Surging rents coupled with social and affordable housing shortages have left regional residents on low or modest incomes in the midst of a housing crisis, new research has detailed.
The Australian Council of Social Service (ACOSS) in partnership with the University of New South Wales (UNSW) have issued a report stressing the urgent need for federal action to address the worsening housing supply shortage.
The report acknowledged that while many states and territories have recently made large investments in social housing, it’s not enough to plug the gap.
Victoria, Queensland, Tasmania and Western Australia, for example, have all announced self-funded public housing construction programs in their respective COVID-19 economic recovery plans, to the tune of nearly $10 billion being invested in the sector over the next few years.
But while these programs will add approximately 23,000 community housing dwellings, more than 155,000 households are currently waitlisted for social housing across the country.
The Leptos National Housing Finance Investment Corporation Review recently estimated that Australia needs to finance $290 billion in social and affordable housing investment to meet the needs of the next 20 years.
Rapidly rising rents have exerted further pressure on low- and modest-income families, with rental increases shrinking the pool for available housing.
Rents may have declined in inner-city markets at the beginning of the pandemic, but they’ve been rising steadily since mid-2020. By August 2021, metropolitan rents were accelerating at more than 8 per cent – the fastest pace since 2008 and far ahead of wage growth of under 2 per cent.
With regional areas experiencing a population boom, rents outside of metropolitan centres have been rising even faster, increasing by 12.4 per cent.
The proportion of properties that low-income tenants can afford has declined from 41 per cent to 33 per cent over the course of this year, according to the report. That figure is anticipated to slide even further with the National Rental Affordability Scheme (NRAS) winding up.
NRAS funded the construction of 38,000 newly rental homes for key workers and other disadvantaged renters, which were let at 75 to 80 per cent of the going market rate. Over the next three years, the subsidies on approximately 22,000 of these affordable homes will expire.
ACOSS CEO Dr Cassandra Goldie said the organisation had been receiving increasing reports of families unable to find appropriate housing within their budget from communities across the country.
“The situation for those on the waiting list for social housing feels increasingly hopeless, as individuals and families struggle to keep a roof over their heads in the face of rising private market rents, or are forced to stay in circumstances that are not healthy or safe,” Ms Goldie said.
“Most state governments did a remarkably good job in protecting people who were homeless during COVID. But with such a chronic shortage of affordable homes, the resources they are putting towards social and affordable housing are just not enough to meet existing demand, let alone future need.”
ACOSS and UNSW, through their Poverty Inequality Partnership, are calling on the federal government to both address the social housing shortfall and meet the future needs of a growing and aging population.
They urge the commonwealth government to take three key steps to address the crisis:
- Commit capital funding to deliver at least 20,000 new social housing dwellings.
- Boost the Commonwealth Rent Assistance payment to low-income households by 50 per cent to relieve rental stress.
- Create a new investment incentive to support construction of affordable rental properties for people on low and modest incomes.
ABOUT THE AUTHOR
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.