Page 4803 - Week 11 - Wednesday, 20 October 2010
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We also want to ensure that the government’s review reflects the comments that have been made by the community. One of the major comments the Greens are hearing is about who the government is talking about when it promotes its affordable housing programs. Is it really developing products that are aimed at those people in the most housing stress? This is where terminology and measures become important as they can assist in ensuring the government is hitting the target, something we do not believe has been consistently occurring.
The government’s actions on affordable housing appear to have been focusing on those households that have two adults who earn a moderate income and wish to buy a house. But work done by groups like AHURI show that low income renters are the largest group of households experiencing an affordability problem, and for 70 per cent of them home ownership is not something they see as likely.
AHURI has also found that the polarised housing market is likely to worsen across Australia and there will be growing reliance on private rentals into the future. In the ACT, rents have risen over 10 per cent in the last year compared to a national average of 2.8 per cent, and recent commentary on the market has signalled that rental prices here are likely to continue to increase.
Looking at what is currently available for rent in Canberra, there are few one-bedroom dwellings available for less than $300 a week, and $300 is the cheapest available for two bedrooms. For a three-bedroom house, the lowest rent listed is $350 a week. If we were to use a strict 30 per cent rule where a household is classified as being in housing stress if it spends more than 30 per cent of its gross income on rent, a single parent with two children living in a two-bedroom flat would have to be earning at least $47,000 a year, something I expect would be quite difficult for many single parents.
With the government’s 2007 affordable housing action plan and subsequent progress reports, I note there is an absence of definitions of “affordable housing” and how it is measured. A previous report provided by the affordable housing steering group to inform the action plan had limited discussion of theoretical definitions and measures, and I note that the paper states that the report focuses on providing policy responses rather than analysis of the housing market. So while some analysis was conducted, it was not extensive and it appears little work was done to ensure the government’s actions were evidence based and well targeted.
This omission may not have been seen to be a serious issue at the time, but three years later we are now noticing this. For example, the government has used a range of figures publicly when referring to what constitutes affordable housing. In the case of purchasers, it refers to $322,000 for a property, and for rentals it uses a calculation of 74.9 per cent of market rent. But the questions remain: who can afford these prices and who is being targeted?
Both these reference points—$322,000 for a dwelling or 74.9 per cent of market rent—imply that the government is using definitions derived from the supply of housing. $322,000 is something the government and developers can or want to
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