Building construction
Australia is facing a housing crisis due to shortage of property and high prices. Pixabay

The Coalition and Greens have voted against Labor's build to rent housing legislation that entailed building thousands of rental complexes and granting tax incentives to builders, who developed rental apartments.

The bill will now be referred to a Senate inquiry, which will submit the report by Sept. 4, Sky News reported.

The Labor's build to rent (BTR) aimed to attract foreign investors from the U.S., the U.K. and Canada, where the practice of developing long term rental apartments was popular. The government wanted to utilize their expertise to replicate the model in Australia.

To be eligible, BTR complexes must have minimum 50 houses ready for rent, available for a three-year lease and 10% of the houses should be affordable and available at 75% of the market rate.

The proposal offered a tax reduction from 30% to 15%, by which the government expected to furnish 150,000 homes, ABC News reported.

Criticizing the Labor's plan, Assistant Housing spokesperson Andrew Bragg told the ABC, BTR seemed more like a foreign investment policy than a housing scheme. He added that the government should focus on domestic housing requirements rather than support foreign funders.

"The party wanted Australians to be the owners of homes, not foreign fund managers," Bragg said, adding that Australians should not be made "serfs to foreign fund managers."

Greens Housing spokesperson Max Chandler-Mather, who had a war of words with Treasurer Jim Chalmers in the Senate compared the bill to negative gearing. He added that Greens will support the bill if adequate changes were made.

Greens did not agree with the clause that makes 10% of the rental homes affordable, that too below 75% of the market rent. Chandler-Mather pointed out that the remaining 90% of the homes will not be affordable.

On Chandler-Mather's query as to when would the government place a freeze on rent, Chalmers reacted that it was a ridiculous question.

"The member for Griffith has got a lot of nerve asking this question today, having just teamed up in the Senate with the Coalition, with the conservatives, to knock off tens of thousands of rental properties to help fix the problem that we have with housing supply in this country," Chalmers said.

He blasted the "hypocrisy" of the Greens for siding with the Coalition and preventing the country from fulfilling a desperate need.

"This is the hypocrisy at the very, very core of the Greens political party and they keep teaming up with the conservatives in the Senate and in the House of Representatives to prevent this country building the homes that our people desperately need," he declared.

Housing Minister Julie Collins accused the Greens and Coalition of playing politics above people's interests.

Labor has been pushing their housing agenda such as Housing Australia Future Fund and "Help to Buy."

The Housing Australia Future Fund, which proposes construction of affordable homes, was passed in the Senate, but is yet to fund a project. The second bill allows 40,000 first home buyers to split their home purchase with the government. The bill was not passed after the Opposition blocked it.