Governments sleep at the wheel as housing affordability crashes

The Australian Council of Social Service today urged Australian Governments to take coordinated action to tackle the worsening housing supply crisis.

“New data shows that the housing supply crisis is getting worse and this is taking a heavy toll on first home buyers and low and moderate income renters who are under increasing financial stress,” said Dr Cassandra Goldie, ACOSS CEO.

The new report from the Australian Institute of Health and Welfare highlighted the serious gap between housing demand and supply, with as estimated shortage of 284,000 dwellings in 2011 projected to increase due to population growth, ageing and decreasing household size.

“‘We know that exorbitant rents, particularly in our major cities, is placing a great deal of stress on families, with 47% of low-income earners paying more than 30% of their income in rent. This is one of the major factors driving people into poverty.”

“Commonwealth Rent Assistance has a major impact on households’ rental affordability, with the AIHW report showing a 27% point reduction in the number of low-income recipients in housing stress after receiving this targeted assistance. Our concern is that this vital rent assistance payment is not keeping up with the rise in community living standards and call for an immediate increase in the maximum rate. The gap between the maximum rate of Rent Assistance and average rent has grown steadily because CRA is linked to the CPI, rather than to national average increases in rent.

“The report also found that social housing schemes, which are highly targeted to people in greatest need, have been extremely effective, however waiting lists continue to grow and supply is not keeping up. As at 30 June 2013, there were over 217,000 households on waiting lists for social housing. There is a critical shortage of over 500,000 rental properties that are affordable and available to low income renters which must be addressed.

“While Australia’s housing situation becomes ever more critical, governments seem to be asleep at the wheel. There is no national affordable housing strategy and growing uncertainty about the future of funding for housing and homelessness investment and programs.

“The most recent budget reduced funding to the National Rental Affordability Scheme, which will result in a loss of 12,000 affordable housing dwellings. At the same time, it extended funding for homelessness services for only another 12 months, with growing uncertainty again in the sector about the future of services and those who rely on them for support.

“The Federal Government has a vital leadership role to play in setting national housing policy to ensure all arms of government are working towards increasing the supply of affordable housing stock, alleviating rental stress and ensure pathways out of homelessness. This cannot be achieved without changes to current housing tax settings which encourage speculative investment in existing housing stock, inflate house prices and do little to increase affordable housing stock,” Dr Goldie said.

Media Contact: Fernando de Freitas – 0419 626 155

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