Market Provision of Affordable Rental Housing: Lessons from Recent Trends in Australia

This article provides new evidence on the supply of private rental dwellings affordable for low income households in Australia in 1996 and 2001 and on shortages or surpluses of affordable dwellings in each period. The results indicate a decline in the supply of low rent dwellings between 1996 and 2001 and a resultant shortage of dwellings affordable for low income households in 2001. However, the size of the low rent supply is only the first affordability hurdle for low income households because much of the low rent stock was occupied by higher income households. Employed higher income young families compete with low income older single persons for access to the low rent stock. Once stock utilisation is taken into account, the shortage of dwellings affordable and available for low income households is increased. Moreover, an apparent surplus of dwellings affordable for low to moderate income households is converted to a significant shortage. The article concludes by raising concerns about the shift to policies that rely on the private rental market to provide affordable rental housing.