A perfect storm: What the end of the rental moratorium says about the state of social housing in Western Australia (part 1 of 2)
blog | Words Kaci Oliphant | 26 May 2021
There are growing fears that homelessness could rise in Western Australia (WA) with the end of government policies like JobKeeper coinciding with the end of the rental moratorium.
As many as 100,000 people could eventually be affected by the ending of the rent moratorium in WA.
As of March 28 2021, the extended emergency period under the Residential Tenancies (COVID-19 Response) Act 2020 came to an end. This legislation mandated a temporary freeze on evictions and rent increases to address the financial impacts of the COVID-19 pandemic. The moratorium applied to all residential tenancies, including those in public and government housing, park homes, as well as boarders and lodgers. On March 29, the normal residential tenancy laws came back into effect, ending the freeze on rent increases and giving landlords more leeway to evict people or tell them to move out because the property is being sold.
JobKeeper payments, which provided funding for eligible employers hit by COVID-19 and related restrictions to supplement or cover employee wages, also came to an end on March 28. Treasury secretary Steven Kennedy, estimated that the end of JobKeeper payments could see between 100,000 – 150,000 Australians losing their jobs, warning that there could be a bump in the unemployment rate. Worryingly, JobKeeper ended just days before the JobSeeker benefit was effectively cut by $100 a fortnight.
With many WA households feeling the impact of COVID-19, especially those who are renting the ending of the rent moratorium in WA coinciding with the JobKeeper and JobSeeker changes could leave many facing overdue rent balances and the risk of eviction. The combined effect? A perfect storm of increased financial pressure, housing stress and risk of homelessness.
“Without a safe, stable, sustainable home it is difficult to keep a family safe, access or sustain a job, or maintain independence in older age. For many people, a sudden or unplanned change in circumstances can place them at risk or lead to housing stress and homelessness. These situations can contribute to a health condition or make it harder to manage an existing one. Accessing services is difficult without a stable home, and a lack of housing options can make it hard to leave unsafe situations.”
While some measures, including the expansion of the Residential Rent Relief Grant Scheme, have been put into place to help those who are struggling to pay their rent, these measures simply defer the problems without adequately addressing the fundamental flaws in Australia’s housing system.
- Since 2000, house prices in Perth have increased more than 200%, with minimum wages only increasing by 92%.
- Over the same period, rental prices have increased 135%, with Newstart allowance* only increasing by 69%.
(WA Housing Strategy 2020-2030)
STRUCTURAL CHALLENGES
In WA, housing affordability is an entrenched structural issue. With many West Australians priced out of the housing market, more people are accessing the rental market. This is problematic given the current vacancy rate is sitting at around 1% in Perth, and even lower in regional areas. With rent expected to rise by 15% after the moratorium period, current renters may feel forced to accept the increased rent payments just to keep a roof over their heads. For those looking for a place to rent, there is a real fear that they may be outbid and left with little alternative accommodation.
With WA renters facing unprecedented difficulty trying to find a home, (which will only worsen with the end of the rent moratorium) there will likely be a surge in demand for social housing and homelessness services; a surge that we are ill equipped to handle.
Around 15,700 households or over 30, 000 people are on the waitlist for social housing (Shelter WA)
It would take more than 1300 years for the WA government to house every person on the state’s social housing waitlist at its current rate (WA Today)
A single person on Youth Allowance and Newstart would find it almost impossible to find an affordable home anywhere in Australia, whether regional or metropolitan’ (Anglicare Australia 2017)
SOCIAL HOUSING REFORM REQUIRED
In WA, there is a crippling social housing deficit with a shortfall of 39,200 social and 19,300 affordable homes (Shelter WA). The WA Housing Strategy 2020-2030 sets a target for a 6% net increase in social housing, adding just 2,600 social homes in WA to meet this need. (Shelter WA). The numbers across the states and territories are similarly concerning.
This deficit in affordable housing is evident across Australia and with mounting barriers to first home ownership, there is a dire need for significant investment from the Federal Government to increase the supply of social housing. Social housing must be considered critical infrastructure for our social and emotional wellbeing. However, on May 11 The Federal Budget was handed down by Treasurer, Josh Frydenberg, with little to no mention of social housing. While $124.7 million over two years was pledged to provide support for workers in the housing and homelessness sector, this does little to address drastic shortages of social housing stock across the country.
There is a need for reform in our social housing sector. We need to adopt innovative strategic approaches to increase the supply of affordable housing. We need to build a resilient housing system that can reorganise, change and learn; and not only as a consequence of crisis.
Building social housing requires significant funding and a strong commitment from central governments. Innovative affordable housing strategies and programs adopt a whole-of-housing industry approach to consultation and implementation. Currently, the fragmented nature of subsidy streams in Australia creates an opportunistic approach to affordable housing development, as projects often rely on one-off funding arrangements, rather than as part of a long-term strategy. A national housing strategy that integrates the different subdises, grants, policies and programs across jurisdictions is needed to drive positive outcomes across the social and affordable housing sector.
A DIVERSIFIED HOUSING MARKET
The demographics of the Australian population seeking housing is changing: our population is aging; household composition is changing; cities are continuing to be the key growth areas; and home ownership is declining. These shifts are affecting the demand for appropriate housing, and the type of available housing is failing to keep pace with changing demographics and needs.
Changing demographics are paired with another major change across jurisdictions, as government agencies are moving from viewing housing through the traditional asset lens, to a more person-centred lens that views housing as a longer-term, whole-of-life strategy. All this is requiring additional, alternative and innovation procurement, and funding and financing approaches.
IDEAS FOR THE FUTURE
Across Australia and around the world, governments, social and private enterprises are developing new solutions to these challenges that acknowledge housing as one element of a broader ecosystem: interconnected with other services and structures, and significantly impacted by shifts in these spaces.
Innovation Unit ANZ is privileged to partner with a number of ambitious organisations working to address the complex challenges that have led to current housing shortages and rising homelessness in WA and beyond. In part 2 of this blog, we will explore the features of new solutions to the housing crisis and share some examples of innovations in social housing and addressing homelessness from around the world.
Read about some of our work in the housing space here:
Age Friendly Auckland / Tāmaki Tauawhi Kaumātua
Housing Instability in Tāmaki Makaurau for Single Mothers