Single mother Cassandra is desperate to stay in the three-bedroom home she rents with her two school-aged children.

The 36-year-old became homeless after fleeing domestic violence and spent five years moving from refuges to emergency accommodation and transitional housing.

She has now lived in the same place for more than three years in Melbourne’s outer east, a rental that “means everything” to her.

But working one day a week, Cassandra is doing it tough.

“The rent only increases once a year, but my income’s not increasing,” she told AAP.

“After paying the rent there’s very, very little left over at the end of the week.”

Struggles like Cassandra’s are caused by an ever-rising gap between house prices and wages, low-income housing peak body National Shelter says.

The organisation, which represents homeless and community housing bodies, is calling on the federal government to build a minimum of 220,000 affordable new dwellings by 2020 under government and private-sector programs, double the current target.

Ahead of the federal election, National Shelter’s chair Adrian Pisarski on Tuesday launched a policy to address what it describes as one of the nation’s most serious problems.

“There’s over a million Australians in housing stress - that problem needs a plan to fix it,” Mr Pisarski told reporters.

The current tax system penalises low-income earners navigating the housing market, he says.

“The tax system distorts the Australian housing market away from being accessible by low- and moderate-income folk and towards people who already have some property and a high income.”

National Shelter is calling for capital gains tax exemptions on higher priced owner-occupied housing and tapering off negative gearing.

It also wants a strategy to community-managed indigenous housing and proposes that the office of federal housing minister be elevated to cabinet level.

Australian Council of Social Services (ACOSS) chief executive and former NT chief minister Clare Martin told the launch in Melbourne many poorer people face numerous barriers, including long-term unemployment or survival on minimum wages.

“If you’re on a low income and you’re living in private rental, that’s when the struggle really hits,” Ms Martin said.

The federal government’s National Housing Supply Council has identified a shortfall of 251,000 rental properties in Australia.

AAP