Affordability blues

City Buildings

Rural rooming houses, city “slums in the sky” and accommodation-for-sex advertisements have been in the news recently – symptoms of a rental market that is tough for tenants on low incomes to afford.
Investigations after a blaze in the Lacrosse apartment tower in Melbourne last year revealed up to a dozen tenants were sharing two-bedroom apartments – including some who slept on balconies, and in lounge rooms partitioned with curtains.
Shared accommodation is no longer the preserve of uni students with some tenants in their thirties and even forties still living in (or returning to) shared accommodation.
And some tenants have been caught sub-leasing rooms by the night on accommodation websites – or offering accommodation in exchange for sex.
EBM RentCover Executive General Manager, Sharon Fox-Slater, said overcrowded homes suffered greater wear and tear; could be damaged by unauthorised “renovations” to create more bedrooms; and were at greater risk of fire from overloaded electricity systems.
“Subletting by the night is also a problem. Landlords and property managers need to inform tenants that by-the-night sub-letting is not acceptable – as it requires tailored short term landlord insurance rather than a standard policy.”
Rents in regional areas are significantly lower than in the city, but, in Victoria, they have been growing at a faster pace over the last five years. Residents priced out of conventional rentals are turning to rooming houses – with 13 on the public register this year, compared to two last year.
The Anglicare Rental Affordability Snapshot for 2015 found that, of more than 51,000 metropolitan rental properties advertised on one April weekend:
  • only one home would be affordable for a single person on Newstart – i.e. rent costs 30 per cent of household income or less;
  • fewer  than one in 100 properties were affordable for people on a disability pension, single age pension, parenting payments or parents on a single minimum wage;
  • families with both parents earning the minimum wage, and two children, could afford 17 per cent of properties on the market; and
  • families with one parent on the minimum wage and the other on a parenting payment would have affordable access to 2.7 per cent of properties.
How to fix the affordability problem?
  • The Federal Senate Inquiry into Affordable Housing recently recommended that the abandoned National Rental Affordability Scheme (NRAS) be put back into place.