Rental affordability snapshot proves Australia's coronavirus welfare payments should stay

Extract from The Guardian

Grogonomics

Housing

Greg Jericho

Those on the doubled parenting payment can now afford to rent 2.6% of available family homes. This tells you how dire things are

@GrogsGamut

Thu 30 Apr 2020 03.30 AEST Last modified on Thu 30 Apr 2020 03.33 AEST

A recent slight slowing of rent rises has done little to make up for the massive jump that occurred from 2007 to 2012. Photograph: Paul Miller/AAP

The latest annual rental affordability snapshot released on Thursday by Anglicare reveals the continuing precarious nature of housing for those on low incomes. But while this has been an ongoing issue, this year’s snapshot highlights the magnitude of the impact the recent temporary doubling of welfare payments has on the ability for people to find a place to live.

The coronavirus has brought to the fore a number of issues in the economy, which makes it easy to forget that many people were struggling even before the economy hit a wall.
Anglicare’s 21st rental affordability snapshot released on Thursday highlights that even prior to the coronavirus wreaking havoc on our economy, it was as hard as ever for those on minimum wage and government payments to find places to rent.

Each year Anglicare surveys properties available to rent on a certain date, and rates them as affordable and suitable for differing households, because importantly, the rental price is not the only consideration.
Obviously a one room apartment might be affordable for a family of four with a parent on the minimal wage, but it is not suitable.
This year, Anglicare’s survey was undertaken on 21 March – just before the introduction of the temporary increase in payments for benefits such as the Jobseeker allowance (formerly Newstart).
This allowed them to compare the difference in affordability before and after the changes.
And it is stark.
On 21 March there were 69,960 places for rent, and just nine of those were suitable and affordable for a person on jobseeker. But if the doubling of the payment was treated as permanent, that increases to 1,040 places:

For a couple on the jobseeker payment with two children under 10, the difference is even greater – from 589 under the old amount to 8,106 – an increase from 0.8% of all rental properties to 11.6%.
Those payments that have not been increased due to the coronavirus – the aged pension and the disability support pension, not surprisingly saw the least change. The only increase for these payments came from including a rise as a result of Wednesday’s latest inflation figures.
Anglicare notes that “close to 750,000 people receive the disability support pension” and that “660,000 people on the aged pension do not own their own home.”
They argue that “it defies logic that they have not been included in the coronavirus supplement”.
The impact on the exclusion of the aged pension from the increase is clear when we compare it with affordability for those on the parenting payment:

For both payments, the pre-Covid payment period in March saw rental affordability as bad as it has been for five years. But while the aged pensioners only got a small boost when the April CPI increase was taken into account, those on the parenting payment were able to afford more places to rent than ever before due to the doubling of their payment.
That this takes the parenting payment affordability to just 2.6% of all rental properties highlights just how poor the situation is.
The latest inflation figures released on Wednesday by the Bureau of Statistics show that average rents have declined in Perth, Sydney and Darwin, and that for the past three years they have, in all cities except Canberra and Hobart, risen by less than inflation:

But this slight slowing of rent rises has done little to make up for the massive jump that occurred from 2007 to 2012:

The Anglicare snapshot highlights just how unfit for purpose were the levels of jobseeker and other government payments – less about assisting the survival of those out of work than punishing them for not being employed.
Anglicare has called for the increases to be permanent – something the prime minister has recently ruled out.
It has also called for a “national economic stimulus package with targets for building social housing”. This echoes a recent call by Geoff Hanmer, adjunct professor of architecture at the University of Adelaide.
Australia’s public construction of residential properties is currently at near record low levels – it barely makes a dent in the total building of houses and apartment:

After the global financial crisis, public housing construction nearly reached 6% of all residential construction, but even that was well below the levels that occurred routinely in the 1970s and 1980s.
The coronavirus looks set to change our economy, but we should not forget that beforehand there were many problems – and chief among them was the inability of those on government payments to survive for any length of time.
The Anglicare rental affordability snapshot highlights just how great an impact the increase in the payments makes on the ability of families to find a place to rent. But it also should shine a light on the need for public and social housing – not just to create places for people to live but, in a period where private investment is retreating, to also provide jobs.

• Greg Jericho writes on economics for Guardian Australia