AHURI BRIEF

What is the right level of social housing for Australia?

4.4 per cent of Australian households live in social housing, compared to 18.2 per cent in the UK. How do we know if we have the right level of social housing?

Last updated 7 Apr 2017

In the 35 years between 1981 and 2016 the percentage of all Australian households living in social housing (i.e. state owned and managed public housing or community managed housing) has remained relatively constant, from 4.9 per cent in 1981 to 4.4 per cent in 2016. Such a constant level could suggest Australia has the balance right, but it also raises the question 'What is the right level of social housing for Australia?'

Table 1: Public and Community housing stock, Australia, 1981 and 2016

 Public housingCommunity housingSocial housing dwellings  (Columns 2 & 3 + SOMIH)All Australian%Social Housing
1981228,938 dwellings

N/A

228,938 dwellings4,668,906 dwellings4.9
2016320,041 dwellings

80,225 dwellings

410,215 dwellings9,241,497 households4.4

Sources: AHURI Final Report No. 231, Productivity Commission, and ABS.

To put Australia's level of social housing into perspective, we can look at other countries with broadly similar cultural characteristics and values. There is a very wide spread of levels of social housing across these countries. In Canada social housing accounts for around 4.2 per cent of all housing, in New Zealand the level is 4 per cent, and in the United Kingdom it is 18.2 per cent. The U.S. Department of Housing and Urban Development publishes that 1.2 million households live in public housing, which is 0.9 per cent of all housing.

Comparing to EU countries

If we look further at the European Union (EU), we also see a wide range of levels of social housing, from a low of 0 per cent in both Greece and Cyprus, to a high of 33 per cent in The Netherlands.

However, when the EU countries are ranked by percentage of social housing, we see the median lies between Germany (4.2%) and Italy (5.3%). Australia (4.4%) sits at about the EU median average. The four highest results from the EU were Netherlands (33%), Austria (20.1%), Denmark (20%) and Sweden (19%).

Figure 1: Percentage of social housing in the European Union, Australia, New Zealand, Canada and United States (2011–16)

Source: Housing Europe (2015)

Comparing using GDP per capita

Perhaps looking at a country's wealth might provide an answer as to what is an appropriate level of social housing. An examination of the 'GDP per capita' (i.e. the country's gross domestic product divided by its population) ranking of the selected countries, shows that, in 2015 (the latest available data), Australia had a higher ranking than all apart from Luxemburg and Ireland.

Denmark and Sweden, with GDP per capita roughly comparable to Australia, had levels of social housing that were around five times greater than for Australia. Ireland, with a slightly greater GDP per capita, had a level of social housing that was over two times greater than Australia’s.

Table 2: GDP per capital ranking of EU, Australia, USA, NZ and Canada, 2015

 GDP per capita in US$ (2015)% Social Housing in 2015

Luxembourg

$101,450.00

0.9

Ireland

$61,133.70

10.3

Australia

$56,311.00

4.4

United States

$56,115.70

0.9

Denmark

$51,989.30

20

  GDP per capita in US$ (2015) % Social Housing in 2015

Luxembourg

$101,450.00

0.9

Ireland

$61,133.70

10.3

Australia

$56,311.00

4.4

United States

$56,115.70

0.9

Denmark

$51,989.30

20

Sweden

$50,579.70

19

Netherlands

$44,299.80

33

United Kingdom

$43,876.00

18.2

Austria

$43,775.00

20.1

Canada

$43,248.50

4.2

Finland

$42,311.00

14

Germany

$41,313.30

4.2

Belgium

$40,324.00

6.5

New Zealand

$37,808.00

4

France

$36,205.60

17.4

Italy

$29,957.80

5.5

Spain

$25,831.60

2.4

Cyprus

$23,242.80

0

Malta

$22,596.20

7.2

Slovenia

$20,726.50

6

Portugal

$19,222.20

2

Greece

$18,002.20

0

Czech Republic

$17,548.30

9.4

Estonia

$17,118.50

1.7

Slovak Republic

$16,088.30

3

Lithuania

$14,147.00

3

Latvia

$13,648.50

0.4

Poland

$12,554.50

7.6

Hungary

$12,363.50

3

Croatia

$11,535.80

1.8

Romania

$8,972.90

1.5

Bulgaria

$6,993.50

2.6

Source: Housing Europe (2015)

Demand for social housing

Another way to assess what may be the right level of social housing for Australia is to look at it in relation to the demand for social housing. This total demand can be considered as either 'expressed demand' (i.e. the total of those already in social housing plus those on waiting lists) or as a combined existing and potential demand (i.e. the total of those already in social housing plus all those who are eligible).

Expressed demand

On the 30 June 2016 there were 394,289 households in public, community and SOMIH housing dwellings across Australia. On that same date, there were 147,884 applicants on the waiting lists for public housing, 38,509 applicants for community housing and 8,199 applicants for SOMIH. When these households are added together we find that 588,881 Australian households were living in or had requested to live in social housing. As there were 9,241,497 households in Australia in 2016, this meant 6.3 per cent of all Australian households (588,881 households) were living in, or had requested to live in, a form of social housing.

Combined existing and potential demand

Analysis of the 2011 Census revealed there were a large number of lower-income households who were renting in the private rental market and who were eligible for social housing.

Because of the way the Census information was assessed, it wasn't possible to isolate eligible householders from those living in group households, those classified as homeless (such as living with family or friends) and those living in non-private dwellings (such as rooming houses, supported residential services, caravan parks, refuges etc.). As a result, the researchers had to undercount households who would be eligible and therefore had to underestimate the potential demand.

Nevertheless, the 2011 Census data showed there were 465,356 private renter households eligible for social housing based on their low-income. When added to the number of households already in social housing (389,631 + 465,356 = 854,987 households), this indicates that 11 per cent of all Australian households (7,760,319 households in 2011 Census) were eligible for, or living in, social housing in 2011.

If we only consider those households who were paying 30 per cent or more of income in rent, the number of additional eligible households reduced to 287,724 households, which meant 8.7 per cent of all households were eligible for, or living in, social housing in 2011.

The verdict

Although the level of social housing in Australia has dropped a little over the last 35 years, there is, of course, no one final answer to what is the correct level of social housing.

Australia's level of social housing in 2016 of 4.4 per cent was lower than that revealed when considering either expressed demand or a combined existing and potential demand. It was also low in comparison to the UK and countries within the European Union that had similar GDP per capita rankings, although the percentage of social housing was comparable to culturally similar Canada and New Zealand, and was very much higher than the level in the US.