Private rentals in disadvantaged suburbs: creating a new divide within our cities

Tale of two cities. We know there is a stark socio-economic divide in our cities. But new work has highlighted a further socio-economic divide within disadvantaged communities, which will have major implications to come, writes Professor Hal Pawson, Director of the AHURI Research Centre. This post was originally published on the City Futures blog hosted by the University of New South Wales.

Many residents of disadvantaged suburbs in our major cities rightly see their home locality as posing problems for themselves and their neighbours. Key concerns include exposure to relatively high rates of crime and antisocial behaviour (41% of people living in such areas believe that ‘crime is a problem here’), and remoteness from job-rich localities (only 33% endorse the statement ‘There are good employment opportunities within or accessible to the area’). Importantly, this latter factor contributes to typically high unemployment (and especially female unemployment) experienced in these places. With the geography of disadvantage in Australia’s major cities shifting ever further outwards, away from our job-rich inner urban areas, this is a growing problem.

But despite having more than their fair share of poverty and other social problems, our disadvantaged suburbs are not unmitigated spaces of alienation. While a significant minority of residents of Sydney’s most disadvantaged areas (37%) would exit their neighbourhood if given the chance, locals in the main identify positively with their home area. And residents of such places who see their suburb as ‘going downhill’ are easily outnumbered by those who see it as ‘on the up’. Moreover, the idea that suburbs low in socio-economic pecking order have little social capital is challenged by the finding that almost half of disadvantaged area residents (49%) report membership of a local community group or club – usually a social or sports club.

These findings originate from a City Futures survey of four lower value Sydney suburbs. Complementing our separately published findings of qualitative case study work in six disadvantaged urban localities of Australia’s largest cities, the survey covered Auburn, Emerton (Mount Druitt), The Entrance and Warwick Farm. All four are in the lowest 10% of the national neighbourhood ranking according to the ABS SEIFA deprivation index. Identified as part of a larger AHURI research project, the surveyed localities were chosen to broadly represent the four socio-economically distinct types of ‘disadvantaged suburb’ identifiable in Sydney, Melbourne and Brisbane. Therefore, the survey – involving 801 resident interviews – encompasses the diversity of disadvantaged urban localities in our major cities.

Housing market operation

As well as investigating place attachment and social exclusion, the survey probed the operation of disadvantaged suburb housing markets, revealing that these areas appear to play a significant ‘home ownership gateway’ role. However, while a substantial proportion of first-homebuyers are drawn into these places from elsewhere, many intended to use this move as a stepping stone, planning a neighbourhood exit when feasible. For more than half of owners intending a move, features of the neighbourhood perceived as ‘problematic’ (especially in terms of community safety and access to services) are a motivating factor.

Private rental markets in disadvantaged areas, meanwhile, are mainly characterised by local and/or within-tenure churn (or turnover). Compared with homebuyers, far fewer local private renters expect to leave the area when they next move.

Private rental problems

As represented in areas like this, the private rental sector stands out as by far the most problematic tenure in terms of poor housing conditions. Almost a fifth of PRS homes (18%) were deemed by interviewers as poor or very poor on external condition and a quarter were similarly judged on the condition of outside space. Comparable figures for public housing were only about half these levels.

Moreover, when it comes to disadvantaged suburb populations, the private rental sector is the dominant location of economically excluded households. While the rate of economic exclusion for private renters in such areas is close to that for public housing tenants, the much greater scale of the private rental sector in these places is the crucial factor here. Projecting our findings to represent all disadvantaged suburbs in Sydney, we estimate that 56% of all economically excluded households in such areas will be private tenants, whereas only 29% are public renters. Social inclusion initiatives focused entirely on public housing will miss the majority of people who are economically excluded.

Gauging the incidence of deprivation

Our identification of ‘economically excluded’ households draws on survey responses to a series of standard ABS questions asking whether lack of funds has forced the respondent to forgo various ‘essentials’ (e.g. food and clothing) over the past year, or to seek financial help. As well as helping to identify those population groups most at risk within disadvantaged areas, these results give us a handle on the extent of deprivation in these communities by comparison with wider norms.

Averaging the survey results across the four localities, 33% of all resident households had experienced at least one of the named forms of deprivation during the previous year – some two-thirds higher than the figure (20%) for the whole of Sydney and the whole of Australia. In showing that deprivation is not the norm in such places, the survey reassures us that spatially concentrated disadvantage remains relatively shallow in Australia. Conditions in Australia’s most deprived urban communities cannot be equated with those in the so-called ‘sink’ suburbs found in many US cities and some in Europe.

Equally, however, the survey findings illustrate the stark socio-economic divide within our disadvantaged communities where poverty and deprivation is widespread among tenants, both public and private, yet almost absent among home owners. With the unusually high private rental growth rates currently seen in disadvantaged areas, this has ominous implications for the future.

For the full report see: Disadvantaged Places in Urban Australia: Residential mobility, place attachment and social exclusion; AHURI Final Report no. 243 by Hal Pawson and Shanaka Herath