The Greens Member for Griffith, Max Chandler-Mather, took to Twitter to explain to people why “building luxury apartment towers makes the housing crisis worse”. According to Max:

“Every time valuable inner city land is handed over to luxury property developers we lose another opportunity to build good medium density public and affordable housing. Developers on the other hand will only “supply” private housing when they can profit.”

I’m not sure why Max put “supply” in quotation marks. Does he genuinely believe that developers making a profit is undesirable? If so, would he also object to local grocery stores “supplying” food only when there’s a chance to make a profit?

But that aside, Max is wrong when he claims that the construction of luxury apartments will make the housing crisis worse. Building any form of housing, even luxury housing, creates a domino effect, freeing up housing elsewhere. When individuals move into luxury apartments, they vacate housing for individuals with less wealth than themselves, who then free up housing for those with even less wealth, and so on, making the entire housing market more affordable.

If Max gets his way and prevents developers from constructing luxury apartments, then where will prospective buyers go instead? The domino effect also works in reverse: they’ll compete with middle-income buyers, raising prices for that type of housing, forcing those with less wealth to look even further down the chain. The entire housing market becomes less affordable.

To help fix Australia’s housing crisis we need to prioritise incentives that promote the construction of all types of housing, benefitting individuals of all income levels. And yes, that includes luxury apartments.