Insights

Rental affordability and loneliness: there’s a common thread.

Posted March 01, 2023

Author(s):

Jo Noesgaard

Sectors:

Types:

Local government
Business

SGS Economics and Planning Older and Younger hi

It’s no secret Australia is experiencing a rental affordability crisis. Rental prices are rapidly increasing, leaving a third of young Australians in rental stress. Something needs to be done, but most of the available solutions – like building more affordable housing – will take time.

While these solutions are valuable and crucial, they are no help for renters who need an affordable place now.

In the meantime, a potential solution lies not with the young renters, but lies with elderly owners. There are some 13 million vacant rooms across Australia. Many of these rooms are in lone-person households. In Greater Sydney half of the 420,000 lone households belong to people over the age of 60.

They not only live alone, but many of them are lonely.

SGS Economics and Planning Older person and loneliness

Loneliness is an epidemic in Australia. In 2020 almost 1.2 million people (14.6 per cent of the population) across New South Wales reported feeling lonely. Loneliness especially affects the young, the old, and those living alone. The Bankwest Curtin Economics Centre estimated that loneliness is costing Australia $2.7 billion each year.

At the Sydney Summit, held by the Committee for Sydney in February, our team proposed one solution to ameliorate both the rental affordability crisis and loneliness epidemic in Australia: intergenerational renting. In other words, connect young people who need a room with the elderly who need company. SGS Senior Associate, Jo Noesgaard told the audience at the Summit:

“We can use the 13 million empty rooms across Australia to increase rental supply opportunities and connect older people with younger people, improving social connections.”

SGS Economics and Planning Jo Noes Gaard at the Sydney Summit

The premise is simple: older people living alone rent their room for an affordable price to a younger person, who may in return, provide company and hep with basic chores. The rent won’t be live-in care, but support with gardening, shopping, and cooking, for example, could be exchanged for an affordable place to live.

The idea might sound quaint, but our research shows that of two million empty rooms in Sydney, 550,000 are within 1km of a train station. In fact, 20,000 are within 1km of Kings Cross and Edgecliff stations. Leaving empty rooms in prime locations that could be rented out at affordable prices.

Outside of the proposed benefits, making a situation like this work is another matter. Connecting young and older people, in a safe and secure way, seems like no easy feat but it can be done. As Jo Noesgaard, SGS Senior Associate points out:

“Some small existing programs do this already, so we know it can work. We want to push this idea to the next level".

SGS Economics and Planning Young and Older working on laptop

The “next level” could be a platform – like an app – that matches older residents with young renters. The platform would need to be carefully designed and regulated to keep the community safe. Both young people and older people are potentially vulnerable community members. If a platform were developed, Noesgaard emphasises that Government oversight, regulation and compliance is required.

Intergenerational renting already happens at a local level – both by word-of-mouth and other platforms. Jo Noesgaard hopes that a purpose-built platform will establish intergenerational renting as a viable option on a large scale.

It may well be. We estimate that if only five per cent of older people with spare rooms in Greater Sydney partook in the initiative, it would result in approximately 50,000 dwellings for young people, reduce rent in the region and mean that the elderly are a little less lonely.

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Author(s):

Jo Noesgaard

Sectors:

Types: