Thursday, June 16, 2016

The rent (assistance) is too damn low

Sydney, we have a real problem.

The rent in Sydney is so high now that even historic pockets of affordability are way out of reach for people doing it tough. We might have been able to rely on public or social housing if supply had kept pace with the growing population, but it didn't.

That shortfall has combined with pressure from moderate income households - also desperately trying to keep their budgets in check - and landlords taking full advantage to meet their exorbitant interest costs, to squeeze this city dry of affordable rental housing. The most graphic way of seeing the impacts for the last few years has been Anglicare's Rental Affordability Snapshot. Now we have a second way of showing the problem in the form of National Shelter's Rental Affordability Index. Sydney is a sea of red and orange, showing the lack of affordable options.
Sydney's rental housing. The redder it gets, the cheaper it ain't.
At the fringes there appears to be some hope - green looks promising, if you receive close to a moderate wage. But we wondered about tenants surviving in this city on Newstart, and receiving Commonwealth Rent Assistance (CRA). We crunched some numbers, and the news is not good.

We've looked at how much a one bedroom apartment would cost to rent in some of the more traditionally affordable parts of Sydney and surrounds, and compared it to the income a single person person receives on the Newstart allowance, plus CRA. We can see the numbers going back to 2004 when the Rent and Sales Report began reporting on first quartile rents for each Local Government Area. The "first quartile" in this case is the level of rent halfway between the lowest rent for new bonds lodged in March of each year, and the median, or middle rent.

We chose these five Local Government Areas as being both historically and currently some of the most affordable areas of the Sydney region, as well as representing the northern, southern and western areas within a relatively accessible distance from the city.
Clearly, Rent Assistance has never been about paying the rent in full. But it does make a real difference in bringing a home within reach for a lot of us who would struggle even more without it.

Click image for larger version
Government figures show that more than a quarter of people in NSW who receive rent assistance would pay more than 30% of income if not for CRA, and 15% would otherwise be paying pay more than 50% of their rent. However, in NSW we are still left with 15% of people, or nearly 70,000 tenants, who are paying more than 50% of their income even after receiving CRA.

The #votehome campaign is calling for a 30% increase in rent assistance. What would that look like? We've applied that to a few different household types in Wyong, the cheapest LGA for lower quartile rents in Greater Sydney. These figures show what percentage of income is taken up by rent after receiving CRA. Remember, anything over 30% is considered unaffordable if you receive a low income:

With a 30% increase in CRA:

OK, it may not look like much, but it translates into around $20 a week more to spend on food, utilities, clothes or health. While the other income support payments look better, it is important to keep in mind that people living with disabilities, and those with kids do have other expenses that can really stack up. Ultimately, Newstart is just inadequate as a payment and needs to be increased, but an increase in rent assistance will still make a substantial difference.

You can support the increase by signing the #votehome petitions here.

The rent figures were derived from the Rent and Sales Report. We'll be releasing the first edition of Rent Tracker shortly, where we'll dig in to the reality of rent prices in NSW and explore the wealth of knowledge that the tenants of NSW provide simply by paying bond.

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