Low income earners can't even afford rent, says new Anglicare report

There is a critical shortage of rental homes in Australia, especially in cities, says Anglicare

By Stephen Cauchi

April 27 2017 

There is a critical shortage of rental accommodation for low income earners, according to a new Anglicare Australia report, with single people on the minimum wage “almost entirely locked out” of urban rental markets.

In the latest insight into Australia’s housing affordability crisis, the report said that low-income Australians had to forgo essentials like food and visiting the doctor just so they can pay the rent.

Australian governments had to start building more homes to fix the crisis, especially in cities, said Anglicare.

The Rental Affordability Snapshot, released on Thursday, also criticised the behaviour of landlords and the lack of tenants’ rights. Many tenants felt they would be evicted if requests were made for even basic repairs, said the report.

The Snapshot, which has been released annually for eight years by Anglicare, stated that “in terms of the raw numbers, little had changed” regarding rental affordability compared to previous reports.

But there was a crucial difference in 2017, said Anglicare. “What has changed is that there is, finally, a universal political acknowledgement that this is a crisis and that governments and organisations at all levels need to work together to address it.”

The Snapshot used two commonly used benchmarks to measure “affordability” and “housing stress”.

An “affordable” rental is one that takes up less than 30 per cent of a household’s income.

“Housing stress” is defined as when housing costs are greater than 30 per cent of disposable income, coupled with a household income in the bottom 40 per cent of the income distribution.

Using these criteria, only a tiny fraction of rental housing in Australia is affordable for those on the minimum wage or on government welfare.

“There is a dire shortage of affordable rental houses for people on low income, particularly the 10 per cent of Australians reliant on government payments,” said the Snapshot.

“Consistent with previous years, the survey shows that a single person on Youth Allowance and Newstart would find it almost impossible to find an affordable home anywhere in Australia, whether regional or metropolitan.”

In metropolitan Australia, single people on the minimum wage were “entirely locked out of the private rental market in Melbourne, Canberra, Sydney and Darwin and able to potentially access a paltry 1 per cent or less of suitable properties in Brisbane, Darwin, Adelaide and Perth.”

The Snapshot also emphasized the rental challenges faced by disabled people.

On the weekend that the report sampled the Australian rental market, “only 586, or 0.9 per cent of properties, Australia-wide (were) affordable for people living on the Disability Support Pension.’’

To make matters worse, home modification for disabled people “simply don’t figure in the vast majority of affordable rentals”.

Regional areas were far more affordable than metropolitan areas, the report found.

For example, for a couple with two children on a Newstart Allowance, 8.2 per cent of regional properties were found to be affordable and appropriate, compared to 0.3 per cent in metropolitan areas.

But there was a catch, said the report: “regional areas generally have fewer services and higher unemployment rates, raising the dilemma of, “if you can afford to live there, there are no jobs and if there are jobs, you can’t afford to live there!”

The effects of the affordability crisis were severe, the report said.

To pay rent, people and families had to cut other basic living expenses.

“Put simply, people go hungry, and turn to emergency food relief if they can; go without heating in winter and cooling in summer; (and) can’t afford essential transport (and) medical expenses.”

Furthermore, affected families had to “deny their kids involvement in school and recreational activities”.

Many individuals and families, particularly those living in cities and on welfare, were paying over half their income on rent and living with the constant threat of being homeless.

The rates of homelessness were an underestimate given the numbers of people couch-surfing or returning to live with family, the report said.

Other serious impacts included young people forgoing education because they couldn’t afford accommodation and women seeking to avoid family violence being unable to move away from the perpetrator.

The report said the lack of rights for tenants had “extreme” consequences.

“In all states and territories except Tasmania landlords are able to evict tenants on periodic leases without cause. The consequences of this can be extreme,” the report said.

Families who were evicted often had to place children in foster care because they couldn’t find another home quickly enough, the report said.

The Snapshot quoted a recent CHOICE report showing that Australian renters often lived “in a climate of fear with little rights”.

According to that report, “Unsettled”, 62 per cent of renters feared asking their landlords for changes; half reported discrimination when applying for a rental property; half worried about being listed on a residential tenancy database; a fifth experienced leaking, flooding and issues with mould; nearly one in twelves lived in a property in urgent need of repairs.

“Australia lags far behind comparable countries in giving renters proper rights, including the option of longer leases, the right to have pets and reasonably alter a property to make it a home.”

The Snapshot urged governments to increase public spending on housing, increase welfare payments, and lift the minimum wage to a “living wage”.

In particular, it urged a reboot of the National Affordable Housing Agreement; a new, UK-style National Affordable Housing Finance Corporation to increase investment in affordable housing; and a cut-back on negative gearing and capital gains tax exemptions.