This section articulates terminology adopted nationally for defining affordable housing and groups in housing need which have been agreed to by Australian Housing, Local Government and Planning Ministers.
Common terminology for affordable housing
Affordable housing
Appropriate housing
Low and moderate income households
Level of housing costs
Common terminology for affordable housing
As part of the National Action on Affordable Housing, the Housing, Local Government and Planning Ministers endorsed a common approach to describing affordable housing terminology in August 2005. They noted that a national approach to describing and analysing affordable housing need at geographic levels, reflected in planning policy, provides a consistent process to identifying housing need and informs the range of tenures, products, and price points necessary to deliver housing to meet those needs.
The following terms, concepts and affordability benchmarks have been agreed within the framework of the NAAH.
Affordable housing
Affordable housing is:
- appropriate for the needs of a range of low and moderate-income households; and
- priced so that households are able to meet other essential basic living costs.
Appropriate housing
Appropriate housing is:
- is appropriate for that household in terms of size, quality, accessibility and location;
- is integrated within a reasonably diverse local community;
o does not incur unreasonable costs relating to maintenance, utilities and transport;
- provides security of tenure and cost for a reasonable period.
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Low and moderate-income households
‘Low and moderate-income households’ have incomes below 120 per cent of the gross median income of all households. The category may be sub-divided for some purposes into households with incomes below 50 per cent of the median (‘very low-income’); between 50 and 79 per cent (‘low-income’); and between 80 per cent and 119 per cent (‘moderate-income’). Many jurisdictions will distinguish between the metropolitan and non-metropolitan median income levels for their own state or territory. This may need to be further adjusted to account of the differing housing costs to accommodate larger household sizes (see indicative price benchmarks).
Level of housing costs
There is no precise measure of the affordability of housing costs. A widely-used indicator (the General Affordability Indicator) is that mortgage or rental payments should be less than 30 per cent of household gross income. Other indicators are sometimes used in response to particular circumstances, policy goals or administrative considerations.
Other terminology used in this guide is defined in the glossary.
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