Fears Australia's housing crisis will worsen as affordable rental scheme winds down

Fears Australia's housing crisis will
worsen as affordable rental scheme
winds down
By Emma Pollard
April 28th, 2021

NRAS tenants Anjeli and Yogesh Sharma are worried about where they’ll live when
their rental subsidy ends. (ABC News: Nickoles Coleman)

Thousands of low-income renters across the country are facing eviction or higher
rents as government subsidies come to an end.

Key points:
   •   The NRAS scheme was launched in 2008 to create more affordable housing
   •   Low-income tenants are paying rent around 20 per cent below market rate
   •   Advocacy groups warn tenants could struggle when their homes leave the
       scheme between now and 2026

The federally funded National Rental Affordability Scheme (NRAS) gives incentives
to housing providers, which then rent properties out for at least 20 per cent below
market rates.

Each investor can access the scheme for up to 10 years.

The program started in 2008 with the goal of boosting the number of affordable
rental properties in Australia but was axed by the Abbott government in 2014.

According to the latest figures, 2,184 homes will leave the NRAS this year, meaning
many renters will either be slugged with higher rents, or have to compete to find a
new home in a tight market.

By mid-2026, there will be no homes left in the scheme, with 32,930 properties
exiting Australia-wide over the next five years.

There is no plan to replace the program, which worries advocacy groups who
say that low-income tenants could be left homeless as rents rise nationwide.

Cancer sufferer worried about homelessness
Yogesh and Anjeli Sharma have lived in their NRAS unit at Capalaba, in Brisbane's
east, since 2014.

Mr Sharma is on an age pension and his wife is on Centrelink payments after she
was diagnosed with cancer and had to take leave from her job at a nursing home.

"Since May last year she was diagnosed with breast cancer, then she had chemo
and the operation and now she's going through the emotion of herceptin and the five-
year tablets.

"We don't know when she'll be able to go to work and that is creating a lot of
problems with the income," Mr Sharma said.

Yogesh Sharma wants the federal government to continue NRAS.(ABC News:
Nickoles Coleman)

The Sharmas are worried they could end up homeless when the subsidy on their
rent ends in 2024.

"I just keep on thinking, what are we going to do? What are we going to do? And my
wife is getting more worried and instead of cancer going away, it might even come
back," he said.

"If they want to cut the NRAS scheme out, have another plan in place where people
such as us or people who really are low-income earners and people who really need
it can be supported.

"Or [have] plans put in place for some other form of housing or get the federal
government to give us the 20 per cent that we're going to lose.

"They do not have to give it to us, but they can pay directly to wherever we are
renting."

Mr Sharma called for action on rental affordability.

"I've worked 51 years in this country, I've been 14 years in the Queensland
government, I had my own business for nine years which went down the chute
because of Woolworths and Coles opening up," he said.

"I would like to request for the Queensland government and the federal government
to look very seriously in what's happening to people like us.

Social and affordable housing 'going backwards'
Steve Bevington is the managing director of Community Housing Ltd Group, which
manages 1,600 NRAS properties.

He said Queensland will be hardest hit as the scheme winds up with about 30 per
cent of the homes located there.

"In Queensland there's 100,000 social and affordable housing properties needed
now, there's going to be an increasing demand over the next 15 years.

"So now is the time to put together the schemes which will resolve the problem.

"We're going backwards, we need to go forwards."

Mr Bevington said governments had failed to address the issue.

"Australian governments of all persuasions in the last 10 years would only get about
one or two out of 10, that's on a federal level, because there isn't the necessary
funding to resolve this problem," he said.

"State governments do not have the powers of taxation and do not have the funds,
so they are trying their very best.

"If you look at the Victorian government, they have a very large pipeline [of social
housing] and it would be good if the Queensland government could follow suit.

"Really we need a scheme which has an ongoing provision, so that the housing isn't
lost after 10 years and the people are essentially put on the streets or placed under
housing stress."

Situation 'worst in 40 years'
The executive officer of advocacy group National Shelter, Adrian Pisarski, said
housing affordability is the "worst that I've experienced in the 40 years that I've been
looking at it".

Homelessness support services have reported skyrocketing demand for help.

Adrian Pisarski from advocacy group National Shelter said a national housing
strategy is needed.(ABC News: Amy Sheehan)

The latest data on national rental rates from property analysts CoreLogic showed
rents rose by 3.2 per cent over the first quarter of 2021, the largest quarterly
increase since May 2007.

"Overall, our housing market works OK if you're on a reasonable or high income, but
if you find yourself on a low income, it's increasingly, over the last 25 years, gotten
worse and worse and worse and worse," Mr Pisarski said.

He called on the federal government to lead a process that engages the state
government, private sector, the community, and local governments to develop a plan
for more affordable housing.

"Governments don't have to pay for all of this by themselves, we know that the
superannuation funds are really willing to invest in this area, but what they do need is
a bit of assistance from, primarily, the federal government, but also state
governments," Mr Pisarski said.

He said engaging the federal government had been "very difficult", and while
Housing Minister Michael Sukkar's staff had been accessible, the minister had not
agreed to requests for a meeting.

"What we hear from the federal government is that this is a state responsibility, they
do not seem to think that they have any skin in this game, despite the fact that the
Commonwealth/state housing agreements in Australia go back over 70 years now,"
Mr Pisarski said.

“So there is definitely a role for the federal government.

"It cannot deny that it has a role in it when it creates things like HomeBuilder, when it
funds Commonwealth rent assistance, when it's intimately involved in aged care,
when it is intimately involved in homelessness.

"It cannot turn its back on the problem of housing affordability and we would really
welcome federal leadership in this area," he said.

Mr Sukkar said external reviews had found flaws in the scheme.

"The Australian National Audit Office (ANAO) reviewed NRAS in 2015 and identified
the scheme as being slow in delivery and failing to meet its delivery targets despite
ongoing government funding," he said.

"The Grattan Institute has made similar criticisms of the scheme noting that NRAS
was 'plagued with administrative issues' and 'expensive, unfair and poorly
targeted' with a warning that 'governments should think twice about doing NRAS
again'."

He said the federal government will provide more than $8.2 billion in housing and
homelessness funding in 2020-21 and that the October 2020 budget included $1
billion in “low-cost concessional loans” for community housing providers to deliver
affordable homes.

Queensland Housing Minister Leeanne Enoch said the state government is spending
$1.6 billion on building more than 5,500 social and affordable homes over a 10-year
period.

Online source: Fears Australia's housing crisis will worsen as affordable rental scheme
winds down - ABC News