Current housing affordability measures are not accurately reflecting the real housing costs for lower-income households, according to new research.
A study from the Australian Housing and Urban Research Institute (AHURI) found that most trade-offs made by low-income households to afford housing are not accounted for in standard affordability metrics used by policymakers.
Lead researcher Dr Adam Crowe of Curtin University said there are nuances that are being missed.
“Generally governments understand housing affordability as a relationship between housing costs and household income,” Dr Crowe said.
“What is not considered is whether that housing is of an adequate standard that doesn’t negatively affect household health, wellbeing and other essential costs.”
The research highlighted key aspects that should be better accounted for, including energy efficiency, liveable building standards, and transport accessibility.
Energy hardship, which occurs when households struggle to maintain indoor thermal comfort or pay energy bills, is not currently measured in housing costs.
This issue has become more prominent as energy prices have risen well beyond inflation, wages, and income support payments.
The study also revealed the relationship between housing affordability and locational advantage or disadvantage.
Areas with lower housing costs but higher transportation costs were more likely to experience social exclusion and spatial disadvantage.
Dr Crowe said there is a need for better integration of government policies to deliver improved housing outcomes for low-income households.
“Our research stresses that integrating housing, planning, transport and employment policies is critical to reducing the risks of housing stress and locational disadvantage for lower income householders, while offering increased access to key resources and services,” he said.
The researchers recommend developing a universally applied definition of safe and healthy housing standards across Australia and measuring households’ required energy expenditure rather than their actual energy expenditure.
They also suggest expanding transport assistance schemes for low-income households living in locationally disadvantaged areas to reduce transport costs and improve connections to job-rich areas.
Dr Crowe said that these measures could help create a more comprehensive and nuanced measurement of housing affordability, taking into account the multiple and complex trade-offs households make in their housing decisions.
“The private sector can be encouraged to develop affordable housing through policies that address planning certainty and costs such as taxes and developer contributions to infrastructure, as well as strategies exploring alternative construction technologies proven to cut costs and build times,” Dr Crowe said.
