Housing Affordability Literature Review and Affordable Housing Program Audit Urban Research Centre University of Western Sydney
This report was prepared with the assistance of Elena Sliogeris, Louise Crabtree, Peter Phibbs and Kate Johnston. Professor Phillip O’Neill Director Urban Research Centre
List of Acronyms
AMI BCLT CERC CEHL CHT CLT CSHA HAF HDFC HFHA LEHC LIHTC NRAS SHA ULDA UDIA Area Median Income Burlington Community Land Trust Common Equity Rental Cooperative Common Equity Housing Limited Champlain Housing Trust Community Land Trust Commonwealth-State Housing Agreement Housing Affordability Fund Housing Development Funding Corporation Habitat for Humanity Australia Limited Equity Housing Cooperative Low Income Housing Tax Credit National Rental Affordability Scheme State Housing Authority Urban Land Development Authority Urban Development Institute of Australia
Executive Summary Structure of the literature review 1 4
How has housing affordability been defined?
What are the problems with these definitions? Can we come to an agreed definition for affordable housing?
Nature and Extent of the Problem
Where is the problem manifest? What groups are affected?
How is the housing affordability problem influencing householders’ housing choices and behaviours? 14 What is the recent history of the issue? 15
What changes in housing affordability can be identified and what has been done elsewhere? 16
Assessment of policy and programs
17 18 19
21 21 22
England Ireland United States
Deed restrictions Limited-equity housing cooperatives Community land trusts
South Australia Australian Capital Territory
Planning mechanisms Forest Glade Habitat for Humanity Australia Cooperative Housing
29 30 30 31
Ownhome Sustainable and Affordable Homes Partnerships with Housing Associations Common Equity Rental Cooperatives
31 32 32 32
National Rental Affordability Scheme Housing Affordability Fund
Commentary on the Australian programs What other opportunities are there for new initiatives?
Table 1. Comparison between affordable homeownership mechanisms. Box 1. Subsidy leakage in dual mortgages.
There is substantial evidence of a growing housing affordability problem in Sydney as well as across Australia.. The incidence of the problem has spread from very low-income through low-income into moderate-income households. There is now a consistent call for housing schemes to retain ‘key workers’ and ‘the working poor’ in established areas to ensure access to employment, education, public transport and other facilities and amenities. Landcom has a strategic position within this landscape and there exists a range of current and potential mechanisms Landcom might utilise to create and maintain a pool of affordable houses. Yet, while it is widely accepted that there are affordability problems in Sydney, and across Australia, it is difficult to arrive at a universally accepted definition of affordability, or of a threshold beyond which housing is not affordable. The 30/40 rule is currently the most widely used criteria for affordability. This refers to the point at which 30 per cent of the gross income of a household in the lowest 40 per cent of the income distribution is allocated to housing costs; beyond this, housing is deemed unaffordable. Like all general measures, however, the 30/40 rule can be blind to variations across household forms and sizes regarding their capacity to meet other living costs after housing costs are met. Despite various attempts to incorporate variable household living costs into calculations...
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