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Essential workers priced out of affordable rentals, report shows

By Zarah Torrazo
11 April 2023 | 11 minute read
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New data showing essential workers are bearing the brunt of the impact of surging rental prices has strengthened calls for the government to buff up its social housing investment.

The latest data from the national housing campaign Everybody’s Home showed essential workers are being priced out of rentals across Australia, with the average employee now spending around two-thirds of their income on housing. 

The Priced Out report, which analysed data on rents and award wages for 15 essential worker categories, also revealed essential workers have been losing an average of six hours from their weekly income due to rent increases since March 2020. This translates to a loss of 37 days of income each year for the average essential worker. 

“Essential workers are the backbone of our communities, yet they are being priced out of them because of the unsustainable rises in rents. More and more essential workers are being pushed into serious rental stress,” Everybody’s Home spokesperson Maiy Azize said. 

Early childhood educators, aged care workers and cleaners are among the hardest hit by the rising cost of accommodation, as they are being forced to spend more than three quarters of their income on average on renting a place to live. 

Concerningly, people on the lowest award rates are now being left with only around $20 a day after paying rent, based on the capital city average, according to the report.

But even those on the higher wage tier among essential workers are not safe from rental stress. Data showed that essential workers who receive higher pay, like teachers and firefighters, would have to spend 58 per cent of their average pay on rent significantly above the 30 per cent threshold for rental stress to afford the average capital city rent.

The results further revealed that as rent prices rise, essential employees in single-person households are likely to experience severe financial stress, whereas those in couple-person families are likely to be dependent on their partner’s income. 

Notably, the ongoing rental crisis means many essential workers can’t afford to move to parts of the country that are most in need of staff, while others, such as those in aged care, are leaving the profession altogether in favour of higher paid work.

Everybody’s Home also found there were virtually no regions of Australia where a single full-time essential worker, such as those in aged care, early childhood or nursing, could afford to rent by themselves.

“So many essential industries are facing workforce shortages with workers unable to afford to stay or move to parts of the country where these shortages are at their worst,” Ms Aziz said.

For example, an aged care worker would have to spend 77 per cent of their pay on housing in order to meet the average capital city rent of $572 per week. This rate rises to 81 per cent for workers in hospitality. 

“Our tax system is rigged against renters, driving up the cost of rent for millions of Australians. And on top of that, Australia has a huge shortfall of social homes for people who can’t afford rent,” Ms Azize stated. 

While the government has promised 20,000 social housing properties in five years, as part of its Housing Australia Future Fund, Ms Azize had previously called for the fund to be “scaled up in order to match the scale of the crisis”. 

“If the government is serious about tackling this crisis, it should be scaling up the Housing Australia Future Fund to match the scale of the crisis we face. That means topping up its funding every year and uncapping the funding for social housing. That would get more badly needed dollars into housing and more homes built,” the spokesperson said in a previous statement. 

In light of the new alarming data, Ms Azize reiterated the call for the government to take action, starting by committing to building more homes. 

“The federal government must start building 25,000 social homes every year to end our shortfall. That will help workers in severe rental stress, and free up affordable rentals for everyone else.

The government can fund those social homes by winding back handouts for investors and landlords,” she concluded.

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