Low income renting and social well-being

Do low-income households in receipt of a public housing rent rebate or of private sector rent assistance have enough for an adequate standard of living after paying rents? How have housing and related expenditure for low-income households changed since the mid seventies? This paper summarises a study which uses unit record data from the ABS Household Expenditures Survey (HES) to answer these questions as well as to provide other housing expenditure analysis such as long term trends in home ownership, the debt levels of low income renters, and their perception of their general well being. The major part of the paper is however concerned with evaluating the effects of rent subsidies on tenant well-being. In public housing over the last three or so decades there has been a progressive move from a residual rent model in public housing (which assumes rents should set at what is left after a household's other costs are paid for) to a rent-first model (i.e. rent is taken out before other expenditures). What does the move from one rent setting model in social housing to another mean for public tenants and how has rent assistance helped private renters? To answer these questions the study used the Social Policy Research Centre (SPRC) indicative budget standard for Australia to determine whether, and to what degree, households fell below the budget standard even after receiving rent subsidy. The findings challenge the notion that income-related measures of affordability are an appropriate benchmark for designing affordability policies.