Australia

Changes in the supply of affordable housing in the private rental sector for lower income households, 2006–11

Almost one in four Australian households rent their housing in the private rental sector including many lower income households. Government housing policies increasingly rely on the private sector rather than social housing to accommodate these households and offer various forms of assistance to lower income households to assist them to access and remain in the sector.

The scheme that affects the greatest number of lower income private renters is the Australian Government's Rent Assistance scheme with an annual budget of $3.6 billion (2012–13) but state and territory governments also offer schemes to provide financial and other types of assistance, such as loans to pay bonds and various rent support schemes. For these initiatives to be successful requires an adequate supply of affordable rental dwellings for lower income households.

This is the first publication from a project that investigated the supply of, and demand for, private rental dwellings affordable to lower income households in 2011 and compared this with the situation in 2006. The project follows three others which reported on the situation in 1996, 2001 and 2006 as well as changes in the relevant intercensal periods. This approach enables an assessment of the extent of shortages or surpluses in rental dwellings affordable by lower income households as well documenting trends in the supply of affordable rental dwellings relative to demand. This report focuses on supply and will be followed by a second report which investigates in more detail the type of demand from lower income households for rental accommodation.

Cover of AHURI report

The report identifies five areas for policy development as part of a comprehensive package which involves different roles for governments, viz:

1. Support Q1 [very-low-income] households to compete more effectively in the private rental market through better designed and targeted demand-side subsidies.

2. Substitute the market through government investment in affordable supply for Q1 households (capital and/or recurrent) in which rents can be kept at affordable levels.

3. 'Nudge' the rental market with its current predominance of individual/household investors by re-calibrating taxation incentives to encourage investment in new supply of lower rent dwellings.

4. Design a new market through establishing infrastructure to enable institutional investment in the private rental sector specifically targeted at lower income households with appropriate arrangements for keeping rents affordable.

5. Regulate the market to enable affordability to be maintained through tenancy, as occurs in many other developed countries.

Title: Changes in the supply of affordable housing in the private rental sector for lower income households, 2006–11

Authors: Kath Hulse, Margaret Reynolds and Judith Yates

Published by: Australian Housing and Urban Research Institute

Date: December 2014

Available from: Australian Housing and Urban Research Institute at <http://www.ahuri.edu.au/publications/projects/p51018>

Note from Urbanalyst: The above summary is sourced directly from the document and/or accompanying documentation. Aside from minor editorial modifications, the information is presented as-is.

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