Housing affordability and mental health: does the relationship differ for renters and home purchasers?

There is increasing evidence of a direct association between unaffordable housing and poor mental health, over and above the effects of general financial hardship. Type of housing tenure may be an important factor in determining how individuals experience and respond to housing affordability problems. This study investigated whether a relationship exists between unaffordable housing and mental health that differs for home purchasers and private renters among low-income households. Data from 2001 to 2010 of the longitudinal Household, Income and Labour Dynamics in Australia (HILDA) survey were analysed using fixed-effects linear regression to examine change in the SF-36 Mental Component Summary (MCS) score of individuals aged 25-64 years, associated with changes in housing affordability, testing for an interaction with housing tenure type. After adjusting for age, survey year and household income, among individuals living in households in the lower 40% of the national income distribution, private renters in unaffordable housing experienced somewhat poorer in mental health than when their housing was affordable (difference in MCS = -1.18 or about 20% of one S.D. of the MCS score; 95% CI: -1.95,-0.41; p = 0.003) while home purchasers experienced no difference on average. The statistical evidence for housing tenure modifying the association between unaffordable housing and mental health was moderate (p = 0.058). When alternatives to 40% were considered as income cut-offs for inclusion in the sample, evidence of a difference between renters and home purchasers was stronger amongst households in the lowest 50% of the income distribution (p = 0.020), and between the 30th and 50th percentile (p = 0.045), with renters consistently experiencing a decline in mental health while mean MCS scores of home purchasers did not change. In this study, private renters appeared to be more vulnerable than home purchasers to mental health effects of unaffordable housing. Such a modified effect suggests that tenure-differentiated policy responses to poor housing affordability may be appropriate.