Friday, November 27, 2015

The pointy end of unaffordable housing

Housing affordability is a very Sydney issue. If you've spoken to any Sydneysider in any capacity throughout the last five years, you might have picked up on this. Coverage of the issue can feel all-consuming, but there’s little denying it is framed by the cost of buying and selling houses. How a cardboard box glued to the ground, that went for thrippence and a stick of gum last time around, fetched seven figures on Saturday. Or, if you think we're just being provocative, how these days a million of your most precious dollars can't even buy an uninhabitable shack, wedged between a wreck and a petrol station on the busiest road in Sydney.
Do I hear 1.5?
National Shelter ventured into the fray this week with a more useful contribution – the release of a quarterly Rental Affordability Index. The accompanying report notes that “focusing on housing affordability through the lens of home ownership does not provide insight into the households that are struggling with housing affordability most – those in the rental market.” And as we've long suggested, it's the private rental market where the real pain of unaffordable housing is felt.

The index will measure the affordability of renting across the nation, with a focus on the cost to low income households.  It leans on the ‘30/40 measure’, “that if housing costs exceed 30% of a low income household’s (households with the lowest 40% of income) gross income, then that household is experiencing housing stress”; risking the ability to pay for basic amenities such as food and water.

And the outlook in Sydney, “the nation’s worst picture” where “almost all renters struggle”, is concerning to say the least. Even the average income household in Sydney is perilously close to the line, needing 28% of its income for rent. But non-family households in the bottom 20% of income have the worst levels of affordability of any group analysed for the report – needing 65% of their income just to rent at 25% below the market rate, making their rent ‘extremely unaffordable’. The results are only marginally better for family households in the same quintile, and households in the bottom 20-40% income bracket.

Interestingly, renting in regional NSW is also unaffordable for both family and non-family households with income in the bottom 40% - though mostly to a lesser extent than in Sydney.
The report also includes a dose of the absurd with its list of five most affordable localities in Greater Metropolitan Sydney. Perhaps the purpose of this particular statistical tidbit is to emphasise that the most affordable choice is to live somewhere else. Because only a statistician would believe that four of the five most affordable locales actually form part of the state capital, ‘Greater’ or otherwise. Black Springs, by far the most affordable suburb in the index, is a fair hike along back roads to bustling Bathurst. Bluehaven and Lake Haven are a hop skip and jump from the shores of Lake Macquarie, whilst Silverdale is adjacent Warragamba Dam. Mount Druitt, in second place, is the only suburb within our city’s bounds to make the cut.
Or perhaps this simply affirms another key finding of the report – that poor rental affordability “is creating a divide in our cities between where the opportunities exist and where households are located.” Indeed most affordable properties for low-income earners are situated west of Blacktown, forty plus kilometres from the CBD. By contrast, the five least affordable localities are far more predictable - a mix of eminent city and harborside locales.
Monitoring, measuring, and comparing housing affordability in this manner is a commendable and overdue contribution to the housing discourse. Whilst it is the only authoritative source of rent data in NSW, the Rent and Sales Report has no affordability focus. And though the picture painted by the initial findings are undoubtedly bleak - for none more so than those struggling in Sydney, - we are heartened by the traction the report has received in the news media and elsewhere. This issue matters to us. We will certainly be keeping an eye on the report's findings, and are confident in its potential to inform and influence the conversation in the months and years to come.   

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