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SMS reminders to reduce social housing rent arrears

The Department of Family and Community Services (FACS) wanted to find out if a reminder SMS text message would be a more effective way to get people in social housing to pay their rental arrears.

There are currently 290,000 people living in social housing in NSW. This housing provides a safety net for vulnerable people, providing assistance to those who need it, while they need it. Tenants pay less than the usual market price for rent and other related expenses.

When a tenant’s account goes into arrears, FACS has to follow up with them to collect the overdue rent or set up a payment plan. They send letters, make phone calls and visit tenants in person. Could SMS text messages help lower the cost and time spent on this?

The trial

We worked with FACS to set up a randomised controlled trial. When people went into rental arrears, they were randomly allocated to one of five groups. All groups received the letter notifying them they were in rental arrears; however four of the groups also received one of four different text messages.

Version Text message
Version 1

Your rent is overdue. More than 9 out of 10 tenants in your area have paid their rent on time. Paying now keeps you in your home. Visit housing.nsw.gov.au/pay

Version 2 Your rent is overdue. Your tenancy may be at risk if you do not pay now. Call your local office or visit housing.nsw.gov.au/pay
Version 3 Your rent is overdue. Unpaid rent costs the government and community money which could be used to help others like you find a home. Visit housing.nsw.gov.au/pay
Version 4 Your rent is overdue. When you moved in, you committed to pay your rent on time. You have broken this agreement. Visit housing.nsw.gov.au/pay

Results

10,000 text messages were sent during the six-month trial. It was a success.

Over three quarters of people who received the text messages paid their overdue rent or entered into a payment plan, compared to 68.5 per cent who only received the letter.

The most effective text message was:

Version 4 Your rent is overdue. When you moved in, you committed to pay your rent on time. You have broken this agreement. Visit housing.nsw.gov.au/pay

We also found some groups of tenants, such as people aged between 55 and 64 and households that included people with a disability were more responsive to the text message than letters.

During the trial, some people went into rental arrears for a second or third time. We found that these people were more likely to pay their overdue rent if they received another text message. The trial also found that sending different messages to tenants was more effective than sending the same message again. 

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