Runaway house prices are the talk of city dinner parties. But they also make it harder for young people to move out of homeless services into private accommodation, and prevent others from even getting into refuges

Paul Karp and Michael Safi | The Guardian | Saturday 13 February 2016

Jack (not his real name) is studying music and has aspirations of starting a rap label. He is staying in a homeless refuge in Bondi and wants to move to somewhere where he can be more independent. Photograph: Matthew Abbott for the Guardian

Jack isn’t much interested in Sydney’s soaring house prices. The 16-year-old, one month into his latest stint in a homeless refuge, started Tafe this week, studying music. He’s more occupied with starting his own rap label. That, and moving up the ladder of the New South Wales homelessness system. The bargain is simple: gather the necessary life skills – not having to be told “to wake up, to look after yourself, to do your chores”, Jack says – and you advance. His next rung is transitional housing. “A step above this, where you’re more independent,” he says, gesturing at his stately Bondi shelter, walls adorned with photos, art, extensive house rules and a painting reading, Relax Don’t Relapse.

A painting by one of the live-in youths at the entrance of Caretakers Cottage, a centre for 12- to 17-year-olds in Bondi. Photograph: Matthew Abbott for the Guardian

Independence is the goal of the entire system, and Jack’s too, since his relationship with his father deteriorated and he was forced on to the streets. “Getting my own place, moving into an apartment with roommates,” he says, grinning under a baseball cap pulled low. “That’d be pretty good.” But the city’s overheated housing market has other ideas. Runaway prices, and the high rents that follow, might be staple conversations at dinner parties and pubs around Sydney, but they bite hardest for Jack and young people like him.

“The front door is open,” says Michael Coffey, the chief executive of Yfoundations, a youth homelessness peak body. “But there’s a blockage at the back door. There’s just not enough housing for people who go into the homeless system to get out, and into independence.” According to an annual snapshot by Anglicare, of the more than 65,000 rental listings they surveyed last April, just 1% were considered affordable for singles on unemployment or other benefits.

For the few properties they can afford, the stereotypes about homeless people present a formidable barrier: real estate agents are not wooed by applications that list crisis accommodation as the last address. The result is a clogged system: young people ready to leave a crisis shelter or transitional house but blocked from doing so; while others who desperately need to enter the system remain stuck on the streets. Now Macquarie Street is wading in.

For many, such as Jack, it’s family breakdown that pushes them into the system. For others it’s domestic violence, the death of a parent, a stint in jail. “Young people don’t leave home because they didn’t get Coco Pops for breakfast,” Coffey says. “It’s for really terrible situations.” Just how many young people make up Sydney’s homeless population is unclear. The City of Sydney’s twice-a-year Street Count – a 3am torchlit survey of rough sleepers and occupied hostel beds – in August turned up 828 people. But it’s an underestimation of the total, particularly of young people, who are more likely to couch surf, move between friends and family, or never be noticed by the system at all, advocates say.

The specialist youth services are creaking, says Katherine McKernan, the chief of Homelessness NSW. “The crisis system is experiencing the highest demand for some time,” she says. Winning a lease is hard for any young person. Real estate agents, understandably, prefer to see salaries, rental records and a stable lifestyle. For homeless young people the odds are even longer. “They don’t have high incomes, they’re generally on Centrelink; they have multiple personal barriers to independence due to complex trauma, and often they have issues with employment due to their personal issues,” says Michelle Ackerman, the operations manager at YP Space, a young persons’ social service.

Anna, who became homeless in her mid-teens, got lucky. She’s subleasing, off books, from a pensioner. But her specific needs narrowed her chances. “I needed to stay in the area because my psychologist was bounded by the region,” she says. “And the prices there were really high.” Complicating matters, half the region was off limits – too close to her family, from who she’s estranged. And owing to the mental toll of her experiences, the university student can only work part-time, and is sometimes laid low by a crisis. “I needed a place I could stay even when I wasn’t earning money,” she says.

Even those young people with more straightforward demands find price a hurdle. A bedsit unit in a relatively affordable area such as Mount Druitt in western Sydney still costs $171 a week – about half the income of a someone on youth allowance. Over the past decade, rents in Sydney have jumped 56.8%, far outstripping the growth of wages (41.6%), the minimum wage (37.1%) and the Newstart allowance (30.8%). “We have noticed a massive increase in rental prices,” says Kellie Checkley, the head of another homelesnessness service, Project Youth. “I have staff who are trying to rent places and have difficulty and they have good full-time jobs – so what hope does a young person have?”

Caretakers Cottage runs the Bondi crisis centre for 12- to 17-year-olds where Jack lives, and also provides transitional and semi-independent housing in 35 units and houses around Sydney’s south-east suburbs, including Mascot and Maroubra. Laurie Matthews, the chief executive and co-founder of Caretakers Cottage, says young people can’t move out of homelessness into the private rental market because it’s unaffordable. Of 20 young people who left Caretakers Cottage’s transitional housing in the last year, just seven moved into the private rental market, with the rest moving back with family or extended family. Matthews says he is “astounded” as many as seven were able to afford to rent in Sydney, an “exceptional circumstance” that came about because some older young men found well-paid labouring jobs and were able to get a sharehouse together. “Some of the students staying with us have gone to set up student housing but you need to do a lot of casual work to sustain living in the private rental market,” he says.

Actually persuading the real estate agent is the next challenge. Chris Stone, a policy officer with Yfoundations, says stereotypes loom large in agents’ minds. “If [young people] go to inspections by themselves, real estate agents don’t think they can pay rent,” he says. “If they go in with other young people, they’re a gang. If they go in with a caseworker, then there’s a stigma. “Some [real estate agents] see a letter from homelessness service as a good thing because it means they have support. But others say it means they have problems, so no thank you.”

Rebecca, 22, and Dennis, 23, are a Port Macquarie couple in Housing NSW emergency housing, hoping to find a place in YP Space’s semi-independent accommodation. The couple, who have a newborn baby, had to leave home after a family breakdown in December. Rebecca says since then they have put in more than 60 applications for rental properties, without success. Dennis says the couple try to go to inspections together but he sometimes goes by himself so Rebecca can look after their daughter. A social worker drives Dennis to inspections as he does not have a licence and suffers from arthritis. The couple has a budget of between $280 and $350 a week, with Rebecca receiving a parenting payment and Dennis the Newstart allowance. “[Housing NSW] and YP Space have said we’re doing everything right … everyone has said that our applications are strong, but because we have no rental history we won’t get a place,” Rebecca says.

Laurie Matthews at the entrance to Caretakers Cottage, the centre he and Sara Matthews founded in 1977. Photograph: Matthew Abbott for the Guardian

Project Youth, another charity, helps to bolster young people’s applications. Its case workers offer lifts to inspections, advice on applications and financial counselling to improve credit and rental history. It houses young people in semi-independent units where they sign subleases and pay rent as they would in the market. Stephanie, 23, tells Guardian Australia Project Youth supported her into a sharehouse and then a one-bedroom apartment in Sydney’s south-east after a family breakdown. Caseworkers can teach people to drive, create payment plans for bills and, in her case, arranged a business mentor for her graphic design work. “Where I live is pretty much like a private rental,” she says. “The idea is that you’re given rental history so you’ll have an easier time to find a place to live.”

Real estate agents, too, can be part of the solution. Eva Gerencer helped to establish the Macarthur Real Estate Engagement Project after recognising that in a competitive market, “homeless people just couldn’t compete”. Her team cultivated relationships with agents – three in the first year, then 10 in the second – to vouch for the homeless clients they would refer as budding tenants. “Welfare speak” didn’t cut it with the agents. “We realised it had to work both ways. For them to want to participate they had to see they would save time and cost,” she says. The pitch was simple: keeping a struggling client in a house is cheaper for agents than evicting them. When a client ran into trouble, the agents could call on Gerencer’s team, who would intervene with payment plans, employment services or financial counselling. Nearly 60 tenancies were saved during her tenure. The project in Macarthur is now run by Mission Australia, with similar initiatives springing up across Sydney.

The state government has a complicated relationship with Sydney’s surging house market. The stamp duty it hauls in has increased 25% each year since 2012-13, according to the Grattan Institute’s John Daley. But the minister for social housing, Brad Hazzard, recognises the pressure it puts on government services. The public housing waiting list now exceeds 60,000 and existing residents are staying longer.

This month Hazzard launched a 10-year strategy that includes increasing the number of youth who cycle through the homelessness system and into long-term, stable housing – preferably private – by 10%. It also includes more use of rental assistance schemes, including a medium-term rental subsidy, financial counselling, bond loans and rent advances – lifejackets to keep people afloat in the private market. In the NSW premier, Mike Baird, advocates might have an ally. Baird has volunteered with youth homelessness services, and choked up talking about it on the campaign trail In September, he whittled down his predecessor’s 321 government priorities to just 30. Moving more homeless youth into housing made the cut. It’s a reason to hope Macquarie Street is serious – and a standard to hold it to.

The names of all the young people in this article have been changed.