We need to talk about the rent affordability crisis

ANALYSIS

Happy International Tenants Day! Or is it? 

Rents are going up. Vacancy rates are stubbornly low. Homelessness is on the rise. 

In short, Australia is suffering through a housing affordability crisis.  

VCOSS recently surveyed community sector workers to see how renters are faring. 

While affordability has been a long-term issue for renters, COVID made it worse.  

Record low rental vacancy rates (especially in regional cities) are adding to the pain. 

About 85 per cent of community sector workers said finding an affordable place to live was the top issue facing renters in both 2021 and 2022. Unsurprisingly, people living on Centrelink incomes were the worst affected. 

This has all been compounded by a global cost-of-living crisis.  

In Victoria, long-awaited and welcome changes to make our renting laws fairer and safer came into effect in March 2021. Some of the changes deal with rent and financial hardship, such as limiting rent increases to only once a year, and giving people who receive a notice to vacate (for falling behind in their rent) 14 days to pay the arrears. 

But these changes alone haven’t (and were never intended) to alleviate all the cost-of-living pressures facing renters. 

With a Victorian election around the corner, all political parties should be now turning their focus to what else can be done. 

This means more than building on positive changes already made to our renting laws.  

The world has changed since 2015, when the Victorian Government began reviewing and reforming our existing laws. This means more changes are needed. For example, investigating how to curb outrageous rent rises. 

More also needs to be done to educate renters (and landlords) about new renters’ rights. If nobody knows a right exists, or how to assert it, then that’s a problem. This will require continuing to roll out high-quality information tailored for specific groups of renters.  

It will also mean bolstering Consumer Affairs Victoria and the Victorian Civil and Administrative Tribunal (which often rules on rental disputes) to ensure renters can access information, advice and dispute resolution.  

Governments also need to be funding community organisations properly and predictably.  

What does this have to do with renting? A lot, actually. Community legal centres, housing and homelessness services, financial counselling organisations and information bodies help renters keep their leases. But funding restraints mean they can’t keep up with demand. 

While outside of the Victorian Government’s jurisdiction, lifting Commonwealth income support payments like JobSeeker, Youth Allowance, the Disability Support Pension (etc) is critical. 

Commonwealth Rent Assistance also needs an overhaul. The independent Productivity Commission says this should happen urgently. Any shakeup must also look at how we adequately assist people who are eligible for social housing, but are stranded in the private rental market because there isn’t enough social housing. 

In this context, the Victorian Government should explore whether current state-based financial supports to renters are still meeting need. For example, while family violence victim survivors now have more legal rights to stay in their home, that doesn’t make it any easier to afford the rent, utilities and other expenses. Significant financial barriers remain. 

Finally, the elephant in the room.  

All governments need to work together to build more public and community housing. Victoria has made a great start with the nation-leading Big Housing Build. We need a sustained pipeline of growth beyond the current four-year commitment, with the Commonwealth playing its part. 

By our estimates, Victoria alone must build at least 60,000 new properties homes over the next 10 years just to meet current demand.  

Not only will building more social housing literally give people a safe and affordable place to live, it will also take some demand off the red-hot private rental market.  

In short, more social housing is essential to ensure affordability, reduce evictions and prevent homelessness. New renters’ rights should also be extended in full to social housing tenants. 

Victoria’s 1.8 million renters are relying on us getting this right.

VCOSS is the peak body for Victoria’s social and community sector, and the state’s premier social advocacy body.

We work towards a Victoria free from poverty and disadvantage, where every person and community experiences genuine wellbeing. Read more.

VCOSS acknowledges the Traditional Owners of Country. We pay respect to Elders both past and present, and to emerging leaders. Our offices are located on the sovereign, unceded land of the Wurundjeri people of the Kulin Nation.