Rob* calls me just after his latest rental inspection, which has thankfully gone well. “The [property manager] was actually decent, they didn’t pick on having some laundry on the couch or whatever.”
He’s seen the full gamut of landlords and realtors over the years. Now in his late forties, Rob has been renting since he was 19. While he’s worked on and off, the disability pension has been his major source of income since he left home. Rob is currently living in a major regional centre in Victoria. He will be renting until he gets off a social housing waitlist, which, in his estimation, may take seven to ten years.
The other option is to purchase a home using the money he stands to inherit upon the death of his ageing father. “Sadly, it is [factored into my life-planning]. I don’t want it to be. That’s the only way I’ll ever get out of renting.”
“The current rental market is awful”, said Jamie from South Australia. “I am self-employed with a low income, so I expect that I will be renting for the rest of my life.”
While the major parties spruik policies to support younger Australians into home ownership, Rob and Jamie are part of a growing cohort of older renters forced to compete in an increasingly expensive private rental market that often doesn’t cater for their needs.
Renters over 60 now make up around 12 per cent of the Tenants’ Union of NSW’s advice and advocacy caseload. That’s “almost a doubling” on the figures six years ago, according to Tenants’ Union CEO Leo Patterson Ross. He notes the upward trend has been observed across housing providers and advocacy bodies, including homelessness services. “They’re also seeing similar increases in [the number of] older people who are struggling because they have been renting”.
Reporting on the housing crisis tends to focus on the plight of millennials and Gen Zers, locked out of home ownership by the invidious interaction between rising dwelling prices and paltry wage growth. Implicit in these accounts is the treatment of home ownership as the best — or as economists would say, optimal — mode of accommodation. We tend to take this assumption for granted but like many national myths, the ‘Australian Dream’ of home ownership is not so much founded on collective aspiration as it is on a set of specific and entrenched policy settings.
This phenomenon has been recognised since at least the mid-1980s, when public policy academic Francis Castles published his influential history of the Australian welfare state, The Working Class and Welfare. In Castles’ account, Australia’s historically robust industrial relations system and redistributive wage regulation allowed for the development of a “wage-earner welfare state”. Under this system, most people had high enough incomes to buy their own homes early in their working careers and pay them off by retirement. This meant that welfare benefits like the Age Pension were set at lower levels, because they arguably didn’t need to account for accommodation costs.
You don’t need an economics degree to recognise that times have changed since then. Trade union membership has dropped precipitously, wage growth has slowed, and rates of home ownership have declined from their post-war peak. What hasn’t changed is the assumption that welfare benefits don’t need to cover accommodation costs, despite research from the Australian Housing and Urban Research Institute showing that if rates of outright home ownership declined, Australia’s pensioners would be some of the poorest in the OECD.
There are significant individual, systemic, and fiscal consequences for our nation’s reliance on private homeownership — consequences that older renters are already beginning to experience.
Married Brisbane couple Katie and Adam both owned homes in previous relationships which they sold in their respective separations.
“If we owned our own place it would be bliss”, Katie said. “[It would be] a place to grow old and raise our grandchildren together and it hurts me that I have to rent”.
The couple are now considering moving to Bangkok to escape the expense of the Brisbane housing market. Unable to save for a deposit while also paying rent, Katie is also worried that they won’t be able to retire if they stay, given they “haven’t had superannuation [their] whole lives.”
Patterson Ross also notes the particular difficulty faced by renters who haven’t earned superannuation over their entire working careers. “They haven’t had as much time to build up a large pool,” he said. “Particularly for older women, we see people who might have almost no super and so they really are reliant on the Age Pension, which is, I think, recognised as not adequate, particularly for renters.”
Reliance on income support payments also limits renters’ choices of where to move. “When you’re renting on Centrelink, you go to the places you don’t want to go”, Rob said. “You go to places where the crime rate is high, or where you’re hours from the major cities.”
It can also complicate applying for private rentals. Rob notes that most lease applications will only ask if the individual is employed or unemployed, requiring him to extensively explain his source of income. “A lot of landlords will look at someone with a pension and go, ‘no’.” This is despite the fact that, as he argues, his income under the disability pension is effectively “guaranteed”.
Of course, not all benefits are created equal, and older renters may be left in the lurch if they are forced to suddenly rely on a lower rate of payment.
Rob’s elderly mother is also a renter, living in South Australia with Rob’s stepdad — we’ll call them Anne and Michael. The pair are able to afford a rental property for just the two of them because Michael receives the Veteran Payment, a benefit paid at a higher rate than all other income support payments bar ABSTUDY.
Rob worries about what will happen to Anne when Michael dies. “When he passes, she will have to get a roommate. That’s depressing.”
While moving out with flat mates might be a rite of passage for younger renters, older renters are understandably more averse. “There are young people on job seeker who really wouldn’t like to be in a sharehouse, but there’s a broader number of young people who are more comfortable,” notes Patterson Ross. “It sort of feels more normal, whereas for an older person, it can feel more confronting and uncomfortable.”
“I don’t want to have to share someone’s house at this age, I don’t want to have to do housemate things”, said Rob. However, with rental prices on the rise, sharing is beginning to become a necessity for some older renters. While currently living alone, Jamie has previously “shared accommodation with different people four times”. Katie and Adam have “no choice but to have a boarder”.
Older renters are also likely to face more difficulty moving. “Health and mobility issues [narrow] the suitable rental buildings available,” said Jamie. “The stress and physical efforts involved with frequent moving from 12-month and other short-term leases is also more difficult.”
Patterson Ross also notes that older rents may have “more ties to a particular community or location that are harder to replicate”. This can lead to difficulty accessing “medical assistance, but also social supports as people’s mobility and different aspects of their health decline.”
“We’ve seen this particularly in relation to public housing or social housing relocations, but also in the private rental market as well. Someone with Alzheimer’s will really struggle to change location. When [they] have to move home, it’s really disruptive to their ability to continue to live independently.”
As both Rob and Patterson Ross acknowledge, older generations aren’t the only demographic struggling in Australia’s private rental markets. “The worst combination [for renting] is to be someone young and on low income”, Rob argues. I am struck by his empathy for younger renters, in spite of the generational wars we’re constantly told are raging.
When asked about whether they believed the newly re-elected Labor government would take action to fix the housing crisis, none of the renters were completely convinced substantive change would be realised.
“I am hopeful something will be done. They’ve promised more public housing and the first homebuyers scheme looks to have promise.” Rob said, but he worried that builders and developers would be able to exploit smaller-scale, demand-side reforms to “jack the prices up.”
Jamie and Katie both considered the prevalence of investment property holdings among politicians on both sides of the aisle to be a barrier to substantive political change.
“I doubt that any significant changes will be made to help renters, especially given that they have already backed off of overhauling negative gearing and capital gains tax,” Jamie said.
In a call back to the Castles thesis, Patterson Ross suggests the problem could be solved by ending Australia’s fixation with home ownership.
“If we made renting better and made it more attractive, it would actually ease the pressure on owner occupation. I think at the core we need to make sure that renting is a viable option for people for their whole lives, because it is”, he said. “There are a number of reasons and situations where people aren’t going to be able to buy, That doesn’t mean they shouldn’t have some stability, some dignity in their homes”.
* The names of some interviewees have been changed to preserve their anonymity
