Wednesday, January 12, 2011

Rental affordability is irrelevant

There's been quite a bit of reportage about changes by the NSW State Government to the way it charges rents for jetties and the like for waterfront properties.

There's been rather less said about a change the NSW State Government has made to the law about excessive rent increases for residential tenancies. Nevermind the boaties – in making the latter change, the Government has basically blown a raspberry at every renter in the State.


The change is this:

Under the old, soon-to-be-repealed Residential Tenancies Act 1987, when tenants applied to the Tribunal for an order against an excessive rent increase, the Tribunal would consider a list of factors (s 48), starting with 'the general market level of rents' and ending with a catch-all:

(g) any other relevant matter.

Now, under the new, soon-to-commence Residential Tenancies Act 2010, the Tribunal's list of factors (s 44) still starts with 'the general market level of rents', but ends with:

(h) any other matter it considers relevant (other than the income of the tenant or the tenant’s ability to afford the rent increase or rent).

So, of all the things in the world that might seem relevant to the Tribunal when it considers whether rent is excessive, it is expressly prohibited from considering affordability.

When the new legislation was first circulated as a draft Bill, this prohibition was not in it – it was added later, apparently in response to the REI's hysterics.

Will the change have a big practical effect? Honestly, no – under the old provisions, the Tribunal was not in the practice of determining excessive rent applications with regard to affordability anyway. And overall there's still more to like than dislike in the changes made by the new Act.

But it's not a good look, is it? The affronted reader might well ask how serious are the legislation's authors when they say they're concerned about housing affordability.

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