After reading in last Monday's news that Canberra has Australia's worst housing affordability, I'm preparing for the housing revolution. I've stocked up on coffee supplies, sharpened the good scissors, and I'm cleaning out the spare room while I look for an au pair. Because if our housing affordability problems continue, we'll be living in a city where there are no baristas, hairdressers, or childcare workers. They can't afford to live here anymore.
Not to mention nurses, school teachers, or social workers. We'll all have to do our own photocopying too – have you seen the low pay rates for administrative staff? Add grandparents to the list of missing persons in our future city – Age Pensioners can't afford market rent here. Neither can people with limited income earning capacity due to disability or caring responsibilities, or anyone unemployed long enough to max out their credit card trying to cover the rent while they're between jobs.
Every city needs people who are at the lower end of the income range. Not because we like someone else making our flat whites and changing the baby's nappy. We need them because a healthy society is based on relationships between human beings. It's hard to have good relationships with people who aren't here. Especially if we've driven them out of the city by ensuring they can't afford the rent. One third of Australians are renters, which means housing affordability is about rent as well as mortgage interest rates or first home buyers grants.
The language we use about affordability says a lot about how we think (or don’t think) about people who are renting. It's not just about mortgage interest rates, first home buyers grants, stamp duty and land tax, and average incomes. Housing stress is generally accepted to occur when a person is paying more than 30% of their income on housing. To understand what that means in dollar terms, we need to take a closer look at income levels. The ABS says that in 2007-08, median household income was $67,003 per year. That’s significantly less than an average income of $91,300. A small percentage of people have very high incomes, while the majority of Australians earn far less. Andrew Leigh said in a 2006 paper at ANU, before he became an MP, that “only 4.5% of Australian adults have an income that exceeds $100,000 per year, and only 1.5% have an income that exceeds $150,000 per year”. What this means is that the average, or mean, income is much higher than the median income, or the income level that half of Australians fall below.
If half of Australian households earn less than $67,003, that means we need half of the available rental properties on the market to ask rent of less than $386 per week if we want to make sure that everyone has an affordable place to live. That includes our grandparents, students, low paid workers, the people who forgo earning an income so they can take care of our children and disabled and elderly. Keep in mind that this $386 is for a household, not a single person – so we're looking for at least two or three bedrooms, and some places need accessibility for the elderly or disabled. For someone earning $550 a week in a cafe or retail shop, and living alone, anything over $165 per week in rent will put them into housing stress. Even less for a student on Austudy, or someone on a pension or unemployment benefits.
It's time to wake up and smell the coffee while we still can. Everyone has the right to a safe, secure, sustainable, affordable home. There are solutions out there. All we need are Federal and State Governments with the courage and foresight to put them into action.
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