This month the Anglicare Australia network completed its ninth Rental affordability Snapshot. It surveyed 67,365 private rental properties that were advertised across the country on the 24th March. Applying the internationally accepted benchmark that states households on low incomes spending more than 30% of their income are in housing stress, we found very few of the surveyed properties to be affordable for households on government benefits or the minimum wage.
The headline data found no properties in any capital city to be affordable for a single person on Newstart or Youth Allowance. In fact, there were only three properties across the country that were affordable for those on Newstart and two for single people on Youth Allowance. The fact that these three properties were all in rural areas does possibly limit the number or variety of work or study opportunities.
The most generous of government benefits is the aged pension. Yet for a couple on the aged pension, only 4.3% of rentals would have been affordable. For a single person working full-ttime on the minimum wage only 2.9% would have been affordable.
The Rental Affordability Snapshot doesn’t tell the whole story of course. We only look at whether a property is suitable and affordable. To be suitable we look at the number of rooms. We make an assumption that a single person can live in a share house, or a one bedroom or studio style rental. We assume that children require their own bedroom. We don’t, however, allow for spare rooms or studies; for a garden necessarily or extra living space.
With 67,365 properties, we can’t assess them all for accessibility for people with disabilities or mobility issues. This means that we can probably assume that the 0.72% that was affordable for a single person on the Disability Support Pension probably wouldn’t all have actually been suitable.
Nor can the Snapshot consider the competition for each of these properties. As Alison in Launceston told Anglicare Tasmania, there are sometimes 40 rental applications for the more affordable properties.
So how on earth do people manage? Obviously a great proportion of Australians living on government benefits, earning the minimum wage, or are under-employed, are living with unaffordable rental costs.
Anglicare Australia members see people making sensible, rational decisions about making the rent. You can’t pay half of the rent, and it would be unusual to be able to negotiate an extension. What you can do is to choose cheaper, less nutritious food. You can go without a meal a couple of times a week. You can keep the kids home on school excursion days, or when you can’t afford to put lunch in the lunch box. You can choose not to fill a prescription (or not to go to the doctors in the first place). You can delay paying other bills like utilities or car insurance.
These decisions make sense at the time. But there is no room in this budget for emergencies or contingencies, let alone even the most simple of treats. And while they make sense at that time they can have long-reaching consequences. They affect the children’s education, the family’s health, the employability of the adults.
In Perth, Anglicare WA spoke to Charles, a single man on an aged pension. If Charles were renting at the median price in Perth, he would be spending 78% of his pension. Our services regularly see people spending 80% of their income on accommodation. In Charles’ case, this would leave him with less than $100 a week for everything other than rent – food, utilities, transport, medication, clothes.
Unfortunately for some, this balancing act can only go on for so long and comes to a crashing end when an unexpected bill comes in or when the rent increases. For these people the car, a friend’s sofa, a homelessness service, or for Alison who we met earlier, a tent in a squat becomes home.
All this matters enormously for the 760,000 people on Newstart, the 95,000 on Youth Allowance and the 760,000 recipients of Disability Support Pension. It also matters to the increasing numbers of aged pensioners living in rental accommodation.
AHURI figures show that more people are living in rental accommodation for longer than ever before in Australia. And this is all households types, including those with children, older people and families.
But there are solutions, and each level of government has a stake in housing.
We believe that targeting the tax concessions given over to rental properties into affordable housing would be a big help. There are various estimates around about how much money is forgone in negative gearing, but there is some reliable agreement to Capital Gains Tax and negative gearing together totaling just over $11 billion. This includes Treasury’s statistics show that $6.15billion went in Capital Gains Tax in 2015-16. Targeting this to social rents to increase affordability; new builds to increase stock; and secure longer term leases for reliable tenants would help.
Rental Tenancy Agreements in Australia are held at the State and Territory government level. These were written at a time when few people lived in rental accommodation and then only for a short time, they don’t offer much security to the tenant. In many States tenants can be evicted without cause, and rents can rise steeply if the market changes as this year’s Snapshot found it had in Tasmania and northern NSW.
As we posited in The Meaning of Home, our State of the Family Report in 2017, home is much more than a house. If tenancy agreements could be longer-term, allow for well-behaved pets and personal touches such as pictures on the wall then they would be much closer to a home for those that live in them. The rental agreements used by the social and community housing sector could offer us some guidance here.
The private rental market matters because Australia looks to it to provide housing for a large part of the community. We have diminished the amount of public housing, so people that may have been eligible some years ago now must also look to the private market. With over 100,000 people homeless on census night, we need desperately to increase the amount of public and social housing.
The benefits of housing are simple and fundamental. Without secure and safe housing, the other building blocks of life are difficult to attain. Employment, education, health, well-being and participation are all so much easier when you’re starting from a secure place to call home.