Rental policy: financial viability or affordability in Australian public housing

Hall and Berry (2004) in Operating Deficits and Public Housing: Policy Options for Reversing the Trend highlight the financial crisis facing public housing in Australia. One way in which policy makers can respond to this crisis is by increasing rents. But are such increases justified? This paper locates the current dual rental system within the Australian social housing finance system, comparing it with finance systems operating in other countries. It will show that financial viability is the objective of the social housing finance system. As such it is not an objective of social housing but it is a necessary prerequisite for the functioning of social housing and the ongoing achievement of the objective of social housing. The paper will also explore the relationship between affordability and the objective of social housing. It will argue that this objective is ‘to ensure that all households have access to housing which is adequate and appropriate as a key component of an equitable standard of living’. While affordability is not an objective of social housing, it is a key indicator of whether social housing is achieving its objective and thus integral to social housing. On this basis, the paper argues that there can be no trade-off between financial viability and affordability. It concludes by proposing a solution to the current financial crisis. Abstract not available.