Risk-assessment practices in the private rental sector: implications for low-income renters

This Positioning Paper provides the context, sets out the theoretical framework and outlines the research strategy underpinning a study into the factors influencing risk-assessment and tenancy allocation practices used by property managers in the private rental market. The study builds on previous research demonstrating that a relatively large proportion of low-cost private rental accommodation is occupied by moderate- to high-income households (Seelig 2001a; Wulff and Yates 2001; Yates et al. 2004). However, this is occurring in an environment where the private rental sector is now the de facto main provider of rental housing for lower-income households across Australia (Seelig et al. 2005a). The following research questions will be addressed: What factors are taken into account by real estate agents in their assessment of risks entailed in the allocation of rental tenancies to different categories of tenants? What procedures (qualitative and/or quantitative) do real estate agents use to evaluate risks at the point of allocation of tenancies? Do real estate agents attach greater risk to low-income renters? If so, what aspects of low-income status are perceived, by real estate agents, to constitute risks in rental tenancies? What factors are perceived, by real estate agents, to mitigate any specific risks arising from or associated with tenants? low-income status? What role might the processes of risk-assessment in the private rental sector play in shaping the movements of low-income households within the rental sector? The policy context of this study acknowledges that risk-assessment and tenancy allocation practices are rooted in the broader structural and behavioural patterns of the private rental market as a whole, and are linked to the ways in which landlord?tenant relations are defined in social, economic and legislative terms. The role of the private rental sector in housing lower-income households, the provision of direct State housing assistance to private renters, and private rental sector policy provide the contextual markers that are relevant to this study. The underlying research strategy proposed for the project involves taking an institutional ethnographic approach (Smith 1987), a realist method of enquiry that takes everyday, experiential knowledge as evidence of the workings of wider social (institutional) structures. The focus of enquiry, in this instance, is the institution of the private rental market. Individual and group in-depth semi-structured interviews will be undertaken with property agents in selected localities in New South Wales, Queensland and South Australia. A small number of tenant advocates and community-housing providers will also be interviewed to complement the interviews with the property agents. Phase 1 has involved the trialling and confirmation of the interview strategy to be used in Phase 2 of the study. The researchers aim to identify and describe: Factors that real estate agents take into account in assessing the 'risks' in allocating affordable housing to low-income households Routine practices and formalised procedures employed, at the point of allocation, to evaluate relative risks and potential trade-offs in the allocation of low-cost housing Likely outcomes for low-income householders of real estate agents? risk-assessment practices, under different market conditions Factors or specific arrangements perceived by real estate agents to mitigate or reduce risks associated with low-income status of tenants and increase tenants? capacity to obtain affordable housing in the private rental sector Potential impact of risk-assessment and related practices upon housing pathways of low-income tenants seeking affordable housing in the private rental sector. Thus, the research will suggest directions for developing strategic policies to address factors linked to low-income status that are understood to constitute 'risks' in private rental, and are likely to preclude or limit low-income householders? access to affordable housing in the private rental sector.