Rent hike for social housing tenants

Social housing tenants will face a rent hike of up to $7 per week from next month in a move the State Government has labelled an equity measure, but advocates say will unfairly burden those living on the breadline.

Oct 24, 2019, updated Oct 24, 2019
Photo: Tony Lewis/InDaily

Photo: Tony Lewis/InDaily

The rent increase, which was flagged in the State Budget, will impact about 3000 tenants living in bedsit accommodation and one-bedroom cottage flats.

It will bring those tenants, who currently pay between 19 to 21 per cent accessible income on rent, in line with other public housing tenants, who pay 25 per cent of their income on rent.

The Government said the changes would be implemented “gradually over a period of four years”, with affected tenants to be notified by letter this week.

Human Services Minister Michelle Lensink described the rent hike as “modest” and necessary to ensure a more equitable public housing system.

“Currently, of the approximate 35,000 public housing properties in the system, about 90 per cent of households already pay 25 per cent of their household income towards rent,” she said.

“Some tenants living in cottage flats were paying less than others – around 19 per cent or 21 per cent of their household income – despite living in similar properties and having similar incomes.

“These changes make the system more equitable and mean all public housing tenants pay the same portion of their income (25 per cent) towards rent.”

But Shelter SA executive director Alice Clark said for people living in cottages flats, a rent increase from 19 to 25 per cent could have a “significant impact on what they might spend on food, electricity bills or medicines that they might need”.

“It might seem like a small amount of money but it could affect people quite substantially,” she said.

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“From our perspective, is it fair to have a cottage flat that’s very small, it’s in a group, usually for a single person, that they be paying the same amount for someone in a unit or in a house as a percentage of their income?”

Clark said for a person living on Newstart who would earn about $500 a fortnight, on a 19 per cent rent rate they would be paying $95, whereas on a 25 per cent income they would be paying $125.

“I think that could seriously impact negatively on some people,” she said.

“If there was any way that their rates could avoid being increased, I think that would be ideal.”

Social housing tenants living in bedsits last faced a rent hike in 2011, when they were charged 19 per cent of income, up from 17 per cent of income.

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