Report

Demand subsidies for private renters: a comparative review

AHURI Final Report No. 24

15 Sep 2002
Description

Commonwealth Rent Assistance (RA) is the most significant type of housing assistance for low income households in Australia, and was paid to almost a million recipients in June 2001 at an annual (2000-01) cost in excess of $1.7 billion. RA is a type of demand subsidy and is paid directly to low income households to improve their capacity to pay for housing in the private rental market and for some types of community housing. Increasing reliance on demand subsidies for housing in Australia mirrors the experience of many advanced industrialised countries that rely increasingly on this type of assistance rather than supply subsidy programs that subsidise housing providers and in which subsidies are attached to specific dwellings, such as public housing units.

RA has been the subject of intermittent policy debate in Australia since the late 1980s, and in the mid-1990s plans to integrate it with other types of housing assistance provided under the Commonwealth-State Housing Agreement (CSHA) were hotly debated and then shelved. Consideration of RA and the linkages between different types of housing assistance are back on the public policy agenda in the context of negotiations for a new CSHA from July 2003.

The purpose of the research, as reported in this paper, is to inform the current debate about RA and housing assistance in Australia. The research examined and reviewed demand subsidy models for private renters in Australia compared to New Zealand, Canada and the US. These three countries were chosen because they are most similar to Australia in terms of housing systems. The research examined and compared the objectives, design, implementation and outcomes of demand subsidy models for private renters in the four countries. Each country has its own terminology and, for convenience, this report uses the generic term ‘housing allowances’ to refer to this type of housing assistance.

This is the Final Report of the research project and follows a Positioning Paper <http://www. ahuri.edu.au/pubs/positioning/pp_demandsubsidies.pdf> that presents the conceptual framework for the research, the research questions and an extensive review of the literature on housing allowances in the four countries. This Final Report presents detailed findings about housing allowance models for private renters in the four countries, a brief summary of which follows.

Most of the models are embedded in income support systems rather than housing assistance programs, with the exception of the housing choice voucher program in the US and some small-scale and highly targeted provincial programs in Canada. The objectives and design of housing allowances thus depend substantially on how income support programs deal with housing costs since these vary substantially by type and size of household, location and tenure, to a greater extent than other types of household expenditures. They also vary significantly in terms of eligibility, ranging from broad entitlement to assistance to a high level of targeting and selectivity.

Publication Details
Identifiers: 
ISSN: 
1834-7223
ISBN: 
1 920758 00 3
Publication Place: 
Melbourne
Language: 
Published year only: 
2002
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