The federal government currently supports low-income renters, most acutely impacted by the current spike in rents, through its rent assistance payment. The maximum payments for a couple with three or more dependant children is less than $100 a week, a fraction of the median rents paid by households. This means these low-income households are having to absorb all the current rental increases, putting them under even more financial stress.
The federal government could look to increase the rate of Rent Assistance to provide much-needed relief to these low-income households. However, there is a risk that this will lead landlords to increase rents further, worsening the situation for those households that do not qualify for the payment and making minimal difference to those that do qualify.
Long-term, a greater investment in social and affordable housing by all levels of government can induce downward pressure on market rents. The stock of social housing in Australia has fallen dramatically over the past 30 years and sits at around 4 per cent, versus the average across wealthy nations of around 7 per cent.
Social housing, where rents are typically capped at 25 per cent, plays a critical role in the housing market and can make a big difference to the lives of vulnerable Australians. This includes substantially reducing the rate of homelessness experienced by tenants in social housing versus those in the private rental market.
Addressing rising rents should be a priority for all levels of government, and short and long-term solutions are needed. Every Australian needs a place to call home, and should not be placed under severe financial stress to meet that basic need. Lifting rent assistance is the quick solution, but long term we need greater investment by all levels of government to ensure every Australian can access secure and affordable housing.