Affordable rental housing snapped up by those who don't need it as much: Report

Less needy Australians are increasingly occupying the cheap housing that has traditionally been the domain of the poor.

Research by the Australian Housing and Urban Research Institute found almost 80% of 268,000 private renter households with very low incomes (less than $22,000 a year) miss out on affordable rental accommodation.

The research found that the situation was worsened by a trend of wealthier Australians occupying cheap accommodation that has traditionally housed the very poor.

The greatest shortages in affordable and available private rental dwellings for very low-income renters in capital cities were observed in Sydney (44,500, or 93% missing out), Melbourne (40,200, or 87% missing out) and Brisbane (19,100, or 87% missing out).

It also studied eight large regional centres that also had high levels of very low-income private renter households missing out on affordable rental housing, including the Gold Coast (93%) and Sunshine Coast (88%) in Queensland.

The study analysed the amount and cost of housing as related to various income groups between 2001 and 2006.

It found only 37% of private renters with household incomes in the lowest 40% of the national income distribution were able to access affordable housing.

It found just 21% of very low-income private renter households pay an affordable rent, and 19% pay a severely unaffordable rent.

The study determined affordable rent as less that 30% of gross household income.

“Very-low income renters face affordability problems both because of an absolute shortage of housing that is affordable and because a significant proportion of affordable stock is not available to them because it is occupied by higher-income households,” says Professor Maryann Wulff from the AHURI Swinburne-Monash Research Centre.

“Low-income renters (households earning between $22,001 and $42,000) do not face an absolute shortage of affordable housing but are often excluded because affordable stock is occupied by other income groups,” she says.

For the 360,467 Australian households in the low-income group, there was a net shortage of 87,000 affordable homes, partly because many cheaper homes are occupied by wealthier households, according to the study, entitled Australia’s private rental market: the supply of, and demand for, affordable dwellings.

The study found age, living arrangements and number of children play an important role in determining access to affordable rental housing.

Generally, elderly renters, people living alone, and households without children are more likely to find an affordable rental dwelling.

It noted very few younger renters or families with two or more children were able to access affordable rental housing. About 33% of young childless couples; 36% of couples with children and 21% of single parents pay more than 50% of their gross household incomes in rent.

The researchers say policies aimed at increasing the supply of affordable housing could use the findings of the study to determine the need for various types of dwellings, and they suggested the adoption of a suitability concept that would assess household size and composition against dwelling type.

The study found that Geelong and Launceston had the best affordability outcomes of all the regional centres and major capital cities, so Wulff has recommended studying these two locations in greater detail to help identify housing market or economic factors that reduce the affordability problems.