A State of Dependants

The build-to-rent housing model is designed to turn Australians into a nation of tenants, fully dependent on the state, writes IPA Adjunct Fellow Sinclair Davidson.

Housing in Australia is not just shelter—it is a savings vehicle, an investment class, a public policy lever, and increasingly a political battleground. Home ownership is the institutional foundation of middle-class independence, family formation, and long-term economic security. To own your home is to exit dependency on others—parents, landlords, and the welfare state. Current government policy, however, wants to reduce home ownership to a state of dependency on the economic bureaucracies of superannuation and government-backed capital.

The notion of home ownership—the Australian Dream—risks being dismantled.

The Victorian Labor government, supported by the Commonwealth and cheered on by the superannuation industry, is promoting a radical restructuring of the housing market under the banner of build-to-rent. This model is not simply about increasing supply. It is about replacing ownership with tenancy, decentralised wealth with centralised control, and pluralism in housing with a vertically integrated structure of dependency. A structure in which the state designs the policy, the union movement provides the capital, and a new class of superannuation-backed landlordism owns the homes that Australians are no longer able to buy.

What is Build-to-Rent?

Build-to-rent refers to large-scale residential developments that are purpose-built for long-term rental, held under unified ownership, and professionally managed as investment assets. Unlike traditional residential developments, where individual units are sold off to private buyers or investors, build-to-rent projects remain in institutional hands and are treated as a stable income stream.

Advocates of build-to-rent argue that it offers several advantages over traditional rental housing models. For example, tenants could enjoy greater security of tenure, since superannuation landlords have a long-term interest in stable occupancy and lower vacancy rates. Proponents also claim that the build-to-rent model delivers a higher quality of housing stock, with new apartments professionally managed and built to modern standards including amenities such as shared workspaces, gyms, and concierge services. In theory, these complexes would be better maintained as large landlords are more likely to operate 24/7 management teams. Furthermore, institutional investors with access to deep pools of capital (the retirement savings of Australian workers) can build entire complexes almost immediately, and quickly resolve housing shortages. In short, build-to-rent can play a role in addressing Australia’s housing crisis by unlocking institutional capital, accelerating supply, and offering an alternative to speculative apartment development.

In Australia, build-to-rent is the very definition of crony capitalism.

Build-to-rent models may well function tolerably in those jurisdictions where capital markets are competitive, retirement savings are voluntary, and institutional investors operate at arm’s length from government. In Australia, however, the policy takes on a different character. Here, the capital behind build-to-rent is not neutral, it is compulsorily collected from workers, often managed by industry funds tied to the trade union movement and embedded in a political framework closely aligned with the ALP. In Australia, build-to-rent is the very definition of crony capitalism.

Our institutional framework creates a situation where Australians are being asked to fund, through their wages, a housing model that they may never own, governed by institutions they do not elect, and operated by funds whose governance is shaped by political and industrial interests. The result is not a market-led solution, it is the institutionalisation of dependency under the appearance of policy modernisation.

The Victorian Labor government has become Australia’s most enthusiastic proponent of this model. Through a range of policy incentives, it has sought to make build-to-rent financially attractive to large-scale investors, particularly superannuation funds and foreign-backed developers. These incentives include a 50 per cent land tax discount for eligible build-to-rent developments, available for up to 30 years, an exemption from the Absentee Owner Surcharge, which would otherwise apply to foreign-owned residential landholdings at a rate of 4 per cent, and the fast-tracking of development approvals under the state’s ‘priority development’ regime.

The justification for these concessions is framed around housing supply and rental security. The underlying economic incentives, however, are clear. This model is not designed for individual ownership, local investment, or family savings. It is designed for institutional ownership where individuals are always renters and never owners. This also limits the ability of institutional owners to realise capital gains through asset sales, potentially undermining long-term incentives for maintenance and reinvestment.

Who benefits? Australian super funds, particularly those with close ties to the union movement, are among the most active participants in the build-to-rent market. So too are foreign real estate investment trusts (REITs), pension funds, and infrastructure funds backed by sovereign capital. In Melbourne alone, more than a dozen build-to-rent projects have been announced since the introduction of tax concessions.

These are not small actors. They are sophisticated financial institutions, often politically connected, deploying pooled capital to acquire permanent control over residential assets once built and owned by Australian households. What’s emerging is not merely a change in tenure, but a restructuring of the political economy of Australian housing.

The Institutional Capture of Housing

The expansion of the build-to-rent model is not simply a shift in property financing. It is the centralised control of housing by a small group of capital managers, many of whom enjoy deep structural connections to the ALP and the trade union movement. What is being presented as a housing innovation is, in fact, a consolidation of control over the lives of Australian households.

At the top of the chain sits the state.

The most significant beneficiaries of the build-to-rent regime in Victoria are industry superannuation funds. These funds, such as Cbus Super, Hostplus, and AustralianSuper, manage billions of dollars in compulsory retirement savings. Under the logic of ‘patient capital’, they are now being encouraged to deploy this capital into housing. But not to build houses for ownership. Instead, they are financing large residential projects that they will then retain, manage, and rent out. The Australian worker, in this arrangement, does not become a homeowner. Australian workers will become a tenant of their own retirement fund.

This reflects a deeper policy architecture in which government planning, union-controlled capital, and ALP political networks are aligned around a centralised model of housing provision. A model in which individuals no longer participate as owners but are managed as tenants within what can only be described as a vertically integrated structure of dependency.

This structure collapses the roles of tenant, worker, and investor into a single managed identity; no longer distinct, but one dependent subject governed across multiple domains by the same institutions. This erodes independence, turning individuals into clients of the system rather than a free-standing participant in the housing market.

At the top of the chain sits the state, which designs the policy architecture; the zoning rules, tax concessions, rent frameworks, and planning approvals. It decides who can build, who gets favourable treatment, and under what conditions homes may be occupied but never owned.

Beneath that are the superannuation funds, which deploy compulsory savings not to enable ownership, but to retain capital in perpetuity within housing portfolios. These funds are governed by trustees appointed by trade unions and employer organisations. Their decisions are not apolitical. They are shaped by a worldview in which housing is not an asset acquired by citizens, but a service delivered by technocrats.

At the base sits the individual, a worker, a tenant, or a fund member, bound like some medieval serf into the system at every level. They are compelled to contribute to their fund that could now also be their landlord. Their employment might be tied to a sector represented by the same unions that appoint their fund’s trustees. Each layer is presented as a benefit; superannuation, rental stability, wage regulation. But taken together, this amounts to a dependency trap in which the same institutions control a person’s income, housing, and retirement.

This is not pluralism. It is not competition. It is not ownership. It is a vertically integrated order in which freedom is replaced by management, and personal agency is surrendered to institutional design.

All this power is reinforced by preferential treatment. Industry funds benefit from favourable regulatory frameworks, generous tax concessions, and now under build-to-rent, direct state support in the form of land tax exemptions and surcharge waivers. The effect is to crowd out smaller developers, individual investors, and alternative housing providers. The Victorian Government’s policy is not simply pro-development, it is pro-institutional landlordism, underwritten by public concessions and embedded within the machinery of the state.

Whereas home ownership has historically been associated with personal autonomy, asset accumulation, and political independence, the build-to-rent model reframes housing as a public utility managed by technocratic stewards. The tenant is no longer a citizen-turned-owner, but a serviced client. The landlord is no longer a local or a peer, but a legal entity governed by remote fiduciaries.

The Rise of Perpetual Renting

The defining feature of the build-to-rent model is not simply that homes are retained for rental; in practice they will never be made available for purchase. Unlike traditional apartment buildings, built-to-rent units are removed from the ownership pipeline altogether—a form of tenure ring-fenced against aspiring homeowners.

This would matter less if home ownership in Australia were robust. But it is not. Between 1996 and 2021, the home ownership rate among Australians aged 25–34 fell from 51 per cent to just 34 per cent. Among those aged 35–44, the decline was from 71 per cent to 61 per cent. The younger half of the population is being steadily excluded from the ownership society their parents took for granted.

The build-to-rent model does not solve that exclusion; it institutionalises it.

Build-to-rent embeds long-term renting as the normative housing experience for the next generation. In this model, individuals no longer aspire to home ownership; they aspire to ‘rental security’. We all know this is a euphemism for being a well-behaved tenant in a soulless and bureaucratised tenancy regime. The same type of people who run your employer’s HR department will control how and where you live.

This is a political economy of dependency, not opportunity.

Perpetual renting will have profound effects on wealth accumulation, life choices, and political independence. Stripped of ownership, renters can only ever rely on wages, welfare, and superannuation to make ends meet. They can never aspire to own their own home, or even become a landlord themselves.

Ownership gives people a stake in their own prosperity and in civil society at large. Perpetual renters may be more mobile, but they will be less invested in their local communities, and more vulnerable to those institutional powers that govern where they live, how much they pay, and what rights they have. As home ownership declines, the proportion of Australians who are economically dependent and politically marginal rises.

The New Dependency State

In this new dependency state, institutional investors are now landlords. They own the housing stock, price the rent, and evict the tenant if required. But the tenant is also the worker, the fund member, and the source of capital. This is not merely a financial structure, it is a governance system for a managed society.

As Brett Christophers observes in Our Lives in Their Portfolios, the rise of asset managers as dominant landlords and infrastructure owners represents a new form of governance where social life is shaped not by elected officials or private citizens, but by portfolio strategies, yield expectations, and risk models. In this regime, asset ownership is abstracted, operational decisions are outsourced, and democratic accountability is structurally absent. The same logic applies in Australia’s build-to-rent sector, where housing is being transformed into a managed asset class, funded by compulsory superannuation contributions and governed by remote fiduciaries. What Christophers calls the ‘financialisation of everyday life’ becomes a system of passive domination, in which Australians find their housing, retirement, and employment conditions shaped by capital stewards they did not choose, cannot influence, and must nonetheless obey. Home ownership, once a cornerstone of civic autonomy, is reduced to a line item in someone else’s quarterly report.

This would not be a democratic society in any meaningful sense. At present, individuals make housing choices within a democratic policy framework shaped by elected representatives. In a managed society, those choices will be dictated by institutional actors, fund managers, planners, and bureaucrats operating under the guise of expertise and long-term stewardship, none of whom are directly accountable to the public. When the same institutions control employment, retirement, and housing, they do not just manage risk, they manage people. And in doing so, they reduce citizenship to tenancy.

Renters, Dependants, and the Managed Society

Housing policy in Australia has never been just about shelter. It has always been a proxy for deeper questions of ownership, autonomy, and the distribution of economic power.

What is unfolding under the build-to-rent model is a deliberate shift in institutional design. A transfer of control from individuals to entities. From owners to managers. From families to funds.

This is a political economy of dependency, not opportunity. Australians are being asked to relinquish the aspiration of home ownership in exchange for a promise of stability; a promise mediated by landlords they cannot know, policies they cannot influence, and institutions they are compelled to fund.

A free society requires more than good management. It requires ownership. It requires decentralised control. It requires that the roof over your head belongs, in law and in fact, to you, not to a fund, not to a syndicate, and definitely not to the government or its cronies.

If we do not reverse this trend, we risk becoming a nation of tenants, governed by stewards we did not choose, in a country we no longer own.

This article from the Winter 2025 edition of the IPA Review is written by IPA Adjunct Fellow Sinclair Davidson.