Policy makers must look at rent to make housing market more equitable: Senate Inquiry

The Senate Inquiry into housing affordability has once again confirmed that Australia’s housing market isn’t meeting the needs of all Australians. As a result, governments at all levels have “a legitimate role, and indeed a responsibility” to use policy interventions to change this. Whilst the relevant factors are complex, housing unaffordability is fundamentally the result of median house prices rising faster than median household incomes over a long period of time. This forces people who would otherwise buy a home to stay in the rental market, which in turn tightens that market. The report made over 40 recommendations including making rental affordability an issue of national importance, and that the Federal Government to lead the way in developing a coherent affordable housing plan.

The report found that as a policy issue affordable home ownership tended to “overshadow” affordable renting, but given that many Australians will rent for life, the committee recommended that the government understand renting as a “mainstream form of tenure.” Despite the call for better policy around affordable renting, the committee found that home ownership is still the most desirable form of tenure because it provides “broader economic and social wellbeing to the community.” Therefore, most of the committee’s recommendations were initatives to support more affordable home ownership.

The committee also found that there isn’t enough social housing to cope with demand and as a result, waiting lists are too long. However the resulting recommendation is vague, asking that all levels of government make “a concerted effort” to increase social housing stocks.

It was very encouraging to see CHP referenced on a number of key points, such as the role of the Federal Government in improving housing affordability. According to the Report the Federal Government should be the “driving force” behind coherent affordable housing policy because it holds many of the key policy levers that affect affordability on the demand side, such as taxation.  The committee also noted CHP’s submissions on  the ongoing financial costs associated with homelessness, how the phenomenon of ‘renting down’ affects low-income renters and the overall supply of public housing stock. CHP’s submission can be viewed on our website.

Government Senators  issues a dissenting report in response. It acknowledged that housing affordability is problem, and that the Report identifies many of the relevant issues. However, it rejected a large number of the recommendations based on its commitment to cutting red tape, things being a state/territory issue, and others being addressed by the Federation Report.