Where is home for marginalised consumers?
Presentation to the CPRC Policy Connect Series, Monday 25 February
Most low-income Australians secure their housing in the private rental market. They’re spending more of their incomes on housing and rental stress is on the rise. And the number of low-income renters will rise in future since home ownership is on the decline, especially among the young and the poor. By mid-century nearly half of all older Australians may not own their own home in retirement.
In this presentation as part of the Consumer Policy Research Centre’s Policy Connect series, Grattan Institute fellow Brendan Coates argues that policy responses to help low-income earners with rising housing costs can’t ignore the private market.
Rents are higher than they need to be because we haven’t built enough housing and there’s good evidence that if we built more rents would fall, including for those near the bottom. There’s a clear link between rising housing costs and homelessness among those that are already vulnerable. And tenancy rules should be reformed to provide more secure housing for low-income earners.
But more support for the housing costs of low-income earners is needed. Boosting Commonwealth Rent Assistance by 40 per cent should be the priority in the short-term. It’s well targeted to those in need and there’s little evidence it will lead to higher rents. More social housing is needed but it’s expensive, and should be targeted to those at greatest risk of homelessness.