Housing affordability problems might not be all bad

For all the talk of a housing affordability crisis across Australia, having unaffordable housing isn’t necessarily bad for people. This is perhaps a dangerous statement to make, but housing cost stresses and other problems – when experienced in isolation – may be tolerable. Difficulties usually emerge not from one problem but from an accumulation of problems.

Housing affordability alone may have limited impact on people if they are able to adjust the household budget or their rental or mortgage costs. But if a household has an accumulation of problems (for example, unaffordable housing, plus insecure tenure, plus unemployment), that greatly reduces their capacity to adjust or respond effectively.

Acknowledging the difference between separate problems and an accumulation of problems is more important than you’d think. If we don’t, we underplay the impact of multiple problems on people, incorrectly identify who most needs assistance and probably misdirect our attempts to help.

Generations of Australians have enjoyed very high housing standards compared to most other nations. For the last couple of decades, though, cracks have appeared (and are widening) in the Great Australian Dream.

Australia now has some of the most unaffordable housing in the world. The problems of housing quality and insecurity in the private rental sector are increasing.

And the public housing safely net is now so small it cannot catch all of the people who need it.

Researchers, governments and Australia as a society are concerned and heavily invested in understanding and responding to housing-related problems. But perhaps we are too “problem-focused”.

We often seek to understand and solve housing affordability, or rental insecurity, or homelessness, or even more broadly, employment or problems associated with disability. But we tend to look at each aspect separately.

In doing so, we overlook the fact that many housing-related problems are experienced in combination – usually by the same people.

Teasing out patterns of problems

What if we were to think of people with multiple problems, instead of the separate problems that multiple people have?

In the current edition of Cities, we model how people’s problems accumulate. Using data from the Household Income and Labour Dynamics in Australia (HILDA) dataset, we look at more than 17,000 adult Australians in unaffordable housing. We define people as having unaffordable housing if they have low to moderate incomes and spend more than 30% of their household income on housing costs.

Our research set out to test the degree to which these people experience multiple housing and related problems. In this experiment we focus on six problems: affordability, locational advantage, security, welfare, employment and disability.

This simple analysis far from captures the full breadth of housing-related problems that individuals face. Even so, it reveals enough about people’s accumulation of housing problems in Australia to challenge our current thinking.

Our analysis shows us that only a relatively small proportion of people (around 10%) have an accumulation of these housing-related vulnerabilities. But simply identifying who has multiple problems doesn’t necessarily indicate the package of assistance they might need.

When we examine the collection of accumulated problems among the 10%, we see few clear patterns of shared problems. Even in this small analysis, there are 40 distinct combinations of problems.

The largest group sharing a pattern of problems represents only 12% of the 10%. Remember that we are only looking at a limited list of six problems here. It would almost certainly be much more complex in the real world.

The findings allow us to reflect on how assistance might shift if focused on people with an accumulation of problems. Using the example of housing affordability, we might seek to address it for every person in the whole population of 17,000 classified as having unaffordable housing.

However, this research shows that more than half of these people (60%) do not have any other problems.

How does this affect policy?

Perhaps our concern for housing affordability should be disproportionately focused on the small group who have an accumulation of multiple problems.

What this research leaves us with is a call for a different way to think about and respond to housing-related problems. It suggests we should look beyond separate problems – such as housing affordability – and focus more attention on the people with an accumulation of multiple problems.

The substantial variation in combinations of housing problems also suggests that “individualised” responses may be much more effective than generic packages of problem-focused assistance.

To some extent, the suggestion that we should be thinking about people’s accumulation of vulnerabilities and problems is not new.

Policy thinking appears to be heading in this direction anyway. Australia is well down the path of exploring individualised welfare, with approaches and packages like Consumer Directed Care and the NDIS (the intentions of which were well discussed in recent work).

Perhaps the way we think about housing affordability just needs to catch up.

Emma Baker is presenting research on housing children at the 10th Australasian Housing Researchers Conference (AHRC) hosted by RMIT University’s Centre for Urban Research (CUR), with the University of Melbourne and Swinburne University, from February 15-17 at RMIT University in Melbourne.