What is Your Biggest Expense?
I’ve been wondering and worrying about the housing affordability crisis that I believe is going to be upon us as we move forward and interest rates start to rise.
Do you have any idea of how much of your income you spend on housing?
In this week’s blog, I take a look at this aspect of housing and what some of the alternatives, such as Tiny Houses or Community Housing for the future.
What is housing affordability?
It’s not straightforward but it encompasses:
- a household’s financial situation
- the overall demand in the housing market and
- whether a household is seeking to rent, is renting or looking to buy or is a homeowner.
All of these factors influence individual housing affordability. The easiest way to look at it is to measure the housing costs against the household income.
What does this look like today?
In 2017-18, 11.5% of households spent 30-50% of their gross income on housing costs with another 5% spending 50% or more. These proportions have increased dramatically over the last two years and these figures will become available when the latest Census results are released.
One of the most frightening statistics is that over 1 million low income households were in financial housing stress in 2017-18, spending over 32% of their income on housing costs. Single people spend on average the highest proportion of their income on housing costs.
What are the options?
Governments all around the world are looking at affordable housing options and the provision of social housing is one option. Victoria’s Big Build Project in Australia is looking at building an additional 12,000 new dwellings including 9,300 new social housing properties for an investment of $5.3 billion. This investment delivered throughout metropolitan and regional Victoria, will boost total social housing supply by 10%.
Community housing is another exciting possibility with more and more private stakeholders looking to create communal or shared housing options. “Sharing with Friends” is a charity in NSW that facilitates projects for women to share housing together where they would contribute an affordable amount to a communal house, having their own studio apartment with shared living space and laundry and courtyard facilities. This is an exciting project and one that enables women to embrace community, avoiding loneliness and homelessness.
I, for one, am passionate about Tiny House living and have been talking to lots of people about starting a Tiny House village on the Mornington Peninsula. Councils all over Australia are having to review their planning schemes to allow for this unique and progressive housing option. Tiny Houses can be relocatable, off grid and provide affordable housing for women and men alike that will not be in a position to purchase their own “mainstream” home. Tiny Houses only need someone’s land! Tiny Houses can provide shelter, self-esteem, security and a place to grow old. We need to embrace this; we do not want a world where stress for housing consumes our older generations.
The Tiny House Festival is held in Bendigo in March and hosts a range of builders, designers, runs workshops and embraces the notion that housing is affordable for everyone. Let’s create a world where we can all live with love and financial security. It’s simply a mind shift!
What do you think about Tiny Houses? Is it something you might consider for the future?