-interest data systems to reduce information asymmetry and monitor delivery
Within this framework, government acts as a platform builder. It sets rules, provides enabling infrastructure, and ensures public value is retained, while allowing communities, professionals, and capital providers to scale delivery.
This approach shifts housing policy from managing demand within a speculative system to establishing a parallel system that is non-speculative, locally grounded, and capable of scaling over time.
Housing delivered under perpetual affordability models should be treated as national infrastructure, with policy settings aligned accordingly.
Without this shift, public policy will continue to operate within a system that compounds inequity over time.
Policy, legislative and system options
Perpetual affordability as a standard
Policy should adopt a clear standard: public investment in housing must deliver affordability that persists beyond the initial beneficiary and is not lost on resale. This requires mechanisms that retain value within the system.
Affordability should be treated as a system property, not a one-time household outcome.
This provides a governance mechanism to ensure affordability outcomes are retained and not eroded across ownership cycles.
Legislative reform
A dedicated statutory framework is required to separate land from improvements in a way that supports secure, financeable ownership.
It is notable that retirement village models, which rely on land lease structures, are well established. However, there is no equivalent model oriented toward younger or moderate-income households.
Legislation should enable long-term or perpetual ground leases, recognise dwellings as financeable assets independent of land, and permit resale formulas that limit price escalation. Without this, land rent models will remain marginal.
National land data and valuation reform
Australia’s land valuation system remains fragmented across state-based Valuer-General offices, with inconsistent methodologies, update cycles, and data access. This limits accurate calibration of land rent settings and weakens national housing policy.
International examples, including South Korea, show the value of a standardised, nationally coordinated land value dataset to support transparency and policy precision.
Australia would benefit from a consistent national framework with standardised methods, more frequent updates, and improved access. Without this, housing policy is being set with incomplete information on the nation’s largest asset base.
Public land and valuation
Public land should be treated as infrastructure, not as a one-off revenue source. Current approaches that prioritise disposal at the highest immediate price fail to account for long-term public value.
A triple bottom line framework, incorporating financial, social, and long-term system benefits, including social return on investment, should guide land use decisions.
Tax reform linked to land outcomes
Reform of capital gains tax should be linked to land supply for perpetual affordability. A transferable or capped CGT concession tied to land donation into registered land trust structures would convert tax expenditure into long-term housing infrastructure. A phased reduction in the CGT discount could support this transition, with lower rates applied where gains are reinvested into perpetually affordable housing.
Extending the treatment of vacant land interest deductibility beyond individual investors to companies and trusts would improve equity across ownership structures.
Negative gearing should be reoriented toward productive housing outcomes. Deductions could be limited or quarantined to new construction and to models that retain affordability over time, including Community Land Trusts, ensuring tax concessions add to housing supply rather than compete for existing dwellings.
Superannuation and SMSF investment settings
SMSF incentives can be redirected toward perpetually affordable housing models. Where tied to affordability retention, concessional tax treatment would build a growing stock of housing rather than being lost on resale, while also supporting a stable, non-speculative asset class aligned with retirement objectives.
Borrowing and deductibility settings should also be reviewed. Limited Recourse Borrowing Arrangements and interest deductibility could be conditioned on investment into new supply of perpetually affordable housing, aligning tax policy with intergenerational equity objectives.
Community purchase pathways
A Community Opportunity to Purchase Act (COPA) should be considered, giving community or mission-aligned entities a first right to acquire land for affordable housing. This would reduce the advantage of well-capitalised insiders and enable community-led delivery.
Delivery infrastructure
A perpetual affordability housing incubator should be established to support community-led housing models. This should provide feasibility funding, governance support, and access to professional services, alongside a dedicated construction funding window.
Housing Australia should act as a central financing and risk management platform for perpetual affordability models, including provision of guarantees and construction finance to reduce delivery risk.
Financial system reform
A maximum effective residential mortgage term of 30 years should be established, without extension through refinancing or loan rollover. This would prevent affordability pressures being deferred through ever-longer debt horizons and restore housing finance as a productivity tool rather than a price inflation mechanism.
Interest-only lending for residential investment should be phased out or tightly constrained. These products amplify speculative demand by reducing holding costs and enabling asset accumulation without principal reduction. Their continued use shifts risk onto future entrants while reinforcing price growth disconnected from income.
Conclusion
Intergenerational housing inequity will not be solved by helping one cohort borrow more into a speculative system. It will be reduced only when policy retains land value, limits extraction, and builds a growing stock of housing that remains affordable across ownership cycles.
This requires policy settings that embed these outcomes by design, ensuring that affordability is not eroded over time and that each intervention contributes to a cumulative, rather than temporary, housing solution.