A review of private rental support programs

Abstract

This Final Report presents the findings of a project undertaken by a team of AHURI based researchers to review Private Rental Support Programs (PRSP) in each Australian State and Territory. The overall aim of the project is to assess the effectiveness of the programs in assisting low-income tenants. The rationale for the project is that over the coming years many low-income households will be reliant on the private rental market as a consequence of the high costs of homeownership and limited availability of public housing. Though private rental costs are generally less expensive than purchasing a home, there are expensive start up costs when renting that can result in tenants experiencing housing stress and difficulties in managing their tenancy. Private Rental Support Programs (PRSP) is the term used to describe the broad range of services provided by State and Territory housing authorities to assist low-income tenants at the start of their tenancy. The programs are ‘one-off’ forms of support and are additional but distinct from Commonwealth Rental Assistance. The support provided is different in each State and Territory but can entail bond loans, rental grants, reimbursement of relocation expenses and other ‘one-off’ grants. There is very little published research on the operation of private rental support programs both in Australia and internationally. However, from the evidence collected a number of findings emerge. First, Australian States and Territories provide more extensive ‘one-off’ support schemes than elsewhere. Second, though there is a perception amongst some policy makers that PRSPs are complex to administer and difficult to evaluate, the benefits that accrue for tenants are generally regarded as significant and valuable. Third, although landlords are generally supportive of the schemes there are some who are reluctant to consider housing tenants in receipt of PRSP. Fourth, the effectiveness of the PRSP is often undermined by tight rental markets which both limit the scope for tenants to exercise choice and accentuate higher rental costs. The findings from the Australian wide research project show that though each State and Territory PRSP has similar aims, the actual operation of each program varies considerably. Five out of the eight housing authorities (Northern Territory, South Australia, Queensland, Victoria, ACT and Western Australia) operate bond loan repayment schemes. In Northern Territory, South Australia and Western Australia a repayment scheme only commences once the landlord makes a claim on the bond at the end of the tenancy. In New South Wales, eligible tenants receive a bond grant that is not required to be repaid. In Tasmania a bond guarantee scheme is in place. It was generally recognised that PRSPs provide financial support at a time when tenants struggle to find the necessary resources to start their tenancies. For this reason, they are viewed as an effective policy intervention within the confines of their overall aims (i.e. ‘one-off’ support) but for tenants experiencing ‘on-going’ or episodic forms of housing stress the capacity of PRSP remains limited. In addition, a number of barriers were identified that had the effect of undermining the programs, including limits on the amount of support provided and antipathy from some landlords who were reluctant to house tenants in receipt of PRSP. The operation of PRSPs is also hindered by gaps in current assistance particularly in the areas of information regarding tenants rights and responsibilities and support for the development of life skills. The consensus amongst housing and welfare professionals was that PRSPs would be more effective if ‘on going’ support mechanisms could be established for tenants in the private rental market but that the limited resources available are not currently sufficient for this mode of operation. Innovative policies to address these barriers have been established in Tasmania with the introduction of an enhanced PRSP including the employment of tenant support workers to provide more long-term support for vulnerable tenants in the private sector. South Australia is also exploring strategies to support PRSP customers’ tenancies through the Private Liaison Demonstration Project currently underway. Finally, though States and Territories housing authorities were keen, in principle, to develop performance measures to assess the success of the schemes, it was generally recognised that it is difficult to draw meaningful judgements from either process or output measures because of the effects of market factors on the accessibility and sustainability of tenancies. The aim of developing more sensitised measures to assess PRSP effectiveness requires a mode of longitudinal analysis that can track the experiences of tenants in receipt of Private Rental Support.