Want to slash social housing waitlists? We should allow tenants to swap homes

There are 184,100 people on social housing waiting lists around the country, reflecting the impact of declining homeownership and escalating private rents.

However, building new social housing takes a lot of time and money. The Australian government’s $2 billion social housing plan, for example, will deliver only around 4,000 new homes.

But even for people with roofs over their heads, it doesn’t necessarily mean they live in the best house for their circumstances. Their homes could be too big, too small, or have yard space they struggle to maintain.

In some countries, social housing residents can simply exchange homes with one another. It’s called a “mutual exchange”. It could be highly effective in Australia for getting more people into homes without having to build any.

How does it work?

Research explains how mutual exchanges work.

A tenant interested in moving to a different social home lists their property on a public exchange (similar to holiday services such as HomeExchange). The tenant tells the platform what type of new home they are looking for and where it should ideally be located.

An algorithm then goes to work to identify:

• any direct (bilateral) matches in which two households could swap

• any closed-loop or multi-swap possibilities, known as “chains”.

This determines where household A could move into B’s home, while B could move into C’s home, and C could then move into A’s home.

Social landlords can also list vacant properties to spark a string of swaps, with the last property in the chain then becoming vacant. In theory, chains and strings can be very long.

Having a flow-on effect like this is great, as people obtain housing they prefer to the one they currently live in.

The matching can also accommodate the social landlords’ needs such as allocation policies, occupancy requirements and rental arrears. These are rules the algorithm handles easily.

There is, nevertheless, work the social landlord must do to facilitate moves. Internal processes and protocols must change to support mobility. After 20 years of operation in the United Kingdom, landlords have this down pat.

Why could it help?

Lack of tenant mobility has a big price tag. In 2010, a report found the annual cost of poor tenant mobility in the UK to be £542 million (just over A$1 billion).

Poor mobility reduces access to jobs and education, as well as to social supports and caregiving. Happier tenants look after their properties, pay their rent and are good neighbours.

When every dollar matters in putting roofs over heads, we should be looking to avoid such waste.

Allowing tenants to swap properties frees up stock and is a significant unrealised opportunity.

Mutual exchanges help 14,000 tenants in the UK move each year. Of these, 18% reside in under-occupied homes, and their willingness to move frees up more than 2,000 larger properties for families, getting more people off the waiting list.

That’s the equivalent of A$800 million in avoided costs (at a conservative build cost of $400,000 per house).

In other cases, it means hard-to-let properties are not left empty.

What’s the picture like in Australia?

In 2023, there were 60,730 underutilised public housing units in Australia. At the same time, there were 20,979 overcrowded households.

After getting these overcrowded households into these larger properties, another 80,000 people could be housed if the occupancy of the remaining roughly 40,000 larger homes was increased from one person to three.

Social housing building programs need to encourage lone-person households to transfer into smaller homes to maximise the overall number of people who can be housed. But this requires genuine choice.

Tenants currently have little opportunity to transfer or swap properties. In Australia, the individual choice and control principles that underpin the NDIS and aged-care provision are noticeably absent in social housing. A central plank of both is that the participant should have power over where and how they live.