The regional impact of rent assistance

Summary

The effectiveness of Commonwealth Rent Assistance (CRA) on housing affordability in high rent regions can be achieved by adjusting the nationwide settings of CRA, and does not require the development of a ‘regional formula’.


Project Number: 30147
Research Theme: Private_Rental
Project Leader: King, Anthony
Funding Year: 2002
Research Centre: RMIT-NATSEM

Research and Policy Bulletin

Research & Policy Bulletin

Issue 059: The Regional Impact of Commonwealth Rent Assistance

The effectiveness of Commonwealth Rent Assistance (CRA) on housing affordability in high rent regions can be achieved by adjusting the nation wide settings of CRA, and does not require the development of a 'regional formula'.

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Description

This research extends AHURI's capacity to construct micro simulation models of housing policy and housing market change by adding a geographic component that assesses impacts at the sub-regional level (Statistical Local Areas - SLAs). This report models four CRA scenarios for their impact upon the geography of housing affordability for private renters in regions across Australia.

The key findings of the research are:

  • The impact of CRA is to substantially increase the proportion of households in affordable housing in the private rental market. CRA takes the proportion of households in affordable housing from one-third to two-thirds.
  • Regional differences in rents in the private rental market, interacting with the Australia-wide settings of CRA, result in regional variations in the impact of CRA upon housing affordability.
  • By changing the nation-wide settings of CRA, policy makers can alter the geography of housing affordability.
  • A decrease in the minimum rent threshold of CRA would tend to improve affordability for those in regional Australia.
  • An increase in the maximum rate of CRA would tend to improve affordability for those in metropolitan areas.
  • The model helps to assess the costs and benefits of these changes. For example, a 10 per cent increase in the maximum rate of CRA would increase the average amount of CRA received from $72.45 to $76.94 per fortnight and cost an additional $4.4 million per fortnight.

More Information

Download now Research and Policy Bulletin: Issue 059: The Regional Impact of Commonwealth Rent Assistance
59 KB PDF Document

Download now Final Report: No. 071: The regional impact of Commonwealth Rent Assistance
3.95 MB PDF Document

Download now Positioning Paper: No. 057: The regional impact of Commonwealth Rent Assistance
1.4 MB PDF Document

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