Australia's Housing Affordability Crisis Worsens: Anglicare

The benchmark for rental housing to be considered affordable is that ‘rent [is] no more than 30% of a household budget'. A good portion of low-income renters spend more than 50% of their budget on rent.

660,000 people on Aged Pension do not own their own home. With only 3.2% of the listings surveyed were affordable for a couple on Aged Pension and 0.8% for a single person on Aged Pension (down from an already meagre 1.24% in 2018), these individuals face severe housing stress due to Australia’s ever-persistent housing affordability problem, reveals Anglicare’s 2019 Rental Affordability Snapshot.

The problem, according to the Australian Housing and Urban Research Institute, is that federal and state policies to address housing affordability for low-income households are primarily focused on demand-side assistance—for example, rental assistance and housing purchase assistance. In theory, the increasing capacity to afford homes would increase the demand for affordable housing, which would prompt more investment into the affordable housing sector, thus filtering into a boost of housing supply.

Yet in reality, ‘shortage of affordable rentals for low-income households grew between 1996 and 2011’, and is only expected to continue to grow.

The flaw with this theory is that while these methods help households afford housing by subsidising households, the trickling increase in housing supply cannot keep pace with the needs of Australia’s low-income households. In fact, the persistent shortage of affordable rentals suggests that there simply isn’t enough financial incentive for developers to make large-scale investments into the affordable housing sector to meet demand.

Comparing housing affordability schemes within Australia with other policies drawn from international sources, AHURI notes:

‘… Over time a range of countries have gradually developed large affordable housing sectors [but] not one country is able to increase the supply of affordable housing solely through income support to households alone. In most cases, a dedicated subsidy or incentive stream […] has been necessary’.

Attempts have been made by the Australian government to address the supply shortage, particularly with the National Rental Affordability Scheme (NRAS), which was designed to subsidise the development of affordable housing, thus creating incentive for investment. However, it was criticised for being inefficient, having poor accountability for allocated funds and a time-consuming application process.

In 2014, it was discontinued after a mere five (nearly six) years, and despite hopes that an improved replacement programme would be announced, there has yet to be one introduced, nor does it appear likely for one to be introduced in the foreseeable future.

According to Anglicare Australia executive director Kasy Chambers, ‘the solution is simple, but has proven to be stubbornly difficult—the government must reclaim responsibility for housing […] it is past time for governments to invest in the development of social housing'. (ET)