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Australian and state and territory governments provide a range of types of assistance to people having difficulty with finding or sustaining affordable and appropriate housing in the private housing market. Housing assistance refers to both access to social housing (such as public housing), and targeted financial assistance to eligible Australians.
Housing affordability is critical to Australia’s welfare. Affordable housing is housing that is appropriate for the needs of low to moderate income households and priced so that alongside the costs of housing, people are able meet their basic living costs, such as paying for food, heating, and medical care.
However, in recent times, finding and securing affordable housing has been difficult for many low-income households in Australia. Rising rents and low vacancy rates have intensified rental stress across Australia, especially, in the capital cities (Domain 2023; SQM Research 2023). In 2019–20, approximately 619,000 low-income households were spending more than 30% of their income on their housing costs (that is, were in rental stress). More than two-thirds (67%) of these households were in capital cities (ABS 2022a).
Living in unaffordable housing can be detrimental to the welfare of low-income households. High housing costs can make it difficult for these households to meet their basic living costs without compromises or sacrifices. It can also make it difficult to save money for retirement and emergencies or for pursuing opportunities, such as further education or business ventures (Anacker, 2019). Because housing affordability can affect so many different aspects of people’s lives, it can have a dramatic bearing on the quality-of-life afforded to low-income households.
Housing assistance can provide households in need with affordable and appropriate housing, or with the means to afford appropriate housing. By providing housing assistance, low-income households can achieve greater financial flexibility and housing stability (Anglicare Australia 2019). The flexibility and stability provided to these households can also lead to greater social and economic participation, and as a result, improve social cohesion (Bridge et al 2007; Carnemolla and Skinner 2021).
A variety of drivers—circumstances or changes, can contribute to the probability of households seeking housing assistance. Understanding these drivers, and the influence of critical life events, housing market and other factors, on households can assist in defining housing stress, an early indicator of household need for housing support, and can form part of interventionist approaches to housing assistance provision and policy (Ghasri et al 2022).
Housing stress describes the factors, and associated outcomes with an inability to meet housing or rental costs. For example, unexpected, or unwanted change in tenure, forced eviction or homelessness. Housing stress is also described by researchers, governments, and policy makers as households that are paying a high portion of their income on housing. The 30/40 housing stress measure is defined as the lowermost 40% of households (based on household income distribution) that spend 30% or more of total income on housing costs (Ghasri et al 2022).
Critical life events are events that lead to major change in a person’s life. These factors can involve family formation or breakdown, providing care to a family member, or loss of employment. Multiple intersecting critical life events may also put significant financial pressure on a household’s ability to manage their housing and living costs.
Housing market factors are the specific arrangement of conditions in the private housing market that impact housing options and choices, and are influenced by taxation, regulation, supply, and availability. Additionally, other factors related to housing affordability include low vacancy rates, rising private market rental costs, and cost of living pressures such as inflation, interest rates, and energy costs may impact household situation of housing stress (Ghasri et al 2022; Stone et al 2016).
Households may seek assistance to alleviate pressures of housing affordability within a tightening private rental housing market, largely characterised by low vacancy rates, across capital and regional areas. However, households may be confronted with long wait lists for housing (Stone et al 2016).
In response to housing insecurity and housing affordability challenges households may need to access contingency resources (such as savings, assets, skills, or social networks) to ensure that they can sustain access to housing. However, low-income households often lack the additional resources to insure against or respond to any negative impacts arising from critical life events or housing market factors, leading them to seek housing assistance (Ghasri et al 2022) (Figure 1).
Figure 1: Drivers for households seeking housing assistance
Low income household
A household whose equivalised disposable income falls between 3% and 20% of households. Equivalised disposable household income accounts for differences in household sizes and composition (ABS 2022b).
Government housing assistance includes both indirect expenditure (taxation), direct expenditure by way of public and social housing, financial assistance (to support people to access private rental market housing), grants (first homeowner) and Specialist Homelessness Services (SHS) for people at risk of or at risk of homelessness. Policies and programs are implemented by all governments.
A brief history of housing assistance
In 1943, the Commonwealth Housing Commission was appointed by the Commonwealth government to evaluate the condition of Australia’s housing stock. Due to the combined impact of the Great Depression and the use of labour and building materials in supporting the war effort, appropriate and secure housing was incredibly scarce during this time (Dufty‑Jones 2018). In response to Australia’s sizable housing shortage, the government began to provide people with adequate housing, to foster economic development and replace the tenement housing present at the time (Troy 2012; Macintyre 2015).
In 1944, the Commonwealth Housing Commission reported a shortage of some 300,000 dwellings and advised the Commonwealth to provide housing to overcome this housing deficit (Pawson et al. 2020). This advice would later result in the establishment of the first Commonwealth-State Housing Agreement (CSHA) in 1945.
The CSHA was an agreement between the Commonwealth and states/territories to provide funds for the construction of new dwellings. As a result, social housing provision from governments became a more prominent aspect of the housing landscape. The original 1945 CSHA has been updated numerous times, with the 2003 CSHA being the final revision, before it was officially replaced by the National Affordable Housing Agreement (NAHA) in 2009 (Parliament of Australia 2017). The NAHA was later superseded by the National Housing and Homelessness Agreement in 2018 (DSS 2022a).
Historically, social housing was built to stimulate the economy, provide people with secure accommodation, and facilitate participation in the workforce (Pawson et al. 2020). As such, access to social housing was made available to predominantly working families on very low, low, and moderate incomes (Groenhart et al. 2014; Yates 2013). However, from 1956 to 1973, the Government’s housing strategy shifted towards encouraging home ownership and supporting low-income households in the private rental market. In 1973, income eligibility limits were introduced to social housing households, signifying the beginning of the shift towards the current policy where social housing are allocations partly based on need (Yates 2013).
By the 1999 CSHA, a greater emphasis was placed on helping families and individuals that could not be housed in the private market. Accordingly, a key feature of the 1999 CSHA was providing housing assistance according to need, classified by income, rather than security of tenure (Parliament of Australia 2001).
With the introduction of the NAHA in 2009, provision of social housing focused on assisting households experiencing disadvantage, and more complex needs— or in other words, people who are in greatest need, especially people experiencing homelessness (Pawson et al. 2020).
National Housing and Homelessness Agreement (NHHA)
Since 2018, the Australian Government has provided approximately $7.9 billion in Commonwealth funding to states and territories to improve access to affordable, safe, and sustainable housing. The NHHA describes government roles and responsibilities for social housing, and support for people at risk of and experiencing homelessness (FFR 2018).
The NHHA came into effect on 1 July 2018, reforming previous funding agreements with states and territories, the National Affordable Housing Agreement (NAHA) supported by the National Partnership Agreement on Homelessness (NPAH). A one‑year extension of the NHHA to 30 June 2024 has been offered to the states to support the transition to the Government’s housing agenda.
Housing and Homelessness Plan
The Australian Government announced development of a National Housing and Homelessness Plan (the Plan) to inform future housing and homelessness policy in Australia. The Plan will include several new proposed initiatives outlined throughout this section, to improve housing and homelessness outcomes for Australians. These include, the National Housing and Affordability Council, Housing Australia Future Fund, the National Housing Accord, and an expanded remit of the National Housing Finance and Investment Corporation (NHFIC) to be renamed Housing Australia, as well as additional programs to assist people into home ownership (DSS 2023; NHFIC 2023; Treasury 2022a, Department of Finance 2023).
National Housing Supply and Affordability Council
The National Housing Supply and Affordability Council will guide development of the National Plan. The Council will deliver independent advice to Government on ways to increase housing supply and affordability, including promotion and regular collection and publication of data on housing supply, demand, and affordability (Treasury 2022b).
Housing Australia Future Fund
The Housing Australia Future Fund is a financial asset fund, set up to build financial capacity in the form of ongoing investment returns to deliver new social and affordable housing. The Australian Government has set a commitment to deliver 30,000 new social and affordable homes in the fund’s first five years, including 4,000 homes for women and children impacted by family and domestic violence, or older women at risk of homelessness (Treasury 2023).
National Housing Accord
In late 2022, the Australian Government released detail on the National Housing Accord to address the supply and affordability of housing with an agreement to align efforts of all levels of government, institutional investors, and the construction sector.
The Accord recognises the need for more housing to be provided by the market with government playing a pivotal role within investment in the building of affordable housing that is close to services and other amenities.
Australian Government funding of $350 million is planned for the delivery of 10,000 affordable homes over five years from 2024, with use of superannuation fund returns and other institutional investment returns to deliver social and affordable housing with public funding covering the gap between market rents and subsidised rents.
Additionally, State and territory governments have committed additional quotas of up to 10,000 new homes, a total of up to 20,000 new affordable dwellings (DSS 2023; Treasury 2022a).
Other housing initiatives
The National Rental Affordability Scheme (NRAS) was established in 2008 to increase the supply of affordable rental homes available to low to moderate income households. The program accepted property investors (including charitable organisations and for-profit organisations) who were offered financial incentives each year for renting out a property at a minimum of 20% below market rate. As of June 2022, there were 27,012 active allocations. The program ceased in 2014 with the scheme due to conclude in 2026 (DSS 2022b).
Housing assistance funding
In 2021–22, Australian Government funding for the NHHA was $1.7 billion. An additional $4.8 billion was spent on Commonwealth Rent Assistance (CRA). In 2020–21, this figure increased to $5.4 billion due to pandemic-related measures. In 2021–22, state and territory social housing net recurrent expenditure was $4.6 billion, up from $4.5 billion the previous financial year. State and territory government social housing capital (non-recurrent) expenditure was $2.6 billion, an increase from $2.1 billion in 2020–21 (Productivity Commission 2023).
The different forms of housing programs and assistance explored throughout this report include:
- social housing, owned and managed by government and non-government organisations, including:
- public housing (PH)
- state owned and managed Indigenous housing (SOMIH)
- community housing (CH)
- Indigenous community housing (ICH)
- financial assistance given to tenants to meet private rental costs, including:
- Commonwealth Rent Assistance (CRA)
- Private Rent Assistance (PRA)
- financial assistance with home purchase, including:
- Home Purchase Assistance (HPA)
The report does not cover the provision of services such as obtaining accommodation or sustaining tenancies provided by Specialist Homelessness Services. For information relating to these specific homelessness services, see Specialist homelessness services annual report 2021–22 (AIHW 2022a).
Definitions of housing assistance programs
Social housing is low cost or subsidised rental housing provided to eligible Australians by government or non-government (including not-for-profit) organisations (AIHW 2022b).
- Public housing: Rental housing managed by all state and territory housing authorities. This includes dwellings that are owned by the housing authority or leased from the private sector or other housing program areas and used to provide public rental housing or leased to public housing tenants. Public housing can be accessed by non-Indigenous Australians, Indigenous Australians, and permanent residents on low incomes and/or with greatest and/or special needs.
- Community housing: Housing managed by community-based organisations, available to low to moderate income or special needs households. Community housing models vary across states and territories, and the housing stock may be owned by a variety of groups including government. Community housing can be accessed by non-Indigenous Australians, Indigenous Australians, and permanent residents.
- State owned and managed Indigenous housing: Housing that state and territory governments provide and manage. It is available to households that have at least one member who identifies as being of Aboriginal and/or Torres Strait Islander origin. Eligibility criteria for these households include low income, special needs, or greatest need.
- Indigenous community housing: Housing that Indigenous communities own and/or manage. These organisations may either directly manage the dwellings they own or sublease tenancy management services to the relevant state/territory housing authority or another organisation. This type of housing is made available to households with at least one Indigenous member (NIAA 2022).
Financial assistance with rental costs
- Commonwealth Rent Assistance: This is a payment provided by the Australian government to eligible families and individuals who pay or are liable to pay private rent or community housing rent. Commonwealth Rent Assistance is paid at 75 cents for every dollar above a minimum rental threshold until a maximum rate (or ceiling) is reached. The minimum threshold and maximum rates vary according to the household or family situation, including the number of children (DSS 2019). Indigenous Australians who are eligible can access this program.
- Private Rent Assistance: This is financial assistance administered by each state and territory government. It provides a range of financial assistance to low-income households experiencing difficulty with securing or maintaining private rental accommodation. Private Rent Assistance is usually provided as a one-off form of support—such as bond loans and rental grants—but may also include ongoing rental subsidies and payment of relocation expenses. Indigenous Australians who are eligible can access this program.
Financial assistance with home purchase
- Home Purchase Assistance: This is a form of government financial assistance administered by each state and territory. It provides a range of financial assistance to eligible households to improve their access to, and maintain, home ownership. Home Purchase Assistance may vary by state and territory, as some products are only offered within certain states and territories.
Government assistance for home ownership
There are various forms of Australian and state-territory government assistance and programs to support people into home ownership. Australian Government initiatives are briefly described below; however, they are not the focus of this report.
Several schemes are managed by the National Housing Finance and Investment Corporation (NHFIC) on behalf of the Australian Government (NHFIC 2022).
- First Home Loan Deposit Scheme supports people to buy their first home sooner, with a deposit of as little as 5%.
- The New Home Guarantee Scheme (HGS) supported people to build or buy a new home, with higher property price caps available in selected areas ended from 1 July 2022.
- The Regional First Home Buyer Guarantee (RFHBG) is an initiative to support eligible first home buyers purchase a home in a regional area, with a little as 5% deposit without paying Lenders Mortgage Insurance (LMI). Any guarantee of a home loan is for up to a maximum amount of 15% of the value of the property.
- The Family Home Guarantee (FHG) aims to support eligible single parents with at least one dependent child in purchasing a family home, with a deposit of as little as 2%.
The First Home Super Saver Scheme (FHSSS) was introduced by the Australian Government in the 2017–18 Budget. The FHSSS supports first homebuyers who meet the eligibility criteria to save money for a house deposit using their superannuation fund. Those who are eligible can voluntarily contribute up to $15,000 in any one financial year, and $30,000 in total under the scheme. They receive the tax benefit of saving through their superannuation contribution arrangements (ATO 2022).
The Indigenous Home Ownership Program supports Indigenous Australians into home ownership through providing access to affordable home loan finance. The program aims to address barriers such as loan affordability, low savings, and impaired credit histories (IBA 2021).
The National Disability Insurance Scheme (NDIS) funds Specialist Disability Accommodation (SDA) for a number of NDIS participants with extreme functional impairment or very high support needs, when deemed necessary and reasonable. SDA funding is used to stimulate investment in the building of new dwellings for NDIS participants (NDIS 2021).
The First Home Owner Grant scheme, introduced nationally on 1 July 2000, is funded by the state and territory governments, and administered under their legislation. A one-off grant is payable to first homeowners who apply and satisfy eligibility criteria. Additional schemes may also be in place in states/territories, such as first home buyer exemptions from some transfer duties.
Some of these forms of assistance can be used in conjunction with one another and/or state and territory first homeowner grants and stamp duty concessions (Australian Government 2020).
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