Rapidly rising housing costs in many parts of Victoria, alongside decreased incomes for many households as a consequence of Covid, mean that more people are living in precarious situations. Too many low-income households are living in housing stress, which increases their risk of homelessness and means many are choosing between paying rent and putting food on the table. This Anti-Poverty Week 2021, we examine the link between poverty, housing, and homelessness – and discuss what is needed to improve the situation for thousands of Victorians.
Poverty, housing, and homelessness
Homelessness almost always occurs in the context of poverty. Where people are unable to work, or do work but receive low or insecure incomes, they are often simply unable to afford housing in the private market.
Rapidly rising housing costs – including rent and mortgage – are contributing to sharp increases in rental stress among low-income households in Victoria. Housing stress occurs when property costs exceed 30 percent of household income among those on low income, meaning that there is not enough money left to afford other essentials such as food, transport, health, and energy bills.
People living in housing stress are particularly vulnerable to homelessness; an unexpected expense or loss of income can mean they have to choose between paying rent and paying for the essentials. In Victoria, financial difficulties and housing costs are among the leading causes of people seeking support from homelessness services.
Finding an affordable home in Victoria is becoming more difficult for people on low-incomes, and almost impossible for those living on Government income support – in the 2021 Rental Affordability Snapshot, just three rentals across Victoria were affordable for a person on JobSeeker.
Housing supply in Victoria is lacking, particularly for low-income households. In 2020, the Victorian Government announced an historic $5.3 billion investment into social and affordable housing through its Big Housing Build. The program will deliver 9,300 social housing dwellings and 2,900 affordable housing dwellings over four years.
Council to Homeless Persons welcomes these measures to make Victoria a fairer and more resilient state. But with the lowest proportion of social housing in the country and a shortfall of 102,800 social housing dwellings in Victoria, there is more work to be done to ensure people on low incomes have access to housing they can afford. That’s why the Federal Government must also invest in social and affordable housing programs, to deepen the impact of the State Government’s efforts.
Spending on affordable housing does not just create homes for people who need them; it also creates jobs and boosts the economy – which is much-needed as Victoria recovers from its extended period of lockdown during the Covid-19 pandemic.
Income support is another key tool in supporting people out of housing stress and poverty. Commonwealth Rent Assistance (CRA) helps people who are renting and rely on the income support system, including low-income families. In Victoria, more than 300,000 households receive rent assistance, but the rapidly rising costs of rent across Victoria mean that more than 40 per cent of households remain in rental stress.
In 2020, when JobSeeker payments were effectively doubled with the addition of the Coronavirus Supplement, CRA recipients in rent stress fell to under one third. People reported being able to afford rent and the essentials, and nearly 70 percent of people surveyed reported that they were finding it easier to pay their rent or were considering moving into safer or more appropriate accommodation.
But, when additional income support was taken away, many people were thrown back into poverty and rental stress. An increase in the JobSeeker rate of just $3.57 per day falls well below the amount needed to meet sharply increasing housing costs across the state. The small increase leaves Australia’s unemployment payment the lowest in the OECD and hundreds of thousands of Australians in rental stress.
Everyone should have a same home, and enough money to afford the basics. But right now, people who are struggling to get by on the $44 a day JobSeeker rate are being forced to make heartbreaking decisions between paying their rent, putting food on the table, and paying their bills. With the cost of housing soaring, it’s never been harder for those on the lowest incomes to keep a safe roof over their head.
You can help to improve the country’s social safety net, by joining calls from the Everybody’s Home campaign to Treasurer Josh Frydenberg, to increase JobSeeker and related income supports to at least $67 per day, increase Commonwealth Rent Assistance by 50%, and make an urgent Federal investment into social housing.
Learn more about the Everybody’s Home campaign and sign the petition here.