Affordable Housing Program Audit

There is substantial evidence of a growing housing affordability problem in Sydney as well as across Australia. The incidence of the problem has spread from very low-income through low-income into moderate-income households.

There is now a consistent call for housing schemes to retain ‘key workers’ and ‘the working poor’ in established areas to ensure access to employment, education, public transport and other facilities and amenities.

Landcom has a strategic position within this landscape and there exists a range of current and potential mechanisms Landcom might utilise to create and maintain a pool of affordable houses.

Yet, while it is widely accepted that there are affordability problems in Sydney, and across Australia, it is difficult to arrive at a universally accepted definition of affordability, or of a threshold beyond which housing is not affordable.

The 30/40 rule is currently the most widely used criteria for affordability. This refers to the point at which 30 per cent of the gross income of a household in the lowest 40 per cent of the income distribution is allocated to housing costs; beyond this, housing is
deemed unaffordable.

Like all general measures, however, the 30/40 rule can be blind to variations across household forms and sizes regarding their capacity to meet other living costs after housing costs are met.

Despite various attempts to incorporate variable household living costs into calculations of housing affordability, the 30/40 rule remains the most readily useable and comparable affordability benchmark.

Also read: Affordable housing programme audit