NRAS Incentives getting cut - Is affordable housing at risk ?

Posted By Ayla Miels

Tenants from affordable housing across Australia could find themselves with nowhere to go this year, as key funding that supports lower rents runs out amid the coronavirus pandemic.

Thousands of low to middle-income earners could see their rents jump at least 20 per cent in the coming months, with an affordable housing incentive still set to expire despite increased demand during the COVID-19 crisis.

Industry experts say more than 4400 affordable housing properties – due to the exit of the National Rental Affordability Scheme (NRAS) this year and next – are at risk and are calling on the federal government to do more to maintain the nation’s already limited supply of affordable housing.

With a growing number of Australians already finding it difficult to pay rent, Community Housing Industry Association chief executive Wendy Hayhurst said the federal government should extend support for existing affordable housing which was due to lose funding this year and next.

NRAS was introduced by the Rudd government in 2008 and subsequently scrapped by the Abbott government in 2014. It gives annually indexed incentives to investors who offer rents at 20 per cent below market rates for up to 10 years.

The Funding started to dry up in 2018, with more than 1400 properties across the country reaching their 10-year limit. Currently, there are more than 36,700 NRAS properties across Australia, for which funding will progressively be cut off up to 2026.

It seems that there were plans to adjust NRAS in light of COVID-19, as a Department of Social Services spokesperson said properties would continue to exit the scheme as scheduled.

“This was always the intention of NRAS when it was designed in 2008. Once the NRAS incentives expire, ongoing tenancy arrangements are a matter for tenants, tenancy managers and investors of the properties to manage.” The spokesperson added that Commonwealth Rent Assistance was provided to eligible tenants.