Rents for these two-bedroom units reach $900 a week. Here’s why they shouldn’t

Low- and moderate-income workers are being pushed into rental stress as two-bedroom units in Sydney are being advertised under the affordable housing scheme for up to $900 a week – well above the city’s median asking price.

A combination of spiralling Sydney rents and a system that experts described as “fragmented and incoherent” means many affordable housing properties, notionally let at a discount to market prices, are beyond the means of the people they are meant to accommodate.

An apartment block in Liverpool, Sydney.Credit: AFR

A review of rental listings by The Sydney Morning Herald has uncovered cases in which affordable housing units are being let for prices barely discounted from market rent, while at least one for-profit community housing provider charges tenants extra to rent car spaces.

In one case, in Zetland, Cubic, a real estate agency that is also registered as a for-profit community housing provider, has three two-bedroom apartments listed for rent in the same building. The prices for the apartments range from $830 to $900 a week, with two listings also advertising a car space for an extra $50. Cubic did not respond to a request for comment.

In Coogee, a one-bedroom apartment is being advertised through HomeGround, the real estate arm of not-for-profit community housing provider Bridge, for $695 a week. In Glebe, a for-profit provider recently listed a two-bedroom unit for $820 a week. In Greater Sydney, the median asking rent for units is $720 a week.

Industry insiders have described examples of affordable housing being let for more than identical private tenancies in the same building. Analysts warn that tenants routinely go into rental stress to pay for the discounted properties.

One real estate agent who previously managed affordable housing told the Herald regulations that tie a property to market rent mean that, in some cases, as the market rises, tenants are charged more for the subsidised product than their neighbours.

“You get situations where another landlord might be a bit more generous or not as attuned to the market, so they don’t adjust the rent for two or three years. Meanwhile, we’re doing yearly reviews,” said the agent, speaking on the condition of anonymity.

“I had an affordable housing apartment that I was managing where the upstairs neighbour had the same number of bedrooms, but the affordable housing rent was higher just because it wasn’t the same landlord.”

Experts say many issues uncovered by the Herald are down to loose regulation and poor definitions. There is no register for affordable housing, so authorities have little oversight of how much stock is already in the market and how it is being managed.

Similarly, affordable housing sometimes costs more than 30 per cent of a person’s income – the common definition of rental stress – or is not set below 20 per cent of market rent, as stipulated in the state’s affordable housing guidelines.

For example, guidelines state that market rent should be measured using the government’s official rent and sales report, but also allow community housing providers to use “different approaches” to setting rent.

If the official rent report says the current median price for a one-bedroom unit in Coogee is $800 – meaning the $695 apartment listed by Bridge is discounted by about only 13 per cent – the provider can use other measures to evaluate the market. Bridge Housing did not respond to a request for comment.

Alistair Sisson, a Macquarie University research fellow working on affordable housing, said it was also common for providers to charge more than 30 per cent of a person’s income. “It’s a fragmented and incoherent policy space,” he said.

The Minns government has touted affordable housing as key to addressing Sydney’s housing crisis.

In the eight accelerated transport-orientated development precincts, Labor expects tens of thousands of new apartments to be delivered through changes to zoning laws. Affordable housing held in perpetuity will make up to 15 per cent of these new developments.

The government recently circulated a consultation paper, in which reforms included an affordable housing register. NSW Housing Minister Rose Jackson said the government was “exploring all possible options to ensure that affordable housing actually helps people by providing fair and genuinely affordable homes”.

“It sounds obvious, but affordable housing should be affordable – currently we know in many parts of Sydney that is not the case,” she said.

Shelter NSW principal policy officer Cathryn Callaghan said it was crucial that the government acted before new affordable housing units entered the market through zoning reforms.

“When rents get very high … you are calling something affordable that no one in their right mind would,” she said.

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