Understanding Barriers and Pathways for the Sustainable Implementation of Affordable Housing in Australia: The Case of the National Rental Affordability Scheme (NRAS)

Abstract

Australia’s housing affordability crisis has deepened despite extensive policy intervention, with the private rental sector experiencing unprecedented pressure. This study proposes that affordable housing should guarantee low and moderate-income households their fundamental right to access secure and safe dwellings, enabling these households to meet essential needs and maintain quality of life without enduring housing stress. Despite significant public investment, a critical housing shortage persists across the nation with a need to build 640,000 homes annually. This crisis is exacerbated by ineffective public–private–community partnerships (PPCP) and the absence of a unified national housing policy. This study critically examines the NRAS to understand why market-based interventions have consistently fallen short of addressing housing affordability challenges. Through empirical analysis of 31 in-depth interviews with senior stakeholders across public, private and community sectors, this research identifies five systemic barriers: definitional inconsistencies in affordable housing policy; inflexible strategic frameworks; misaligned investment incentives; geographical inequities in resource allocation; and fragmented governance structures. The study introduces the Personal and Collective Will in Policy Implementation (PaCWiPI) framework as an innovative approach integrating Maslow’s Hierarchy of Needs with Henderson’s Poverty Line metrics. Our findings demonstrate that effective housing policy requires a fundamental shift from rigid, standardised approaches towards adaptive frameworks that are responsive to diverse market conditions. This research advances housing policy scholarship by providing empirical evidence of implementation barriers while offering practical recommendations for future initiatives, relevant to the current Housing Australia Future Fund and other regionally-related housing policies.

1. Introduction

Australia’s housing affordability crisis represents a complex policy challenge that has been exacerbated by significant events including the Global Financial Crisis (GFC) [1] and the COVID-19 pandemic [2]. The recent introduction of the AUD 10 billion Housing Australia Future Fund (HAFF) in 2023 by the Albanese government to fund the delivery of 20,000 social and 10,000 affordable housing units over the next five years [3] is part of the Australian government’s efforts to address housing crises [4] and highlights both the persistence and scale of this challenge since the early days of the colonial settlement [1].

It is important to note that the term ‘affordable housing’ can be broad and may encompass various types of housing solutions, including both rental and ownership models [5]. This study focuses specifically on affordable rental housing policy implementation, examining why market-based interventions have struggled to effectively address housing affordability. The choice of this focus is particularly relevant given that Australians are now renting longer than buying [6] and the disproportionate impact of housing stress on vulnerable populations [7]. The private rental sector has become a critical component of Australia’s housing system, yet systematic policy failures have led to persistent affordability challenges and increased homelessness [7,8].

Over the past five decades, several interrelated factors have shaped Australia’s housing crisis. These include the dominance of neoliberal market-based approaches [6], the financialisation of housing [9] and insufficient investment in social housing stock [5]. The post-COVID-19 pandemic economic environment further exposed and deepened these housing inequalities [2], while the policy responses focused on supporting property prices have inadvertently exacerbated affordability challenges [8].

The National Rental Affordability Scheme (NRAS) represents a crucial case study in understanding the limitations of market-based housing solutions. Despite aims to increase affordable housing supply, NRAS and similar market-oriented initiatives such as the National Affordable Housing Alliance (NAHA) agreement have fallen short of achieving universal housing access [10,11]. This shortfall is evident in Australia’s current critical shortage of 640,000 social and affordable homes annually [12], a gap that HAFF’s targeted 30,000 new dwellings [3] appear insufficient to address given the affordability crisis for low-income, medium-income and vulnerable households [12,13].

Our research makes two contributions to housing policy development. First, through comprehensive empirical investigation involving 31 key stakeholders—including policymakers, decision-makers, private housing providers and community advocates—to identify specific implementation barriers within NRAS, such as governance challenges, compliance issues and policy adaptation difficulties [9,14]. Second, it provides timely evidence to inform current affordable housing initiatives at the three levels of government, offering practical insights into improving policy design and implementation through better stakeholder coordination and more flexible policy approaches [7,10].

This study examines how policy capture by market interests [11] and fragmented governance structures [15] have affected housing policy outcomes. It argues that effective housing policy requires a whole-of-government approach informed by critical historical perspectives and systematic evaluation of past interventions [9]. The analysis of this study provides recommendations for strengthening policy implementation and improving affordable housing outcomes.

The article is divided into five sections: an overview of the transformation of Australia’s rental market and NRAS as a case study, a methodology outlining our empirical approach, a presentation of research results and findings, a discussion of implications for future affordable housing policies in Australia and a conclusion section.

2. Transformation of Australia’s Rental Market

The implementation of housing policies, particularly within Australia’s private rental sector, reflects a complex interaction between social, economic, environmental and political factors that has evolved significantly since the 1990s. Building on the housing affordability crisis discussed earlier, this evolution spans three distinct periods: pre-GFC market deregulation (1990s–2007), post-GFC interventionist responses (2008–2013) and recent policy fragmentation (2013–present) [5,16,17,18]. During this time, the dominance of neoliberal approaches has fundamentally reshaped housing policy, favouring market-based solutions over direct government intervention and contributing to a decline in social housing stock.

The relationship between demand, supply and external forces such as interest rates and planning systems has become increasingly critical in shaping affordable housing delivery [19,20]. This is evident in the structural transformation of Australia’s rental market, where public housing has declined from 6% in 1991 to approximately 3% in 2021, while private rentals now accommodate over 32% of households [21], up from around 18% in the 1990s [22]. This shift highlights the fundamental tension between public and private housing provision, with distinct governance frameworks, tenant demographics and investment drivers characterising each sector.

The NRAS, implemented under the Rudd–Gillard government (2007–2013), represents a pivotal case study in market-based housing solutions. Previous research has examined NRAS through various methodological approaches, including case studies [21], policy analyses [23] and stakeholder surveys [24], revealing both intentional and inadvertent implementation challenges. These studies highlight how political disengagement, administrative complexities and sustainability concerns affected the program’s efficacy. Specifically, the multi-level governance structure led to approval delays and implementation uncertainty, while debates persisted about whether NRAS genuinely increased affordable housing supply or merely displaced private market provisions [25,26].

Critical analysis of stakeholder dynamics reveals how competing interests across public, community and private sectors influenced policy outcomes [27,28,29]. While some argue that stakeholder complexities contribute to policy failures [30,31,32], others emphasise how stakeholder affiliations shape policy narratives and implementation [33,34]. This tension became apparent during NRAS’s operation, where misaligned goals and inadequate resource allocation contributed to implementation challenges. The scheme’s vulnerability to political changes, especially during the transition to the Abbott government in 2013–2014, demonstrates the importance of political sustainability in housing policy design [33,34,35].

The COVID-19 pandemic has reignited debates about NRAS’s potential reinstatement, highlighting its ongoing relevance to housing affordability and homelessness [36,37]. Contemporary studies of NRAS reveal how policy design deficiencies, established practices and governance challenges contributed to both operational and strategic limitations [26,38]. These findings emphasise the need for more integrated approaches to policy evaluation and implementation, particularly in addressing the persistent challenges of housing affordability that were outlined in the introduction.

This research addresses gaps in existing literature, including analysis of policy impacts and insufficient understanding of cross-jurisdictional variations. While previous studies have examined specific aspects of NRAS—such as budgetary implications [23], subsidy mechanisms [25] and implementation strategies [24]—most were constrained by regional focus or methodological limitations. By adopting a comprehensive national approach and conducting in-depth interviews with diverse stakeholders, this study provides unique insights into improving housing policy design and implementation [39]. These insights are relevant for current initiatives such as the HAFF, which aims to deliver more equitable and sustainable housing solutions [3,4].

The experiences of NRAS thus provide crucial lessons for future policy development, emphasising the importance of robust design, stakeholder engagement and political sustainability in achieving effective housing outcomes [40]. This understanding is essential for developing more resilient and equitable housing policies that can better serve Australia’s diverse housing needs, particularly in addressing the critical shortage of 640,000 social and affordable homes annually identified in the introduction [12]. Through this analytical framework, the sector can better understand how policy capture by market interests [11] and fragmented governance structures [15] have affected housing policy outcomes, supporting our argument for a whole-of-government approach informed by critical historical perspectives and systematic evaluation of past interventions.

3. Research Design and Methodology

This qualitative research study is part of a larger project that examines the principles and practices of the Australian private rental market, comparing the Affordable Housing/NRAS and Build to Rent (BtR) housing frameworks. The study has received Ethics Approval No. LA210315 from the authors’ university human research ethics committee.

3.1. Sample Recruitment

Purposive and snowballing sampling strategies have been used to gather key informants from diverse backgrounds to understand the private rental market processes affecting policy design and implementation of affordable housing schemes in Australia [41,42,43]. Local, state/territory and national stakeholders were identified and contacted, with referral sampling asking participants to recommend industry colleagues who met recruitment criteria.

Researchers contacted participants via telephone or email after identifying eligibility criteria, including an extensive understanding of the affordable housing sector [44]. Authors sent recruitment emails with a booklet for the interview research instrument, an explanatory statement, a consent form and an interview questionnaire. Participants were required to complete the form electronically or verbally at the beginning of the interview. Recruitment occurred between 1 March 2022 and 24 February 2023, targeting one to two key informants from each participating organisation who held senior positions with direct NRAS implementation experience.

The final sample size was determined through data saturation principles [45]. Data saturation was systematically monitored throughout the recruitment process using thematic analysis of interview transcripts. By the 27th interview, thematic convergence was evident, with four additional interviews conducted to confirm that no new themes emerged, resulting in a final sample of 31 participants. Conducting additional interviews after reaching near saturation results in redundancy, as new information becomes less frequent and less significant [46]. This approach aligns with established qualitative research methodologies [45,47,48].

3.2. Data Collection

The investigators conducted 31 interviews with participants (

Table 1. Characteristics of interview participants (n = 31).

Characteristics	n	%
Gender
Female	9	29%
Male	22	71%
Highest Education
Undergraduate
Bachelor’s Only & Double Degrees	7	23%
Bachelor & Grad Dip/Cert.	5	16%
Postgraduate
Master’s Only	10	32%
Master’s & Grad Dip/Cert.	5	16%
Higher degree research
PhD	4	13%
Position
Chairs only and ‘Chairs & CEO/Directors’	8	26%
CEOs/MD
Group CEO, CEOs only & President	4	13%
Managing Directors	3	10%
Executive Directors (ED)
Directors (Corporate, Executive & National Policy)	7	23%
Senior executive (Chief/Head of Sections)	3	10%
General Managers and Managers (GM/M)
State Policy, Strategic & Advisory	6	19%
Experience
14–19 years	8	26%
20–29 years	12	39%
30–39 years	7	23%
40–45 years	4	13%
Sector
Community	6	19%
Private
Private—For profit & others	9	29%
Private—Not for Profit	13	42%
Public	3	10%
Participant Location
Queensland	14	45%
New South Wales	9	29%
Victoria	5	16%
Australian Capital Territory	2	6%
South Australia	1	3%

Adapted from [49] © Johari Hussein Nassor Amar and Lynne Audrey Armitage.

) using Zoom (29), MS Teams (1) and over the phone (1). Informed consent was obtained before starting the interviews. A semi-structured approach allowed in-depth exploration of themes, elicited key informants’ most informed areas and pursued new lines of inquiry based on participant feedback. The interview guide questionnaire was used to facilitate this process.

The interview sample consisted of 71% males and 29% females, with 48% having postgraduate degrees, 39% having undergraduate degrees and 13% having higher education degrees. The data show a diverse representation of senior positions, with 26% being chairs, 23% CEOs/managing directors, 32% executive directors and 19% general managers/managers at state government and organisational strategic levels. During the interview, the participants’ work experience ranged from 14 to 45 years. The interviewees were divided into three sectors: two-thirds from the private sector (42% not-for-profit, 23% for-profit/others), the community sector (19%) and the public sector (10%). The participants were distributed across Queensland (45%), New South Wales (19%), Victoria (16%) and the Australian Capital Territory and South Australia (9%).

However, it should be noted that once the authors identified the relevant participant groups for this study—those in decision-making positions within their organisations—we sent an equal number of invitations across all regions in Australia, which were inclusive in terms of location and gender. The eventual participation was determined by the responses received, which resulted in the current regional distribution. This approach aligns with other studies [49,50], which found that regional distribution in studies is determined by the responses received, despite equal invitations being sent out.

The interviews conducted lasted between 25 and 89 min, with a mean of 50 min and a mode of 66 min—aligning with the accepted interview time from previous studies [47,48]. The interviews ended when the interviewer and interviewees agreed on the data’s value. The interviews were professionally transcribed, cleaned and coded by the researchers [45]. The data were securely stored on a password-protected server, accessible only by the research team aligned with the university’s Research Data Management Policy.

3.3. Data Analysis

NVivo 14 software was used to manage, code and categorise transcripts. The analysis was conducted in three stages [51,52,53]. In Stage One, the software reads transcripts and code statements into nodes, assigning conceptual labels to produce first-order themes [11]. In Stage Two, deductive analysis based on prior theory is combined with inductive refinement, grouping nodes into second-order themes [54]. The researchers collaborated in Stage Three to review and synthesise the Stage Two codebook, identifying relationships and developing themes into aggregate dimensions [55]. The study’s credibility was enhanced through triangulation, interviews of interview transcripts, observation notes and a member-checking process, which involved returning participant transcripts for review and correction, thereby improving accuracy and validity [56].

4. Discussion of Results and Findings

The Australian housing crisis requires an identification of critical barriers and opportunities for affordable and social housing development [5,6,57]. This section systematically analyses stakeholder perspectives of Australia’s NRAS, examining its design, implementation and outcomes. Drawing on extensive interviews with key industry stakeholders, five interconnected themes emerged that characterise the scheme’s effectiveness in addressing housing affordability. These insights from industry leaders, policy experts and housing practitioners illuminate the complex interplay between policy design, market dynamics and implementation challenges, while emphasising the need for a sustainable whole-of-life system approach to affordable housing policy in the private rental sector.

4.1. Definitional Ambiguity in Affordable Housing Policy

A significant challenge in addressing Australia’s housing crisis is the absence of a universally accepted definition of affordable housing [9,58]. Previous studies have identified definitional inconsistencies as a barrier to effective policy implementation [11,25] and this research demonstrates how such ambiguities directly impacted the effectiveness of NRAS.

For instance, the widely used 30/40 indicator—which defines housing stress as spending more than 30% of income on housing for those in the bottom 40% of the income distribution—is increasingly regarded as inadequate [59,60]. This metric fails to account for regional variations and household circumstances, leaving many households excluded from support under schemes like NRAS due to narrowly defined income thresholds.

Definitional ambiguity was identified as a critical obstacle, with the interview question asking how to define ‘affordable housing’ described by some participants as ‘a million-dollar question’ due to its inherent subjectivity. As one participant, an executive director, explained:

The word “affordable” is subjective—something can be affordable to one person and not affordable to another. Just like buying a Mercedes is affordable to one person but not to another. The definition of affordable housing is based on spending 30 per cent of gross income on rent per month. Yet this definition means ’affordable’ rent could range from $1000 to $10,000, depending on one’s income.

[LA2219]

This concern was reinforced by a national chair and CEO of a housing organisation:

There is no universally agreed-upon definition of affordable housing. The term means different things in different jurisdictions. For instance, local, federal and state governments may all use the term ’affordable housing’ while referring to entirely different concepts. Until recently, we’ve been fortunate not to conflate affordable housing with low-cost construction. I’m starting to see that happen now, but historically, affordable rental housing meant that the product itself was discounted, not that it was more cheaply constructed. I guess the affordability comes from the smaller size of the units and the lower cost of land in the outer suburbs’.

[LA2209]

The impact of definitional ambiguity is observed in the varying approaches adopted across Australian jurisdictions. Participants revealed that policy frameworks significantly influenced interstate differences between the way NRAS is conceptualised and operationalised. For example, Queensland maintains similar income thresholds between social and affordable housing [61,62,63], although it is differentiated through property quality, immediate access need and rent calculations. In contrast, Homes Victoria’s Big Housing Build employs a tiered approach with distinct income categories, where rents are set at least 10% below the area’s median market rent and capped at 30% of the median income to ensure affordability for low- and medium-income households [64]. However, while Victoria’s Housing Statement includes 55 references to affordability, none of these references provides a concrete definition of how housing affordability will be measured or guaranteed [65].

NRAS’s implementation exemplified these definitional challenges. While initially targeting low-to-middle-income earners, data indicates that by 2018, approximately 45% of NRAS tenants were eligible for social housing. This shift created operational tensions between investor expectations and tenant management requirements, highlighting the need for clearer definitional frameworks that consider both income-based and market-relative measures while accounting for regional variations and diverse socio-economic contexts.

4.2. Strategic Policy Framework and Adaptability

The NRAS policy framework demonstrated initial effectiveness but revealed significant structural limitations in its long-term implementation. While the scheme delivered approximately 35,000 affordable housing units and attracted $11 billion in private investment [63]—suggesting positive outcomes for household accessibility—its rigid structure ultimately constrained its adaptive capacity. A community housing general manager noted:

The program successfully delivered affordable rental stock that simply wouldn’t have existed otherwise, preventing homelessness and housing stress for thousands of families.

[LA2225]

However, the absence of dynamic policy adjustment mechanisms limited NRAS’s ability to respond to emerging challenges and opportunities. The scheme’s core financial structure—a $100,000 subsidy distributed in equal $10,000 annual instalments over ten years—exemplified this inflexibility. This standardised approach failed to account for crucial market variations, particularly in property values and rental demand across different geographical contexts [66]. A national chair of a housing association elaborated:

We saw affordable housing being built where land was cheap rather than where people needed to live. The same subsidy for a suburban three-bedroom house and an inner-city studio apartment simply didn’t reflect market realities.

[LA2207]

Analysis of implementation outcomes revealed three critical structural deficiencies [5,6,67]. Firstly, the policy framework demonstrated limited responsiveness to market dynamics, particularly in adjusting to shifting patterns of housing demand and supply. Secondly, the absence of formal stakeholder feedback mechanisms prevented the incorporation of operational learnings and market insights. Thirdly, rigid compliance requirements inadvertently discouraged innovation in housing delivery, particularly in areas such as modular construction methods and mixed-use development integration.

The static nature of the NRAS policy framework particularly impacted its geographical effectiveness. The scheme’s inability to calibrate incentives according to local market conditions resulted in suboptimal distribution of affordable housing stock [23], creating oversupply in some regional areas while failing to address critical shortages in high-demand metropolitan centres like Sydney and Melbourne, detailed in Section 4.3. This misalignment between supply and demand patterns underscores the importance of incorporating adaptive policy frameworks in future affordable housing initiatives to better respond to evolving market conditions and foster innovation in housing delivery methods.

4.3. Investment Initiatives and Market Response

The NRAS intended to attract institutional investment in affordable housing, but its rigid design inadvertently incentivised small-scale ‘mum and dad’ (or household) investors, creating a significant misalignment between policy objectives and market outcomes [68]. This disconnect between intended institutional participation and actual investor enthusiasm created a fragmented ownership model that generated behavioural incentives misaligned with sustainable and affordable housing outcomes [2,25]. As a managing director of a housing organisation observed:

Large-scale investors operate on a rental yield basis, seeking stability and long-term tenants. Small-scale investors, however, were primarily motivated by capital gains, leading to higher turnover and less stable housing outcomes.

[LA2227]

The scheme’s over-reliance on individual investors generated several systemic challenges, consistently identified by many research participants.

(a)

the prevalence of small-scale investors prioritising capital gains over rental yields led to frequent property turnover when market values appreciated, disrupting housing security for vulnerable tenants.

(b)

the short-term investment horizon characteristics of individual investors resulted in a diminished commitment to sustained tenancies and ongoing property maintenance, undermining the fundamental objective of providing stable, quality housing for low-income households.

(c)

NRAS’s failure to establish itself as an attractive institutional asset class not only limited participation to individual investors but also enabled some participants to exploit regulatory gaps through practices such as artificial rent inflation to maximise subsidy benefits.

International comparisons provide useful insights, e.g., the United States’ Low-Income Housing Tax Credit (LIHTC) program, which successfully mobilised institutional capital to deliver approximately 3.65 million affordable rental units between 1987 and 2022 [69]. The LIHTC’s success in attracting institutional investment through structured incentives, compliance requirements and scale advantages demonstrates the importance of aligning investment frameworks with policy objectives.

This international experience, combined with the outcomes of NRAS, highlights the need for Australian policymakers to design more effective mechanisms to attract institutional investment while ensuring sustainable and scalable affordable housing solutions. Interviewees acknowledged that, despite its challenges, NRAS successfully prevented homelessness and alleviated housing stress for thousands of families, demonstrating its potential to achieve policy objectives if structural shortcomings are addressed.

4.4. Urban vs. Regional Allocation Inequities

The NRAS policy’s uniform subsidy model failed to account for regional differences in housing markets, particularly the significant variations in land values and housing demand across Australia’s diverse geographical contexts. This standardised approach led to spatial misalignment between housing supply and household needs, including considerations of dwelling design, location preferences and socio-economic factors. Consequently, NRAS investors disproportionately favoured areas with lower land values over high-demand urban centres. As the CEO of an affordable and social housing organisation noted:

No adjustment for variation to housing cost across geographic location or type. That is, same [NRAS] incentive payment regardless of whether the house is in the inner city or outer suburbs, or a 5-bedroom house or a studio.

[LA2228]

The absence of a geographically nuanced subsidy allocation mechanism created significant distributional inequities across regions and communities. This aligns with recent scholarly critiques of spatially blind affordable housing policies [4,70]. Analysis of NRAS implementation revealed three distinct spatial patterns:

Firstly, NRAS incentives systematically clustered affordable housing developments in regions with lower land values, creating an undersupply in metropolitan centres where housing affordability pressures were most acute. Secondly, the geographical distribution of NRAS units often placed them at a considerable distance from major employment centres and essential amenities, creating accessibility challenges that particularly affected disadvantaged households. Thirdly, the insufficient allocation of NRAS incentives in major urban centres like Sydney and Melbourne contributed to deteriorating housing affordability in these cities’ low-income areas.

Federal-state jurisdictional tensions and misaligned priorities between governments and developers further compromised the scheme’s spatial effectiveness. While stronger fiscal and monetary policy instruments could have addressed these NRAS implementation challenges, the scheme instead became entangled in competing institutional interests [71].

Federal disengagement significantly exacerbated these spatial inequities, exemplified by then-Prime Minister Tony Abbott’s statement in 2014, as reported by one participant: ‘Housing is not our problem. It’s not in the Constitution for us to do so we are not doing it’ [LA2208]. This withdrawal from housing policy leadership contrasted sharply with federal investments in other non-constitutional projects like the National Broadband Network (NBN), reflecting similar challenges faced by other nations in the Organisation for Economic Co-operation and Development (OECD) lacking coordinated housing and sectoral policies [72]. Research participants consistently emphasised that future incentive policies must prioritise regional flexibility in housing supply while integrating infrastructure and employment planning to better accommodate population growth and enhance affordability outcomes [73].

4.5. Governance and Partnership Models

The multi-level governance framework of the NRAS analysed through the lens of collaborative governance theory [74] revealed significant coordination challenges between federal, state and local authorities. This fragmented implementation reflected what [75] terms ‘Type II governance’, where jurisdictional overlap creates inefficiencies in decision-making and program delivery. The chair of a housing providers’ organisation at the national level highlighted:

Another shortcoming is that NRAS has problems in its actual administration and management of the scheme. Again, in the US, the funding is by the federal government and the states basically run the program—and that’s what should have happened here as well. So, you have got massive duplication and you have a bureaucratic group in Canberra who really aren’t familiar with the industry, the sector, the people. NRAS should be run by the state government housing departments. That’s what they do.

[LA2205]

International comparisons provide valuable insights into addressing these governance challenges. For example, the United Kingdom’s devolved housing authorities demonstrated improved efficiency through their ‘Single Conversation’ process, a joined-up approach designed to unlock regeneration and infrastructure to improve access to affordable housing for the most vulnerable while fostering community development. This approach achieved a high completion rate of 35,400 homes in 2007–2008 [76]. Similarly, The Netherlands’ social housing organisations, although independent and responsible for setting their own targets and managing their financial responsibilities, operate within a legal framework mandating priority for lower-income households.

Such sentiments of integrative, collaborative approaches were echoed in the data analysis. As a national policy director stressed:

Successful affordable housing delivery requires meaningful collaboration between government, private sector and community housing providers. NRAS showed us both the potential and challenges of such partnerships.

[LA2217]

While collaborative governance literature identifies stakeholder engagement as critical for policy success [77], NRAS participants criticised its design and implementation for lacking formal institutional arrangements to harmonise the interests of governments, private investors and community housing providers. This governance gap resulted in measurable inefficiencies and dissatisfaction with coordination mechanisms.

As such, future policy for the Australian housing sector should adopt evidence-based stakeholder engagement frameworks backed by clear accountability measures and shared objectives, formalised through agreements. This potential is exemplified by the New South Wales Land and Housing Corporation’s (LAHC) redevelopment of the Ivanhoe Estate at Macquarie Park. This project demonstrates the effectiveness of structured collaboration between government, private developers and community housing providers to deliver 3500 dwellings, including at least 950 social housing units and 128 affordable housing units, while reducing administrative processing times [78].

5. Implications for Future Directions

The fundamental question confronting the Australian housing sector centres on defining affordable housing in an era where traditional metrics fail to capture modern economic realities. The established 30/40 rule for determining housing affordability has proven neither necessary nor sufficient to address contemporary housing challenges. As presented in the previous section, numerous studies demonstrate that this approach fails to account for the nuanced dynamics of housing costs and their disproportionate impact on households in different income percentiles.

This study provides empirical evidence from the Australian rental housing market, supporting the argument that oversimplified metrics obscure the intricate relationship between housing costs and poverty. For instance, households within the 20th to 60th income percentiles face a paradoxical exclusion: while meeting traditional affordability thresholds, they still allocate an unsustainable portion of their income to housing, resulting in housing-induced poverty. As articulated by a senior housing advisory director:

The growing group of people, perhaps in the 20–60% decile of incomes, who can’t get into public housing and who can’t get into home ownership and for whom affordable rent, meaning something set at say no more than 30 or so per cent of their income, actually means that they experience housing-related poverty and that’s really where NRAS and BtR has attempted to sit in the last decade or so.

[LA2210]

Post-COVID economic realities have intensified these challenges [2,79,80]. Housing costs have risen disproportionately to income growth, while below-market affordability standards lack the elasticity needed to assist households across diverse income levels. Rent increases, reportedly reaching 200% to 400% per fortnight in some cases [79], have driven the proportion of income spent on housing to an average of 30.8% [80]. This renders the 20% below-market standard ineffective, leaving people vulnerable to poverty and homelessness [19].

In response, there is an increasing momentum within the Australian housing sector for reform demanding a nuanced approach to affordability—one that encompasses immediate costs and long-term sustainability [36,37,81]. Suggestions have been made that housing policy requires an inclusive approach that acknowledges that access to housing is a fundamental human right [82]. This research establishes actionable strategies through the critical examination of existing frameworks and integration of innovative theoretical contributions within the Australian context.

5.1. Reframing an Affordable Housing Definition

The research demonstrates the necessity to rethink affordable housing by focusing on household well-being [83] rather than relying solely on an income metric [19] and housing-induced poverty indicators [61,84]. While this shift may create challenges in interpreting and implementing existing housing policy, it enables the potential adoption of a complementary term that coexists with the traditional definition, ensuring the delivery of affordable housing—both rented and purchased—that considers financial constraints as well as the quality of life for low- and medium-income households [85].

In response to the current housing crisis, marked by rising rents and limited supply [82], this study advocates for the integration of two complementary frameworks into the policy definition of affordable housing: the Henderson Poverty Line and Maslow’s Hierarchy of Needs [60,83]. The Henderson Poverty Line, a key Australian metric, sets clear benchmarks that identify those experiencing poverty and assess households’ hardship and capacity to maintain adequate living standards, e.g., after paying housing costs [84]. Maslow’s Hierarchy of Needs adds depth through five essential elements: safety, health, convenience, comfort and sustainability. This framework demonstrates how residential satisfaction builds sequentially, with sustainability representing the highest level of well-being [86].

Drawing on this theoretical integration, the authors propose a definition that offers a robust foundation for a framework for the provision of affordable housing within the broader parameters of household needs for sustainable living standards:

Affordable housing guarantees low and moderate-income households their fundamental right to access secure and safe dwellings, enabling these households to meet essential needs and maintain quality of life without enduring housing stress.

While this reconceptualised definition of affordable housing reflects evolving societal priorities, the policy implications remain substantial. As demonstrated in previous sections, inconsistent definitions across Australia’s jurisdictions were among the major causes of NRAS failure. Although a standardised definitional framework might simplify implementation, it risks overlooking regional variations [60] and diverse household needs [15,58]. This tension necessitates adaptive frameworks, such as the UK’s single conversation model to accommodate localised requirements while maintaining specificity in affordable housing standards from a human rights perspective. Nonetheless, specificity in defining affordable housing remains critical to balancing national standards with regional diversity from the human rights perspective.

5.2. From Rigid to Responsive Affordable Housing Framework

Research demonstrates that effective housing policy requires a fundamental shift away from inflexible, rigid approaches towards standardised, adaptive and inclusive frameworks that respond to changing market conditions and population needs [26]. The impacts of inflexible policies are clearly exemplified by the NRAS [9,40,68]. Its uniform annual subsidy of AUD$10,000 per dwelling, while well-intentioned, failed to account for the heterogeneity of local markets, broader socio-economic implications and specific dwelling unit characteristics.

The scheme’s shortcomings became particularly evident in mining regions, where empirical evidence revealed that declining market rents combined with the 20% rental discount often resulted in subsidised rents exceeding local market rates. Such outcomes highlight the inadequacy of NRAS’s one-size-fits-all policies in addressing the complexities of affordable housing across varied contexts. Contemporary affordable housing policy must recognise housing as a fundamental component of social infrastructure, establishing adaptive and inclusive frameworks that address diverse population needs while ensuring housing security across the continuum [15,87,88].

Affordable housing policy must address the needs of diverse groups, including low-income families, individuals with disabilities, gig workers, retirees and Aboriginal and Torres Strait Islander communities [82]. Such an inclusive approach reduces systemic challenges, minimises social and economic costs and fosters equity and cohesion [89]. The interconnected nature of housing challenges and broader social policy domains, including employment, healthcare and community safety, demands a holistic approach [14]. Research participants observed that inadequate access to affordable housing is correlated with increased recidivism rates, rising healthcare expenditure due to mental health issues and broader strains on community resources [82].

This emphasises the need to shift from narrow, household-focused interventions to market-responsive policies that address all aspects of the housing continuum. As one stakeholder observed, ‘there is a continuum in the housing market and all of them need to be assisted in different ways’ [LA2206]. Integrated, mixed-tenure developments—combining social, affordable, private rental and owner-occupied housing near transport, amenities and employment—offer promising models for future housing policy. Notable examples include the nascent Ivanhoe Estate in New South Wales, Australia; the university town of Freiburg, Germany, demonstrating over 30 years of integrated development [90]; and Elephant Park in the United Kingdom, with construction spanning 2013–2028 [91].

5.3. Public–Private–Community Partnerships Framework

A public–private–community partnership (PPCP) framework represents a crucial mechanism for addressing Australia’s housing challenges. However, the insight from the interviews reveals that both opportunities and systemic barriers face PPCP implementation and lie in reconciling divergent stakeholder priorities while ensuring social equity objectives, as highlighted below.

• Public institutions possess significant yet underutilised assets, such as land, that could facilitate the increase of safe, secure and affordable housing supply
• The private sector brings capital and operational efficiency, yet often prioritises immediate financial returns over long-term housing affordability
• Community advocates support social equity by ensuring alignment between public and private sector interests and broader socio-economic objectives

Despite their potential, PPCPs have been facing systemic challenges, including insufficient coordination, transparency issues and NIMBY (Not In My Back Yard) mindsets impeding to effective implementation, development and investment in affordable housing [15,32,82]. Historical examples provide valuable insights into PPCP successes and failures in delivering sustainable affordable and social housing [1]. For example, the Pruitt–Igoe project in St. Louis, Missouri, initially celebrated as a model of urban renewal and housing provision, failed due to inadequate long-term planning, poor community integration and systemic challenges [92]. Similarly, NRAS evidences how poor policy design can lead to overreliance on small-scale individual investors whose capacity to address housing demand is fractured.

The integration of diverse stakeholder needs into housing policies requires robust regulatory structures, and long-term asset-holding periods are essential to mitigate policy fluctuations, community needs and market uncertainties. As one executive director noted, ‘If they [government] are going to solve or help solve the [affordable rental housing] problem, they need for-profit, not-for-profit and government all in there’ [LA2213]. This collaborative approach is evident in recent initiatives, e.g., the City of Moreton Bay giving land to community housing providers at peppercorn rates [93], which demonstrates that innovative approaches to public asset utilisation can enable private sector participation while serving community needs.

However, challenges, like a decline in skilled workers, construction material delays and inconsistent policies, demand a cohesive national housing strategy with tailored approaches to meet specific geographical variations and cultural contexts [94]. Addressing these disparities requires long-term investment, planning and robust systems to ensure sustainable outcomes that reflect local community needs and market conditions [71]. Despite recognising these groups, actionable national housing policy recommendations for integrating their contributions remain absent.

5.4. National Affordable Housing Policy Strategy

The conspicuous absence of a cohesive national affordable housing strategy in Australia reflects a fragmented policy landscape where the three tiers of government operate in isolation. This disjointed approach has led to systemic inefficiencies and policy inconsistencies, undermining promising initiatives like NRAS, which, despite its potential, was described by an interviewee [LA2220] as being ‘administratively overcooked and undercooked in terms of delivery and implementation’ largely due to the lack of a national housing policy framework.

The nature of affordable housing policy in Australia reflects a broader systemic failure to balance local needs with national coordination [5,38,40]. This imbalance has left governments at all levels prioritising short-term political agendas over long-term strategic planning, thereby destabilising the supply of affordable housing that addresses Australia’s diverse housing needs. As one national CEO of a housing organisation noted,

‘One of my frustrations in the housing sector and with government at all levels, seems to be that we’re very good at coming up with pilots and ideas and then they are just out the door’.

[LA2204]

The consequences of these policy gaps are stark, with low- and moderate-income households increasingly marginalised from job-rich and high-amenity areas, as illustrated by the 2022 SGS Economics and Planning Rental Affordability Index [95]. However, there is broad consensus that reforming the sector requires a national policy framework that resists political volatility while remaining adaptable to local needs.

Therefore, this study proposes incorporating the Personal and Collective Will in Policy Implementation (PaCWiPI) framework (Figure 1) as a central feature of national housing policy. As participants noted, ‘if a politician or a party doesn’t feel like they’re going to get pinged by the public because they didn’t do something, chances are it won’t get done’ [LA2207]. The PaCWiPI framework addresses this political inertia by creating structures that prioritise long-term planning and stakeholder collaboration over short-term political gain.

The framework has four concentric circles which integrate theoretical foundations and practical implementation considerations:

• Layer 1—Affordable housing definition: At the core of the framework lies the synthesis of Maslow’s Hierarchy of Needs with Henderson’s Poverty Line, establishing a fundamental theoretical basis for understanding housing needs. Before any scheme is approved, a clear definition of affordable housing must be established. This integration combines Maslow’s universal psychological and physiological requirements [96] with Henderson’s contextualised economic threshold [97], providing a comprehensive foundation for housing policy development.
• Layer 2—The housing continuum: This layer presents the spectrum of housing solutions, ranging from crisis accommodation to home ownership, with intermediate stages including public housing, affordable housing and private rentals [98]. By mapping concrete housing solutions to different levels of housing choices, affordability needs and support requirements, the framework operationalised its theoretical foundation. The continuum enables households to access housing solutions beyond their immediate geographic area, emphasising housing mobility across tenure types as circumstances change, rather than remaining trapped in a particular segment of the housing system.
• Layer 3—Integrated policy dimensions: This layer represents the tripartite considerations of demand-side needs, supply-side objectives and policy-side strategies through a systems thinking approach. By addressing these critical dimensions holistically and in coordination with other policies—such as those related to employment, infrastructure, education and health—this framework ensures policy responses are not developed in isolation. Understanding these dynamics will enable stakeholders to create effective strategies to address both immediate housing needs and long-term objectives while ensuring equitable access across socio-economic groups.
• Layer 4—Implementation principles: The outermost layer addresses replicability, predictability and scalability (RPS) principles in housing strategies through PPCP and mixed-tenure infrastructure. Affordable housing solutions must adapt to specific socio-economic contexts while remaining flexible for replication, ensuring that reliable outcomes can be predicted and outcomes are efficiently scaled to meet growing demand. The framework categorises the principal determinants of RPS into technical, economic, planning, operational, performance and regulatory factors, including those arising from expanding sector needs. By applying RPS principles, policymakers and stakeholders can develop reliable, adaptable and effective affordable housing strategies suitable for diverse and evolving contexts and needs.

But, of course, for this approach to succeed, the housing sector requires political will and improved data transparency to track operationalisation and enable long-term planning through continuous improvement. These elements are essential to overcoming political and bureaucratic barriers and delivering a sustainable and equitable housing system for all Australians. The urgency of this need is demonstrated by current housing stress across all socio-economic levels: households at the 25th percentile of income are forced to allocate 54.3% of their earnings to rental housing costs [99], while even households earning $170,000 annually—placing them above 70% of Australians—can access only 85% of advertised rentals [100]. The crisis is further exacerbated by a 30% surge in residential construction costs since the pandemic [101], while homelessness continues to worsen, with over 10,000 new cases monthly and rough sleeping increasing by 22% over three years [102]. The PaCWiPI framework offers a workable blueprint to reduce pressure on the Federal Government’s target of building 1.2 million new homes and various regional initiatives within the next five years [3], as it provides a structured approach to addressing these intensifying challenges through systematic data collection, analysis and responsive policy implementation.

6. Conclusions

The needs of low- and middle-income households in Australia are not being adequately met by housing policies, as has become more apparent over the past few decades. This study examines the ongoing difficulties households encounter in the private rental market, which have been made worse by the pandemic, skyrocketing rents and the termination of NRAS. This involves a review of the literature, followed by an analysis of current empirical findings provided by stakeholders across various sectors involved in affordable housing. The findings shed light on key areas that require attention to address Australia’s shortcomings in providing affordable and social housing for its growing population. This includes families, individuals living alone, the elderly and disadvantaged individuals, whether due to physical, financial, or geographical reasons, as well as those above the fourth income quintile who are also experiencing housing stress. The study accentuates the importance of taking action to rectify this situation and ensure that adequate housing is accessible to all segments of society.

This study of Australia’s affordable housing challenges reveals significant limitations that warrant attention in future research and policy development. While the qualitative insights from 31 stakeholder interviews provide valuable perspectives on policy implementation barriers, the small sample size also limits the generalisability of findings. To address this limitation, future research must incorporate comprehensive quantitative analysis, including longitudinal housing market data, economic modelling and large-scale household surveys.

The research highlights critical gaps in current housing policy approaches, particularly the absence of a universal definition for affordable housing and the lack of concrete implementation strategies for theoretical frameworks such as PPCP. These frameworks, while conceptually sound, require practical testing and refinement through empirical analysis. Statistical evidence is needed to evaluate policy effectiveness, project future housing demands and assess the financial viability of proposed partnerships across different market contexts.

Strengthening the evidence base for housing policy development requires a multi-method approach that combines stakeholder insights with robust quantitative data. This should include an analysis of price-to-income ratios, rental affordability trends and the geographic distribution of housing stock across Australian metropolitan and regional areas. Such data would enable more precise targeting of interventions and allow meaningful comparisons with international housing markets and policies. Economic modelling could help quantify the effectiveness of past initiatives and project the impact of proposed policy changes.

By addressing these methodological limitations and expanding the scope of analysis, future research can better inform the development of effective, evidence-based housing policies. The integration of quantitative evidence with qualitative insights will strengthen the foundation for policy reform, ensuring that interventions are both theoretically sound and practically viable in addressing the nation’s housing affordability challenges—Australia’s shame.