GOVERNMENT rental assistance doesn’t go far enough to achieving successful housing outcomes and is increasingly being used as an alternative to desperately needed social housing.
According to new research from AHURI, the effectiveness of private rental assistance schemes is highly dependent on market conditions, with more than half of study participants who had received assistance unable to sustain their rental tenancy.
“The scarcity of new social housing places means many applicants have no guarantee of when they will be housed. Instead, Australian governments are having to look to private rental market assistance as a way to support households,” said Dr Fatemeh Aminpour, lead researcher from the University of New South Wales.
“In 2021-22, across Australia over 174,600 households had applied to live in social housing but only 29,100 households were offered a home; at the same time more than twice as many households (70,100 households) were offered some form of private rental assistance. This type of assistance is typically targeted at applicants whose needs are less acute and have greater capacity to sustain a private rental tenancy after a period of support.”
The research found that just 11% of private tenants have a lease of two years or longer and that 31% of moves by these households were forced.
In 2020-21, 49% of social housing register applicants who had previously received a bond loan or ongoing private rental subsidy had been unable to sustain their tenancy.
Most private rental assistance programs have affordability cut-offs, meaning applicants can only receive support if they are applying for less that 50% to 55% of their income, to prevent signing on to unaffordable tenancies.
Even if households were to successfully be allocated assistance doesn’t guarantee access to a suitable property.
“Private rental assistance recipients are finding it increasingly difficult to secure private rental properties that conform to the eligible affordability cut-offs,” added Aminpour.
“We saw that sometimes assistance products aren’t being taken up, not because they’re not needed but because of rents being too high to meet the eligibility requirements. This raises serious questions as to the viability of private rental assistance as an alternative to social housing in jurisdictions like Australia, where the private rental sector is relatively under-regulated and volatile.”
The research indicates application processes and the housing assistance system need to be made clear and accessible.
With individual plans developed for clients who may be eligible for social housing but not of high priority, to ensure access to other services including private rental assistance.
“We also see there is scope for state and territory governments to establish partnerships with private landlords to secure rental tenancies for low-income families who receive private rental assistance products,” added Aminpour.
“Governments could offer guarantees against any rental losses occurring in tenancies of homes covered by such an agreement.”
