Housing and Employment Pathways for Low-income Workers: Exploring Impacts of Affordable Rental Housing Institutional Settings in Sydney, NSW

Abstract

Australia’s housing literature largely covers social housing for households outside the labour force, with little attention to the less-subsidised Affordable Rental Housing (ARH) for low-to-moderate income workers. Like social housing, ARH tenants must earn below a threshold for ongoing tenancy, and those on lower income spectrum can pay rent at 25-30% of their income instead of the higher discounted-to-market rate. This thesis explores how rent-setting, eligibility reviews, and landlord practices influence ARH tenants’ employment decisions, especially when career advancement may come at the cost of loss of eligibility for ARH and a transition to Sydney’s expensive private rental market. Exploring these for ARH is relevant as it targets working households, and timely, given the sector’s prospective growth. Interviews with 13 tenants and 4 landlords of ARH in inner Sydney revealed a narrow income band for ARH accessibility, despite theoretically accommodating a wider income range than social housing. Discounted-to-market rents (usually at 75%) in high-cost areas remained unaffordable for the lowest earners, whilst charging rents at a proportion of tenants’ low income (usually at 25%) raised concerns about landlords’ ability to cover high property costs. Improvement in incomes resulted in reduced net gain for ARH tenants who paid income-related rents, raising concerns about using gross income (instead of net) in rent calculations. Nevertheless, this did not discourage tenants from improving their work. Continuing eligibility rules, however, posed a dilemma as improved income may disqualify a tenant from ongoing tenancy. While limited by sample size, these findings provide a basis for larger-scale research for ARH policy development. The thesis recommends 1) increasing CHP's financial capability to house low-income workers in ARH units, especially in employment-concentrated areas, 2) setting rents based on the sufficiency of net income (instead of gross) after rent, 3) considering a higher income eligibility threshold to allow sustainable transitions to a similar unit in the local private rental market, and 4) improve affordability and security of tenancy not only in the ARH sector, but also in the private rental market. This thesis highlights the need for policy reforms in the ARH and wider rental sector, recognising tenants as people who actively engage and respond to housing regulations and practices, based on varying degrees of housing experiences, employment prospects and individual needs.