Public housing rent increases: part 2

Since yesterday's post on the public housing market rent confusion, Minister Goward's media release has gone up on Housing NSW's website, which helps clarify this misreported issue.

As stated in the media release, and discussed yesterday, Housing NSW has instructed the valuers who are calculating its market rents not to apply a discount 'simply because the property was being used as public or social housing'. Instead, 'a fairer calculation of market rent based on similar surrounding properties in the local area will be applied'.

To which we say: okay – but let's keep in mind that this fairer calculation should still result, in many cases, in market rents that are lower than private rents for that area.

The reason for this is simple: in many cases, public housing properties just would not go for the rents that 'similar surrounding properties' go for in the private rental market. Many public housing properties are older, and built to more austere principles than similar surrounding properties. Many are also in estates with more than their fair share of poverty, ill-health and other problems. If they were on the private rental market, the rent would be lower.

The Minister's media release gives some examples of the difference between public housing market rents and private rents. We think that it may be that some or all of this difference is fair enough.

A two-bedroom public housing apartment in Waterloo will be in a building of distinct appearance, austerely designed and built 40-50 years ago, in a poor estate. A two-bedroom apartment on the private market will be rather more flash.

Housing NSW's market rents should reflect these differences. The valuers should arrive at that conclusion by considering all the usual factors for determining the rent for a property. If they don't, and Housing NSW instead tries to increase rents to levels that don't reflect relevant differences, you should apply to the Tribunal – because the Tribunal can, by applying the law of the land, set an appropriately lower market rent.

For more information on challenging an excessive rent increase in the Tribunal, or to find details of your local Tenants' Advice & Advocacy Service, visit www.tenants.org.au.