The Commonwealth's policy capacity with regard to housing policy and provision has been erratic and patchy. Partly this is because housing was not traditionally a formal Commonwealth responsibility but something in which Commonwealth governments episodically intervened, and partly it was because Commonwealth ministers often did not exercise demand for policy advice in this area. When policy capacity was exercised it tended to define housing narrowly as a welfare initiative, thereby limiting its conception and excluding other important questions and problems involved with housing as a policy domain. This trajectory meant that the advisory deficiencies of the Commonwealth were often exposed at exactly those times when they were most needed. It also meant that the Commonwealth lacked the detailed knowledge and understanding of housing issues when it was called upon to deliver various programs. The article argues that the Commonwealth needs to adopt a more strategic housing policy that addresses longer term needs as well as the economic, social and environmental consequences of its housing policy.