Private rental assistance is only a stop-gap for long social housing wait lists

New AHURI research reveals that private rental assistance is increasingly used as an alternative for households unable to access social housing. It found that successful housing outcomes are difficult to achieve in highly pressurised private rental markets - even with this government assistance.

The research, ‘Getting off the waiting list? Managing housing assistance provision in an era of intensifying social housing shortage’, undertaken for AHURI by researchers from University of New South Wales, Sydney and RMIT University, investigates how policy makers and housing providers can use other forms of housing assistance to support people who are otherwise eligible for social housing. 

Private rental assistance is being used to address high levels of demand for social housing 

‘The scarcity of new social housing places means many applicants have no guarantee of when they will be housed. Instead, Australian governments are having to look to private rental market assistance as a way to support households,’ says lead researcher, Dr Fatemeh Aminpour of the University of New South Wales. 

‘In 2021-22, across Australia over 174,600 households had applied to live in social housing but only 29,100 households were offered a home; at the same time more than twice as many households (70,100 households) were offered some form of private rental assistance. This type of assistance is typically targeted at applicants whose needs are less acute and have greater capacity to sustain a private rental tenancy after a period of support.’

Private rental assistance may not be effective in crowded and expensive rental markets

While the aim is to support lower-income households to sustain private rental tenancies, there is a question whether these forms of assistance are effective. It is estimated that only around 11 per cent of private tenants have a lease of two years or longer, and that 31 per cent of recent moves by these households were forced. Furthermore, in 2020-21, 49 per cent of social housing register applicants who had previously received a bond loan or ongoing private rental subsidy had not been able to sustain their private rental tenancy. 

Private rental assistance programs also emphasise the applicant’s capacity to afford a private rental property. Most private rental assistance programs have affordability cut-offs such that applicants can only receive support if the rent for the property they are applying for is less than 50-55 per cent of their income. This works to prevent applicants from taking on unaffordable tenancies. 

‘Private rental assistance recipients are finding it increasingly difficult to secure private rental properties that conform to the eligible affordability cut-offs,’ says Dr Aminpour. ‘We saw that sometimes assistance products aren’t being taken up, not because they’re not needed but because of rents being too high to meet the eligibility requirements. This raises serious questions as to the viability of private rental assistance as an alternative to social housing in jurisdictions like Australia, where the private rental sector is relatively under-regulated and volatile.’

In addition, just because households are allocated private rental assistance it doesn’t mean they are guaranteed access to a suitable private rental property.

What can policy makers do?

Despite these challenges, private rental assistance has an important role in supplementing social housing waiting lists. The research identified a range of opportunities to improve current processes for managing private rental assistance for social housing applicants, including:

• making the application process and the housing assistance system clear and accessible by ensuring that applicants have the necessary information and advice during the social housing application process, and that housing assistance staff understand their clients’ needs and aspirations 
• developing individual plans for clients who may be eligible for social housing but not of high priority, enabling them to access other services that are available to them, including private rental assistance.

‘We also see there is scope for state and territory governments to establish partnerships with private landlords to secure rental tenancies for low-income families who receive private rental assistance products,’ says Dr Aminpour. ‘Governments could offer guarantees against any rental losses occurring in tenancies of homes covered by such an agreement.’