Australian renters face surging costs after end of national affordability scheme

‘It’s quite frightening,’ says a tenant who lost her rent subsidy. As debate stalls over the housing future fund, she’s not the only one who’s frustrated

Ruth Johnson was afraid her rent would surge when it was no longer covered by a federal government subsidy program. She was right.

For three years, Johnson was one of 32,000 renters benefiting from the National Affordability Rental Scheme (NRAS), a Rudd-era program that paid property owners a subsidy in exchange for them keeping rents on new homes below market rate for a decade.

Under the NRAS, Johnson’s suburban Brisbane townhouse cost her $272 per week – until last May, when the subsidy expired.

When Guardian Australia first spoke to Johnson in October 2021, she was working part-time and sole-parenting her toddler. She had moved into the NRAS property after unexpectedly becoming a single parent a few months before her daughter was born.

“I needed support and NRAS was there to offer that support. The thought of being without it is quite frightening,” she said at the time.

NRAS cost approximately $3.1bn over its lifetime, which critics said was too much for the relatively small amount of affordable housing it made available. It was scrapped by the Abbott government in 2014. The homes already participating were grandfathered and new ones were unable to join.

Johnson’s rent increased immediately to $320 per week after her home was phased off the scheme. In the past few weeks, she was notified that it was increasing again, to $400 per week.

“Really all they said is ‘this is market value for the area’. The rental crisis in general is crazy,” Johnson said. She has had to return to full-time work to pay for the increases despite wanting to spend more time with her preschool-age daughter.

“I didn’t have a choice,” Johnson said.

Emma Greenhalgh, chief executive of national housing advocacy organisation National Shelter, said Johnson’s story was “not unusual”, especially for those in NRAS homes owned by investors rather than community housing associations.

About 30% of all NRAS properties were located in Queensland, by far the highest concentration. About half of all properties nationally were owned and managed by private companies, and half by not-for-profit community housing groups.

Many NRAS properties have already exited the scheme; all of the subsidies will have expired by 2026.

In her previous role with Q Shelter, Greenhalgh said she had spoken to many NRAS tenants in Johnson’s situation.

“People were highly distressed – particularly people who had come off the housing register originally,” Greenhalgh said. “It’s fear and stress and powerlessness.”

To address the rental crisis, the Queensland state government this week put forward a proposal to limit rent increases to once a year, but has come under fire from tenants advocates who say the proposal does not go far enough.

The premier, Annastacia Palaszczuk, also said on Wednesday that the government, in partnership with a community housing organisation, would “investigate” buying up to 335 of the 5,000 homes that will be sold after they exit NRAS in the next couple of years.

It comes as the federal Labor government’s signature housing program, the Housing Australia Future Fund, became locked in a stalemate after the Coalition, the Greens and key independent senators refused to support it.

Independent David Pocock said the bill needed “more ambition” while Greens MP Max Chandler-Mather called it “a $10bn gamble on the stock market where the volatile returns are invested in housing”. HAFF would invest $10bn and then spend the earnings, up to $500m a year, on affordable and social housing projects.

There had been a lot of “frustration” in the housing sector around the future fund debates this week, Greenhalgh said. “The housing crisis, it didn’t happen in one year – this has been a decade in the making.”

National Shelter was broadly supportive of the fund but wanted it “optimised” and “improved”. The organisation has called for the federal government to invest an additional $2bn into a rapid response housing fund that would allow housing providers to increase affordable housing more quickly through means other than construction – for example, through spot purchasing or renovation.

Johnson said she has not sought a new rental because the idea of trying to negotiate the current rental market was too stressful.

“I’ve watched a lot of people end up homeless with their stuff on the side of the road,” Johnson said. “There are single mothers out there putting up posts on Facebook saying, ‘come and collect my belongings, I have nowhere to live’. How can we allow that to happen? It’s mind-boggling.”

Do you have a story about the end of NRAS? Contact:


Stephanie Convery

The GuardianTramp

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