Tuesday, March 20, 2018

FACS and figures: Delving behind the figures for the waiting list and new social housing dwellings

Post authored by Robert Mowbray, Policy Officer - Older Tenants.

On Monday, 5 March 2018 the Minister for Family and Community Services, Pru Goward, sent out a media release
Hundreds of people on the social housing waiting list and hundreds more will have access to brand new homes as the NSW Government continues to deliver on its promise to build more housing through the sale of properties in Millers Point. ... We are assisting vulnerable people by building new social housing. ... To date, the Government has completed construction on 775 new homes with a further 372 under construction ... funded through the sales program so far.
Let’s delve behind the figures for the waiting list ... and other vulnerable people, and for new social housing dwellings in this State.

Waiting list

At 30 June 2017 the social housing waiting list in New South Wales remains in excess of 50,000 applicants.
Source: Steering Committee for the Review of Government Service Provision, 'Report on government services 2018', Productivity Commission, 23/1/18, Table 18A.5. Figures for 2008 to 2012 from previous reports. (You can view Table 18A.5 here.)

The seriousness of this figure is reinforced by the fact that specialist homelessness services provided support to just under 75,000 people in New South Wales in 2016-17. (View Table CLIENTS.1 here.)

And, indeed, the recently released 2016 ABS Census ‘Estimating homelessness 2016’ data shows that the number of people who are homeless in New South Wales has soared by more than one third between the 2011 and 2016 censuses. On Census day in 2016 they numbered 37,715 people. You can check this out here. You can read more about this here.

In a recent article in The Conversation, Emeritus Professor Gavin Wood and others of RMIT University, assert that ‘public housing is the most important factor in preventing homelessness among vulnerable people’ and, further, ‘the empirical evidence also suggests that community housing fails to provide the same protection for people at risk of homelessness.’ Read their article here.

Yes, the Minister is correct in saying there are hundreds of people on the social housing waiting list. Indeed, over the last ten years this figure has been increasing. However, the figure at 30 June 2017 represents a decrease of 7,460 (12.6%) on the previous year’s. Note (d) in Table 18A.5 (referred to in the above figure) states that ‘data for 2016-17 exclude suspended applicants’. So what is meant by suspending an application? You will find the answer in a policy document here . FACS or a community housing provider participating in Housing Pathways may suspend (make non-active) an application for social housing or transfer for many reasons, including:
  • Pending receipt of further information or proof of social housing eligibility or housing requirements.
  • If a client is temporarily unable to accept an offer of accommodation because of:
    - being currently in prison;
    - illness, hospitalisation or holidays;
    - caring for a family member.
  • If a client has a debt from a former social housing tenancy of more than $500
  • If the client applying for a transfer has rental arrears, nuisance and annoyance breaches or any other tenancy breaches that are currently under investigation.
So, it appears that the reduction in the number of applicants on the waiting list in New South Wales over the last year may be due primarily to an ‘administrative cull’.

Other vulnerable people

No-one would disagree with the assertion that a very large number of people on the housing waiting list in New South Wales are vulnerable, given the state of the housing market.

But, let’s not forget the residents of Millers Point who were forced to re-locate.

Family and Community Services Housing kindly has provided the following information. At the beginning of the process there were 579 tenant and household members (in 399 tenancies) to be relocated. At 8 February 2018, 578 tenant and household members have either vacated or are committed to moving. One tenant is refusing to move. There are no tenancies remaining in the Sirius Building. During the course of the forced relocations, the sales of 28 properties in Millers Point were deferred. These were set aside for some of the remaining tenants and household members in November 2015. Of these, 21 are occupied by 19 tenancies.

The impact on the residents of Millers Point and the Sirius building who have been relocated has been traumatic for many. Their experiences have been documented by Professor Alan Morris in a report entitled ‘A contemporary forced urban removal: The displacement of public housing residents from Millers Point, Dawes Point and the Sirius Building by the New South Wales Government’, published by Shelter NSW here. Also, you may read Professor Morris's article called '"It was like leaving your family": Gentrification and the impacts of displacement on public housing tenants in inner-Sydney' in the Australian Journal of Social Issues here . In this article, Professor Morris places the events at Millers Point in a broader context. Watch this space for Professor Morris's forthcoming book with a similar title.

New dwellings

To meet such a massive need for social housing, it is worth asking whether there has been an increase in the number of such dwellings across New South Wales over the last three years.

We start to obtain a picture by looking at the Productivity Commission's 'Report on Government Services 2018' released in January 2018. Here we find the latest figures on the number of social housing dwellings across Australia. You can check these here . Table 18A.3 clearly shows that there was a net decrease in public housing stock in the three years to 30 June 2017 (latest published figures) by a figure of 584 dwellings.

Productivity Commission's 'Report on Government Services’ and other government data are not transparent about increases and what is affordable, as distinct from social housing.

Source: Steering Committee for the Review of Government Service Provision, 'Report on government services 2018', Productivity Commission, 23/1/18, Table 18A.3. See Note (d) for correction to figure for 2011.

Over the same period, there has been net increase in community housing dwellings of 2,754 (after deducting National Rental Affordability Scheme tenancy rental dwellings).

Source: Steering Committee for the Review of Government Service Provision, 'Report on government services 2018', Productivity Commission, 23/1/18, Table 18A.3. Community housing data include affordable housing. However, this table has been adjusted to omit National Rental Affordability Scheme community housing tenancy rental dwellings for 2016 and 2017, because these were omitted for previous years (see Note (d). Other affordable housing that is included is properties transferred over several years from the Nation Building Economic Stimulus Program.

A key question is how many public housing dwellings were transferred to community housing between 30 June 2014 and 30 June 2017. The Productivity Commission's report does not provide figures on the number of social housing dwellings transferred. Family and Community Services Housing advises that the number of properties transferred from public housing to community housing between 1 July 2014 and 30 June 2017 was 679. This leaves us with an increase in community housing dwellings over the three year period of 2,075. Part of the increase in community housing stock in recent years comes from the Nation Building Economic Stimulus Program (NBESP). There are no published figures here.

So, there appears to be an increase in public housing of 95 dwellings, if we don’t count transfers to community housing.

Sales of Millers Point properties to 22 February 2018 number 172 (check here) and total $527.4 million (plus stamp duty of a further $28.3 million). You will find information about the public housing properties built with the proceeds of these sales here. 775 dwellings have been built up to January 2018, with another 372 under construction. To calculate the net gain from these proceeds, you will need to subtract 371 dwellings (399 less 28 retained dwellings) which represent the stock being lost in Millers Point.

Also, the number of public housing dwellings will have been reduced by properties demolished to allow for the new construction, and any dwellings removed from the stock as part of Communities Plus. These figures are unknown.

It is not unreasonable to assume that the need for social housing increases at least at the same rate as the population. (Indeed, in times of high housing stress, it should be greater) The rate of increase in social housing stock over the last three financial years is only a third of the rate of population growth in NSW.
Source: Population data from ABS at Jun 2014 and Jun 2017. Former viewed at: http://www.abs.gov.au/AUSSTATS/abs@.nsf/allprimarymainfeatures/54A5E977BB10644CCA257E1300775B9B?opendocument Latter viewed at: http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/3101.0Main+Features1Jun%202017?OpenDocument
The construction of new dwellings from the proceeds of sales of Millers Point properties represents small growth only. Yes, we have seen a steady, but modest stream of new supply. So, what of the future?

There is slim hope that the Sirius building can be retained as social housing. In mid-February of this year, the Tenants’ Union of NSW forwarded a submission to the NSW Planning and Environment arguing that future use of the Sirius site incorporate significant proportions of social and affordable housing, in addition to any private ownership of residential dwellings that may be permitted within the building to help give it a viable financial future. You may read our submission on their website here.

It is disappointing that sales of public housing are used to give very modest increases in stock at a time when the NSW Government ran a budget with a substantial surplus and, accordingly, had available to it substantial, alternative funds for its building program. What is also noteworthy was the lack of consultation before the decision to sell in Miller's Point.

Let’s hope that the future is brighter. On 14 August 2017, the Minister Goward announced the successful tenderer for the Ivanhoe Estate at Macquarie Park where social housing dwellings will increase by more than three-fold – from 259 social to 950 social and 128 affordable dwellings. (You can read about this in a media release here.) The NSW Government is pressing ahead with its Social and Affordable Housing Fund (SAHF) as ‘an innovative approach to the way we are delivering social and affordable housing in NSW’. You may read more about it here. On 12 September 2017, Premier Gladys Berejiklian and Minister Goward announced that the Government had now committed to a target of 3,400 new social and affordable dwellings through this fund, following 2,200 announced in March 2017. Check here. On 7 Feb 2018 the NSW Government officially opened the Expressions of Interest for the second phase of its Social and Affordable Housing Fund (SAHF), which will deliver up to 1,200 additional social and affordable homes. In this phase, at least 70% are to be social housing. Check here.

Wednesday, January 3, 2018

Home Truths

Jennifer StoneWe're very pleased to present this guest appearance from Jennifer Stone, a renter in the Snowy Monaro region, who has recently started a group for renters in the region to connect and discuss local renters issues. The original version of this article was published on their Facebook page.

The home of the silenced
Snowy Monaro renters welcomes you to come into our place and sit with us a while. There is something vital we need to tell you, something which concerns us all.  If you come to know who we are and our situation, you will understand.
We come from diverse backgrounds, interests, beliefs and aspirations, yet we are a family, united by common experience. Though we are significant in number, we are marginalised, distained, unheard and unknown. We have no real shelter, but pay a high price to dwell where the walls of greed’s injustice over shadow us - and block us from a home.
We know our nations’ harsher reality, our nation’s pain. We offer you home truths, and hope you will hear us. Until we are heard, our nation is in plight.

Towns prosper when we prosper and whither when we thirst
While a substantial amount of our income goes to supporting landlords and real estates, we spend much that is left in our community. In this way we provide vital support to the local economy and help it stay afloat.  Our numbers have brought extra medical centres, high schools and supermarkets to service the community.
We work in almost every sector of the region. Our children represent a significant number of the student population in the regions’ schools.  Amongst us are also pensioners and those struggling to find jobs in our community. For those on social security payments without community or state housing, average rental costs are prohibitive. 
The economy is much impacted by the increasing and excessive rents in our region. Renters face great hardship and are struggling to find money for even the most essential items. There is a shortage of permanent rental properties appropriate to our means and needs.  As rents are becoming unaffordable, Snowy Monaro renters are increasingly forced to pay for sub standard housing with inefficient heating, lacking proper insulation. High power bills cripple our financial capacity.
If we complain at our conditions or at breaches by the landlord and real estate, we face eviction in retaliation, and inter real estate black lists. Indeed there is a special provision so landlords may give termination notices for “no grounds” – this is so the tenant can not argue their eviction (even with much evidence of retaliation by landlord and real estate).
As we are forced to leave a place and go to another, we have to find bond money, we lose pay days while moving and sick days from intense rental stress. Children suffer from such destabilisation, as does the whole community. In general we are in an ever growing inescapable cycle of debt. Our plight impacts the community’s well being as a whole. We see our regions’ potential for prosperity much diminished as rents become unaffordable - yet the financially powerful minority, seem blind to this.

We suffer from divisive and prejudicial myths
It seems there is a myth amongst some landlords who own local businesses that they are the backbone of the community. They say that renters are lowly “lazy”, “dirty”, drug addicted, poor “dole bludgers” who are beneficiaries of their “hard work”. They speak of us as second class citizens, less important than themselves. Some real estates call the renter “scum” and we know for sure they treat us as such.
Derogatory myths can create a painful reality. The myth that the majority of renters are financially poor has now come to express fact. As houses have become unaffordable, rent has become unaffordable. Both renter and mortgaged landlord share the pain of immense financial pressure, often in debt and living beyond their means – an economic climate stirred by the greed and power lust of just an elite few. This pressure has lead to an economy where those who have more financial wealth, gain more each day and those who have less financial wealth, lose more each day.
The average wage hardly changes while rents go up exponentially. Renters are paying their landlords’ mortgage along with their own increasing debts. Landlords who have no mortgage are greedily extorting tenants, renting out sub standard houses at excessive market prices. Such landlords hold shelter to ransom. As landlords increase their ability to buy yet another house, renters become more likely to never have a home. The myth that renters are lazy while landlords worked hard for what they have, purveys a great falsehood. Indeed, renters work doubly hard for what their landlords have! We are the hand that feeds the landlord, are we not?

Wisdom heals the prejudice and division
Those who have become financially impoverished are not worth less. The financially rich are not worth more.  There is nothing which can diminish the worth of any being.   All people are  intrinsically valid, necessary to each other and vital in their unique contribution. No one is better than or less than another. In truth we are really one, there is no division.
Everyone creates the community and all are responsible for the conditions of that community. Prejudicial myths inevitably create the worst of conditions for all. A myth which divides people by declaring some of greater worth and others of lessor worth, by any measure, must inevitably lead to a conflict for power and recognition. This conflict develops a ravishing greed which devastates and seeks to devalue all contesting its path. This in turn gives rise to mass poverty, disenfranchisement, marginalisation, cruelty and suffering.
A harmonious and prosperous community would grow, if it was understood that we are all equal yet unique, individual yet one. If all are seen of vital worth, no one would seek to devalue another nor make a house of greater value than the people who dwell there. Divisive myths of prejudice blind the powerful minority to their own truth and the truth of their nation. 

The home truths which can heal us – please listen, please hear us
We are your kin, your sisters and brothers, parents and grandparents, children, and, generations to come. We are one. In truth, we are you. What happens to any one happens to all.  No one is at home when all about them are homeless, paying for insufficient shelter, exposed to greed, extortion, repression, and eviction at a landlord’s whim.  A house which comes by way of life long debt or subjugation of another can never be a home for anyone. The nation cannot be at peace, when so many are unsettled.  
When values of decency are worth less than values of commodity our nation is impoverished.  Happiness, not commodity, is the measure of a nation’s wealth. A nation is truly wealthy when its people enjoy a peaceful home without fear of eviction, where all may contribute to society through unique expression, welcome in the nations embrace. A nation is not wealthy if its people are homeless, enslaved and in perpetual debt. If on paper a house is worth a million dollars, it is worth nothing to those who cannot call it home - that paper value serves no one if its cost destroys life. Money on a graph is not food we can eat and property on a graph is not a place to shelter.
Houses are homes and not commodity. Economists devoid of moral compass, call out triumphant when run down cottages sell at palatial prices - while homelessness ravages the nation. Who gains when the majority have no claim to home, striving to survive, and backs bent to power thirsty property managers who lack empathy, and distain ethics? How is it that the financially powerful minority of this nation sanctify greed without question – do they not see the greater part of their nations’ family in despair.  Muted acquiescence to raging greed makes all of us complicit in the theft of happiness from generations to come.
What we do to another we do to ourselves - when did people abandon this eternal guidance? The ancient truths have never changed, we reap what we sow. Seeds of kindness bear fruits of happiness, fulfilling and empowering all. When the nurturing harvest of this wisdom is ravaged, hunger for power grows, casting seeds which bear injustice, cruelty, drought and despair. 
There are elderly pensioners eating from cans of pet food to pay the rent, suffering the pain of eviction when the landlord sells for their needed profit, did you know? This is our pain as a nation, this is our home truth.
Let’s meet again and find a better way.

 By Jennifer Stone of Snowy Monaro Renters

Thursday, November 23, 2017

There goes the neighbourhood - Renters in the Census 2016

This week saw the publication of new research from the ANU showing that the problems of housing affordability in Australia don't stem from an undersupply of housing. This is something we've been saying for years - it is not the overall supply that matters, but the kind of supply. Specifically, supply of housing for lower income people.

A few days earlier, the Urban Displacement project in the US updated their San Francisco maps. That project is looking at where people with lower incomes are going when they become priced out of the area they are living in. That updated prompted the crew at #WeLiveHere2017 to ask if anyone was doing similar work here.
We thought this was definitely something worth looking into ourselves and we intend to devote a few posts to exploring this issue through crunching some Census data. This first post explores the very lowest income households. The following pictures are here for our mobile readers - they come from an interactive map available here where you can zoom in to any location in NSW and get more details.

We calculated the range of weekly household income for all households in NSW and found the first quintile, or lowest 20% of household incomes, in local areas (for the nerds, 2016 Statistical Area 2) across the state in both 2011 and in 2016.

Then we started looking at how many rental properties in local areas were reporting paying rents that would be affordable to that income level. This includes all forms of public and community housing, as well as private rentals. Using the 30% rule, in 2011 the lowest quintile could afford a property being rented at $155 per week. By 2016 this had risen to $198.30. The following two maps show the raw numbers of properties meeting that number across Sydney. About two thirds of these properties across the state are public or community housing.

Unlike all other rent price sources, such as bonds data and advertisements, the census exclusively measures sitting rents. This is significant in that it explains why some areas may have a higher number of these affordable premises than might be expected if you are used to looking at articles talking about rent movements.

Click the image for a larger picture or the interactive version here

Click the image for a larger picture or the interactive version here

The change is only slight when looking at these raw numbers, but the story becomes much more clear when we look at the change between the Censuses. Across Sydney the proportion of housing available for people on the lowest incomes is dropping - except in a few areas potentially indicating a concentration of this affordable housing.

Click the image for a larger picture or the interactive version here

However, we reckon there's a bit of a difference between an area with very few properties affordable to the lowest income quintile dropping and an area with quite a few affordable properties losing them (or gaining them). To explore that a bit more we've created a final map, which categorises the local areas into 12 groups depending on their placement on a scatter plot. This scatter plot measures on one axis the proportion of housing in the area which on Census night in 2011 was being rented at a rate that was affordable to households in the lowest income quintile and on the other the movement in the proportion of that affordable housing between 2011 and 2016 censuses.

The colour scheme divides those areas losing affordable housing into three equal sets and those areas gaining affordable housing into three equal sets. They are then further divided based on whether they have more or less than the median amount of affordable housing at the 2011 Census.

Once that scatter plot has been mapped we get the following map - zoomed in on Sydney here but the interactive version covers all of New South Wales.
Some of the areas that may seem surprising to appear in the affordable column are there because whilst they are generally affluent areas they do have concentration of public and community housing - or at least did. As one example the Hunters Hill - Woolwich statistical area comes up as affordable due to approximately 167 of the 683 total rental properties in the area being public or community housing - nearly 25%. This is a high proportion considering that across the state only a little over 15% of properties fall into this category.

Click the image for a larger picture or the interactive version here

So what do we learn?

In Sydney it is essentially a bad news story everywhere we turn - either there are unaffordable places getting worse or there are nominally affordable places getting worse. All that bright blue is areas with affordable housing disappearing. The orange is areas with unaffordable rentals that are disappearing. Across the state there appears to be a concentration of affordable housing occurring with most areas falling in the proportion of affordable housing but increases in pockets.

That these rents are sitting rents raises another concern - what happens when people are forced to move? Fortunately a high proportion of these properties are public or community housing but a significant number are in the private market. As such these are households who are in very vulnerable positions. If they do need to move, especially in the private rental sector, they are likely moving on to much higher rents as the market continues to rise.

This is an early version of this data - we haven't adjusted rents and income for household size for instance. It is clear that a single person on the same income as a household of five is more able to fit in a smaller dwelling more comfortably and likely in more affluent areas.

In the next version of these maps we'll be making these adjustments and drawing out the changes in public and community housing as well as looking at slightly higher income groups.

Wednesday, November 15, 2017

Uncertain futures - Renters in the Census 2016

The second round of the 2016 Census was released last week, and amongst employment, education and travel statistics there's the question of whether respondents had moved in the previous few years.

We took a look at this question across different tenure types. It probably comes as no surprise that renters in the private sector were nearly 3 times more likely to have moved in the last year as any other tenure type. In fact, more than a third of renters in New South Wales moved home in the last year.

In the last 5 years, more than three quarters of renting households had changed. This is entirely consistent with findings included in our latest Rent Tracker about the churn of rental bonds in NSW.

The story continues for people aged 60 years and over:

People who may particularly need to remain in a single home are, because they are in the private rental sector, three times as likely to have moved in just the previous year as any other tenure type. There were about 136,000 tenants aged 60 or over at the Census, meaning 23,000 had moved in the last year, and a further 44,000 in the last five.

This level of insecurity is unsustainable. Previously, people who were unable to purchase their own home in order to have housing stability and affordability in retirement would be able to rely on social housing. As above, movement in social housing is fairly comparable to owner occupiers, but years of under investment has meant it is reaching historically low levels.

As people are increasingly renting into retirement, change is needed to ensure private renting is stable, livable and affordable - primarily, the removal of unfair evictions.

Monday, October 23, 2017

Making sense of social housing in NSW

Social housing operates within a complex glob of morphing policies and procedures, prodded by occasional shifts in public policy at both a state and federal level that draw various laws, instruments and agreements into contact with one another in a range of ways. A sound working knowledge of the sector in its entirety can take years to develop, and once established could fall apart within an instant should one glance away at precisely the wrong moment.

A case in point is last year's announcement that the management of large swathes of tenanted public housing properties will be transferred to community housing landlords in New South Wales, in keeping with the Council of Australian Governments' (COAG) National Affordable Housing Agreement (NAHA), which was negotiated during the early days of the Rudd-Gillard-Rudd Government era. The announcement of the Management Transfer Program sparked some discussion here on the Brown Couch, and across the broader sector, about just who these community housing landlords are. How do they come to be in the business of housing people from the public housing waiting list since they're not run by the Government of NSW?

The plot thickens, as the results of the Program's tendering process have now been announced. Over the next couple of years, management of around 14,000 tenanted public housing properties across six different regions is to be handed to nine community housing landlords who are already operating in other parts of the state. So... now is a good time to take a look at what it means to be a "social housing" landlord in New South Wales.

Given we've already mentioned the NAHA, we should note it is the intergovernmental agreement that determines who takes responsibility for what within our housing systems across Australia. As an agreement among the Commonwealth, state and territory governments it is a static document, although it is intended to be renegotiated and updated from time to time. It has been altered quite a bit since its series of predecessors first took form: established in the 1940's as the "Commonwealth State Housing Agreements" as something of a post-war nation building scheme; and it is currently being renegotiated as a "National Housing and Homelessness Agreement".

Regardless of form, or name, these agreements have generally all set out to achieve the same objective: to set the conditions under which the Commonwealth would give funding to the states to run their public housing schemes. These agreements have been broad enough to allow each state and territory to run their housing programs as they see fit, as indeed they do. A strong focus of the current agreement has been to shift the delivery of housing assistance and services away from government to the not-for-profit sector, and successive NSW Governments have responded - indeed contributed - by attempting to consolidate and build our community housing sector. Notably, this included the regulation of the sector in 2010, with a state based scheme that has since been replaced by the National Regulatory System for Community Housing. It also included the establishment of a single waiting list for housing assistance, accessible through a portal known as Housing Pathways, under which any participating landlord could both process applications for and make offers of subsidised rental housing to eligible households.

In this context our language and legislation has come to reflect the idea of "social housing". With this term we could be referencing either or both of its constituent parts: "public housing" or "community housing"; and for practical purposes the only difference is whether the landlord is the government or a not-for-profit agency who has been contracted by government to provide the same essential service. Of course, things become more complicated when we consider the public policy implications of this rhetorical shift, as it gives our still predominantly neoliberal governments easy cover to withdraw from the direct provision of public housing proper, and focus entirely on the setting of policy instead. They do this on the grounds that "community housing landlords are well placed and can do it better", although this is far from an established truth. While we can have no objection to the growth of this community housing sector, the fact that it only ever seems to happen at the expense of our established public housing provider is a simple reflection of the State's entrenched reluctance to pay for and provide social housing. Given the sector has spent the better part of a decade trying to attract private finance to its cause, it reflects a certain level of disinterest in housing-as-shelter from the profit-driven private sector as well - as an aside, it will be interesting to watch how the emerging "build-to-rent" discussion proceeds from here.

Right - so while all of that is going on at the higher level, there is a somewhat consistent legal framework setting the scene in the meantime for social housing landlords and tenants across New South Wales. Although with the right political will the statutes under which social housing policies are determined can be changed - as we have seen throughout the last couple of years with mandatory evictions for social housing tenants and the introduction of concurrent leasing by the Land & Housing Corporation to enable the current Management Transfer Program - keeping tabs on the legislative framework can be a useful way to maintain one's bearings while trying to make sense of social housing.

The Residential Tenancies Act 2010 devotes an entire Part to social housing tenancy agreements, a discrete form of residential tenancy agreement to which a number of additional provisions apply. This Act defines a social housing tenancy agreement as "a residential tenancy agreement where the landlord is a social housing provider", and then defines a social housing provider as:
  • the New South Wales Land & Housing Corporation
  • the Aboriginal Housing Office
  • a registered community housing provider within the meaning of the Community Housing Providers National Law (NSW)
  • an organisation for the time being registered under Part 5 of the Aboriginal Housing Act 1998
  • an organisation or a member of a class of organisation prescribed by the regulations
This immediately brings a number of other statutes into play. There's the Housing Act 2001, under which the Land & Housing Corporation is established as the legal entity that enters into residential tenancy agreements and other related dealings in residential property on behalf of the government; and under which the income based rental subsidy scheme is established. This is the legislation that gives us public housing, and it is amendments to this legislation that has enabled the emergence and establishment of community housing over many years.

There's the Community Housing Providers (Adoption of National Law) Act 2012, under which regulation of the community housing sector is provided by adoption of the Community Housing Providers National Law. This Act brings New South Wales into the National Regulatory System for Community Housing and, in some circumstances, allows the government to conditionally transfer title from the Land & Housing Corporation to a registered community housing provider. Note this has fallen out of fashion as concurrent leasing has come into play, having been made available by amendment to the Housing Act in 2016. For the time being property is being transferred to the community housing sector using this form of head-lease, but transfer of title under the Community Housing Providers (Adoption of National Law) Act remains an option.

Finally there's the Aboriginal Housing Act 1998, under which the Aboriginal Housing Office is established along similar lines to the Land & Housing Corporation, but with a specific remit to develop policy and deliver subsidised housing for Aboriginal households who rent. This Act also allows regulation of a broader Aboriginal Community Housing sector, for whom the National Regulatory Scheme for Community Housing is also being brought into play. By association, we must mention the Aboriginal Land Rights Act 1983, under which Local Aboriginal Land Councils who provide rental housing to their members may register with the Aboriginal Housing Office or the National Regulatory Scheme for Community Housing in order to have the requirements for approval to run a community benefits scheme that includes the provision of residential accommodation to their members waived by the NSW Aboriginal Lands Council.

The policy framework in which social housing operates is likely to keep changing, and where required legislative changes will sometimes follow. But for now, the above provides an overview of social housing in New South Wales. We'll keep an eye on the development of the National Housing and Homelessness Agreement, and take further note of any impact it might make.

In the meantime we'll do our best to answer any questions left in the comments, or sent through to us via the usual channels.

Tuesday, October 10, 2017

Victoria's rental revolution - how does New South Wales compare?

Yesterday we celebrated Victoria's proposed tenancy law reforms, and reflected on some tired old lines that turn up every time we give serious contemplation to improved rights for renters. Today let's take a closer look at just what the Victorian Government's "Rent Fair" package includes, and how it compares to our own laws in New South Wales.

Victorian landlords: ready to cross the border at the first sign of tenants' rights
Victoria's proposed reforms are many and varied. They've been categorised into six different groups: rental security, tenants' rights, faster payments and rental bonds, fair priced rent, pets are welcome, and modifications.

Let's dive in.

Rental security
This includes the big one: landlords must give a reason to end a tenancy. This should be rolled out in every Australian state and territory, except Tasmania where it already applies. Along with others from the community sector we've been actively campaigning on this issue here in NSW (find out more at Make Renting Fair NSW). Allowing landlords to end a tenancy without a stated reason actively undermines tenants' confidence in renting laws because they worry they'll be evicted unfairly if they make a fuss or stand up for their rights. By now this should be well established, but if you still need some convincing we recommend a quick look over the recent Unsettled report published by Choice, National Shelter and the National Association of Tenants Organisations. Three cheers for Victoria for announcing this change!

We should note that Victoria already has a long list of reasonable grounds available for landlords to use, and their "no grounds" notice comes with 120 days notice. In New South Wales we are missing some key grounds, such as where the landlord needs to recover the property for their own personal use; and our notice period is a full month shorter at 90 days. Any suggestions we can fix our own laws in New South Wales by expanding the list of grounds for termination and leaving the "no grounds" option intact just took a bit of a hit.

But here's where it starts to get flakey: the law will limit the use of the ‘end of fixed term’ notices to vacate. This will allow landlords to use what is effectively a "no grounds" notice of termination at the end of the first fixed-term period (usually six or twelve months), but not in any subsequent period if the fixed-term is renewed rather than proceeding on the basis of an open ended agreement. Make no mistake, this would be an improvement and we'd welcome a similar change in New South Wales. But in practice it will turn fixed-terms into a "probationary" period. Tenants who stick up for their rights during an initial fixed term would still have no protection against an unfair eviction, so might hold off reporting repairs and maintenance needs, or raising other concerns about their tenancy, until after the fixed term expires. It would be better to just ban the use of no-grounds notices altogether, perhaps with an exception for longer fixed-terms of say three years or more (in the spirit of compromise). This might be something the Victorian lawmakers will consider as they're working out how to encourage more long term leases, which is also included under this heading.

As for the rest of the reforms under this heading - prohibiting false, misleading or deceptive representations and requiring pre-contractual disclosure of the presence of asbestos or an intention to sell, Victoria is mostly just catching up with New South Wales, but taking a few steps further while they're at it. The need for New South Wales landlords to disclose material facts prior to entering into a tenancy agreement was introduced with our Residential Tenancies Act 2010, but it wasn't given any measures for enforcement. We're still hoping this will be fixed - along with adding the presence of asbestos in the property as a fact for disclosure - as per the recommendations of the recent review of our own renting laws.

Tenants' rights
There are two proposals under this heading. A commissioner for residential tenancies who will "champion the rights of Victorian renters in the private sector" strikes us as an interesting idea, but we'll wait and see how that plays out for awhile before we get too hung up on it. A landlord blacklist seems like an odd thing for a government to introduce, when they could just encourage greater compliance with the law by investigating complaints and issuing penalties, but we'll keep an eye on this one as well.

Faster payments and rental bonds
A move to allow a 14 day automatic bond repayment is more or less in keeping with what we've long since known and loved in New South Wales - if you can't get an agreement and both signatures on a bond claim form, then either party can make a unilateral claim that will be paid out after 14 days unless the non-claiming party raises a dispute and takes it to NCAT. Sensible, although we do think it would be better if only tenants were allowed to make a unilateral claim, allowing landlords to dispute the claim or apply to NCAT after a reasonable time if they felt they were entitled to it. Changes  to the way the early release of bond works in Victoria will be of little consequence to us in New South Wales - our law allows this at any time as long as all parties agree, or the requesting party is handing it all over to the other, whereas the Victorian proposal will extend the right to an early refund to be available in the last fourteen days of a tenancy, rather than the last seven days. The same goes for updated bond cap & up-front rent cap for most properties - these are already in place in New South Wales, where a bond may not exceed four weeks rent and no more than two weeks rent in advance can be required regardless of the type of property or amount of rent payable. The move for faster repairs reimbursement, where tenants can seek reimbursement for the cost of urgent repairs they have effected because they couldn't wait for the landlord, is a small step ahead - Victorians will be entitled to this within seven days of a request, while we could still be waiting up to fourteen days. That is, of course, assuming we've followed the process correctly - never effect an urgent repair without reading up on the law first, because failing to follow all the steps could see you permanently out of pocket.

Fair priced rent
Victoria has announced a very modest change here, that will leave us in their dust. Rent increases are already restricted in Victoria - they can't happen more than once every six months, and under the proposal this will change to once every twelve months. Meanwhile, in New South Wales, there is no limit or cap on the frequency of rent increases. In theory, your rent could go up daily and there ain't a damned thing you could do about it - provided you've been given the proper notice on each occasion - other than apply to the Tribunal and argue that a proposed increase is "excessive". Limiting rent increases to a maximum of once a year would be alright in New South Wales, but we'd also need to rework the way tenants can respond to them. It should be up to the landlord to show that a significant increase is reasonable, rather than the tenant to show that it is excessive.

This plan also proposes cracking down on rental bidding, which is something we can all get behind. The law in New South Wales is not really clear on whether it's lawful for landlords to solicit bids, but it seems okay to accept a higher rent if a tenant jumps in first. Just because you can pay more doesn't mean you should, and landlords shouldn't dangle properties in front of desperate tenants with a wink, a nudge, and a sign saying "pssst, make me an offer" hidden in the top drawer. Victoria says it will prohibit landlords from "inviting" bids, which is bad news for a couple of rent bidding apps that are sniffing around at the moment, but perhaps it could go a little further. We should be clear - in an era when governments are relying on the private sector to make up the shortfall created by chronic under-investment in social and affordable housing, allowing those with greater means to push up prices for the rest of us should be well and truly outlawed.

Pets are welcome
Pets in rental property will be allowed by right of every Victorian tenant! Or will they? The proposal says tenants will need the landlord's written permission first. It also says the landlord won't be able to unreasonably refuse, but that leaves a lot of grey area around just how rigid this new "right" will be. Further, this seems to be more of a right for people who rent and want a pet than people who have a pet and want a home to rent. Landlords will still be able to discriminate at the point of application by simply declining to rent to people with pets.

A better way to give tenants the right to keep pets would be to take a "don't ask, don't tell" approach. We should confirm once and for all that landlords have no business making decisions about who besides themselves shall get to keep a pet, and prohibit including a "no-pets" clause in tenancy agreements.

Ensuring that tenants can make minor modifications to their home is the final piece of news coming out of the Victorian proposals. It makes good sense, and again it brings Victorian laws in line with ours in New South Wales. With this kind of reform the devil is in the detail, as questions of who gets the value of an improvement if the tenancy ends prematurely will need to be considered thoughtfully. We haven't quite gotten this right in New South Wales yet, either.

Monday, October 9, 2017

More news from down the Hume

There's been massive news out of Victoria over the weekend, with the Andrews Government pledging to make renting fair!

The announcement refers to an "unprecedented package of tenancy reforms" that includes doing away with the Victorian equivalent of unfair evictions, preventing discrimination against tenants with pets, and cracking down on rental bidding. All of these sound pretty good to us here on the Brown Couch, and we look forward to seeing further details as these proposals are implemented by amendment to Victoria's Residential Tenancies Act 1997. Early details are available here.

Of course, not everyone was happy with this announcement. ABC online reports:
The Real Estate Institute of Victoria (REIV) said the changes would force up costs, which would be passed on to renters. 
"Rents will go up, people will leave the market, there'll be less supply and that's only going to push people out of the rental market and make it more difficult for those who are seeking to rent premises cheaply," chief executive Gil King said.
But our colleague from the Tenants' Union of Victoria, Mark O'Brien, wasn't having any of it:
"Every time there's reform of the residential tenancies law, the institute claims it's the end of the world as we know it and that's never what occurs," he said.
O'Brien's view is supported by a great deal of research, which suggests property investors tend to be motivated by financial considerations rather than tenancy laws.

Still, it's a line the investor lobby and landlord advocacy groups like to trot out at times like this and we expect a similar conversation will emerge in New South Wales when at last the results of our own review of renting laws make their way towards Parliament. We've been expecting this would occur before the year is out, but now that's looking unlikely. This means we've still got time to convince our own government they should be following Victoria's lead to make renting fair - you can lend your support to our claims here.

But it also means our own landlords' and real estate agents' groups will have more time to practice their lines about tenants' rights leading to all sorts of doom and gloom for renters. "Careful what you wish for," they might say. "The changes will force up costs, rents will go up, people will leave the market, there'll be less supply and that's only going to push people out of the rental market and make it more difficult for those who are seeking to rent premises cheaply".

The thing about all this is that there's not much stopping rents from going up as it is. For a quick refresher on why this is, have a look at our earlier post about why rental affordability continues to deteriorate.

But back to the specifics of the claim. The Real Estate Institute of Victoria seems to have skimmed over their suggestion that rents will go up to offset an increase in landlords' costs. Perhaps they've cottoned on that such claims are a furphy, because even though most landlords would go out backwards without them rents are a function of what tenants can pay rather than what landlords' choose to spend when buying and holding property. Or perhaps they just don't think the Victorian proposals will add significantly to their costs so they've steered clear of any further detail. Either way, they've put their emphasis on the slightly different argument of "people will leave the market, thereby reducing supply".

We should keep an ear out for this one in New South Wales, too. It's the idea perhaps that fair renting laws will take all the fun out of property investment, so landlords will take their money and spend it on other, much simpler things. Keep in mind the same argument was made when our current laws were drafted in 2009/10, and the private rental market was hands down the most likely place for a property in New South Wales to turn up in following sale or construction between the 2011 and 2016 Census events.

Still, given the prices property owners could expect at the moment it stands to reason some might be tempted to cash out. Some might even use the prospect of law reform as a cover for their decision. Rest assured they'll be factoring in capital gains before all else, and nobody likes to sell before hitting their targeted windfalls unless they really, really have to.

Those who do sell will be doing immediate damage to their sitting tenants - just as any landlord does when selling for any other purported reason. That is, unless they sell to another investor who is not so concerned about law reform (or other purported reason), and will keep the tenancy going. Given it's mostly an investors' market at the moment this scenario is becoming more and more likely. But, on the off chance an investor cashes out by selling to a first home buyer, the net impact on supply will be zero if the buyer is leaving the private rental market in order to take up home-ownership. And if a whole lot of investors suddenly decide to sell up all at the same time, prices might start to come down a little and first home buyer activity might find some renewed vigour.

It's the landlords who take their properties with them when exiting the market that are the real problem. These are likely to be in the very small minority, since most landlords run at a loss for tax purposes, and rely on any rental income to cover their main costs which includes the interest on their loans. Nevertheless, this risk could be easily countered with a vacant property tax, the likes of which the Victorian Government has also recently proposed. The revenue from such a tax could be used to fund new social housing dwellings.

Despite what we can expect to hear from the investor lobby in the coming months, the NSW Government would do well to start taking notes on Victoria's tenancy law reform proposals.