New research from the Australian Housing and Urban Research Institute (AHURI) highlighted significant shortcomings in the way housing affordability is measured by policymakers.
The study, conducted by Curtin University researchers, found that many of the trade-offs lower-income households make to afford housing are not considered in current affordability metrics, leading to misleading conclusions about what is truly affordable.
Poor-quality housing and high commuting costs can make housing appear affordable when it is not.
The study, titled “Measuring housing affordability: Scoping the real cost of housing”, examines how housing affordability is affected by factors like energy costs, transport expenses, and housing quality.
“Generally, governments understand housing affordability as a relationship between housing costs and household income,” said lead researcher Adam Crowe (pictured above).
“What is not considered is whether that housing is of an adequate standard that doesn’t negatively affect household health, wellbeing and other essential costs.”
Crowe emphasised the need for a more comprehensive approach to measuring affordability that accounts for these often-overlooked expenses.
One significant issue identified by the research is energy hardship – when households struggle to pay for heating, cooling, and maintaining comfortable living conditions.
With energy prices rising faster than wages and income support payments, many households face financial stress that goes unrecorded in traditional affordability measures.
Crowe noted that these hardships often “fly under the radar” and are not captured in current policy frameworks.
The AHURI research also explored the connection between housing location and affordability, finding that homes in lower-cost areas often come with high transportation expenses, isolating residents from job opportunities, education, and essential services.
The study suggested that areas with cheaper housing, but high transport costs can lead to social exclusion and disadvantage.
The findings underscored the need for policy interventions that promote affordable housing in well-connected, job-rich locations.
Crowe stressed the importance of integrating housing, planning, transport, and employment policies to reduce housing stress and locational disadvantage.
“Our research stresses that integrating housing, planning, transport and employment policies is critical to reducing the risks of housing stress and locational disadvantage for lower income householders, while offering increased access to key resources and services,” he said.
The report calls for a nationally applied definition of safe and healthy housing standards and recommends measuring households’ required energy costs rather than their actual expenditures.
The research suggested that better policy coordination could lead to improved housing outcomes for low-income households.
Strategies such as encouraging private landlords to provide well-located, quality rental options and expanding transport assistance schemes for residents in disadvantaged areas could help mitigate the impact of high transport costs.
Additionally, promoting the development of affordable housing through planning reforms, tax incentives, and innovative construction methods could make a substantial difference.
The AHURI study concluded that a broader approach to defining and measuring housing affordability is essential to address the complex challenges faced by lower-income households.
Expanding affordable housing supply in strategic locations and integrating key policies are critical steps toward providing better living conditions and opportunities for all Australians.
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