Everyone knows Australia is facing a housing crisis. But did you know this is actually a global problem?
Our summary of the OECD Publishing brief, 3 July 2026
Across the OECD, a home of your own is slipping out of reach. Rents climb, waitlists grow, and families increasingly find that the biggest line in their monthly budget leaves little room for anything else. This isn’t a temporary blip. It’s a structural mismatch between the homes people need and the homes that exist. And the evidence points to one clear lever for change: expanding the supply of affordable and social rental housing.
The good news? Policymakers already know what works. The challenge is doing it at scale, on two fronts at once.
The Scale of the Crisis
The numbers tell a sobering story. On average across the OECD, the share of private market tenants spending more than 40% of their disposable income on rent jumped from 12.8% in 2012 to 17.9% in 2023. For low-income households, the strain is even sharper: roughly 40% of low-income tenants now hand over more than 40% of their income just to keep a roof overhead.
Meanwhile, the safety net is fraying. Social housing—the very stock designed to protect the most vulnerable—is shrinking. In about two-thirds of OECD countries, social housing makes up less than 5% of the total housing stock. And since 2010, that share has declined in almost every country with available data.
The consequences ripple far beyond household budgets. When housing eats up income, families cut back on everything else. Young people delay homeownership, or give up on it entirely. Workers stay put instead of moving toward better jobs, deepening skill mismatches across the economy. Birth rates feel the squeeze. And at the sharpest edge, homelessness and housing insecurity rise. Housing affordability, in other words, is not just a housing problem. It shapes the health of entire economies and societies.
What’s Driving the Gap?
To fix the problem, we have to understand what feeds it. The crisis grows from pressures on both sides of the market.
On the supply side, several forces limit how many homes get built:
- Rising construction costs and labour shortages in the building trades
- Higher borrowing costs that make new projects harder to finance
- Restrictive land-use policies and limited land in high-demand areas
- The spread of short-term rentals, which pull homes off the long-term market
- Declining public investment in housing over recent decades
On the demand side, the pressures are just as real:
- Ageing populations and migration reshaping where and how people live
- A shift toward smaller, more numerous households, meaning more homes are needed for the same number of people
Put these together, and you get a market pulled tight from every direction. No single tweak will loosen it. That’s why the OECD brief argues for a two-track approach—one that acts fast today while building for tomorrow.
The Two-Track Policy Framework
Think of it this way: you can’t wait years for new buildings to rise while families struggle right now. But you also can’t solve a structural shortage with quick fixes alone. You need both speed and depth. That’s the logic behind the two complementary tracks.
Track One: Mobilise the Existing Stock
The fastest relief often comes from homes that already exist but sit empty or underused. Bringing these back into use eases pressure in tight markets quickly, upgrades building quality, and avoids the carbon cost of new construction. Two tools stand out.
Rental intermediation schemes put a trusted middle party—often a Social Rental Agency—between owners and tenants. The agency manages the property, guarantees the landlord steady, reliable income, and in return offers the home to tenants at below-market rents. Owners get peace of mind. Tenants get an affordable place to live. Everyone wins.
Fiscal tools nudge the market in the right direction. Reduced tax rates on rental income encourage owners to rent out their properties. Vacancy levies do the opposite—they make sitting on an empty home more expensive, pushing owners to put it to use.
Track Two: Build for the Long Term
Quick wins matter, but they can’t substitute for genuinely expanding supply. Over the long haul, the goal is to develop new affordable and social rental housing—enough to ease the upward pressure on prices across the whole market.
This takes patient, sustainable funding. Governments and their partners can draw on a range of mechanisms:
- Special-purpose revolving funds, where loan repayments are recycled to finance the next round of building
- Loan guarantees, public loans, and equity contributions that lower the cost and risk of development
- Specialised credit lines and savings accounts that channel capital toward affordable housing
Just as important is who builds and manages these homes. Specialised providers operating on limited-profit or not-for-profit models—municipal companies, co-operatives, and housing associations—keep the focus on need rather than profit, creating a balanced and diversified housing sector built to last.
The two tracks aren’t rivals. They’re partners. One delivers rapid, sustainable relief. The other builds the foundation for a fairer market over decades.
Lessons From Countries That Acted
Theory is one thing. Real results are another. Several countries show what’s possible when governments commit.
France demonstrates the power of scale. Through rental intermediation, it mobilised 93,000 units—putting empty and underused homes back into service for those who need them. France also funds concessional loans for new development through dedicated special savings accounts, proving that both tracks can run side by side.
Belgium built its success on a strong local network. Ninety-six Social Rental Agencies worked to mobilise 30,000 dwellings, turning private stock into affordable homes one property at a time.
Ireland took a direct route with its Rental Accommodation Scheme, where local authorities contract straight with private landlords to secure homes for households in need—cutting through complexity to deliver housing quickly.
Vancouver, Canada offers a more cautionary lesson. Its empty-homes tax, introduced in 2017, successfully reduced vacancy rates. But it did not, on its own, improve rent affordability. The takeaway is clear: single measures rarely solve the whole problem. They work best as part of a broader, coordinated strategy.
Recommendations for Policymakers
So what should governments actually do? The brief points to a set of practical, evidence-based steps.
- Base funding on real need. Set investment volumes using regular, bottom-up assessments of housing demand—not guesswork or outdated figures.
- Set rents smartly. Rents should cover development costs so providers stay solvent, while remaining genuinely affordable for tenants. It’s a balance, but a manageable one.
- Keep the model sustainable. Index rent levels to inflation and adjust them in line with tenant income growth, so provider business models remain viable over time.
- Monitor the fundamentals. Track borrowing and construction costs systematically, and let that data guide decisions on subsidies and rents.
- Reform land-use rules. Restrictive land-use policies are a major supply constraint. Updated regulations can be a powerful tool to guarantee the provision of affordable rental housing where it’s needed most.
To know whether these efforts are working, policymakers should watch a handful of key indicators: vacancy rates, the housing cost burden as a share of disposable income, the share of social housing in the total stock, and shifts in borrowing and construction costs.
CHIASA: Working on closing the gap
The affordability crisis didn’t appear overnight, and it won’t vanish overnight either. But it is not beyond our control. The countries that have acted—mobilising empty homes, funding new construction, and reforming the rules that hold supply back—show that progress is possible when the strategy is smart, and the commitment is real.
The result is fast relief today, and a fairer housing market for tomorrow. That’s how we close the gap—not with a single silver bullet, but with a deliberate, sustained effort to give every household a place to call home. This is at the core of what we do at CHIA SA, and moving forward, we will continue to advocate for the importance of community housing in addressing Australia’s housing crisis – drawing on lessons from around the world.
CLICK here for the full Policy brief
