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Rental crisis raises risk of homelessness

rental-crisis-homelessness — A roof over your head (eventually). Image by www.pixabay.com,

This topic was sparked by news from a near-neighbour who had received the dreaded ‘landlord requires vacant possession’ letter.

All tenants go into a lease today knowing that the landlord can decide to sell the property, at which point they will be evicted. A lot of landlords have been doing that over the last two years, taking a profit as property prices spiralled.

The rental vacancy figures in this town and just about everywhere else would suggest that once a rental property is sold, it disappears from the rental pool – at least for a while. The national rental vacancy is 1.2% – at a time when analysis of Census housing data suggests that 700,000 private dwellings are locked up and uninhabited. More on that later.

We all know people who are renting and finding it increasingly difficult to feed their families. In recent months, there have been many stories in the media about families struggling to find a place to live. Those who find themselves at the end of a lease with no new home in the pipeline are at risk of becoming homeless.

Even when we are told the reasons for the shortage of housing, solutions are less obvious. Mostly due to self-belief and a strong self-image, some people caught between a lapsing rental and a tight vacancy rate will find their way round it.

It isn’t hard to find caravan parks, farm-stays and outback tourism ventures that need residential caretakers. The successful candidates get to park their vans for free and quite possibly pick up a small stipend as well.

People in these circumstances (a) do not regard themselves as homeless and (b) they can enjoy the luxuries afforded by a 22 ft caravan and an annexe.

June quarter data from CoreLogic shows that Australia’s rental market continues to tighten as low supply levels cause national vacancy rates to dive. Rents continued to rise across all capital cities and property types over the past three months.

Dwelling rents in the June quarter were 9.1% higher across the capital cities and up 10.8% in regional areas, compared to June 2021.

CoreLogic report author Kaytlin Ezzy said the recent upwards trend in rents has occurred mostly in the absence of overseas migration.

“This sustained period of strong rental growth has seen national dwellings record the highest annual growth in rental values since December 2008, when rental demand was supported by record levels of international migration,” Ms Ezzy said.

Vacancy rates across national dwellings fell to a record low of 1.2%, down from 2.2% this time last year.

In March, CoreLogic contributed to a report in The Guardian that found rents in Queensland had risen by as much as $200 a week over the previous two years.

The report found that steep rent rises in parts of Queensland forced people into caravans, sheds and poverty – even before widespread flooding displaced thousands more people.

While the ABS has released 2021 Census housing data, it will be “early to mid-2023” until we see the homelessness data. The most recent official data was collected in 2016 and released a year later. The homeless tally then was 116,427.

The Australian Institute of Health and Welfare (AIHW) estimates that in 2020–21, around 278,300 people received assistance from Specialised Homelessness Services (SHS). Around 111,100 clients were homeless when they first began support.

There are different categories of homelessness, apart from those who literally have nowhere to go and end up sleeping rough or in a charitable shelter. Then there are people living in sheds, garages and other unconventional buildings, couch surfing (staying with friends), hostels and unsuitable temporary accommodation.

Since late 2019, the onset of the Covid pandemic, the escalating price of real estate and an ever-increasing scarcity of rental properties has unquestionably added more individuals and families to the homeless tally. There is an increasing cohort of ‘hidden homeless’, that is people who are either not eligible to apply for support or feel they do not need it.

In Australia, some of these people head for the great outdoors. Accommodation demand driven by ‘Grey Nomads’ has produced hundreds of free camps and low-priced camp-grounds run by local show societies. The free roadside reserves, which may nor may not have a toilet/and or shower, usually have rules about how long you can stay. In Tasmania, many free camps allow you to stay for up to a month.

.Everyone’s circumstances are different, but we have met many people who had sold their house and bought a road rig. Many of the so-called Grey Nomads are retired tradies and public servants who can afford a $200,000 self-contained rig and go on the road for months at a time.

But if you travel the country and stay in free camps, you are just as likely to see a couple living in a 30-year-old caravan towed by an equally ancient car.

The big problem waiting for Australia’s new Prime Minister to tackle (after he has settled down our Pacific neighbours), is the housing crisis.

Believe me – it is a crisis. There are simply not enough houses to go around. This is particularly so in Queensland, where interstate migration has put the housing sector under massive strain.

There are reasons for the dire shortage of housing and they include delays in building new homes amid adverse weather in 2022. Then there are homes destroyed by floods or bushfires.

But as residential property analyst Michael Matusik discovered, the housing shortage is in part due to some 700,000 private dwellings that are “deliberately left vacant”.

Matusik reached this conclusion after analysing 2021 Census housing data, which showed there were one million unoccupied dwellings in Australia (about 10% of the country’s private residential accommodation).

The ABS defines unoccupied dwellings as: holiday homes (for owner’s use or rented out); investment properties without a tenant; newly built but vacant dwellings; habitable dwellings being renovated and/or vacant dwellings for sale or lease.

Matusik wrestled with those categories and calculated that after discounting the latter, 700,000 unoccupied dwellings were investment properties that were locked up rather than tenanted.

“Many of the unoccupied dwellings are in capital cities, especially Sydney and Melbourne where more apartments are in the dwelling mix,” Matusik wrote in his regular subscriber bulletin, Matusik Missive. “In these cities the proportion of overseas buyers, especially from Asia, and particularly from China, is the highest in the country.

“It is somewhat safe to say that something like 70% of the unoccupied dwellings across Australia are deliberately locked up.

“Assuming past immigration levels return, then there is a need to build some 150,000 new dwellings across Australia each year.

“If we could unlock these 700,000 empty homes, we would not need to build a new home for 4.5 years.”

While admitting this is ‘fantasy land’, Matusik says that any move to open up these dwellings would go a long way to improving short-term dwelling supply.

As we approach National Homelessness Week (August 1-7), some agencies will no doubt be calling for an earlier release of Census data on the homeless.

I asked the peak body, Homelessness Australia, for a comment; but remembered it was de-funded by the Federal Government in 2014. When one of their volunteers gets back to me, I’ll include their comment.

For now I’ll say that however bad the news is, it is better that we know sooner than later.

Homeless or “Houseless”

homelessness-grey-nomads — Goondiwindi Showground at dusk, photo Bob Wilson

I felt obliged to write about the vexed topic of homelessness after witnessing people sleeping rough in Queensland’s small towns. It shouldn’t happen, but it does.

The stereotype of a homeless person is the hobo asleep in the doorway of a city store, worldly goods in two carrier bags as a pillow. The reality is closer to an unhappy teenager, couch surfing with friends, or an 60+ women in a van on her own. Or Mum and two kids living in their car in a small town where they are less likely to be hassled. She’s cooking stew on a two-ring propane stove at the local park while using a public power point to charge her mobile. The kids are running about, being kids.

As we all should know, the official data (at the last Census in 2016), confirmed there were 116,000 people in Australia who were defined as homeless. However, the Australian Homelessness Monitor 2020 estimated the numbers had climbed to 290,000 by the close of 2018-2019 – that’s one in 86 people.

Queensland has big challenges when it comes to helping the homeless. The state is so physically large (1.835 million square kilometres) that social workers can sometimes rack up a 1,300 km round trip just to see one client.

This FOMM started forming after we watched the Academy Award winning movie, Nomadland, on Sunday night.

Emerging into a chilly early evening I said, “Better get home and light a fire,” despite being well aware our cosy brick house doesn’t yet need much heating (Warwick recorded 1degree Celsius last night-Ed).

Nomadland, if you have not seen it, is a docu-drama focusing on a 61-year-old widow, Fern, who has joined the legions of people known in the US as van-dwellers. Fern has been hit by a quadruple whammy: husband dies, factory closes, job goes, town is abandoned.

Left with a house she cannot sell, Fern hits the road in a beat-up van she has modified for her own purposes.

In Australia she’d be known as a Grey Nomad, although as in the US there are two distinct classes of traveller. First there are the well-to-do nomads, able to afford a big road rig with all the trimmings. Most often they are self-funded retirees, letting their hair down after a lifetime working. In the US they’d probably be known as Snowbirds (wintering in Arizona).

The other type of nomad, perhaps like those portrayed in Nomadland, live permanently on the road, in whatever style of motor-home or caravan they can afford. Like Fern, these people do not regard themselves as homeless (so are therefore not a statistic).

They favour free camps, recreation reserves and roadside rest areas where local governments have sanctioned overnight stays.

Some just pull off into the bush, far enough away that they cannot be seen from the road. In Australia, free camps will usually have a toilet; some may have a shower and a few have electricity. Fees range from nothing to $10 or $15 a night, the latter usually only applying to camps that have power and showers.

So while we toured around playing at being nomads, in Nomadland, Fern lives permanently with these restrictions and more. In one scene she is tucked away in her camper van at night eating a pizza when a man creeps up and peers through the van window. Then he hammers on the door.

“You can’t park here!”

“I’m leaving, I’m leaving.”

In Australia, our version of van-dwellers gather together in large numbers at the better known “free” camps. They also favour the physical space and lack of bureaucracy found at local showgrounds. These facilities are popular with big rigs (buses, motor homes and fifth-wheelers). If you own such a vehicle it is hard to find a caravan park which can accommodate an 8m-long van plus towing vehicle.

In Goondiwindi, I counted 50 rigs staying overnight at the showgrounds on the edge of town, close enough to the highway to hear the constant roar of heavy traffic. For $25 we got a powered site, TV reception and (as always out west), patchy mobile reception. There was a camp kitchen, toilets and showers and a separate toilet and shower with disabled access. Also the all-important dump point (for vans with chemical toilets).

Many small town showgrounds charge between $15 and $20 a night, less if not using power. It is often an honour system, with no way of knowing how many people came in after dark and left before dawn.

It’s probably impossible to establish how many Grey Nomads live permanently in their vans and own no real estate. They’re not homeless as long as the money holds out and the vehicle does not break down. As Fern explains to someone who is hiring casual staff – “No, I’m not homeless – I’m houseless.”

According to Tourism Research Australia, about 2.6 million Grey Nomad trips were taken by 55 to 70-year-old domestic travellers in 2019. This was up 12% on the previous year. As we found on our journey north in 2021, restrictions on international travel are accelerating this growth.

In a submission to the Inquiry into Homelessness in Australia, the Queensland Government stated that in 2018-19 , one in 116 people in the state received homelessness assistance.

“While this was much lower than the national rate of one in 86 people, it shows an increase from the previous year.”

The submission said that 55% of Housing Register applications had been identified as being at risk of homelessness.

Homelessness in Queensland is driven in part by housing affordability pressures, increased cost of living, stalling wages growth and welfare payments that don’t keep pace with the cost of living.

The majority of the 43,000 people seeking Special Homelessness Services (SHS) were spread among three cities (Brisbane, Townsville and Cairns) and seven regional centres.

Aboriginal and Torres Strait Islanders accounted for 33% (14,432) of all those seeking SHS (40% men and 60% women).

The largest cohorts seeking help were people fleeing domestic and family violence (31%), people with mental health issues (27%) and young people aged 15-24 (20%). My demographic accounted for just 6% (2,676), men and women (50/50) aged between 55 and 70.

I always had this somewhat romantic notion that being homeless and sleeping rough in tropical Queensland might not be a hardship. I said as much in the lyrics of Big Country Town: “We caught the ferry back to Main Street, there’s fellas sleeping in the park, beneath the blanket of the summer, they’re safe and warm there in the dark.”

Well, maybe in the height of summer, but on this caravan trip we shivered through a few single figure nights. As many Grey Nomads would know, sub-zero night temperatures are common in the interior of the country.

Meanwhile, as autumn turns to winter in Warwick, charities are doing their best to fill the gaps in services for those suffering hardship. Volunteers from the Seventh Day Adventist Church take their Community Van to Leslie Park every Sunday evening. The Salvation Army organises a ‘community gathering’ every Saturday, offering “a free meal, a positive and practical message and friendship.” These well attended free meal sessions attract more people than one might expect in a town of 15,000. Until you remember than one in 116 Queenslanders were homeless in 2018-2019, and that was before the pandemic.

More reading

https://bobwords.com.au/tales-of-quarantine-and-homelessness/

https://www.abc.net.au/news/2021-04-17/queensland-homeless-crisis-rental-shelter/100074284

Footnote; The Conversation, which I often cite, is on a donation drive to ensure it can continue providing independent, academically sound, not-for-profit journalism. https://donate.theconversation.com/au

Homeless for a rainy night

homeless-for-night — The Hope Centre for the homeless, Logan. Photo used by permission

For some, today is a reminder that anyone can become homeless, with various agencies (and reality TV) bringing this urgent issue to light. It also marks the end of the financial year, a kind of witching hour for those engaged in financial markets, investing in rental housing, or running Australia’s businesses, large and small.

For seventy-nine intrepid souls, our charity sleep-out on Maroochydore beach was thwarted by early morning drizzle turning into heavier rain.

Some abandoned their posts, leaving sheets of cardboard for others to make shelters with. Others took up the scarce positions under the eaves of the Maroochy Surf Club.

I took refuge in a nearby toilet block, mopping my wet hair with a sweatshirt. I decided I’d done enough, including raising $700+ and headed home in the wee hours. I briefly imagined a truly homeless mother in a similar situation. The two-year-old wants to be carried and the seven-year-old is saying “This is dumb, I wanna sleep.” So they walk 300m in the rain to the 1997 Ford wagon and do as best they can.

The St Vincent De Paul Society homelessness sleep-out raised more money this year ($125,577) with fewer people sleeping out. That’s an impressive result from a regional population of 300,000, (1,500 of whom are homeless).

The 2016 Census homeless tally (105,000 in 2011), won’t be known until 2018. But a 2014 Australian Bureau of Statistics survey found that 351,000 Australians had experienced homelessness in the previous 12 months.

There were a few speeches last night before we headed out to a balmy 17 degree Maroochydore evening. Mix FM’s Todd Widdicombe threw gentle barbs at local politicians and did a good job of generating competitive bidding for the charity auction (including a pillow sold to local politician Steve Dickson for $320).

St Vincent De Paul Society tells us most social housing on the Sunshine Coast was built more than 30 years ago. The Coast’s private rental vacancy rate is less than 2% and one-bedroom units are hard to find. A chart of social housing demand shows that 64% of people are looking for accommodation for one person. Developers on the coast tend to build three and four-bedroom homes and two or three-bedroom units. Many units are rented to holiday-makers.

Older people facing a tougher future

This is not a problem unique to the Coast. Pensioners and working parents have been priced out of the rental market in all metropolitan areas across Australia, according to National Shelter’s Rental Affordability Index (RAI), released on May 17.

Chief Executive of COTA Australia (Council on the Ageing) Ian Yate told a conference this week that older Australians were the forgotten faces of the housing crisis. He cited as examples the 70 year old divorcee facing homelessness, the 80 year old with a knee replacement who can’t find appropriate or affordable accommodation, the 68 year old couple retiring, still with a significant mortgage.

“Older Australians are increasingly falling through the cracks in the growing housing affordability and supply challenge,” he said. “A growing number of older Australians need to rent, rather than owning a home outright.

“We are already starting to see rates of home ownership by older Australians decline, and this is forecast to drop even further in the next 10-15 years.”

Anglicare’s annual report into housing affordability shows that welfare recipients and single-person households are the least likely to find appropriate accommodation. Queensland’s stock of social housing is just 3.6%, compared with a national average of 4.5%.

Rents are generally lower on the Sunshine Coast and the weather markedly warmer than the Southern States, even in winter. Little doubt this is why young people take their battered old wagons, surfboards and sleeping bags to the beach.

While many people in crisis use their cars as a refuge between one home and the next, others have developed an on-the-road lifestyle.

I once met a woman in her 50s whose camper van is her home and always on the road, unless she’s visiting family in one state or the other. Recently we met a couple who have a permanent caravan moored in a small town van park. They also have a bigger van for their grey nomad adventures. Safe to say most of their capital is tied up in these depreciating assets

For those who’d rather have a fixed abode, the Queensland Government recently made a ‘better-than-nowt’ commitment to provide 5,500 new social and affordable housing units over the next 10 years. Last year, the Government launched a Better Neighbourhoods initiative in fast-growing Logan City, with an affordable housing target of 3,000 by 2030.

Hoping for Hope Centre II

Family and Kids-Care Foundation established the Hope Centre in 2009, a complex of 19 self-contained units, designed for individuals and small family groups in crisis.

President Tass Augustakis told FOMM the charity is currently considering participating in the Better Neighbourhoods Logan initiative, seeking funding for a second Hope Centre which can accommodate larger family groups.

“The thing that got me going to start the Hope Centre was seeing women sleeping in cars with their kids. It just shouldn’t be happening, but it still is.”

Family and Kids-Care donated the land for the first Hope Centre and raised funding from the Federal Government to build it.

“After reading about the State Government’s affordable housing strategy, I’m organising a meeting to discuss Hope Centre II,” he said.

“We can provide the land, but we need the Government to contribute between $10 million and $12 million to build a four or five-level unit building.”

Cameron Parsell, a researcher with the University of Queensland, last year revealed that it costs governments more to provide services to the homeless than it costs to provide standard accommodation.

He produced ‘compelling and robust’ data in The Conversation which showed that chronically homeless people used state government funded services that cost approximately $48,217 each over a 12-month period. He compared this with another 12-month period in which the chronically homeless were tenants of permanent supportive housing.

“The same people used state government services that cost approximately $35,117 – $13,100 less when securely housed, compared to the services they used when they were chronically homeless.”

Urban studies researcher Emma Power, also writing in The Conversation, says single, older women are among the fastest-growing groups of homeless people in Australia. Yet most are unable to apply for community housing because the sole eligibility criterion is their low-income status.

Sadly, women who are not leaving a violent situation or who do not have a recognised disability will risk homelessness before they qualify for community housing.

The answer is for governments to provide more secure, low-cost social housing and/or increase rent-assistance payments across the board.

But as Power points out, the latter is not ideal. Although it assists renters in the short-term, it effectively subsidises private landlords.

This has been going on for a long time and it is getting worse, despite a lot of work by charitable organisations like St Vinnies. I tucked myself into my cosy bed (early) last night, feeling OK about raising the equivalent of a fortnight’s rent for someone.

But it is a band-aid at best.

Homelessness and affordable housing

homeless-housing-affordable — Homelessness and affordable housing, photo by Giulio Saggin

Last week I was walking from Roma Street Station to the top end of George Street, the hub of State Government. I was meeting friends for lunch and on the way passed a few apparently homeless young men on park benches, one tucked inside a doorway, others hovering around intersections, nervously smoking.

One young person was sitting on the footpath with a cardboard sign that read “homeless – please help”. I was too preoccupied on my mission so I ignored the hat, not even dropping a few coins on the return journey.

So now I’m hunting around the house for a decent sleeping bag and a beanie, hoping to make amends for my lapse in empathy by participating in a fund-raising community sleep-out on June 29. (If I chicken out I promise to donate money to the cause.)

Our local member Andrew Powell (Member for Glass House) has agreed to participate in the annual sleep-out.

Mr Powell wrote about this in his regular Glasshouse Country and Maleny News column. He will be among local dignitaries, business people and community members sleeping rough outside the Maroochydore Surf Club on June 29. Participants will be given a sheet of cardboard to sleep on and fed a simple meal of soup and bread rolls. Mr Powell says there are 1,500 homeless men, women and children on the Sunshine Coast.

The St Vincent de Paul northern diocese (which is organising the sleep-out), has provided support over the eight months to March 2017 to 450 homeless people, including 250 children.

The gesture by the Member for Glass House is admirable, but this is a problem that has, at best, been patched up by successive Queensland governments. The Sunshine Coast, which has a paucity of affordable and public housing, is named as one of the regional areas to be targeted by the new housing strategy.

The Rental Tenancies Authority published median rents for the Sunshine Coast region in December 2016. Tenants pay between $315 and $400 a week for a three-bedroom home or a two-bedroom unit. Rents are cheaper in the Hinterland areas like Beerwah, Peachester, Mooloolah, Palmwoods, Hunchy and Woombye, but public transport is limited and one needs a reliable car to live in these areas.

Meanwhile, Queensland has a plan

As the debate continues about the lack of affordable housing and how to find beds for homeless people, the Queensland Government has a 10-year plan.

The Government had some fairly positive (and uncritical), press about its plan to provide more than 5000 social and affordable houses. The $1.8 billion Housing Strategy announced in this week’s State Budget aims to get the private sector involved and utilise State government-owned land.

Treasurer Curtis Pitt said it was the biggest commitment to housing in Queensland’s recent history. The strategy will see more than 5,500 social and affordable homes built over the next decade. Eight hundred homes are to be built each year for the first five years. This is about double the number of social and affordable homes built in 2016-2017.

The Minister said the housing strategy includes $1.2 billion to renew the existing social housing property portfolio. A $420 million housing construction program aims to boost the supply of social and affordable housing. This includes $3.5 million to build two refuges for women and children escaping domestic and family violence.

The Government is also allocating $75 million to advance home ownership in ‘discrete’ Aboriginal and Torres Strait Islander communities.

At first glance this sounds like a bold plan, made with some compassion for those struggling to survive in a competitive housing market. On second glance, it is unlikely to make a dent in Queensland’s 25,000+ public housing waiting list.

Too little, too late?

Public and social housing comprised 4.8% of the total national housing stock, according to the Australian Housing and Urban Research Institute (2011 Census data). AHURI’s research showed that at a minimum, the social housing system would have to have been around 43% larger (on 2011 figures) to accommodate all those who met public housing eligibility criteria and who pay more than 50% rent.

Nevertheless the Queensland strategy has been welcomed by the construction industry and the housing sector, as it is said to provide 450 jobs. One of the more positive aspects of the plan is that 5% to 25% of the land used for these purposes will be land already owned by State Government. This implies vacant or under-utilised land near public buildings like hospitals and schools. So maybe at last the under-privileged will get to live in the middle-ring suburbs of Brisbane rather than 49 km away in fast-growing Logan City.

In December 2016, the State Government announced a $1 billion investment plan to build 3000 new houses in Logan City over 20 years. Minister for Housing and Public Works Mick de Brenni said the Better Neighbourhoods Logan initiative would deliver a range of economic and social benefits, including 410 new social and affordable dwellings over the next five years and over 3,000 new homes by 2036. A spokesman confirmed that the 3000 social and affordable homes are part of the Budget housing strategy. That leads me to surmise that another 4000 homes will be built in other regions over 10 years, on average, 40 new houses per year for each of the 10 regions identified by State Development.

The strategy shows some progressive thinking in that new social or affordable housing strategy should incorporate:

Rental bond loans to help tenants meet the private market;
Provision for public housing tenants to own their own home through shared equity loans or rent-to-buy schemes;
A new Housing Partnerships Office to streamline processes and lower costs and time frames;
Private sector involvement through expressions of interest to develop small, medium and large developments in regional centres;
$29.4 million to provide front line services for victims of domestic violence and young people at risk of homelessness. This includes a $20 million boost for ‘youth foyers’ – supported accommodation for young people aged 16-25 who are either homeless or at risk of becoming homeless.

Looking after property investors

The State Budget announcement follows a plan revealed in the 2017 Federal Budget to allow a tax break to invest in social housing.

Retail and institutional investors are being offered a 10% increase in capital gains discount (from 50% to 60%). The Australian Financial Review reported that the scheme, aimed at Management Investment Trusts, would allow the discount to MITs and their investors, provided they offer the properties at an affordable rent for at least 10 years. The AFR said the Government also planned to issue bonds backed by rental income from social housing, replacing bank debt issued to approved social housing developers.

While governments play ‘catch up’ with affordable housing, the onset of winter should turn our thoughts to the homeless.

As Andrew Powell observed, it is not a matter of choice.

“In many cases homelessness comes about through factors out of a person’s control – whether this is mental or physical illness, financial instability, lack of education, domestic violence or something else entirely,” he wrote in the GCMN.

Yes, and sometimes all of the above.

Goodwill housing

While we’re all getting in the goodwill mood, Australians need to think seriously about this country’s housing problem. There isn’t enough of it to go around and what property is available is often out of the reach of low income households.

(Percentage of age groups with mortgages: ABS Surveys of Income and Housing)

This is no overnight thing. Tax concessions which favour property investors have led to a big swelling of their ranks – some 1.18 million. First there was negative gearing, re-introduced in 1985, which allows investors to claim rental expenses and interest on housing loans against their income. Second, the 50% capital gains tax exemption which property investors have enjoyed since 1999. Most invest on the expectation of future capital gain, rather than negative gearing benefits.

A 2014 article in The Conversation by Kate Shaw revealed that Australia’s GDP contribution of real estate transactions is the highest in the world – three times higher than in the US. Around one in seven Australian taxpayers owns one or more investment properties. Australia also has one of the highest levels of household debt in the OECD, due to mortgage borrowings.

As recent research on Australia’s rental market has found, those in the lowest 40% of gross income group struggle to meet rental costs and in capital city markets like Sydney or Melbourne pay up to 65% of their income for rental accommodation.

As a rule of thumb, low income earners paying 30% or more of their gross income in rent or mortgage payments are suffering housing stress.

Gavin Wood and Rachel Ong writing for The Conversation earlier this year underlined the growing problem of housing affordability. In 1982, the ABS survey of income and housing stated that 168,000 (or 10%) of home buyers spent more than 30% of their gross household income on housing costs. By 2011, those numbers had soared to 640,000, or 21% of all home buyers.

Wood and Ong also found that young first time buyers are finding it increasingly difficult to buy a home. As the chart above shows, the rate of home ownership in the 25–34 year age group slumped from 56% in 1982 to only 34% in 2011.

Wood and Ong say one in six Australians own two or more houses and 30% are holiday houses (2010 figures).

The Australian Housing Urban Research Institute (AHURI) says that while private rental is an important and growing part of our housing system, it has failed to serve the housing needs of low-income people. The 2006 ABS Census showed that 22% of households rent privately. In 2006, private renter dwellings numbered 1.47 million Australia-wide, an increase of 11 per cent since 2001.

But new research by A.C Nielsen for domain.com.au estimates that up to a third of Australians over 18 are renting, with higher proportions in the Northern Territory (43%) and Queensland (36%).

The stumbling block for people looking to rent a house or unit in a capital city is the up-front cost (usually a month’s rent and a bond (assuming $1000), not to mention storage and moving costs. FOMM figures the average establishment costs of a lease in one of five capital cities to be $2,828).

And domain’s rental market research shows it can be a short-lived reprieve, with 47% of Australians living in their current rental property for less than two years, and only 27% in the same property for more than five years.

Housing policy NGO National Shelter instigated the Rental Affordability Index as a response to media and political obsession with house purchase markets. The Index highlights the severe housing stress experienced by renting Australians. The report was produced by National Shelter, Community Sector Banking (CSB) and SGS Economics and Planning.

National Shelter executive officer Adrian Pisarski says the index fills major gaps in housing data, as it tracks household rents against household incomes in capital cities and regions across Australia.

“It reveals deterioration in our rental affordability, a result of 25 years of policy inadequacy and market failure. It shows why our low income households live in poverty and why life is a struggle, often a desperate one for moderate income working families.”

The RAI gives households who are paying 30% of income on rent a score of 100, a critical threshold for housing stress. A score below 100 indicates severe housing stress.

The report’s key finding is that while average rental affordability remained below 30% across all states, households in the lowest 40% of income consistently face severely and extremely unaffordable rents. This is the case in all regions of Australia. In the worst cases, non-family households are spending more than 60% of their income on housing (Sydney and Melbourne). Causes of homelessness, then, are shifting from traditional factors (escaping abuse, substance misuse, mental health issues), to being pushed out of the housing market by those with higher incomes.

People who are struggling to live on a government payment are the worst-affected by the crisis in affordable housing, according to the 2015 Anglicare Australia Rental Affordability Snapshot. The snapshot across all cities and regions shows that of the 65,500+ properties assessed for suitability, less than 1% were available for single people living on government allowances. Single people on the minimum wage would find 3.3% of these properties to be affordable. A working couple would fare better, with 23.8% of these properties suitable for their level of income. An age pensioner couple would find only 3.4% or 2,239 properties affordable.

Pisarski says the basic problem remains the lack of affordable rental properties and the lack of housing supply in general. He says one of the results is an emerging trends towards inter-generational living, with two and sometimes three generations under the one roof.

Australians are afforded little in the way of tenant protection, compared with cities in the US and Europe where rent controls and security of tenure are considered to be an important adjunct to social security.

Shaw makes a few broad comparisons between tenant legislation in Victoria and Germany. Rents can be increased in Victoria every six months with no limit on the amount (though the tenant may have grounds for appeal). In Germany, rent increases are capped at 20% every three years. In Victoria, 60 days is the standard amount of notice to vacate. In Germany notice varies according to how long the tenant has lived there: three months is the minimum for someone who has lived in the property for less than five years. Six months’ notice is required for a tenancy between five and eight years; nine months for longer than eight years.

In a perfect world, the Australian government would be looking to offer tax incentives to investors to rent to eligible (low-income) families at well below market rent. There was such a scheme, called the ‘National Rental Affordability Scheme’, but this only applied to investors building new dwellings, and as of September 2015, at least in Queensland, even this limited scheme was shut down:

To end this penultimate FOMM for 2015 on a cheery note, I read recently of one landlord who gave his tenants a one month ‘rent holiday’ as a Christmas present and thanks for being good tenants.