Opinion piece: Communal title no obstacle for Aboriginal home ownership

Posted: Mon, February 11, 2013

Land rights are under attack and blamed for preventing Aboriginal people owning their own homes in the bush but is that a rather simple view on the ongoing problem of remote community housing? CLC Director, David Ross responds to criticism of land rights and Land Councils in relation to home ownership.

Communal title no obstacle for Aboriginal home ownership 

Land rights: bitterly contested, passionately fought and  still, irrefutably, close to the hearts of thousands of Aboriginal people all over the Territory.  Land rights and the Land Councils, never far from controversy, are back on the political agenda. While the critics change, their arguments have basically remained unchanged for nearly two decades.  Land rights, one of the few positive outcomes to emerge for Aboriginal people in the Northern Territory in the past  40 years,  has inexplicably been turned into a liability.

The opinion piece from the Hon. Alison Anderson, Minister for Indigenous Advancement ; ‘New measure brings us home’ in the NT News on Australia Day 2013, champions Indigenous property rights and celebrates 'The Mortgage' as the driver to get people out of bed in the morning and off to work.  I agree that property rights are crucial to prosperity – it is why I have worked for more than 20 years in the Land Council to secure land for Aboriginal people  who would have had none. But for Anderson property rights have a pretty tight definition: the quarter acre block. She relies on the Howard-era ‘land rights prevents home ownership’ ideological mantra rather than the facts.  For Ms Anderson and her colleagues - and possibly  most of middle Australia - communal title is equated with Soviet Russia and home ownership is the Holy Grail. It’s a populist argument which paints Aboriginal land and the Land Councils as the impenetrable gulags of modern Australia . It’s an argument that belongs with the dinosaurs.

Of course the reality is always quite different to the popular myth and this case is no exception. Individual home ownership by Aboriginal people living remotely is almost non-existent. There are some homes bought on Tiwi Island and  four families nearly bought houses at Wudapuli when they  signed up to some quirky arrangement to buy their houses under Mal Brough’s ill-fated ‘no school, no mortgage’ scheme. Ultimately these families never did buy the houses:  after building the homes it was discovered they were too expensive for residents to afford with existing subsidies. The houses were instead transferred to Territory Housing. But Aboriginal people live all over the Northern Territory, not just on the half that is Aboriginal land. So why hasn’t home ownership been taken up on the rest of it if land rights is the problem?

For a start, the Minister should be asking herself and her Government, why can’t communities on NT freehold land –what we call excisions or community living areas – lease their land for commercial or personal use? The Northern Territory Government could change that tomorrow if it chose since it is   NT legislation which has rendered the residents powerless. Instead,  it is increasingly looking like the Australian Government will intervene once again and force change to enable the leasing of land to go ahead, as it is now occurring on land rights title.    

The Northern Territory Government could also ask itself why there is no private home ownership of houses in remote Northern Territory  freehold towns like Kalkaringi, Elliot, Ti Tree and Finke?  They aren’t on Aboriginal land either so why hasn’t home ownership taken off there? The answer?  Because the real impediments to home ownership are not communal title or the Land Councils, but  factors that affect most Australians : the cost of houses and the ability of  people to pay for them.   

The key to increasing economic development across Aboriginal lands does not lie in abolishing the customary tenure system; it lies in adapting this system to resolve any specific and genuine problems with the consent of the landowners. 

 The Land Councils  have been working to represent their constituents as best as possible  in  a rapidly changing environment and under immense pressure from successive federal governments desperate for change. The CLC is at the forefront of developing new models  for secure tenure on Aboriginal  land and developing new, workable models of Aboriginal home ownership without abandoning the principles by which traditional owners hold the title to their land. 

Let’s clear another myth out of the way right now: it has always been possible for individual leasehold interests to be granted on Aboriginal land to build houses. The CLC has participated in drafting amendments to make these processes easier and more accessible and it is completely possible, both legislatively and administratively.

After decades of building on land without formal arrangements, the Australian Government decided in 2007 it would not build anything or fund anything until it had a lease. While this has created a huge workload for us  it formalises land interests and improves land administration – and that much is welcome.  Finally, rent is being paid like agencies do everywhere else in the country. Some benefits are less tangible but nonetheless important, such as the recognition, through such transactions, of traditional ownership and of the need to seek permission of landowners. These were unheard of a decade ago – few third parties expected to pay real rent or felt obliged to take out a lease. In this respect Aboriginal land has finally been brought into line with commercial arrangements everywhere else in Australia. Strangely this is the bit that the ‘property rights’ enthusiast don’t like: they want a commercial market but the idea of paying rent on Aboriginal land is unpalatable.

But I believe a focus on the formalisation of tenure and improved land administration alone will be inadequate to improve economic outcomes and at times has distracted attention from other ongoing issues of concern.

The cost of building a new house in a remote community  begins at  more than $500,000: much, much more than the value of the land it would sit on.  By the time the proud new owners had finished paying off the loan they would probably have paid another $500,000 in interest. That is  if they were able to defy the statistics and earn enough and  live long enough to discharge the loan.  And how much would their asset be worth? Possibly absolutely nothing after the normal wear and tear of community life.

 I know few Aboriginal people living in remote communities who would be earning a wage sufficient to service this type of mortgage. And who is going to lend to them?   In late 2011 a forum on access to finance was convened by the NT Government and attended by the major banks, the Land Councils and the Northern Territory and Australian governments. At it, the banks saw no major legislative impediments to providing finance on Aboriginal land - they are used to dealing with highly complex legislation and with consent and approval processes. But they did note that issues such as remoteness, cost, low demand and risk profile are significant barriers to lending.   

The banks highlighted that there is a gap between the cost of building and what people can afford to borrow and they had concerns about houses retaining their value (and the risk of negative equity). These are significant barriers to home ownership and commercial lending that require policy attention rather than rhetoric.   None of this is to suggest that Aboriginal people who wish to own their home on Aboriginal land and have the means to service a mortgage and understand the economic implications should not have the option of doing so. As I have said, such an arrangement can be achieved under the existing provisions of the Land Rights Act.

Perhaps the NT Government may like to consider a scheme whereby it really encourages home ownership on communities by selling its own remote housing stock to those Aboriginal people who are unable to enter the market without a helping hand. After all, it does offer many incentives for home ownership to other disadvantaged  buyers looking in Darwin and the Territory’s towns and Mal Brough was happy to try and  flog off a house at Wudapuli for $270,000 which cost near on $900,000 to build.

Minister Anderson may not have caught up on the fact that the vast majority of houses in remote communities are now held under 40 year leases by either the Australian or NT governments, and Territory Housing control and manage those houses.  Given governments are effectively the landlords for the next 40 years, it is government policy that will determine whether home ownership is possible and achievable.  The home ownership ball is firmly in her court.

Lease-buy arrangements  have made home ownership a reality on some native American and Canadian reservations and Maori lands.  These countries, all well ahead of Australia in terms of Indigenous policy making,  have a range of models that have been developed to accommodate different types of land tenure. The Northern Territory could also be in the forefront of these developments if the NT Government  embraced the new world.passionately fought and still, irrefutably, close to the hearts of thousands of Aboriginal people all over the Territory.  Land rights and the Land Councils, never far from controversy, are back on the agenda. While the critics change, their arguments have basically remained unchanged for nearly two decades.  Land rights, one of the few positive outcomes to emerge for Aboriginal people in the Northern Territory in the past 40 years, has inexplicably been turned into a liability.