While the Australian electorate is still seething from the knifing of yet another sitting Prime Minister, there is no sign the freshly conservative face of the federal Coalition is likely to attend to voters most pressing concerns: insecure work, the cost of living, good public healthcare and education, affordable housing and wealth inequality. While politicians in Canberra have been busy wrestling control of government, an estimated third of the population are in rental stress.
The most recent Demographia report on the state of housing affordability ranks all of Australia’s five major housing markets as severely unaffordable. According to Demographia a ranking of 3.0 (or lower) is considered affordable, while a ranking of 5.1 (or higher) is severely unaffordable. Sydney ranks an incredible 12.9, Melbourne fairs slightly better 9.9 – and regional centers like Ballarat and Bundaberg rate as severely unaffordable at 5.4.
If we reach as far back as the 1960’s (when the majority of sitting MP’s would have been entering the housing market) housing prices have surged by a massive 6,556 percent.
As house prices have soared, those that would have previously been able to own their own home are pushed into the private rental market. Up to a third of Australians now expect to rent for life. This trend can be seen most clearly in the most unaffordable areas, where there is a close relationship between the median house price and the percentage of people in private rental.
The Poor Are Paying the Price
For the 1.86 million people dependant on Centrelink, or the 1.9 million workers estimated to be subsisting on the merger minimum wage the recent tiny dip in the median house price is unlikely to bring much reprieve to their rental bill.
The Australian Housing and Urban Research Institute suggests as much of 14% of the population are in dire need of affordable housing.
According to Anglicare’s recent report on housing affordability, a single person on a low income will find less than 0.01 percent of rental vacancies affordable. Depending on how badly you fair on the low income scale, you may find up to 6% of properties affordable. But as the report notes, low income earners are in direct competition with people on much higher incomes looking to reduce their own cost of housing. It’s not hard to imagine that the majority of low income earners land on the bottom of the application pile.
Low income households will find little reprieve in public housing, which has largely been abandoned. While social housing has increased – total stock has not kept pace with the demand. Victoria has just 80,311 public or social housing properties, while the the population grew 125,000 last year alone.
The impact of these big picture trends is that it is pushing low income and working poor households into homelessness. According to the Australian Institute of Health and Welfare, 288,000 people required assisted by a homelessness service in 2016–17.
Behind those statistics are those that are not seeking assistance, or are sacrificing other basic needs like food, heating or medical care to maintain their rent.
Some are Even More Vulnerable
Some people are more likely to end up shouldering the burden of the housing crisis.
As I wrote earlier this year, older women experiencing homelessness has risen 31 percent in 6 years. Women over 60 are the lowest earning group nationally and having led conventional lives, raised families, worked part time or in unpaid roles – they have retired with less savings and assets than men their age. Underpaid, with little savings, facing a permanently inflated housing market, older women have been thrown under the bus by prolonged government inaction.
Migrants are disproportionately likely to end up homeless. According to the last Census, 45 percent of people who are homeless are migrants. Language barriers are a contributor, but discrimination in employment, working rights, and visas linked to violent partners are all part of the picture. While overt race-baiting has become a deplorable feature of political discourse, many migrants are shut out of the basic benefits of Australian society. As Homelessness NSW state:
“Depending on which category of visa [someone holds] their visa conditions may mean they cannot legally work, access Centrelink, Medicare or government assistance to undertake education or training.”
Young people are especially vulnerable to the shifting dynamics of a predatory economic climate. While more young people are forced to stay home for longer, many lack this choice. Family breakdown, violence, or the entire family falling into homelessness are big drivers of homeless among young people. While the demonised by politicians and media outlets alike for being lazy and entitled, most young people are justifiably worried about their futures. Facing an insecure labour market, woeful levels of income support, something as basic as housing security starts to feel like an impossibility.
What is the Root Cause and How do We Fix It?
The state of housing is not simple, and is made up of a complex interaction of policy levers across State and Federal governments. Issues like land supply, tax incentives and the increasing insecurity of work and flat wage growth all contribute to the current crisis. To cut through the noise, it is more useful to look at what broad priorities have been set and who they advantage.
Over several decades voters have been sold the lie of ‘trickle-down economics.’ This myth has justified tax breaks for property investors over investment in public housing, concessions to top earners paid for by the poorest workers, the list goes on and on.
As wealth inequality widens it’s getting harder to conceal the fact that the benefits of such policies trickle up, not down. As Anglicare stated in their report:
“Simply put, current government policies mean that billions of dollars more of public funding goes towards supporting housing investors, rather than ensuring everybody, including people on low incomes, has a home.”
This hits at the heart of our national failure – we have fostered a housing market that privileges investors, promotes speculation and cataclysmically fails to treat housing as a fundamental right as basic as food.
This crisis has been decades in the making, but with a dedicated realignment of priorities, it can be fixed. Advocates have been pushing for a National Housing Strategy that would remedy trickle up failure and restore some basic fairness to the housing system. Federal Labour is promising to roll back negative gearing and reform capital gain tax, and if elected should be held to that promise. But we also desperately need to increase the poverty level welfare payments and to create conditions for ongoing secure employment. After so much dog-whistling targeting minorities, young people and the poor, we need a massive shift in our national consciousness. That will take genuine leadership, perhaps the sort that is naive to hope for. But with an early Federal election on the cards, with voters fed up with the status quo, we are overdue for a radical change.
At StreetSmart we believe everyone should have a safe and secure place to call home. Housing is a human right and is the foundation for building relationships, connecting with community, engaging in education and work and having a stable and successful life.
What you can do to help…
Join the community of StreetFunders helping HomeShare to get people out of rental stress here
Sign the Everybody’s Home Petition and demand action on housing here
Find, and contact your Federal MP here