Housing charities throughout Australia are calling for a massive effort to build more new social and affordable homes amid warnings that the wind down of a major affordable housing scheme will lead to the loss of thousands of affordable homes at a time of a worsening crisis in rental affordability.

The warnings come as data released by the Australian Government shows that in calendar 2023, the nation will lose 6,619 of the more than 25,000 homes which are currently active under the National Rental Affordability Scheme (NRAS).

Queensland will be most impacted, with the state set to lose 2,499 homes from the scheme – more than a third of its current total.

Established by Commonwealth and state governments in 2008, the National Rental Affordability Scheme (NRAS) aimed to help promote greater investment in the supply of affordable rental properties.

Under the program, landlords such as private developers are able receive financial incentives where they rent their properties to eligible lower and middle income households at rates which are at least 20 percent below market.

Following its election in 2013, however, the Coalition Government led then then Prime Minister Tony Abbott announced that no further new rounds of funding would be made available from the 2014/15 budget onward – although incentives which had previously been agreed to under existing allocations would be honored.

This happened as part of budget savings measures that were adopted by the Coalition at that time in order to improve Australia’s fiscal position.

As a result, the scheme is now being wound down and will cease entirely by 2026.

At its peak, the scheme was providing as many as 36,566 affordable rental homes.

This is expected to have declined to 24,386 homes by the end of last year and will peter out to zero by the scheme’s end in 2026.

Once properties exit the scheme, they are likely to be rented out at full market rates rather than the lower price at which they were offered under the scheme.

This means that Australia is expected lose almost 25,000 affordable rental homes as a result of the scheme’s winding up by 2026.

The warning comes as lower and middle income Australians continue to face a crisis in affordable rental properties.

Last year alone, data from CoreLogic indicates that rental prices increased by 10.2 percent nationally.

Since the start of the pandemic, median rents have jumped from $430 per week to $519 per week.

That has further exacerbated challenges associated with housing affordability for Australians with low or moderate incomes.

In an analysis of more than 45,000 listings for rental homes conducted in April last year, charity Anglicare found that:

• Less than four percent (3.7 percent) were affordable to a couple who were on the minimum and had two children who and who received both the parenting payment and both streams of family tax benefits.
• This reduced to 1.6 percent for a single person on the minimum wage, 1.4 percent for childless couples who are on the age pension
• At the lowest end of the scale, just 51, 9 and 1 home/homes were affordable to a single adult aged over 21 on disability support, a single person on Jobseeker with one child aged over eight and a single person aged over 18 on the youth allowance respectively.

This situation is likely to exacerbate a shortage of social and public housing.

As at June 2021, data compiled by the Australian Institute of Health and Welfare indicates that 175,600 households were languishing on social or public housing waiting lists.

According to that same data, almost half (47 percent) of all households are forced to wait for more than one year for a housing allocation.

Adding those people to the social housing waiting list and the Australian Housing and Urban Research Institute (AHURI) estimated a social and affordable housing shortfall of 433,000 in 2018.

Taking those 2018 numbers and adjusting for increases in the social housing waiting list since then and a parliamentary report puts the current social/affordable housing shortfall at 524,000, according to a report in The Guardian.

Governments are acting.

An accord between Commonwealth/state/local governments, institutional investors and construction industry lobby groups which was struck last year involves commitments to build up to 20,000 new social and affordable homes over the five years from 2024 and to undertake planning, zoning, land release and investment leveraging reforms to help deliver a total of one million new homes (including both private market and social housing) over that period.

But welfare groups are calling for more.

In a statement, Maiz Azize, national spokesperson for housing, homelessness and welfare coalition Everybody’s Home, called for 25,000 new public and social homes to be built each year.

“Australia already has a social housing shortfall of 500,000 homes, and the rental market has never been tougher,” Azize said.

“These figures (NRAS data referenced in line 2 above) show that we’re losing even more affordable rentals at a time when Australians can least afford it.

“With thousands of affordable rentals set to disappear, we need the federal government to step up and take action.

“We’re calling on them to build 25,000 new social homes each year to help end this crisis. More social housing would lift people out of rental stress, and free up more cheap rentals for people who need them.

“Many Australian suburbs have hit record high rents and thousands of tenants are in rental stress. The government can start changing that from this year if it’s ambitious enough.”

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