Explainer: What is an affordable housing rental property and why are experts calling for more?

Key worker Ita Flynn was spending more than four hours a day commuting for work in Sydney when she first learned of affordable housing.

After being priced out of her one-bedroom unit on the city’s Northern Beaches, the 65-year-old had relocated to a rental property in East Gosford — about 80 kilometres north of the Sydney CBD — and spent years doing the lengthy and costly commute, spending about $80 a week on public transport, before it became too much.

“After a while, I thought I can’t do this anymore, I was just so over it,” Ms Flynn told Domain. “I didn’t know anyone on the Central Coast, all my friends live in Sydney.

“I found myself isolated more and more, and apart from the inconvenience, the days were so long it was ridiculous.”

Unable to find suitable work in her new area, Ms Flynn had settled for putting the bulk of her income to whatever she could afford in Sydney. She expected to get a granny flat or a tiny studio, but instead came across an advertisement for a new affordable housing unit on the lower north shore – with rent cheaper than what she was paying in East Gosford.

“I thought it was too good to be true,” said Ms Flynn, who like many had never heard of affordable housing. “It’s just made a huge difference to my living and also to my quality of life.

“It was like winning the lottery,” she added, of nabbing one of the 10 new affordable housing properties, owned by Willoughby City Council, at Chatswood Place.

Often confused for social or public housing — for which more than 140,000 Australians are on the waiting list  — affordable housing is built for very low to moderate income households and priced so they are able to meet other basic living costs.

Properties are generally close to public transport and job opportunities and managed by not-for-profit community housing providers. Rents are set at least 25 per cent below the market rate and should not exceed more than 30 per cent of a household’s income. Some homes are interspersed throughout new residential developments — as with Ms Flynn’s unit in Chatswood — while others are in specific affordable housing developments.

Low to moderate-income earners can apply for affordable housing and the properties are often advertised for rent on real estate portals like Domain,  however there are sometimes employment criteria or other caveats that must be met. Renters can also contact affordable housing providers directly to enquire about availability.

While affordable housing tenants do not need to be eligible for social housing, they still need to meet income criteria. Caps can vary between regions.

Such housing is crucial for key workers who have been increasingly priced out of some cities, said Andrew McAnulty, chief executive of Link Housing, a not-for profit community housing provider that owns or manages over 500 affordable-housing properties.

“There’s been an explosion of housing costs in the last 20 years and the reality is many key workers can’t live near their employment. They live an hour or hour and a half away and if jobs become more available locally then they won’t actually work in those major centres anymore,” Mr McAnulty said.

“These are people who wouldn’t necessarily be front of mind, the person working in the supermarket, cleaners in hospitals, child care workers and I think the coronavirus pandemic has really shone a light on the role they play in our cities and the need to support them.”

Mr McAnulty was among many industry experts left disappointed by the lack of funding for social and affordable housing in the federal government’s recent stimulus package to support the residential construction industry.

Although JobKeeper and JobSeeker have helped support those doing it tough, Mr McAnulty said, there was growing demand for housing support. This, combined with concern of a potential slowdown in residential construction, meant there had never been a better time to focus on boosting the supply of affordable housing.

Link Housing tenant Carol Edwards has held on to her job throughout the pandemic but her employer has already warned they may not be able to keep her on when JobKeeper ends. 

“It’s a bit tough, I’ve been there for 19 years in August. I was hoping to get my 20 years long-service leave,” the 66-year-old said. “I’m sure there will be a lot more people in similar situations, and [affordable housing] could be a lifesaver.”

Ms Edwards, who was unable to afford her rent after her son moved out, found a place with Link Housing at an Elanora Heights property on Sydney’s northern beaches in April 2019.

“Without it, I wouldn’t have been able to keep my independence – one bedroom places can go for $500 and there’s no way on my wage that I can afford that,” said Ms Edwards, who is paying $368 a week for her unit.

Meanwhile, Ms Flynn has been able to swap her 4.5-hour commute for a 20-minute walk to work, and is delighted to be able to live and work in the one community.

Both Ms Edwards and Ms Flynn know others are not so lucky — with women over 55 the fastest-growing cohort of homeless people — and would like to see more affordable housing built.

Katrina Raynor, a postdoctoral research fellow in affordable housing at the University of Melbourne, agreed.

She said Australia’s lack of a national affordable housing strategy was almost laughable.

“Not many people know what that affordable housing means and a lot of developers, community members and government think that just building more housing results in affordable housing and that is not true, you would have to build so much housing to see a significant drop in the cost of rentals,” Dr Raynor said.

While boosting social housing supply is critical, affordable housing also has an important role to play and could be supported by additional stakeholders, such as developers and institutional investors like superannuation funds, she said.

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She said developers should be required to contribute more, either mandated to deliver a set amount of affordable housing in new projects or pay a levy which could be used by councils to purchase homes.

Such zoning is what made Ms Flynn’s Chatswood home a possibility, as Willoughby City Council was among the first in NSW, along with the City of Sydney and inner-west councils, to introduce it in 1988.

The policy required 4 per cent of select new developments to be contributed to council for affordable housing, said mayor Gail Giles-Gidney, which resulted in 34 affordable housing units and a $12 million housing fund from developer contributions. This zoning will increase to 7 per cent by 2023 under the council’s housing strategy and 10 per cent by 2026.

“We’re hoping to have 70 properties by 2036,” Cr Giles-Gidney said.

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209A/34-42 Penshurst Street, Willoughby NSW 2068

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“We know that there is the demand,  we know it’s very important to provide residential accommodation for key workers [and] we’re also providing apartments for people who are escaping domestic violence.”

While Sydney’s affluent lower north shore may not be what comes to mind when people think of housing support, Cr Giles-Gidney noted there were pockets of high rental stress – such as Chatswood, where more than 18 per cent of renters were spending at least a third of their income on rent. 

She added diversity of housing provided benefits for everyone and was vital to keeping key workers in the area.

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