A SINGLE parent in Frankston working part-time, receiving a Centrelink pension of $40,000 and looking to rent a two-bedroom unit with a child or children would be faced with “severely unaffordable” rent, according to the latest Rental Affordability Index.
The index, released by the Council to Homeless Persons in May, shows such a family would pay about 40-60 per cent of their income on rent.
A single person on Newstart ($15,000), looking to rent a one-bedroom unit in Frankston, would be faced with “extremely unaffordable” rents – with 60 per cent-plus of their income going on rent – the index shows.
In contrast, single parents on low incomes can avoid “severely unaffordable” rents by moving to Rye, Rosebud or Hastings – just three out of seven Melbourne suburbs to fit into that category.
The index shows that a single parent on a low income would still experience rental stress even in these suburbs, where rents are described merely as “unaffordable”.
“It’s a dire situation to be in if you’re a single parent, struggling to look after children, scraping by on a low income and trying to find a place to live,” Council to Homeless Persons CEO Jenny Smith said.
“With so few affordable options, no wonder so many slip into homelessness.”
The Rental Affordability Index produced by National Shelter and SGS Economics tracks rental affordability relative to household income for a number of hypothetical household types. It shows there is not a single suburb where a single parent on a low income would find affordable rent.
“There is no escaping high Melbourne rents: it’s a choice of living somewhere unaffordable or severely unaffordable,” Ms Smith said. “The index shows just how bleak it is if you’re poor and trying to keep a roof over your head.”
Statistics show that women fare worst – particularly if they have left a violent relationship and are looking for a safe, affordable place to live.
“Women and children are forced to either live in extreme poverty while paying high rent or move far away from jobs, schools and support services and with high transport costs to find somewhere more affordable,” Ms Smith said.
The Council to Homeless Persons says the report is further evidence that the federal government needs to do more to boost social housing stock so that low-income earners have an alternative to “sky-high” private rentals.
The seven Melbourne suburbs where a low-income single parent would avoid “severely unaffordable” rents are all 35-plus kilometres from the Melbourne CBD.
“Rents in those suburbs still leave a single parent on a low annual income of $40,000 paying more than they can afford,” Ms Smith said.
She said the other “more affordable” suburbs were Melton, Brookfield, Wyndham Vale and Pakenham.
The report’s release follows on from the federal budget which welfare organisations say did “not go anywhere near far enough in tackling the housing affordability crisis which underlies Australia’s rising homelessness”.
“[It] leaves the vast majority of renters no better off,” Ms Smith said. “It won’t deliver the massive injection to social housing that we need. It hasn’t properly tackled negative gearing and capital gains tax and there’s no boost to rent assistance to help low-income renters in the private rental market.”