Federal Government Urged to Address Affordable Housing Gap

The federal government is being urged to address a critical looming gap in affordable housing that advocates say threatens to push thousands into homelessness.

The National Rental Affordability Scheme (NRAS) – which provides incentives to housing providers offering rental properties at least 20 per cent below market rates – is winding down at the end of 2018.

As the only program in Australia that directly funds the new supply of affordable rental housing, the closure of the NRAS has advocates concerned about the impacts this will have on low-income earners relying on the scheme.

National Shelter executive officer Adrian Pisarski, told Pro Bono News the closure of the NRAS would make disadvantaged Australians even more vulnerable.

“Many people may well end up homeless,” Pisarski said.

“They’ll certainly be in more expensive rentals if they can find an alternative. This will put much more pressure on their household budget.”

Almost 35,000 rental properties nationally are subsidised through the NRAS, and next year more than 1,400 properties will be taken off the scheme – which completely shuts off in 2026.

Pisarski said while the full impact of the cuts wouldn’t be seen for another few years, the federal government needed to immediately increase Commonwealth Rent Assistance and income support payments like Newstart to ensure people don’t fall into poverty.

He also said community housing providers needed to implement plans to manage people leaving NRAS properties.

Andrea Galloway, the CEO of community housing provider Evolve Housing, said her organisation was committed to helping tenants affected by the scheme’s closure, but called on the federal government to take action on the critical looming gap in affordable housing.

“People who lose their rent subsidies could fall into homelessness or go onto the social housing waiting list, which are both scary options,” Galloway told Pro Bono News.

“And this issue is not going to go away. Housing affordability is going to be to be an issue for a long time and the government needs to address it.”

Evolve Housing manages 782 NRAS properties, more than half of which are privately owned.

Galloway said she feared these private investors will sell their property, or raise rent to the full market rate, once these subsidies disappear.

To combat this, she called on the federal government to provide an interim subsidy to investors whilst they looked at another program to fill the subsidy gap.

Jenny Smith, the CEO of the Council to Homeless Persons, told Pro Bono News homelessness services would undoubtedly bear the brunt of the NRAS ending, as people were pushed out of housing altogether.

She said a possible solution to the looming affordable housing gap was to provide incentives for big investors, such as superannuation funds and banks, to lend to not-for-profit community housing organisations.

“We need to get smart about ways to boost the supply of public and community housing. Making sure that everyone has a safe, affordable home is in everyone’s best interest,” Smith said.

Responding to the sector’s call for action, a spokesperson for Social Services Minister Paul Fletcher told Pro Bono News states and territories were the ones primarily responsible for delivering housing and homelessness services.

But they said the federal government was committed to doing its part, including by contributing $1.5 billion to states and territories annually through the new National Housing and Homelessness Agreement (NHHA), and $4.5 billion a year to eligible Australians through Commonwealth Rent Assistance.

“The government understands that housing is fundamental to the welfare of all Australians and is doing its share of the heavy lifting to support states and territories,” the spokesperson said.