Outline factors that can impact on the contemporary issue of affordability. Explain likely outcomes of these impacts. Discuss the effectiveness of the law in dealing with these issues of affordability.

Shelter is not given as of right to Australian’s; it is seen as an individual responsibility to acquire adequate shelter. This means that the community must be able to afford a residence. The issue of affordability can occur when households cannot obtain adequate housing they can afford within their local area because of insufficient income, high house prices or rents, or a combination of these factors. This situation may result in more households either leaving their community to find cheaper housing or living in housing that is too expensive, which can then have flow-on effects upon their living standards and well being.

In general terms the ability to afford shelter, is being able to purchase housing that is appropriate to the needs of a household and within their means to pay. This becomes an issue for many, in NSW it is recognized that households with incomes up to 120% of median household income may experience a housing affordability problem depending on their circumstances. The price of shelter is largely determined by the economic principle of supply and demand. In those areas where shelter is in short supply but demand is high, prices will also be high. Affordability is dealt with in a number of ways. The Residential Tenancies Act provides protection for both landlords and tenants. Landlords must comply with official eviction terms if affordability became an issue for tenants and tenants must pay for all damage caused in the duration of their residency. The Consumer Trading and Tenancy Tribunal also provide protection and resolves disputes between parties if affordability is to become an issue. The First Home Owner Grant Scheme is a national scheme that is funded and administered by the states, together with the Commonwealth Boost Scheme. It is aimed to help people who are purchasing shelter for the first time; it gives $7000 for each purchase and if the home is new or being built a further $3000 is given. The Housing New South Wales Mortgage Assistance Scheme was also introduced in 2008 to deal with issues of affordable shelter, providing short-term help to people experiencing difficulty in meeting mortgage payments, in the form of an interest-free loan. It is a scheme of last resort, to be eligible; the homeowners must be in serious financial difficulty caused by unavoidable changes in circumstances and in danger of losing their home. Rental assistance is also offered to low income earners. Rentstart provides financial aid to help pay advanced rent or rental arrears for rent of private property. To be eligible, a person needs to be a citizen of Australia, be over 18 years of age and have less than $1000 in their bank account. Social housing is also used to deal with the issue of affordability. This includes public housing, cooperative housing and community housing owned by the state government and leased to the public at lower rents than would be paid on the private rental market. The federal government provides further indirect assistance for particular groups, such as aged persons, people with a disability or defense personnel. This assistance is in the form of tax concessions and pensioner rebates and enables people to acquire shelter.

Problems concerning affordability can occur due to an insubstantial income, one’s inability to work or otherwise be occupied (made redundant, retrenched, pregnancy, illness, global financial crisis [2008]) or even rising interest rates. The unknown issues of the future are centrally responsible for the issue of affordability. House prices in Australia have risen faster than average household incomes since 1970. In 2007-2008, 49.3% of low-income households with a mortgage in NSW were found to be in mortgage stress (nationally 46.6%). Sydney is considered to have the most