Reducing homelessness and housing instability: can the private rental market play a role?

The recent announcement by the Victorian State Government of a $150 million investment in the From Homelessness to a Home package highlights the necessity of looking beyond crisis accommodation to long-term housing options to reduce homelessness. In addition to extending temporary hotel accommodation for people experiencing homelessness until April 2021, the package will tackle the associated problem of securing long-term accommodation for people in housing crisis through head-leasing 1100 private rental properties. This is an important development because the homelessness sector has endured continued blockages in transferring people from crisis and medium-term transitional accommodation to long-term housing, leaving many households in a perpetual state of housing insecurity.
 
Permanent, affordable, and stable housing options for low-income households are limited. Social housing is intended to assist these households but it is a scarce resource, making up only 4.2 per cent of Australian households, with 190,000 households on wait lists nationally.[i] [ii] A further 850,000 households nationally are estimated to meet the income eligibility criterion for social housing but choose not to apply.[iii]
 
State and Federal Government housing policy has increasingly relied on the private rental market to accommodate people on low incomes. This approach has been supported through measures such as Commonwealth Rent Assistance, bond loans, and the Housing Establishment Fund. However, depending on location, supply is limited and largely unaffordable, particularly for those on Centrelink payments. Over 40 per cent of households living in private rental properties experience rental stress.[iv]
 
In 2016-2017, the Victorian Government rolled out the Private Rental Assistance Program package, which supports people in housing crisis to secure or maintain private rental housing. Unison Housing provides this service in the form of the Private Rental Access Program (PRAP) in inner, middle and outer western Melbourne. In 2020, this program was evaluated by the Unison Housing Research Lab – a partnership between RMIT University and Unison Housing.[v] Despite significant investment by the State Government, this was the first independent evaluation to investigate longer-term housing outcomes for households receiving PRAP support. The evaluation provides much needed evidence to assist Government to assess the value of further investment in private rental as a method for addressing homelessness.
 
The findings from the evaluation, which included an analysis of 2000 administrative records, surveys with 83 service users and a focus group with PRAP workers, are encouraging. Since 2017, Unison has supported over 2000 predominantly low-income households with financial brokerage, advocacy and information. The survey found that 80 per cent of respondents maintained their housing and avoided homelessness for two years following PRAP assistance. Most of the households (73 per cent) were previously homeless or living in unsuitable accommodation. These households received support to establish new housing, with the remaining households getting assistance to maintain their existing private rental tenancies following difficulties such as rental arrears or receiving a notice to vacate.
 
A key issue is the availability of affordable and appropriate private rental properties. In Melbourne’s west, there is high competition for cheaper rental stock. The PRAP evaluation revealed that single households are particularly disadvantaged, with virtually no affordable properties in the areas serviced by Unison for single people in receipt of a Centrelink allowance. This area requires urgent policy attention, otherwise single people in housing crisis will remain in precarious places such as crisis accommodation, couch surfing, or staying longer term in rooming houses. There are more properties that are suitable for family households. However, these are not necessarily located in areas with the necessary amenities for families such as proximity to schools and public transport.
 
The PRAP evaluation further noted that financial support is only one aspect of assisting households to establish and/or maintain stable housing. Any future government investment in private rental properties will need to include support beyond housing. The success of the Unison PRAP is derived, in part, through the employment of specialist workers, all of whom have previous experience working in private rental management. The workers act as advocates and negotiators to produce positive outcomes for tenants, landlords and real estate agents. The value brought by their skills was recognised by the survey participants, with 82 per cent reporting high levels of satisfaction with the advocacy support provided.
 
The COVID-19 pandemic has brought about new concerns and questions about how to best address housing instability and homelessness. As policy makers consider how to manage the current crisis and also look to the future through private rental options, it is useful to reflect on the opportunities and challenges implicit in this approach. In this context, the PRAP is worth exploring as a model that has demonstrated success in transitioning households from housing crisis to housing stability.