Friday, December 21, 2012

Tenants' advice over the holidays

As we count down to the end of the year on the Brown Couch, many of our friends and colleagues from the Tenants Advice and Advocacy Services (TAAS) have already loaded up the caravan and are on their way to a well earned break.

But don't worry - they'll all be back in early 2013, refreshed and ready to lend their expertise to tenants in need of a tip.

If you run into trouble in the meantime, and you need to know your rights, there will still be a couple of options available.

First, there's the Tenants' Rights Factsheets on the TAAS website.

Or, for more detailed information, you can access the Tenants Rights Manual online.

Then there's a limited Christmas Hotline, for urgent matters that just can't wait -

8117 3750
1800 251 101

We sincerely hope you don't need to make use of any of these services.


That's it from the Brown Couch for 2012 – a year to remember. It was, of course, the centenary of the New South Wales public housing system. We commemorated this with a series of posts that presented a potted history of the system, occasionally reflected in the goings-on of the day. And what, you may ask, did Housing NSW have to say on this most significant of anniversaries?


Nothing. Not a word. It should have. Many workers and tenants over the last hundred years have put a lot into public housing, and a centenary is an appropriate point at which to acknowledge it. And to forget the history of the system is to fail to understand all the dimensions of our present housing problems, and how things may be done differently and better in the future. (By the way, see how Victoria is commemorating the 75th anniversary of the public housing system there.)

This year we also had news that the NSW State Government proposes to repeal the 1948 Act, so upwards of 600 elderly tenants might worry if this is the last Christmas they'll spend in what have been their homes of many years. More happily, this year also saw long overdue law reform for boarding houses, and boarding house residents can look forward to having decent occupancy agreements and access to dispute resolution early in 2013. Hopefully other marginal renters won't have to wait much longer to be extended such a reasonable measure of justice too.

See you next year. Have a safe and enjoyable holiday season.


TAAS closure dates
24 December - 1 January
19 December - 4 January
20 December - 7 January
21 December - 1 January
24 December - 4 January
24 December - 4 January
24 December - 9 January
24 December - 1 January
24 December - 4 January
21 December - 9 January
24 December - 2 January
21 December - 4 January
24 December - 1 January
24 December - 2 January
24 December - 1 January
Koori TAAS closure dates
Greater Sydney
21 December - 4 January
North & North Western NSW
21 December - 9 January
Southern NSW
21 December - 4 January
Western NSW
21 December - 4 January
Resourcing body closure dates
21 December - 2 January
Parks & Village Service
24 December - 1 January
Older Persons’ Tenants’ Service
24 December - 1 January
Tenants’ Union
24 December - 2 January

Thursday, December 20, 2012

Tenancy culture studies: Robert Menzies' 'The Forgotten People' (part 2)

In part 1 of our study of Robert Menzies' 1942 radio speech 'The Forgotten People', we observed how Menzies defines the allegedly forgotten Australian middle class through the metaphor of 'homes' – 'homes material, homes human, homes spiritual' – and suggested that we can learn a bit about the housing policies both of Menzies' era and of today by reflecting on what Menzies had to say under these headings. 

So we discussed Menzies' idea that 'homes material' were homes privately owned and financed – albeit with very considerable assistance from the state. Under Menzies, this assistance came in the form of loans on very generous terms from the War Service Homes Commission to ex-service personnel, and through the partial-transformation of the public housing system into an instrument of owner-occupier assistance, with 30 per cent of Commonwealth funds under the Commonwealth-State Housing Agreement being redirected to building societies and similar institutions, and a huge program of sales of dwellings – such that by 1969, the NSW Housing Commission had sold about a third of all the dwellings it had ever built.

Each of these forms of assistance contributed mightily to the achievement of a home ownership rate of 71.4 per cent in 1966 – the year Menzies resigned.

Now (coincidentally, on what would have been Menzies' 118th birthday) we consider 'homes human' and 'homes spiritual'.

Following 'homes material', says Menzies:           
Then we have homes human. A great house, full of loneliness, is not a home. "Stone walls do not a prison make", not do they make a house. They may equally make a stable or a piggery. Brick walls, dormer windows and central heating need not make more than a hotel. My home is where my wife and children are. The instinct to be with them is the great instinct of civilized man; the instinct to give them a chance in life - to make them not leaners but lifters - is a noble instinct.

If Scotland has made a great contribution to the theory and practice of education, it is because of the tradition of Scottish homes. The Scottish ploughman, walking behind his team, cons ways and means of making his son a farmer, and so he sends him to the village school. The Scottish farmer ponders upon the future of his son, and sees it most assured not by the inheritance of money but by the acquisition of that knowledge which will give him power; and so the sons of many Scottish farmers find their way to Edinburgh and a university degree.

The great question is, "How can I qualify my son to help society?" Not, as we have so frequently thought, "How can I qualify society to help my son?" If human homes are to fulfil their destiny, then we must have frugality and saving for education and progress.

In this flighty and allusive passage, Menzies ambiguously connects homes and family life: it can be read to suggest that he means to exclude tenants from feeling the 'great instinct' to be home with partner and children and to give them a chance in life. We'll leave that to one side and assume that both homeowners and tenants love their children. (By the way, on the most recent figures available, about 60 per cent of households renting are families, and about two-thirds of them have dependent children).

But let's take 'homes human' as a point from which we might view Australian home-ownership in generational perspective. We're guided here by Judith Yates's short 2007 paper, 'Affordability and access to home ownership: past, present and future?', which starts with the generation of homeowners and prospective homeowners addressed by Menzies.

In the 1950s and 60s, the median house price was 3-4 times the average income, and such an income was more than enough to service a loan for the median house price – so theoretically there was no gap that had to be covered by a deposit from the purchaser's savings. Housing interest rates were regulated by the Government, and about 30 per cent of all housing loans were subsidised by governments, too, through the CHSA or the War Service Homes Commission. The economy was growing, unemployment was low and, we've seen, home ownership was accessible to a large majority of the population.

Since then, the rate of home ownership has declined (it's now 68.1 per cent). Not by very much overall, but that's because only Menzies' homeowners and their homeowning children – the baby boomers – have lived longer than previous generations. Amongst younger households, rates of home ownership have fallen signficantly.

 (Source: Yates)

This is not just a matter of preference. On Yates's measures of affordability (the median price/average earnings ratio) and accessibility (the number of years of average earnings saved to cover the 'deposit gap'), home ownership has become less much less accessible and affordable over time.

 (Source: Yates)

What happened? First, in the 1970s, the golden years of postwar growth ended; state interventions in the economy came to be seen as the cause of rigidity, transmitting merely inflation and not productive adjustments. Deregulation and, at least at first, higher interest rates followed, and the deposit gap opened up. For those setting up house now – the baby boomers, the children of Menzies' home owners – the accessibility of home ownership became a little less equal. The housing system had always made winners and losers, but now the stakes were somewhat raised.

Since then, over time and at various points, government support for home ownership has changed and became support for homeowners, to the detriment of those wanting to get into home ownership and ultimately for the incidence of home ownership generally.

In particular, in the mid-1980s, there was the tax reform of the Hawke Labor Government. One part of the reform was a capital gains tax – but not on owner-occupied housing, thus making housing privileged amongst assets and encouraging those with money to spare to spend it on their own housing. Capital gains tax would be payable by landlords on their rental housing, but where owner-occupiers with money to spare go, speculator landlords will follow. Another part of the reform would have quarantined speculators' deductions for negative gearing to rental income only; however, after a campaign of shrieking and wailing by landlords and agents, this entirely sensible restriction was abandoned and a further spur to speculation given.

In the 1990s, interest rates declined – but with tax policy set on encouraging speculation, this lead to bigger loans and higher house prices. Then, around 2000, there was the tax reform of the Howard Coalition Government, one part of which was the halving of the rate of capital gains tax: in other words, any money made speculating on asset prices would henceforth be taxed at half the rate of any money made through work or saving at the bank. Where previously the alchemy of negative gearing transmuted income into capital, so that the speculator's tax liability was deferred (to such time as the capital gain was realised), now the speculator's tax liability was deferred and halved. Encouragement to speculate was turned up to 11.

With an eye now turned to retirement, baby boomers levered, on the basis of their own substantial housing equity, a shedload of money into the housing market, bidding up each other and owner-occupiers too. Look at all the borrowed money tipped into housing.

(Source: RBA Table D2)

So much of that money has been sunk there in the hope or expectation of a speculative pay-off: that someone, some time, will come along and pay even more. We should admit that there must be a spectrum of dreams and emotions represented here: some speculator landlords are just rampantly greedy, while others have seen rising prices and worried for the housing futures of their children – so they've borrowed up and bought in too. Of course, in doing so they've contributed to the present problem of unaffordable homeownership, and distorted the rental market to the disadvantage of low-income renters, undermined the tax base, and voted for the reduction of public housing from being, in the first place, an alternative to homeownership, to Menzies' handmaiden to homeownership, and then to a marginalised poverty trap, to boot! These speculators might love their children, but they've been less than kind to other people's children.

Back to Menzies, briefly now:
And finally, we have homes spiritual. This is a notion which finds its simplest and most moving expression in "The Cotter’s Saturday Night" of Burns. Human nature is at its greatest when it combines dependence upon God with independence of man.

We offer no affront - on the contrary we have nothing but the warmest human compassion - towards those whom fate has compelled to live upon the bounty of the State, when we say that the greatest element in a strong people is a fierce independence of spirit. This is the only real  freedom, and it has as its corollary a brave acceptance of unclouded individual responsibility. The moment a man seeks moral and intellectual refuge in the emotions of a crowd, he ceases to be a human being and becomes a cipher. The home spiritual so understood is not produced by lassitude or by dependence; it is produced by self-sacrifice, by frugality and saving.

For many years now, the dominant principles of the housing market have not been 'frugality and saving' – quite the opposite. Wild borrowing and something-for-nothing speculation have driven it to its present point, where it no longer provides ownership on reasonable terms for most low-moderate income households. Sixty per cent of low-middle income 25-44 year-olds are out of homeownership – and so too are 45 per cent of low-income 45-64 year-olds (these figures from research by Baker and Flood). Of those lower income households (ie lowest 40 per cent) who have gotten into homeownership – probably because they've figured that they should buy now before affordability gets worse – nearly half (48 per cent) pay more than 30 per cent of their income in loan repayments; more than one quarter (27 per cent) pay more than 50 per cent (these figures from the National Housing Supply Council).

Certainly these housing-stressed households will feel that they are making painful sacrifices, but there's considerable doubt as to whether they're actually 'saving' at all. Same goes for the outright speculators. Over the past couple of years there have been signs that the ground is shifting beneath our high house prices, built as they are on foundations of debt that continually need to be reinforced with more debt. That 'emotion of the crowd' – the mixture of hope and fear that prices will keep going up, because someone, some time, must come along and pay more – has been shaken, and with it the actual prospect of such a pay-off.

 (Source: RBA Table D6)

It may be that those with the best claim to be living in Menzies' 'home spiritual' of responsibility, frugality and saving, are tenants.

Tuesday, December 18, 2012

Paying rent at Christmas

If the Commonwealth Bank sent their customers a seasonal greeting that read 'Please remember that your mortgage doesn't stop for Christmas' (let alone a note to the effect that if you're thinking of having a Christmas party, keep in mind that they've got the police on speed-dial), each and every Member of Parliament, and member of the press, would take up a pitchfork and torch and charge pell-mell down Martin Place to give the bank its just deserts.

Alas, sending rude letters to tenants is something of a Christmas tradition (though this year's effort by Housing NSW is a new low).

Many private tenants will have by now received a letter from their landlords' real estate agents advising that the agents will be off on holidays for a few weeks, and the office will be shut, so make sure your rent is paid up well in advance.

In one case of which we're aware, a tenant has been instructed to keep additional money in their bank account because the agent (under their direct debit arrangement with the tenant) will be dipping in early.

Here's what the Residential Tenancies Act 2010 says.

You must pay your rent on or before the day set out in the agreement (s 33(1)).

However, you are not required to pay more than two weeks' rent in advance, or to pay rent for a period of the tenancy before the end of the previous period for which rent has been paid (s 33(2)).

The law doesn't stop for Christmas. If because of their holiday plans an agent won't be around to take payment of your rent on the due day, that's their problem. They can take payment when they get back from holiday.

Because you probably possess a superior sense of Christmas cheer, you might not be inclined to advise in reply that requiring more than two weeks' rent in advance is an offence under the Act, punishable by a penalty of $1100 (s 33(2)). But you should at least cancel the direct debit arrangement, if you have one, and arrange a safer way to pay rent.

Monday, December 17, 2012

Merry Christmas, scumbag

We reproduce this message from Garry Mallard OAM – co-ordinator of the National Tenant Support Network, friend of the Brown Couch, and public housing tenant.


Upon returning from a brief trip to Sydney last Friday, I found in my letterbox, the Housing NSW Christmas greeting for 2012, attached for your information. It takes the form of an A4 sheet of paper bearing the Family & Community Services - Housing NSW logo, beneath which there appears a short message in blue, red and green; the traditional colours of Christmas.

“It will soon be Christmas”, the letter begins in 16 point blue text. Looking good so far the letter continues, “We would like to remind all tenants that rent and water are still to be paid on time”, it continues, as though any tenant is not aware of this fact.

Then we jump to all-caps and 24 point bold red text, “PLEASE REMEMBER RENT DOESN’T STOP FOR CHRISTMAS”, the letter repeats for emphasis.

Housing NSW reverts to 16 point text to deliver its next threat in blue, “We are also working with the NSW Police to ensure that our communities have a safe and peaceful festive season. Please consider your neighbours”.

Moving right along, and in green now, I was greeted with the following, “Thankyou for your co-operation and we wish you a happy and safe festive season.”

As if I weren’t sufficiently incensed at receiving a patriarchal, stereotyping, demoralising and completely unnecessary warning right on Christmas, I discovered that some Einstein thought the warning should be printed on the reverse side of a ‘fact sheet’ bearing the logo and title of the NSW Police Far South Coast Local Area Command.

This little gem advises, amongst other things, that Housing NSW has a Memorandum of Understanding with the Police, which allows it to share all sorts of information with them. It further advises that the Police will be around for a visit during the holidays; the aim of the visit being to remind me of my responsibilities as a tenant, on behalf of Housing NSW, in particular, to advise me against activity which can constitute a criminal offence.

Well, for my money it’s a bloody shame the coppers will not be around Ashfield-way to remind Housing NSW big-shots about behaviour that constitutes a moral and ethical offence.

If I needed a reminder at Christmas, that Housing NSW views its tenants as a job-lot of naughty children that need a stern talking to by a policeman from time-to-time to keep them in line, then I’ve had it!

The 2012 Christmas message from Housing NSW constitutes a fail of epic proportions, which only serves to reinforce stereotypes that HNSW claims elsewhere to abhor.  I am deeply offended by it; as is my partner, who found the note on our kitchen dresser and thought it so outrageous that it must be a gag from one of our many friends within Housing NSW, and I can see why. The letter ticks so many boxes in the “How to completely overlook the spirit of Christmas” manual that it’s hard to imagine how it could have been more offensive short of signing it “Stuff you, from Housing NSW”.

I have many concerns about the 2012 Christmas greeting from Housing NSW, but there is one error that I would like to address above all others. Despite your clearly deluded and overtly patriarchal belief to the contrary, you do not own the communities in which public housing tenants live. Communities are made up of people, not houses. You do not own the people, nor do you live in the houses, the configuration and condition of which, combined with short-sighted and socially irresponsible government policy, contributes so much to the antisocial behaviour your MoU with police was developed to address.

In closing, a Christmas greeting from me to you:

It will soon be holiday season. Tenants would like to remind Housing NSW and its Minister/s that maintenance and responsible social policy is expected on time.


To the many responsible, courteous and helpful people within Housing NSW and Government, who will be every-bit as outraged by Housing NSW’s latest social faux pas, we wish you a very merry Christmas and a happy, safe and prosperous 2013.


Well said, Garry.

Thursday, December 13, 2012

Tenancy culture studies: public housing road tours

It's hard to believe now, but there was once a time when the NSW State Government published tour guides to public housing estates.

The NSW Housing Commission's 1947 booklet, Homes for the People, featured a handy map and directions for five road tours of public housing developments throughout Sydney. Tour 1, from Pagewood to Beverly Hills in Sydney's southeast, was a relative doddle at 42 miles in two-and-a-half hours; to do the lot, the truly dedicated tourist would cover, over 18 hours, 282 miles of public housing, from Hornsby in the north to Liverpool in the west.

The guide proudly pointed out 'items of note', such as 'experimental cottages' in Esme Avenue, Chester Hill; the 'small unit homes (one child families)' in Juno Parade, Greenacre; and the building technologies and materials employed: timber frames, steel frames, concrete, fibro....    

It was a proud publication, and rightly so. This was the era of the first Commonwealth-State Housing Agreement (1945-56), in which renting in public housing was conceived of as a decent and genuine alternative to home ownership, and the Housing Commission built one in every six dwellings built in the State.

Nowadays Housing NSW prefers its properties to be un-notable, even invisible. (Aside from the tour guide, here's another sign of the times: Housing NSW annual reports used to be full of pictures of buildings – but no people; now, there's lots of smiling faces, but no buildings.) However, public housing estates remain places where one can find some important firsts in architecture and planning and many admirable – even successful – endeavours in building better homes for the people.

Here's a few of our favourites.

1. Daceyville. See where the public housing system in New South Wales began. 'There, that is how Australia builds its garden cities' – that's what John Rowland Dacey predicted future tourists would say of the estate, and both the buildings and layout of the estate show the state of the art of early garden suburb planning. Strong radial avenues and short curving streets give the estate a symmetrical, very mannered appearance (the layout of later garden suburbs and neighbourhoods would be more closely determined by the topography); but if you look down Cook Avenue, says estate historian Samantha Sannayah, you can see that the western side of the estate, built to the earlier plan of garden suburb originator John Sulman, is more formal, while the eastern part, built to the later revised plan of Housing Board architect William Foggitt, is 'curvier, and friendlier'. The dwellings, notes another historian of the estate, Robert Freestone, are 'a blend of English cottage and Californian bungalow forms unified by verandas and Federation joinery details'; the earliest are semi-detached but built to resemble a single large house; later dwellings are detached per the suburban ideal; but then the very latest – from the 1980s – employ the large house form again.

Items of note include the first planned cul-de-sac in Australia: the tear-shaped addition by Foggitt to Colonel Braund Crescent.

2. Millers Point, Dawes Point and the Rocks. Actually, even before we had a public housing system, we did have some public housing. The State Government first acquired rental housing almost accidentally when, after an outbreak of bubonic plague in 1901, it resumed the wharves and adjoining areas of Millers Point, Dawes Point and the Rocks. Walk through Millers Point and Dawes Point and see grand and more modest houses from the late nineteenth century, and working class boarding houses, flats and terraces from the early twentieth century. Pause at Clyne Reserve and survey the wharves below and to the south, soon to be redeveloped as Barangaroo, and worry for the future of this special public housing place.

Next, duck under the Bridge at Cumberland Street and behold the Sirius apartments, from the Housing Commission's brutalist period in the 1970s. Awesome.

3. Riverwood. If you go to Millers Point and Daceyville for early twentieth century public housing, try the estate at Riverwood, 18 km southwest of Sydney, for the mid-twentieth century and beyond. The Riverwood estate presents an extraordinary sample of the various types of housing built by the Housing Commission after the Second World War: some detached cottages (mostly sold to residents); walk-up blocks of 2- and 3-bedroom flats; 'pensioner housing' (bedsits); some terrace houses; and the two 1970s high-rise towers, Jefferson and Lincoln. (All the streets, which are distinctively curvy in the suburban grid, are named on an American theme too, after the American army hospital built on the site during the war. None of the hospital buildings, at one time used by the Housing Commission for emergency housing, remain on the estate.)

You can also see the result of later programs for the 'improvement' of public housing estates – in particular, the addition in the 1990s of gatehouses and balconies on the blocks of flats, and the fencing of previously common grounds – and the beginnings of one of today's large public-private redevelopments, as blocks of flats and bedsits at the estate's northern edge make way for Riverwood North, which promises to build an equivalent amount of social housing, along with rather more units for sale to private owners. Finally, there's also the excellent Riverwood Community Centre, which got started in the 1970s under the Australian Assistance Plan of the Whitlam Government

There's many more places of note, of course. Still looking just at Sydney, there's Redfern and Waterloo. There's the Erskineville estate, which predates the Housing Commission (built in the 1930s by the Housing Improvement Board) and survived a proposal to redevelop it in the early 2000s, thanks to a spirited campaign by tenants and their neighbours. There's the Strickland flats, in Chippendale, a rare example of social housing built by local government (the City of Sydney, in 1914). There's Cartwright, part of the Green Valley estate, which was built in 1963 as the Commission's first instance of 'Radburn-type planning'. (The Commission explained in its annual report: 'basically the plan provides for pedestrian movement along a pathway system segregated as afar as possible from vehicular traffic. All mail and other household deliveries, garbage collections, etc will be made by means of short cul-de-sacs at the rear of the dwellings, which will also provide facilities for parking.... The adoption of Radburn-type planning for this neighbourhood was received enthusiastically by the public generally, and in particular, was favourably commented upon by many planning authorities.')

Many successful endeavours in providing better homes for the people... and some not so successful. But even in those places you'll see the endeavours of tenants and other residents and workers to get hold of the facilities and resources that planners and markets didn't deliver. There's lots to see and admire out there. 


Thursday, December 6, 2012

Are social housing applicants getting blackballed?

Agents ask for an awful lot of personal information when you apply for a tenancy.

But this question – from the Real Estate Institute's standard application form – is the worst of the lot:

Have you made an application for accommodation in any social housing, as defined in the Residential Tenancies Act 2010 or aged care facility? [Tick YES or NO]

There can be only one purpose for this question: to vet applications with a view to refusing tenancies to people who are social housing applicants.

If you're a social housing applicant, you can expect to wait many years for a social housing tenancy, so you'll probably need to rent privately in the meantime. And because your income will be low, and there's probably other problems going on in your life, you will already have a hard time getting a tenancy. To be ruled out, out of hand, because you're a social housing applicant, is cruel and wrong.

But not unlawful.

This is a problem for governments, as administrators of social housing, as well as for social housing applicants, and there's a few things governments should consider doing about it.

Federal and State Governments should amend their anti-discrimination legislation to prohibit discrimination on the ground that a person has applied for or receives a social service. We note that the Federal Government has new draft anti-discrimination legislation out for public comment. It doesn't include this ground of discrimination; we'll be recommending that it should.

And the NSW State Government can amend the Residential Tenancies Act 2010 to provide for a prescribed standard tenancy application form, that asks for all the information that landlords reasonably need to know – and nothing they don't.

The Act could also be amended to specifically prohibit agents and landlords from asking about social housing applications. Interestingly, there's a lesson here from the Landlord and Tenant (Amendment) Act 1948, which is currently up for repeal for misconceived reasons. Long before there was anti-discrimination legislation on the statute books, section 38 of the 1948 Act prohibited landlords from refusing to let premises to persons with children – indeed, it prohibited landlords from inquiring as to whether a prospective tenant had any children (section 38(4)).

All of these are reasonable measures of protection for people who have a hard enough time in the rental market even without being blackballed by landlords and agents.

Tuesday, December 4, 2012

Whitlam and housing

Sunday was the fortieth anniversary of the election of the Whitlam Federal Labor Government.

Like us at the Brown Couch, Gough Whitlam himself has always enjoyed pondering the significance of anniversaries. On the commencement of the 1972 campaign he observed, characteristically:

December the second is a memorable day; it is the anniversary of Austerlitz. Far be it from me to wish, or to appear to wish, to assume the mantle of Napoleon, but I cannot forget that the second of December was the date on which a crushing defeat was administered to a coalition – a ramshackle, reactionary coalition.

In a previous post we mentioned briefly how housing and urban policy had, late in the long period of Coalition government, fallen into a state of disrepair, notwithstanding the efforts of Housing Minister Annabelle Rankin. Over the three short years of the Whitlam Government, housing and urban policy enjoyed a much higher priority.

Whitlam's most ambitious initiative was the creation of a new Department of Urban and Regional Development (DURD), conceived of as 'virtually co-equal with the Treasury', to coordinate the  allocation of urban resources by all levels of government. Under Minister Tom Uren, DURD programs included the establishment of the State land banks (Landcom in New South Wales) to better manage suburban development; funding for suburban sewerage; and the development of Area Improvement Plans that brought together and directly funded local governments to plan and work on local and regional infrastructure.

Early in its first term, the Whitlam Government also negotiated a new Commonwealth-State Housing Agreement (CSHA), which made a few notable changes to public housing policy. Whitlam had gone to the election critical of the recent decline in building activity by State public housing authorities, and promising instead to 'request each State authority to estimate the funds it will require to reduce the waiting period for houses to twelve months.' The 1973 CSHA didn't quite do that (fastforward to the present and see how far waiting lists have run out here), but it increased funding, reigned in sales of public housing dwellings, and stabilised the level of construction for a time.

The new CSHA also slightly shifted the target of public housing policy. Traditionally directed at working class households, and exclusive of very poor and vulnerable persons (you could be knocked back by the Housing Commission's allocations committees if you didn't keep your current house well, or had too many children), State housing authorities were henceforth required to make not less than 80 per cent of public housing allocations to households whose incomes were not more than 80 per cent of the average. This attempted to balance responsiveness to households in need with the system's need for higher income households.

Apart from the CSHA, DURD purchased and rehabilitated old dwellings at Glebe and Woolloomooloo for public housing, and demonstrated an alternative approach to redevelopment at a time when the NSW Housing Commission was at the height of its enthusiasm for 'slum clearance' and high-rise construction. The first programs for Aboriginal housing on principles of self-determination were commenced. And under its Australian Assistance Plan, the Whitlam Government established Regional Councils for Social Development and funded other local, non-profit organisations to employ community development workers and improve the social fabric of public housing estates and other disadvantaged areas.

Finally, the Whitlam Government initiated the first steps towards tenancy law reform, by expanding the scope of the Inquiry into Poverty (originally commissioned by the McMahon Government) to include a report, by Adrian Bradbrook, into the landlord-tenant relationship, which set out the basic model of residential tenancies legislation subsequently enacted by (with considerable differences in the details, and delays in the commencement) by the State and Territory Governments.

No subsequent Federal Government has been so active in housing and urban policy. If you live in or visit a place like Claymore (which we visited recently with IUT Secretary -General Magnus Hammar), where residents and community workers meet around a table in a community laundry to connive at ways of getting and keeping basic facilities and resources like decent houses, footpaths, parks and playgrounds, and the occasional bus-run to shops that don't rip you off, you'll see the continuing relevance of Whitlam's agenda. Both sides of politics should see that it's time for a strong and just housing and urban policy again.

Friday, November 30, 2012

Maintenance of NSW public housing to be 'reviewed'

Anyone who has been visiting the Brown Couch for more than a year will know that we've long been keeping watch on the state of repairs and maintenance of public housing in New South Wales.

Since 2008, 'housing services' and 'asset management' have been operating as two entirely separate functions of the NSW public housing system. Combined with a focus on cyclical maintenance at the expense of prompt action on tenants' requests for repairs, this has been to the detriment of both tenants and the properties they live in.

We started to notice some big problems soon after the State Government formalised the split, and sent the NSW Land & Housing Corporation - that is, the legal entity that owns all of our public housing - off to sit under a completely different government department to it's erstwhile overlord, Housing NSW. Since then, tenants have dealt with Housing NSW on matters relating to the management of the tenancy, while the Land & Housing Corporation has kept to itself on matters relating to management of the asset. Now, in order for this approach to work there must be a clear focus on responsive repairs as a priority for asset management, so that when a request for repair is raised by a tenant it is promptly and satisfactorily seen to. The Land & Housing Corporation's current practice doesn't reflect this - tenants are often told they need to wait for repairs, or that the repairs they need are simply not a priority.

This creates a second, and much more insidious problem.

Under the Residential Tenancies Act, a landlord is obliged to maintain a tenanted property in a reasonable state of repair. If there is a disagreement as to what the "reasonable state of repair" should be, a tenant can take their landlord to the Tribunal for an order for repair. If, after all the evidence has been considered, the tenant's view is favoured over that of the landlord, the order will be made.

But when a tenant of the Land & Housing Corporation applies to the Tribunal, it is the tenancy manager - Housing NSW - who turns up to respond. The asset manager - the Land & Housing Corporation, who is also the landlord - might provide some evidence, but that usually just amounts to confirmation of their mistaken priorities. It's not uncommon for tenancy managers, after being told "there's nothing in the budget for that", to express a quiet frustration that the asset managers aren't really letting them to do their job.

... and when the Tribunal orders the repair notwithstanding the landlord's mistaken priorities, the problem created by this separation of roles is further compounded. The tenancy manager has to get the asset manager to accept that their priorities need to change, and this doesn't always go well. In these cases, the tenant is left high and dry. Their only real option is to go back to the Tribunal, where the tenancy manager will turn up to respond again, armed with nothing but the landlord's mistaken priorities and, if the tenant is lucky, the allure of token compensation.

This is a huge problem for tenants, and it's one that has been keeping the Tenants' Advice and Advocacy Services busy. For well over a year, Tenants' Advocates across New South Wales have been advising and assisting public housing tenants to make the most of this botched system. At the same time, we've been telling anyone who will listen that there's a problem here that must be fixed.

Perhaps someone has started listening? It's too early to say. But it seems the Land & Housing Corporation has flagged, in it's recent Annual Report (included in the Department of Finance & Services 2011/12 Annual Report at page 67-149), the development of a new maintenance model. This would form part of a strategy to meet its published objectives. This follows its statement in the 2012/13 budget papers (at page 8.24) that it 'will undertake a strategic review of its maintenance operations over the next two years...'

We look forward to the conversation from here.

Thursday, November 29, 2012

Break fees are broken

'Break fees' for ending your tenancy early are one of the less successful innovations of the Residential Tenancies Act 2010.

To be frank, break fees are broken, and we should go back to square one to fix them.

Under the Act, a break fee is a fee equivalent to six or four weeks' rent (six weeks' if you leave in the first half of your fixed term; four weeks' otherwise). That's the first problem with break fees: they are too high. So high, in fact, that they really act like a fine or penalty for ending your agreement, and if they weren't expressly sanctioned by the Residential Tenancies Act, they'd be unlawful.

If it were lower – say three weeks' rent – a break fee might usefully replace the conventional way of settling liabilities where a tenancy is ending early. The conventional settlement is:
  • the tenant is liable to compensate the landlord for loss of rent, potentially to the end of the fixed term – BUT;
  • the tenant is not liable for any loss that could have been avoided by the landlord taking reasonable steps (ie 'mitigation of loss') – so if the landlord could have gotten a new tenant in and paying rent after a few weeks, but has failed to do so, the tenant is not liable to pay – BUT;
  • the tenant is liable to compensate the landlord for losses incurred in taking those reasonable steps (ie advertising costs, the agent's letting fee, etc).
This means you cannot be certain how much it will cost you to move out early, and that you'll want to watch the agent like a hawk to make sure they're taking those reasonable steps. A simpler and more certain settlement of liabilities would be good, but – and this is the second problem with the current provisions on break fees – break fees don't always replace the conventional settlement. Under the Act, landlords and agents get to choose which one they'll use (that is, the Act allows for break fees as an optional additional term).

And you can expect that they'll choose the one that will cost you more: so, if the property is in an area of high demand and will be relet in a flash, expect a break fee; if it's a slower market, expect the conventional settlement.

Or maybe not... perhaps your landlord or agent will wrongly draft an agreement that provides for both, for something else. We've heard of agents demanding 'break fees' on top of compensation for loss of rent, advertising costs and letting fees – the amount of the fees ranging from one week's to six weeks' rent. Some agents have agreements that provide for one or the other, but are crossing out half of the additional term, so that it reads that the tenant is liable to pay a break fee, but not what the fee is, leaving the tenant mystified as to their liability and what the agent thinks they are doing.

This problem comes mostly from the ignorance and cupidity of some agents, but the break fee provisions should also carry some of the blame, because they have not set out a sufficiently clear and binding reform.  

The present provisions should be scrapped. The Parliament should provide for a three-week break fee for all circumstances; if it won't do that, then just stick with the conventional settlement in all circumstances.

Monday, November 26, 2012

A bit of perspective with the International Union of Tenants (part 3)

You'll recall that earlier in November we met with the General Secretary of the IUT, Mr Magnus Hammar, and heard him speak about how our rental system in Australia compares with various markets across Europe.

Magnus Hammar

It was pretty interesting stuff. As it happens, the Australian approach to home is not universally applied, but tensions between folks who profit from property and folks who live there crop up no matter where you look.

Here's a brief rundown of Magnus' key points:

First, to the numbers. More residents of Central Europe rent their homes than anywhere else in the world.

It's the Swiss (64%) and the Germans (57%) who lead the way. Australians (29%) are about half as likely to rent as residents of Switzerland or Germany.

Our own rental market, as a percentage of total housing stock, aligns more closely with the USA (34%) and England (32%), and we're far more likely to rent than Europeans in the south-east.

Our investment in social housing, as a percentage of total stock, is comparatively poor. It's interesting to note that Germany - one of the world's largest and strongest rental markets - relies fairly minimally on state funded housing.

As you would expect, the percentage of tenancies is higher in Sydney than the Australian national average - a feature that is mirrored the world over. Interestingly, the New York rate completely dwarfs the USA rate generally. Perhaps this is why rent-regulation remains on the statute books in Albany, NY?

All these figures raise an obvious question: what are the structural differences that make renting more common in European countries than in Australia?

The answer is just as obvious: security of tenure.

In many parts of Europe, long tenancies are expected. Tenancies cannot be ended without a good reason, and landlords must take steps to assist their displaced tenants in finding new, reasonably similar accommodation.

In Australia, by contrast, we do not have strong security of tenure. Tenants can be asked to leave without a good reason. In this we are not alone in the world, but it can be considered uncommon from a global perspective.

But the question still remains: which came first? Does a greater numbers of tenancies lead to stronger rights for tenants, or do stronger tenants' rights lead to confidence in renting, resulting in a greater numbers of tenancies?

Whatever the answer, a strong and well supported rental market is not a bad thing. It's not only good for tenants and their rights - it makes for economic stability in times of uncertainty as well.

See if you can spot the Global Financial Crisis on the graph below.

Thursday, November 22, 2012

Hundreds to lose homes if Govt repeals 1948 Act

The NSW State Government proposes to repeal the Landlord and Tenant (Amendment) Act 1948 – known around here as the 1948 Act.

If it does, upwards of 600 persons – mostly aged pensioners – will lose their homes of many years.

(Rod Spearer, 1948 Act tenant, in his Newtown bedsit.)

The 1948 Act controls rent increases and evictions for so-called 'protected tenancies'. No new protected tenancies have been created for more than 25 years (and no more can be created). Between 600-1400 protected tenancies – all more than 25 years old, some much older – remain in existence, according to the estimate of the Older Persons Tenants Service.

Generally speaking, properties covered by the 1948 Act become 'decontrolled' only when the tenant moves out or dies. As a result, controlled properties trade at a discount. Repeal the 1948 Act, and the owners stand to gain a windfall.

Repeal the Act, and all of those tenancies will be terminated, and hundreds of elderly tenants, of limited means, will face homelessness. 


A disturbing prospect. So is the process by which the proposed repeal is made.

The proposal is part of a review by NSW Fair Trading of 'red tape'. It's one of a miscellany of issues, including regulations on upfront gym fees and the Warehousemen's Liens Act 1935. In its discussion paper, NSW Fair Trading states of the 1948 Act:

It is unknown whether any protected tenancies still exist in NSW.

This is wrong – and Fair Trading should know it. We wrote to them about OPTS's 600-1400 estimate last October. OPTS dealt with 28 known protected tenancies in its casework in the year to June 2012. Your correspondent spoke to a tenant under the 1948 Act on the phone the other day. The Herald has too. Fair Trading's wrong statement misinforms and potentially misleads the public discussion of the proposed change.

And the 1948 Act isn't 'red tape'. Everyone affected by it – tenants and landlords – made their arrangements long ago. These arrangements shouldn't be changed by repeal of the Act now, when tenants are in their old age.