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Chapters → A tale of two houses in Erskineville Laurence Troy

A tale of two houses in Erskineville Laurence Troy

The apartment was built on the site of the Metters factory that built Kooka gas cookers, the earliest form of gas cook tops that could be found across Australia. This wider area in Erskineville and Alexandria in inner Sydney was a key part of the productive industrial effort in Sydney and indeed Australia’s wider economy. Like many other inner city industrial precincts across Australian cities, the economic shift has abandoned these locations only to see them gradually converted to apartments and integration into the consumer driven, global facing service economy.

The physical legacy left behind in these formal industrial spaces is often highly contaminated and toxic. According to a report by the ABC, in the case of the Sugarcube development “the development approval included several conditions “requiring remediation” including “contaminated groundwater and detections of heavy metals, hydrocarbons and asbestos”...” and which the City of Sydney are claiming have not been met.[3] This ongoing dispute between the City of Sydney and Golden Rain Development is symptomatic of a wider problem of building defects in the apartment market in Sydney, with this article also noting that it is the fourth building in a short space of time to be ‘abandoned’ because of serious defects in the development and construction process. Previous research has noted up to 80% of all new apartment buildings in Sydney may contain defects. [4] Together with revelations of widespread use of flammable cladding, this building has become yet another public exemplar of an apartment building industry in crisis.

People have been quick to point the finger at developers, builders, certifiers, architects, engineers, depending on whose side you take. The likely truth is each are complicit in some way or other in a wider story about the political economies of building in Sydney. Buildings like this are primarily bought by investors, and have been driven by a banking system only too happy to loan money, state governments concerned to see property related taxes flow, governments all over hanging their economic agenda off a building and construction sector, a planning system only concerned with delivering housing in numbers, and property owners who see the value of their investments rising. An entire development ecosystem geared towards delivering new apartments at speed for maximum profit, each have a vested interest and indeed have all played key roles in setting up and driving the building and development process in Sydney today.

Developing apartments in Sydney represents nearly 80% of all new housing, while new loans to investors at the time this building was being built, accounted for around 50% of bank finance commitments to purchase residential property Australia wide.[5] Together, this means the key driving force of new development in Sydney is primarily absentee investor owners. Or in other words, new housing in Sydney is now fundamentally about meeting demands of an investor class, rather than housing representing a human need as site of social reproduction. The apartment development space, from both a supply and consumer point of view, has become increasingly dominated by financialised interests and mentalities and is symptomatic of a global pivot towards financialisation as the key driving process behind housing outcomes in our cities.

This impacts the younger generation of residents in particular, who are forced into the rental housing market, which is increasingly taking a higher density form, because prices are too high. To illustrate the depth of this shift, in 1986 the rate of home ownership for the bottom 20% of income earners in the key 25- 34 year old demographic was about 60%. By 2011 this dropped to around 20%. [6] Ownership is now completely off limits to many younger households, particularly those on lower incomes, laying the foundations for a re-emergence of old terrains of structural inequality in housing and wealth. Not only are younger people facing the insecurity of high costs and rental tenures, they are also subjected to lower quality, and quite possibly in this case, an environmental condition that literally threatens their health. Of course, younger generations are not the only ones impacted, access to housing wealth is increasingly a defining feature of class inequality across all generations.

This is a neat segue into the second image which is an add for a school fair at the local Erskineville Public primary school, located about 100 metres from the ‘Sugarcube’ apartments. The platinum sponsor for the fair is the real estate agency called ‘The Agency’, and these real estate signs can be found at the front of many properties across Erskineville. The signs of course resemble ‘For Sale’ signs and part of the main proceedings of the school fair event is hosted by members of The Agency. A key part of the event is an auction of various prizes led by the head auctioneer for The Agency, with the largest prize on offer, a discounted commission on your next house sale with the key sponsors. The ‘real estate’ mentalities that sit over the whole event and proceeding are obvious to see, but what is perhaps slightly troubling is that the forum for this is a primary school fair, which in another breath is about facilitating community and belonging focused around children who are under the age of 12.

Academics and others have noted how the logics of finance and speculative investment have increasingly become embedded in the collective psyche and is increasingly driving decisions about housing in Australia, and globally. Allon and Parker (2016) make the case since the early 2000s housing in Australia has substantially pivoted from something providing shelter, to one that is leveraged for consumption and investment. Owning your own place to live and all the attending securities (ontological, welfare), becomes secondary to expanding an investment portfolio. In so far as there was previously a tension between the commodified status of ownership and the non-commodified status of home, the recent transition has very forcefully given primacy to housing as commodity. While some present this propensity for households to take on even larger amounts of debts, Allon and Parker suggest this is far from irrational and reflects the increasing necessity for households in an era of government withdrawal, to ‘go-it-alone’ to secure their own future. [7] This reflects Garcıa- Lamarca and Kaika’s broader claim of how “mortgage contracts [become] enrolled not only personal income, but also the practices of everyday life as well as community and family relations as cogwheels into the global speculative financial strategies that drive capitalist urbanisation”. [8] So, returning to the Erskineville Public School example, it is illustrative of this wider process in which finance and speculative mentalities and in this case the practices of investing in housing, is becoming deeply embedded in everyday family and community life. Perhaps this is just educating children in the realities living within this system?

On the one hand, we have a story about how Sydney’s housing markets has become dominated by speculative interests which is producing a city that positions housing and housing wealth as a key element driving inequality. Conceptually, the first example points towards a highly financialised system in which “financial actors, markets, practices, measurements and narratives, at various scales,” have resulted “in a structural transformation of economies, firms (including financial institutions), states and households”.[9] While debt and finance has long played a central role in Australia’s system of housing, it has arguably qualitatively changed over the past decade as outright speculative policies and mentalities have become central to the housing question, rather than previous rounds in which housing wealth was fused with wider redistributive efforts of government and cultural expectations of house as home. The process of housing production has become tightly bound with speculation and basic questions of minimum standard and human health has fallen by the wayside. This process is driving new inequalities in two dimensions, one is about access to wealth, and the second is about access to quality living spaces both in the form of the dwelling and the wider environment.

On the other hand, we have a story about how this highly financialised narrative is being educated and embedded in the collective cultural consciousness of children, who are for the most part, blissfully unaware of the difficulties their parents face in securing their housing, and the relative advantages they have in life because their parents have secured housing in a socio- economically advantaged part of Sydney.

Living through the rapid change happening in parts of Erskineville offers the tantalising prospect of improved public amenity and services, and a renewed physical landscape. Yet at the same time it is terribly unsettling and often disappointing. New development both erases the very historical fabric that created the sense of community and belonging; and reveals second rate living environments for old and new residents.

These problems are only likely to intensify, and perhaps we should be teaching children the values of housing as home, or in the words of the UN Special Rapporteur Housing, “to move away from housing as a place to park excess capital, to housing as a place to live in dignity, to raise families and participate in community. Being without home is being without security, equality, freedom”. [10]

3 Sas, N, Om, J & Nguyen, K (2019), ‘Sydney Sugarcube apartment tower abandoned after toxic land concerns’, ABC News Online, viewed 13/11/2020
4 Easthope, H, Randolph, B & Judd, S (2012), Governing the Com- pact City: The role and effectiveness of strata management, City Futures Research Centre, Sydney.
5 Australian Bureau of Statistics (2016) 5609.0 – Housing Finance, Australia, April 2016, Commonwealth of Australia, viewed 15/04/2016; Australian Bureau of Statistics (2020) 8731.0 – Building Ap- provals, Australia, September 2020, Commonwealth of Australia, viewed 12/11/2020
6 Daley, J & Coates, B (2018) Housing Affordability: re-imagining the Australian dream, Grattan Institute, Melbourne.
7 Allon, F & Parker, J (2016), ‘Building on Sand? Liquid housing wealth in an era of financialisation’, in NT Cook, A Davison & L Crabtree (eds), Housing and home unbound : intersections in eco- nomics, environment and politics in Australia, Routledge, Oxon, pp. 56-71.
8 García-Lamarca, M & Kaika, M (2016), ‘‘Mortgaged lives’: the biopolitics of debt and housing financialisation’, Transactions of the Institute of British Geographers,. 41(3), p. 314.
9 Aalbers, M (2015), ‘The potential for financialization’, Dialogues in Human Geography, 5(2), p. 214.
10 Farha, L (2020), UN Special Rapporteur Housing, viewed 13/11/2020, <http://unhousingrapp.org/>