Seniors can help solve homelessness
Let more homeowning seniors be landlords – and put a roof over the head of their fellow citizens.
Key Points
There’s a homelessness and rental crisis and cost of living is tough.
84% of seniors’ homes are under-utilised.
Financial barriers to older homeowners renting out spare rooms should be removed.
National Seniors Australia (NSA) is campaigning on your behalf to promote fair and flexible retirement income and improved housing options for all Australians, especially older Australians.
So, when we came across research into those policy areas which promised to deliver on both in innovative and practical ways, we knew we had to bring it to your attention.
Housing affordability in Australia is at its worst level on record as demand outstrips demand and costs skyrocket.
Potential relief from new housing supplies is years away.
Economist, Dr Lyndall Bryant, believes older homeowners have an important role to play in providing relief, which could be activated much sooner.
“Housing affordability is not forecast to improve until at least 2029 and we are seeing homelessness services experiencing a ‘tsunami of homelessness’ as tenants are priced out of the rental market,” Dr Bryant said.
“As at the 2021 census, there were 13 million unused bedrooms within the existing Australian housing stock.”
Her proposal is that older homeowners should be given incentives to rent out spare bedrooms in their homes.
Dr Bryant is from Queensland University of Technology’s Centre for Justice and School of Economics and Finance. Her briefing paper, The role of older Australians in addressing the housing crisis: spare bedrooms, taxation and the pension, addresses the phenomenon of many older people living alone in family homes and apartments with empty rooms to spare.
Traditionally, this has been seen as a problem – as a cause of social isolation, with seniors living in unsafe and expensive-to-maintain housing that is not age-friendly. Compounding this is the rising cost of living which hits older people on limited incomes particularly hard.
While homeowners understandably have emotional ties to the family home, single occupancy locks up housing that otherwise could be available to other generations.
These are genuine and continuing issues, and NSA proposes innovative tax relief and other financial incentives to support those seniors who wish to downsize. You can read more about our Better Housing Campaign here.
Also, our Fairness in Retirement Income Campaign promotes a retirement income system based on the principles of adequacy, sustainability, certainty, and fairness.
Rather than this being seen just as a problem locking up housing, Dr Bryant proposes the housing debate be shifted from the need for new supply to better use of existing housing by encouraging older homeowners to rent out empty rooms.
However, financial barriers to this happening need to be addressed.
Age pensioners would be penalised as the rental income could affect their pension payments. Self-funded retirees could also be impacted by income tax implications and the withdrawal of government medical and other concessions.
So, Dr Bryant proposes that, with assurances that pensions will not be impacted by losing benefits or facing onerous taxes – and with appropriate tenant matching and management – a solution exits that could be a win-win for all.
“Older Australians represent the highest proportion of homeowners, with over 80% of persons aged over 65 owning their own home. Research shows three quarters of those homes contain three or more bedrooms, and 84% of these homes are under-utilised,” she said.
Dr Bryant said Australia is increasingly at a point where the housing crisis intersects with the cost-of-living crisis, making it harder for people to remain in their homes as they age. She notes that many seniors are “asset rich and income poor”.
“Some 80% of older Australians rely at least in part on the Age Pension, and over 25% live in poverty,” she said.
“If we can incentivise older Australians to rent out a spare bedroom, it serves the dual purpose of improving access to affordable housing and cost of living relief to vulnerable older Australians.”
“For a pensioner on a fixed income, struggling to meet increased housing costs, the cost of feeding one extra person may be easily offset by an additional $350 per week income, tax free, with the additional cross cultural and companionship benefits.
“Another option is to adapt the Work Bonus scheme which enables additional earnings of $504 a fortnight for single pensioners, and $660 per fortnight for couples without loss of any pension. This could be adapted to accommodate rental income.”
Concerns, often unfounded, that renting out a spare bedroom would attract capital gains tax when the property was sold could be overcome by the introduction of a short-term capital gains tax “holiday” for a period of two to three years, giving homeowners an amnesty while new housing stock can be built.
“There is an urgent need for further research to be undertaken to explore opportunities to incentivise, support, and protect older Australians to open their homes and unlock existing housing stock for immediate use,” Dr Bryant said
Related reading: QUT, NSA Better Housing, NSA Fairness in Retirement
