Definition of social and affordable housing

Affordable Housing

The term ‘affordable housing’ generally refers to housing available to lower income households which is affordable relative to their incomes. 

The Planning and Environment Act 1987 introduced a definition of affordable housing in June 2018:  Affordable Housing is defined as housing including social housing that is appropriate for the housing needs of very low low- and moderate-income households.

These income levels have been defined by the Victorian Government based on the household income distribution derived from the most recent Census of Population and Housing undertaken by the Australian Bureau of Statistics. Very Low income is defined as less than 50 percent of the median household income Low is 50-80 percent of the median and Moderate is 80-120 percent of the median household income.

The income ranges are shown in Table 1 for three types of household.  The Victorian Government publishes income bands for Greater Melbourne and the Rest of Victoria.  Geelong belongs in the ‘Rest of Victoria’. 

Table 1: Annual income ranges - households eligible for Affordable Housing Rest of Victoria

Source: Victorian Government Gazette 29 May 2018.

Housing Stress

Households in the very low low- and moderate-income ranges which are paying more than 30% of their usual gross weekly income on housing costs (i.e. rent or mortgage payments) are said to be experiencing housing stress.  This measure is greater than that used by the National Centre for Social and Economic Modelling which uses only the very low- and low-income bands (i.e. the lowest 40% of incomes (i.e. 80% of the median).  A significant proportion of households experiencing housing stress may be eligible for social housing.

Social Housing

Social housing is affordable housing which is owned by government and community-based organisations where rents are set at an affordable level (i.e. proportion of income) for eligible households.  The majority of social housing is either Public Housing or Community Housing.

Public Housing

Public housing is housing that is owned and managed by the Government as per the Housing Act 1983. It refers to rental housing that is provided to very-low and low-income households on an affordable basis (no more than 25 percent of income on rent). Most households in public housing receive Commonwealth income support (for example: the disability or aged pension). Public Housing is owned and managed by the Victorian Department of Health and Human Services (DHHS). Tenure is not time limited but is subject to tenants meeting rental conditions contained in their tenancy agreement. These agreements are renewed every 3 years.

Community Housing

Community housing is housing that is managed by a Registered Housing Agency. Community housing may be owned by the RHA or leased from DHHS or private landlords. Community housing is targeted to very low-to-moderate income and/or special needs households who meet income and asset tests in accordance with the Residential Tenancies Act 1997. Rents are commonly capped at between 25 percent and 30 percent of household income with a maximum generally set at 75 percent of market rent. Many providers provide local support services and encourage tenant participation in maintenance and management. Community Housing thus includes:

• Social Housing – long term housing for very low- and low-income households mostly reliant on Commonwealth income support
• Affordable Housing – long term housing for moderate income households mostly reliant on low and casual wages
• Crisis and transitional housing - provide to people experiencing homelessness.

The relationship between affordable social public and community housing is shown in Figure 1 below.

Source: Victorian Government DHHS Affordable Housing voluntary contributions: Public Housing as an Affordable Housing contribution June 2018

Please refer to Table 21 for a Glossary of Key Terms

The reason social housing is so important

Social housing is housing for low income households who are paying a high proportion of their income on rent and who are struggling to meet the cost of living due to their family circumstances and/or as a result of unemployment disability poor health or other factors. 

Households who rely on government benefits (for example: pensions Newstart) as their primary source of income often find it difficult to meet rental payments even if they receive rent assistance payments as part of their benefits.

Some groups are particularly vulnerable.  For example single parents seeking to provide adequate care for their children may struggle to earn sufficient income young people on low incomes who leave their parental home; or older pensioners who are renting.

Some people may be unable to pay rents due to unexpected rent increases financial difficulties health issues or unemployment and as a result find themselves without accommodation.  Other people may be forced to leave their home due to conflict and relationship breakdown including family violence and find it extremely difficult to access affordable rental properties.

Households which cannot meet rental payments are forced to relocate to less appropriate accommodation away from family friends and other support networks. A poor rental history increases the difficulty of finding alternative accommodation in a competitive rental market and some households experience discrimination in the private rental market.

Some people experience homelessness for a period of time staying temporarily with friends or relatives living in substandard accommodation or living on the streets. With the assistance of homelessness agencies and other support services to find alternative accommodation the experience of homelessness may be short term.  This depends on the availability of suitable accommodation and for some people access to support services.  Some people who have experienced homelessness may be able to live independently with little additional support.  Others may require longer term support.

Whatever the circumstances the provision of social housing in the first instance is considered the most appropriate response to homelessness and the imminent threat of homelessness.  The ‘Housing First’ model is based on the principle that safe and secure housing should be quickly provided prior to and not conditional upon addressing other issues.  This is now the preferred approach to tackling homelessness in a number of jurisdictions – both nationally and internationally ^[3].

In summary social housing can provide:

1. Improved access to secure housing and greater security of tenure
2. Greater housing stability providing a secure basis from which to access employment education and community services
3. An enhanced quality of life including improved health and welfare
4. A reduction in homelessness
5. A reduction in demand for services for people experiencing homelessness
6. Access to support services for social housing tenants which are designed to help stabilise tenancies.

How social housing looks

Social housing may take many forms in response to the different housing needs of households in the population.  Current social housing is indistinguishable from other forms of housing in the community and is constructed by mainstream builders to a particular price point.

Social housing may be provided as single dwellings distributed throughout the community.  Social housing may also be provided in multi-dwelling clusters (which could be located in courts) and could be single storey units or two storey townhouses.  Some designs may facilitate interaction between residents for example for older people or single parent families who can benefit from living in small communities.

Social housing may be included in mixed use apartment developments where there is a mixture of private and social housing and/or private commercial space on the ground floor depending on the location and zoning.

A small proportion of social housing may be designed specifically to assist people experiencing housing crises and homelessness and include crisis and transitional accommodation.

Community consultation and data analysis undertaken for this project identified significant diversity in the types of households at risk and requiring social housing across Geelong. ‘Housing needs’ vary in terms of dwelling size built form number of bedrooms location and disability access.

Determining principles

Principles to be considered in determining appropriate housing for low income households are shown below.  These include parameters in the Victorian Government Ministerial Note (2018).

Table 2: Principles for consideration in developing social housing outcomes

NB: When applying these Principles to certain social groups a range of ‘service models’ are used for example: the Youth Foyer model has a proven track record of not only housing young people at risk of homelessness but linking them with training and employment opportunities ^[4].

Social housing development model

There are four main parameters which need to be decided when developing social housing as shown in Table 3.  Key to any growth in social housing is the ability to access the subsidies necessary to make the housing financially viable and sustainable over the long term.

Table 3: Parameters for consideration in developing social housing outcomes