When a boarding house in Sydney’s inner-west was razed by arson last year, taking with it the lives of three residents and leaving eight without homes, the hope was that it would be replaced with a newer, safer version of the same low-cost community housing.
But 12 months is a long time in Sydney’s rampant rental market.
Rooms in Newtown’s newly renovated Vajda House boarding house now range from $270 to more than $400 a week, exposing the pressures on traditionally affordable accommodation options in the city.
Those prices are not unusual in a market in which single rooms are often $500 a week.
Professionals are now filling boarding house rooms that might once have supported people on state pensions or transitioning from correctional facilities.
Darcy Byrne, Inner West mayor said Vajda House epitomises the “disastrous” Sydney rental market.
“It’s really sad to think that the survivors of the fire who lost three of their neighbours would be priced out of finding a home again in the reconstructed boarding house,” he said.
But Elie Farah, who bought the fire-damaged building for nearly $1.5m in June 2022 and invested an undisclosed amount in its renovation, said the Probert Street property is “not the high end” of the boarding house market.
“We’ve rented the rooms out based on what the real estate agent’s advice was,” the construction consultant said, adding that before the fire, the property was low cost, but was also dilapidated. “The people staying there now are very happy with it.”
An inner-west estate agent confirmed that all 12 rooms had been rented to students and professionals including hospitality workers, many of whom are long-term tenants.
Boarding houses are adapting to the squeeze on rentals, said Elaine Macnish, the chief executive of Newtown Neighbourhood Centre, who said single rooms in the area can cost as much as $500. Vajda House is just one example of what are known as next-generation boarding houses, offering modern amenities, private bedrooms and a shared kitchen and bathroom.
“What is happening with a lot of boarding houses is they are closing and being renovated and then being reopened. Their prices are significantly higher than they were before the renovation,” she said.
“If you go into Vajda House now it’s beautiful, it’s absolutely transformed. But of course with that comes a higher price.”
With that, too, comes a dearth of truly low-cost options for those who are most at risk of homelessness.
Newtown Neighbourhood Centre’s Boarding House Outreach Service publishes a weekly low-cost accommodation list, designed as a resource for those with low purchasing power, including those transitioning from correctional centres and hospitals.
Twelve months ago, it was possible to find accommodation – boarding house or otherwise – for $180-$250 a week in Sydney’s inner west, Macnish said.
“The list was 50 to 60 pages long but in the last few months it’s sometimes seven properties long in total,” she said.
In response, her team faced an “internal dilemma” by raising its longtime upper threshold of “low cost” from $250 to $350 a week. Even with the adjustment, this week’s list contains just 22 entries.
“If we say, ‘Look this is affordable’, and it’s nearly 70% of a state pensioner’s income, is this the right thing to do? It can’t be sustainable,” she said.
The inner west and city centre have the highest density of boarding houses in Sydney. While privately run boarding house room rates are not capped and are subject to – and advertised on – the open market, an additional layer of vulnerability comes from the limited rights of boarders in boarding houses, who are not protected by the Residential Tenancy Act, she said.
The property at 117 Probert Street is registered as a General Registrable Boarding House with the NSW Accommodation Register. Once registered as a boarding house, there are significant barriers to reversing the registration and converting the building for other uses.
Macnish’s team has seen a rise in inquiries from those who are turning to accommodation support services for the first time, many of whom are over the age of 70.
“Not everybody is eligible to access emergency accommodation. [Boarding houses] are quite hard to get, especially for single males. We are seeing an increase in homelessness because those options are becoming more and more limited.
“We have people every week turn up here and say, ‘I don’t have anywhere to go. I can’t afford the rent any more.’”
Cathy Callaghan, senior policy officer at Shelter, welcomed new NSW housing regulations that stipulate new boarding houses must be affordable and run by community housing providers, but they do not apply to boarding houses that predate the 2021 legislation.
The State Environmental Planning Policy (Housing) serves to protect the most vulnerable renters, but Callaghan does not believe it will encourage many new providers.
And, while rental prices rise unfettered, she said “it’s crazy to expect the private market is going to properly look after those people”.
The effect is a large and growing category of homeless people who are living in severely overcrowded buildings.
“You might have 12 students living in a 2.5 bed unit. They sleep in shifts. It’s not secure. It’s not long term and they are in housing stress,” she said. Low income earners who spend more than 30% of their income on rent are deemed to be in housing stress.
In Newtown, advocates for affordable housing remain caught between competing demands.
“We often think what can we do to help this?” said Macnish. “Because it is the private market, there is very little we can do. And if you’re an investor, and you’ve just invested several million dollars in renovating, you need to make it work financially.”
For Byrne, who once lived in a Balmain boarding house, that reality leaves the most vulnerable members of his community with a choice between two bad options.
“It’s a disgrace that in Sydney in 2023 the choice for low-income people is moving out of the suburb that is their home or living in substandard conditions,” he said. “We should be able to do a lot better than that.”
