What is affordable housing?
Housing is affordable when households, which are renting or purchasing, are able to pay their housing costs and still have sufficient income to meet other basic needs such as food, clothing, transport, medical care and education.
Formulas are sometimes used to describe housing affordability. For example, it is often said housing is affordable if it costs no more than 30% of a household’s gross income. While this figure provides a useful benchmark of housing stress, the definition of affordability varies according to a household’s individual circumstances. Demands on the same gross income may differ significantly.
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Why do we need affordable housing?
There are a number of factors influencing the current demand for affordable housing in Australia, a demand that is mirrored in many other countries around the world. Some of those factors include:
- strong economic growth and shrinking land resources have combined to push housing prices up. Wage increases have not kept pace and the result has been that home purchase in metropolitan and coastal areas is now beyond the capacity of many households. Likewise, rent increases in key areas close to employment, leisure and educational centres has pushed many people out of areas which were previously affordable and accessible
- a trend toward smaller households because of: an ageing population; an increase in single person households; the fact that people are marrying and becoming parents later in life; and an increase in single-parent households. Smaller households have smaller disposable incomes and therefore need affordable housing.
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How can the Centre for Affordable Housing assist my organisation in developing affordable housing?
Local councils can contact the Centre for:
- assistance to build a case for becoming involved in affordable housing
- advice on the use of planning instruments to achieve affordable housing
- advice, project feasibility, design and management options for any affordable housing units to be developed
- advice on management of affordable housing units, from selecting managers through to achieving operational viability and adjusting selection criteria so they link with councils’ objectives.
Developers should contact the Centre for:
- assistance with project feasibility, liaison with local government and design and management options
The Centre can assist housing providers:
- to develop new models for testing to increase the supply of affordable housing
- with advice on how to achieve operational viability in rental operations
- with advice on specific management aspects, such as assessment and eligibility criteria for affordable housing or approaches to rent-setting.
The Centre for Affordable Housing offers a broad range of assistance. If there is a need that does not appear here, please contact the Centre for Affordable Housing.
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How is affordable rental housing managed?
While experienced community housing providers manage most of the affordable housing in NSW, there are no hard and fast rules. A developer or local council can manage the properties, or they can contract management to an experienced community-housing provider. Alternatively, in larger projects, housing companies have been specifically established to both develop and manage an affordable housing project – for example, City West Housing.
Affordable housing managers have responsibility for:
- property management, maintenance and rental risk
- council rates, building and public liability insurance
- developing and maintaining a waiting list of eligible tenants
- allocating the affordable housing to eligible tenants
- establishing and maintaining accountability mechanisms, including financial reporting mechanisms and annual reports on the managed properties.
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What is a Low to Moderate Income?
For the financial year 2008-09, the gross median annual income for the Sydney metropolitan region is considered to be $63,300. For the rest of NSW the gross median annual income is $56,800.
Households receiving less than 50% of this gross median income are said to be in receipt of very low incomes (less than $31,600 in Sydney and $28,400 elsewhere).
Those receiving between 50% and 80% of median income are categorised as low-income earners (less than $50,600 in Sydney and $45,400 elsewhere).
Households on incomes between 80% and 120% of the median are considered moderate-income earners (less than $75,900 in Sydney and $68,200 elsewhere).
These figures are adjusted periodically, differ from region to region, and may vary to meet the criteria of different programs or agencies.
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Are there any affordable housing facts and figures available for my area?
Yes. You will find details on this website.
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