Affordable housing eligibility routinely overlooked: CEDA

New research shows Australia is not targeting its affordable housing stock correctly, leaving about 19,000 families on social housing waitlists that truly need and are entitled to it.

The Committee for Economic Development of Australia's (CEDA) latest report called out how affordable housing routinely goes to households that do not need it, while eligible low-income renters are locked out.

Currently, only 19% of private rentals that are affordable to a social-housing-eligible households actually go to them. Yet just 36% of these households are in a rental they can afford, CEDA's Fit for Purpose: Aligning Affordable Housing with Need report states.

The gap is widest in Perth, where only 10% of affordable rentals reach a low-income household, and Canberra, where it is 8%. In Sydney and Melbourne, the rate is 18%.

CEDA said the problem starts with how affordable rents are defined.

"Rents are set as a discount to market rates, not as a share of what a household actually earns, so a discount on a high rent is still a high rent," CEDA said.

"Eligibility criteria also run from very low to moderate incomes, allowing higher earners to absorb stock meant for those most in need."

In Sydney, an individual earning $148,000 per annum can qualify for affordable housing. A three-bedroom apartment in St Leonards, for example, was recently advertised as "affordable" at $1046 per week - more than $54,000 per year.

CEDA estimates Australia needs to deliver 21,000 new social dwellings per year to clear the waitlist by 2035. This is amid social housing stock shrinking as a share of all dwellings - down from 5.2% in 1997 to 3.9% in 2025.

Meanwhile, the national waitlist jumped from 155,000 households in 2014 to 190,000 in last year, while the share of waitlisted households classified as "greatest need" has risen from 28% to 41% over the period.

Furthermore, one in five renters is a low-income household deemed to be in financial stress. Two in five recipients of Commonwealth Rent Assistance remain in rental stress even after receiving the payment, CEDA found, while 70% of recipients are eligible for the maximum rate, meaning further rent rises would generate no additional support.

"We don't actually know how much affordable housing exists in Australia, or who is living in it. It's delivered through billions of dollars in grants, concessional finance, tax concessions and planning incentives, yet there's no consistent data on the stock or the incomes of the households occupying it," CEDA chief research and content officer Danika Adams commented.

"Reporting on both should be a standing condition of public funding, because you cannot fix targeting you cannot measure."