Western Australia Minister for Housing Bill Marmion
Rental Adjustments Bring Equity For Public Housing Tenants
Victor P Taffa
From October 1, 2010, the rates of subsidised rent in public housing will be standardised and in addition, tenants on higher incomes will be charged rents which more accurately reflect private rental charges.
Housing Minister Bill Marmion said both changes were consistent with the recommendations of the Social Housing Taskforce Report released in October 2009 and brought Western Australia in line with all other States’ Public Housing charges of 25 % or more.
Any additional revenue raised as a result of the increases will be reinvested into public housing acquisition and maintenance programs.
Demand for public housing continues to grow with 24,136 applications on the waiting list as at June 30, 2010.
“Currently WA has a situation where some tenants pay a lower rate of rent based on the date they moved in, rather than their level of need.” Mr. Marmion said.
“These changes will put all tenants on an equal footing, while ensuring rents remain affordable.”
Currently, tenants who occupied their homes before July 1, 1997, pay 23 % of their income in rent while tenants occupying since July 1997 are charged 25 %.
At the time of each tenants’ annual rent review, those on 23 % will have their rent increased to 24 % of income about $4 per week for single pensioners.
For example, a single pensioner receiving $322.10 per week would be paying weekly rent of $74.08 at the 23 % rate, which will increase to 24 % or $77.30 per week. This will be further adjusted to 25 % after October 1, 2011, to a projected $80.50 per week.
Department of Housing general manager Steve Parry said the gradual adjustments were aimed at ensuring there is minimal impact on affected tenants.
“The changes will assist the long-term sustainability of the public housing system by generating additional revenue to invest in new housing opportunities.” Mr. Parry said.
“This is equivalent to about 400 new rental properties.”
Approximately 14 % of public housing tenants who are on higher incomes, pay rent based on an assessed market value. For these clients, the normal rental charge of 25 % of their income would be above the market rent for the property.
Market rents in public housing are periodically adjusted to ensure parity with private sector rents, using information obtained from the Valuer General’s Office.
The current market rents are based on 2005 data and are no longer comparable to rents in the private sector. The Department of Housing will be adjusting public housing market rents later this year to begin bringing them in line with private sector rents.
“The current outdated market rents encourage tenants on higher incomes to remain in public housing rather than move into the private rental market and free up public housing for those in greater need.” Mr. Marmion said.
“This is an important first step in reforming the public housing system to make it more sustainable and remove disincentives for tenants to transition into other forms of affordable housing.”
“No pensioner will be paying more than 25 % of their income in rent, which, after the full implementation in October 2011, will be an average of about $80 per week, compared with Perth’s median rent of $350 for a unit.” Mr. Marmion said.
The department will write to affected tenants with further details from August 1.