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Social Issue

Housing Stress

what is

Housing Stress

Housing Stress is the experience of stress and hardship when income is unable to meet housing costs and essential goods and services, such as food, health, and leisure, resulting in a low quality of life. A common rule of thumb is to consider any household in the bottom 40% of income earners spending more than 30% of their income on housing costs to be under housing stress.

Decades of over-inflation in housing and land prices have caused the level of housing stress to rise to unprecedented levels. In NSW, 70% of low-income rental households were under housing stress in 2018, and some spend over half their income on rent.

This issue has reached a crisis level, and almost everybody has been impacted in some way, which makes it extremely difficult to allocate support and develop targeted solutions to the issue.

So the first thing we want to know is, based on the evidence and data available, who is the most vulnerable to housing stress, and...

Risks

Renting, Low Income, Single, Young

Based on the research and data we analysed, we found four key risk factors that increase an individual's vulnerability to Housing Stress:

  1. Housing Tenure - Private Renters are the most vulnerable to housing stress, while homeowners, no matter their income level, are significantly less vulnerable to Housing Stress.
  2. Income Level - Low-Income households are unable to afford the average level of rent in Greater Sydney.
  3. Household Composition - Single households are less able to afford high rents and more vulnerable to rent increases compared to Couple Households.
  4. Age - In NSW, Low-Income Young Adult households (<35 years old) regularly spend more than 30% of their income on rent as experience the highest rates of homelessness.

People

Young Renters

Young Renters 18-24 years old in Greater Sydney are the most likely to be living under housing stress as they often bear all of the risk factors of housing stress:

  1. Private Renters - 65% of Single and 57% of Couples under 35yo in Australia are Private Renters. For Low-Income earners, this increases to 70% and 82% respectively.
  2. Low Income - 80% of Young Workers 18-24yo earn Low or Very Low Incomes, as they are often in low-skill, low-wage occupations and work part-time while studying.
  3. Single - Unsurprisingly, 82% Young Adults 18-24yo are single, with the majority (51%) still single by the age of 30yo.
  4. Age - By definition, Young Renters are young, and do not have the same level of wealth and income levels as older renters. They are also discriminated against in the rental market as they lack a long rental history or formal pay records to secure a lease.

Causes

A Broken Market

High rents in Sydney are driven by a market failure, where high demand and low supply in the housing market have driven both the purchase and rental costs of housing to unaffordable levels.

The causes of this have been well reported and become common knowledge, such as high population growth, low housing supply, and a taxation environment that incentivises housing investment.

Outside of market forces, a number of non-market factors have made renting more difficult for Young Renters and driven up levels of Housing Stress, including:

  1. No real wage growth in the last decade
  2. High upfront moving costs equating to 6-11 weeks of rent
  3. Logistical costs such as taking time off work to attend inspections
  4. Depleted savings from frequent moves
  5. Discrimination and stigma from landlords and agents
  6. Difficulty competing with older, higher income, coupled households
  7. Lack of support for Young Renters to secure affordable housing.

Impacts

High Stress & Insecurity

There are several recurring themes in the literature of the impacts of housing stress and long-term housing insecurity on Young Renters, including:

  1. 80% of 18-24yo's and 25% of 25-34yo's in Sydney are living with parents.
  2. Sharing is now a necessity, whether with family, housemates, or a partner.
  3. Renters are compromising on food, health, and leisure expenses to meet housing costs.
  4. Constant financial pressure, housing instability, social isolation, can increase the risk of mental health issues.
  5. Housing that is more affordable is often of poorer quality, which is exacerbated when maintenance is neglected by landlords.
  6. Frequent moves due to insecure housing situations can disrupt social connections.
  7. Low-income renters may lose their ability to secure a formal tenancy and increasingly rely on informal rental options.
  8. Homeownership may no longer be a possibility for Young Renters.

How Might We

reduce the amount of Housing Stress experienced by Young Renters?

What If

renters could help each other find better quality housing by sharing their inspection data?

Rental Quality App

Housing Stress

What If

we shared the stories of Young Renters to show how the rental system is failing young people?

Generation Rent Film

Housing Stress

What If

disused space above the local pub could be transformed into affordable housing for at-risk youth?

Pub Housing

Housing Stress