Soaring rents have dramatically outstripped increases to the commonwealth rent assistance (CRA) payment, with house rentals in capital cities rising by an average of 13.8% over the last two years while rent assistance has risen by a maximum of 4.52%, leaving low-income renters hardest hit by the national rental crisis.
The pressure in regional areas is even more severe, with rent increases of 20.2% across the board. Almost half of low-income renters now experience rental stress, spending more than 30% of their income on rent, even with government support.
The government’s main response to questions about what it is doing to address the rental crisis has been to point to the supplementary payment made to 1.4 million welfare recipients in private rentals, at a rate of 75 cents in the dollar above a certain amount.
As of 20 March this year, the maximum assistance available was $145.80 a fortnight for singles and $193.62 for families, or $72.9 and $96.81 a week respectively. The CRA increases in line with the consumer price index (CPI), an amount tenants’ advocates say is not even enough to buy a cup of coffee.
They argue there has been a “lack of empathy” among politicians ahead of the 21 May election for the 32% of Australians who rent, with welfare recipients the most overlooked, despite the rising cost of living being nominated as a critical issue by voters.
Social security rates have been indexed on five separate occasions since March 2021, but rent assistance has only increased in that time by a maximum of $5 a fortnight for singles and $6.58 for parents with children, or $2.50 and $3.29 a week respectively.
The rent for a three-bedroom house in greater Sydney at the city’s median rent of $550 a week has increased by approximately $67 a week in the past year. For those in a two-bedroom flat currently paying the median of $520, rent has increased by approximately $17 a week. For a dwelling in regional New South Wales at the median house rent of approximately $460, it is an increase of about $77 a week.
Alongside rapidly escalating prices, rental availability has also plummeted over the last 12 months, with analysts saying the worst is yet to come and warning of increased rates of homelessness. A productivity commission report, delivered just prior to the pandemic, warned that an ageing population coupled with declining rates of home ownership meant that people eligible for and needing rental assistance would “grow rapidly over the coming decade”.
If elected, the Labor party has pledged to establish the Housing Australia Future Fund, the aim of which is to build 30,000 new social and affordable housing properties over five years. The Labor leader, Anthony Albanese, has said that this increase in housing stock will help ease the pressure on rents.
Labor has also flagged that it will develop a national housing and homelessness plan if elected. Housing, homelessness and welfare organisations have been calling for years for the development of a federal strategy on housing, including renters in its scope, to guide the National Housing and Homelessness Agreement (NHHA), which governs how the states and territories spend the $1.6bn in federal funds set aside for housing.
Labor has not yet provided detail about how the needs of renters will be addressed through that strategy. On top of that, it has not committed to increasing jobseeker payments and has also dropped plans for a review into the jobseeker rate.
The Liberal party’s housing policies have focused on home ownership. When asked about policies specifically targeting renters, a spokesperson for the housing and homelessness minister, Michael Sukkar, said the government’s priority was “getting more people into the housing market through our measures for first homebuyers”, along with increasing housing supply through the New Home Guarantee Scheme and HomeBuilder programs.
When asked if a re-elected Coalition government would develop a national housing strategy, Sukkar’s spokesperson said the NHHA itself was the strategy.
They also said housing was a matter for state and local governments.
“State governments and local councils need to step up and increase the supply of housing to put downward pressure on house prices and rentals,” the spokesperson said. “We strongly encourage states to rethink their prohibitive taxes and regulatory bottlenecks. States must do their own share of the heavy lifting, funded from their own balance sheets.”
The chief executive of Tenants Victoria, Jennifer Beveridge, said the needs of renters had been overlooked by the major parties.
“There’s a distinct lack of understanding of rental issues and the rental crisis being shown by our politicians in this election campaign,” Beveridge said. “There’s a definite lack of empathy with the younger generation who are giving up on the dream of owning a home. There’s a whole generation expecting to rent for much longer, who are also voters.”
Tenants Victoria has joined the Australian Council of Social Services in calling for an increase to the rental assistance payment by 50%, which, at current rates, would lift it to a maximum of $218.70 a fortnight for singles and $290.43 for families.
“The CPI increase that came through recently – it’s nothing, it doesn’t even buy you a cup of coffee let alone contribute to skyrocketing rents or help people on low incomes,” Beveridge said.
Struggling renters cut across all demographics. Guardian Australia has reported on the plight of sole parents, regional residents who are being pushed out of their own communities or rendered homeless, flood victims, and renters who become ill due to the uninhabitable condition of their homes.
Renters with disability also face serious challenges in the current market, according to the chief executive of the Physical Disability Council of NSW, Serena Ovens. She said limited accessible options in housing stock are “a huge barrier” to finding an appropriate home, leaving many to “make do with housing that only partially meets their needs”.
“Renters with disability are often automatically discounted over ‘able-bodied’ counterparts as being more problematic – while they are often in fact more likely to be stable, long-term renters,” Ovens said.
Leo Patterson Ross from the NSW Tenants Union said there were specific policy levers that could be pulled at a federal level that would materially benefit renters – especially through the NHHA – on issues like no-grounds eviction, as well as in separating financial incentives designed for owner-occupiers from those of investors who buy properties to rent for profit.
“The federal government could say to the states: ‘You are running a tenancy legislation system that is exacerbating your homelessness crisis, you’re essentially wasting federal money. We need you to start running your business in a way that doesn’t make your problem worse, and if you want your federal funding, you need to come to the table’,” Patterson Ross said.
“We also need to create a property investment expectation that’s much more about stable, reliable, low return and not this high-stakes system we’ve fallen into … This is someone’s home, you’re free to buy and sell but the person in the middle needs to be able to rely on this essential service, and shouldn’t become collateral damage.”
A national housing strategy that has bipartisan and multi-jurisdictional commitment is critical to solving the housing crisis, including for renters, advocates said.
“If there’s no plan, how can we make things better?” Beveridge said. “There are good ideas but nobody’s standing up and taking leadership on this issue and facilitating change. It appears, in this country, that we’re happy to maintain the status quo and that’s not good enough.”
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