As the phasing out of the National Rental Affordability Scheme (NRAS) nears, advocates and experts are becoming increasingly worried about the potential impacts on those in need of affordable housing.

As the phasing out of the National Rental Affordability Scheme (NRAS) nears, advocates and experts are becoming increasingly worried about the potential impacts on those in need of affordable housing.

The numbers are particularly concerning, with a sharp rise in the number of homes exiting the scheme this year, totalling more than 6,600.

This comes at a time when rental prices are skyrocketing, and cost of living pressures are at an all-time high.

The question on everyone’s mind is: How will this affect vulnerable members of society, and what can be done to mitigate the adverse effects?

Advocates are calling on the federal government to extend the National Rental Affordability Scheme (NRAS), which enables lower-income households to rent properties at a discount of at least 20% compared to market rates.

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The NRAS was introduced in 2008 under the government of Kevin Rudd, but it is set to expire in 2026. With an increasing number of properties leaving the program each year, advocates are worried that the costs of living and rental pressures will become increasingly difficult for many people to bear.

This year alone, 6,619 rental properties will exit the program, highlighting the need for more action.

Advocates say a commitment to construct 20,000 affordable homes is inadequate.

The NRAS was established to provide affordable housing to low-income households.

Under this program, over 38,000 properties were made available, which advocates say was the “largest-ever supply of affordable housing in Australia.”

The program incentivised housing providers by offering a flat rate annual payment, which was indexed to the rental component of the Consumer Price Index annually. This payment came from both federal and state governments and allowed housing providers to offer lower rental prices to tenants.

In 2014, the decision was made to end the program in 2026, which the previous Morrison government upheld.

However, advocates are now urging the Albanese government, elected in May 2022, to continue the program beyond 2026 to address the shortage of affordable housing in Australia.

In October 2022, Prime Minister Anthony Albanese presented the National Housing Accord, which is the government’s strategy for addressing the availability and affordability of housing. The plan aims to construct up to 20,000 affordable homes within five years, starting in 2024, utilising a fund of $350 million.

Queensland is already feeling the effects of the phase-out.

According to the Rental Affordability Index released in November 2022, rental prices in Australia are increasing at a rate that outpaces household incomes.

The data shows that at least 58% of low-income private renters are considered to be in housing stress, which is defined as spending more than 30% of their income on rent.

Hobart was found to be the least affordable city to rent a home, with tenants in regional areas of Australia facing an especially difficult time with rental affordability.

This problem is further exacerbated in communities affected by flooding, such as Lismore in northern New South Wales, which experienced multiple floods in 2022.

The NRAS is phasing out 6,600 affordable properties this year, and Queensland will be the most affected, with 2,499 homes no longer providing discounted rents. This year alone, 1,320 homes across Australia have lost their affordable rental status due to the scheme’s exit.

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