Here's a question for Australia: when is "affordable housing" not actually affordable? When it costs $925 per week.
Billions in Australian government housing subsidies are going toward apartments marketed as "affordable" that low-income earners cannot actually afford to rent, according to a new analysis published in The Age. In one egregious example, a taxpayer-subsidized one-bedroom "affordable" unit in Bondi was listed at $925 a week, or $48,000 per year.
Yes, you read that correctly. A government program designed to help people struggling with housing costs is funding apartments that require an income of nearly $100,000 to rent without falling into housing stress.
The problem stems from how Australia defines "affordable housing." Rather than being tied to tenant incomes, these units are simply priced 10-30% below market rates. In expensive suburbs, "below market" can still mean eye-wateringly expensive.
The analysis by economists Dominic Behrens and Ethan Gilbert, published in the online journal Inflection Points, argues that Australia's affordable housing programs are "a wasteful use of public funds that redirects government support away from the people who need it most."
Mate, this is what happens when governments prioritize political announceables over actual policy outcomes. "Affordable housing" sounds great in a press release. Nobody checks whether the housing is actually affordable for the people who need it.
The Albanese government's $10 billion Housing Australia Future Fund has so far funded more affordable housing units (9,366) than social housing units (9,284). That's a problem, because social housing - where rents are tied to incomes - is what people at risk of homelessness actually need.
Meanwhile, there are approximately 169,000 people on waiting lists for social housing across Australia, according to the Australian Institute of Health and Welfare. Those waiting lists are growing, and the wait times stretch to years in some cases.
The government defends the approach, arguing that "mixed tenure developments" - apartment buildings with a combination of market, affordable, and social housing - help more projects stack up financially and deliver more homes overall.
That's technically true. Including market-rate and "affordable" units makes developments more financially viable for private developers. But it also means taxpayer subsidies are going toward housing for middle-income earners while people sleeping rough wait for social housing that may never come.
The Victorian example is even more absurd. An "affordable" two-bedroom unit in inner Melbourne listed at $561 per week requires a tenant to earn at least $97,240 to avoid rental stress. But Victorian eligibility rules prohibit anyone earning more than $75,530 from renting it if they're single. The apartment exists in a regulatory catch-22 where almost nobody qualifies.
Homelessness Australia chief executive Kate Colvin told The Age that public money spent on affordable housing below market rent "is generally not affordable for people who are homeless or at risk of homelessness." She advocates redirecting more funding toward social housing, even though it requires higher subsidies per unit.
The housing industry pushes back, arguing that Australia needs to invest in both affordable and social housing to prevent people falling into housing stress in the first place. Housing All Australians executive director Robert Pradolin said "unless we go upstream and stop people falling into housing stress and eventually homelessness, we'll never solve the social housing problem."
There's some logic to that argument. But when "affordable" housing is priced beyond the reach of low-income earners, it's not preventing housing stress among vulnerable populations. It's subsidizing housing for people who, while perhaps stretched, aren't at imminent risk of homelessness.
The situation reveals the fundamental tension in Australian housing policy. The government wants to be seen as addressing the housing crisis. But it's politically and fiscally easier to fund "affordable" housing for middle-income earners than the deeply subsidized social housing that homeless and at-risk people actually need.
"Affordable housing" gives politicians great photo opportunities and impressive-sounding numbers of units funded. Social housing is expensive, serves a population with complex needs, and requires long-term government commitment.
But if your housing policy doesn't help people sleeping in cars or couch-surfing, can you really claim to be addressing the housing crisis?
The $925-per-week "affordable" apartment in Bondi should be the policy scandal that changes the conversation. Taxpayer money shouldn't be subsidizing housing that requires a six-figure income to rent.
Australia has a choice: continue with "affordable" housing that serves middle-income earners and generates good headlines, or redirect that funding toward social housing for the people genuinely at risk of homelessness.
Right now, it's trying to do both and succeeding at neither. The 169,000 people on social housing waiting lists are still waiting, while government money subsidizes apartments they could never afford even at the "discounted" price.
