The end to the National Affordability Rental Scheme could leave thousands at the whim of the private market

Abstract

“If you don’t see a house as your own, you’re not going to be happy there,” says Marion Trench.

The 59-year-old has been renting her townhouse in Bethania, halfway between Brisbane and the Gold Coast, for just under two years, and she loves it. It’s big enough that she can have her grandchildren over to visit. She has furnished it to her particular taste with special secondhand pieces bought at prices she can afford on Facebook Marketplace. She has even planted and grown her own garden.

Trench hoped this would be her “forever home”. But now she’s afraid she’s about to be priced out.

Trench is one of 32,000 renters benefiting from the National Affordability Rental Scheme (NRAS), a program developed and implemented by the federal Labor government under former prime minister Kevin Rudd in 2008. NRAS was designed to draw in the private sector to the provision of cheaper housing, by paying property owners a subsidy in exchange for them making new homes available at below-market rents for a decade.

But the program was controversial, with critics saying it was too expensive – costing approximately $3.1bn over its lifetime – for the relatively small amount of affordable housing it made available. The Abbott government scrapped the scheme in 2014, grandfathering the homes already on it but not allowing new ones to join. That means that over the next three years, the vast majority of NRAS properties are going to lose their subsidy – and those renters benefiting from it are starting to feel stressed.