The Community Housing Industry Association today rejected claims by two think tanks that reforming state government taxes and charges, planning laws, and delivering rental subsidies to renters would be enough to solve the problem of rental affordability.

“While we agree that state and territory governments must do more to address supply restrictions, simply increasing the overall stock of housing will not be enough to ensure housing is affordable for those on low and moderate incomes,” CHIA CEO Peta Winzar said.

“Over the past decade, more and more households on higher incomes have joined the rental market. They squeeze out those on lower incomes looking for affordable places to rent.  Even as we build another 180,000 homes each year, the supply of affordable rental dwellings for lower income households continues to fall.

“It is disappointing to see how ill-informed many of the critics of National Rental Affordability Scheme are,” she said.

Commenting on suggestions by John Daley of the Grattan Institute that the flat-rate NRAS subsidy has resulted in a preponderance of studios and small apartments in cheaper locations, Peta Winzar said Daley was talking through his hat.

“Just 37 per cent of NRAS dwellings are studios or one-bedroom units, she pointed out. “and two-thirds of NRAS dwellings are in capital cities. This suggests NRAS investors weigh up both the long-term value of their investment as well as the recurrent subsidy”.

“Nor is the overall profile of NRAS dwellings inappropriate,” she said, “Far from it. Over half the low-income renters receiving Commonwealth Rent Assistance are single people without children for whom studio and one-bedroom apartments are very suitable.”

“Daley’s suggestion that the NRAS is ‘pretty poor value’ is a view that would be highly contested by 34,000 NRAS households. The NRAS is not perfect, but it does aim to ensure that the additional housing supply is directed to those on lower incomes.

Ms Winzar also rejected suggestions from the Centre for Independent Studies that if the Commonwealth Rent Assistance program wasn’t working it should be cut.

“The rent assistance program is critical in improving rental affordability for 1.3 million low income renting households,” she said.

“Rather than cutting this program, we suggest it is well overdue for a make-over. Designed in the mid-1980s, this program has failed to keep up with the increases in rents and the changing demographics of Australian households. Even with Rent Assistance, two in every five recipients pays more than 30 per cent of their income in rent. Almost half the 900,000 low income households renting in the private market in our capital cities are in rental stress.

So what can be done?

“The Community Housing Industry Association believes Australia’s rental affordability problem most certainly can be solved,” Peta Winzar said.

“We need a long-term national plan to deliver enough housing to meet the needs of all of us – renters and home buyers on low and moderate incomes. Our housing market needs to be efficient – and that means reforming Federal as well as state taxes, charges and planning systems. We need a diverse housing profile that better matches the needs of our population. We need the contribution of all levels of government, the private sector and the community housing industry. It needs the thoughtful, informed contributions of our think tanks. And yes, it needs programs like NRAS that explicitly focus on increasing supply of affordable rental housing for people on low and moderate incomes.”