The State Government needs to act to make renting more affordable
Stable and secure housing is the primary platform for connection to economic and social community life, providing a base that enables people to overcome challenges and live a decent life. Increasing rents and house prices mean people struggle to stay housed, are forced to live in sub-standard homes or live far from jobs and services, and have difficulty covering other basic living costs.
Renters are particularly impacted by high housing costs as they are likely to have lower incomes, less wealth, and spend proportionately more of their income on housing costs. For many on particularly low incomes, rental housing is simply unaffordable (and home ownership is out of the question).
In this context, public housing is particularly important. It provides homes for those who are left out of the housing market and adds supply to the market to make housing more affordable for everyone. Its construction provides economic stimulus in the short term and it is a store of public wealth over the long term. However, the stock of public housing in South Australia has declined over recent decades, many of the houses are old and energy-inefficient, and there is a substantial waiting list for homes.
Renting, whether public or private, also creates other additional costs that at least some homeowners can avoid. For instance, solar power and energy efficiency improvements like double-glazing or insulation are at the owner’s behest and are often not possible for renters. Tenants often have little choice and may find that once in a home they face crippling energy bills due to the thermal inefficiency of the housing and appliances. Low-income renters also receive a lower Cost of Living Concession than home-owners on similar incomes.
What SACOSS is calling for
- 1.1 Make significant new investment to increase the net stock of public housing (investment to be at least equal to the Victorian package: pro rata = $1.4bn over 4 years).
Public and community housing is a key part of the provision of affordable housing. However, as noted earlier, the stock of public housing in South Australia has declined over recent decades, many of the houses are old and energy-inefficient, and there is a substantial waiting list for homes. As a response to the COVID pandemic, most other states have made significant new investments in public housing, with Victoria’s $5.3bn “Big Housing Build” being the largest investment. While SA still has proportionately more public housing than Victoria, there is great unmet need here and if Victoria can find money for public housing investment after all their lockdowns, South Australia should be able to make a proportionately similar investment in our public housing.
- 1.2 Implement minimum energy efficiency standards for private and public rental properties, and mandatory disclosure of energy efficiency ratings for all rental properties in South Australia.
Public and private rental properties in South Australia often have poor energy efficiency and may lack insulation, sufficient window coverings, draught proofing and heating and cooling. This can increase electricity costs for people to maintain sufficient temperatures in their homes, to keep cool in summer and warm in winter. There is often limited power for renters to request changes to the property they live in to make their tenancies more energy efficient or comfortable. To protect renters and ensure a base level of thermal comfort, the government should mandate minimum energy efficiency standards for all rental properties. Beyond minimum standards, there also needs to be mandatory disclosure of the energy efficiency rating of all rental properties. To be meaningful, the disclosure framework must apply at the point of lease for all properties – not be an opt-in voluntary system for landlords. There will also need to be protections against unfair rent increases with the implementation of minimum energy efficiency standards.
- 1.3 Commit additional funding of $64 million over four years for Housing SA and other community based organisations to deliver a targeted energy efficiency program for public and community housing tenants.
Energy efficient housing has been shown to reduce living costs and improve comfort levels for residential occupants, particularly in extreme heat and cold. Data from the National Social Housing Survey (2018) indicated that 4 in 10 social housing tenants, incorporating public, Aboriginal and community housing, said that their homes do not meet their needs for thermal comfort. In the national survey, SA had the lowest score for thermal comfort, indicating that social housing tenants are living in conditions that affect the health and wellbeing of tenants. Significant investment is required for Housing SA and other community-based social housing organisations to deliver a targeted energy efficiency program for social housing tenants. This could include retrofits of housing to seal windows and doors, replacing old insulation and upgrading heating, cooling and hot water systems in social housing properties.
- 1.4 Increase the renter payment rate of the Cost of Living concession to the homeowner level.
The Cost of Living Concession’s origins as council rate relief continue to be reflected in the difference between payments for homeowners and renters. Tenants of rental properties who live on low incomes receive less than half the concession amount that home owner-occupiers receive, except for retirees. The different payment amounts imply that home owner-occupiers have higher ‘costs of living’ than renters, but the national data from the Australian Bureau of Statistics’ (ABS) Household Expenditure Survey shows that this is not the case, while most economic analysis suggests that landlords pass on the costs of council rates – so there is no justification for the lower concession rate.
In 2017-18, there were around 204,000 rental households in South Australia, making up 29.5% of the SA housing market. This proportion was slightly below the national average where 32% were renters.
Renters on low incomes struggle
Renters on low incomes particularly struggle with housing affordability. Of the 204,000 South Australian renter households, nearly 60% were in the bottom two income quintiles. Of those low-income renters, 32.4% or 39,556 households were in housing stress, that is, spending more than 30% of their income on housing costs. Almost all of these were in private rentals. Using data from new rental bonds, SACOSS calculates that the median rental for a 2-bedroom unit in the cheapest Adelaide suburbs in the June Quarter this year was $293 per week. It was $385 for a 3-bedroom house. The data shows that these rental prices are unaffordable for people on low incomes looking to rent. The proportion of private renters in the rental market is also increasing. In 1994-95, 56% of renters had private landlords. By 2017-18, it was 76% as public housing shrank to just 4.9% of the total number of houses.
We have less public housing and long wait lists
In the twenty years 2001-2021, the total number of social housing dwellings in SA fell by 11,645 tenements, a decline of 21%. Public housing dwelling numbers fell even more: by 19,822 or a massive 38% of their numbers in 2001. This was partly due to the transfer of over 1,000 public houses to community housing providers in 2017-18, but also due to a long-term sell-off of public housing. At 30 June 2021, there were 15,988 applicants on the public housing waiting list (excluding applicants for transfers between houses). This equated to 51% of the total public housing stock, which gives some sense of the scale of policy response required.
- 1. Policy Brief: Rental affordability
- 1.1 Policy Brief: More public housing
- 1.2 Policy Brief: Minimum energy efficiency standards and mandatory disclosure for rental properties
- 1.3 Policy Brief: Targeted program to improve the thermal efficiency of public and community housing
Media releases, media and articles:
- Opinion Piece: Social housing helps economy as well as renters
- Media Release: Poverty in SA in the spotlight for Anti-Poverty Week
- Opinion Piece: Low-income renters need State Government help now
- Update: action needed as renters living in "tin shacks"
- Media Release: Public housing sell-off cuts deep
- Opinion Piece: Smoke and mirrors hide housing crisis
- Media Release: SACOSS Conference: housing, water and energy
- SACOSS Video: A Cold Winter's Night