Friday, August 15, 2014

Under 30, renting, working...

In today's guest appearance, former Tenants' Advocate Hayley Stone discusses housing and income support for young people in Sydney.
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I recently applied for a rental property. As part of this process, I provided my licence and my employment history, including the direct contact details of my past and current employers, to a real estate agent.


Federal government proposals around income support for jobseekers under 30, combined with an increasingly 'flexible' job market, could bode ill for under 30’s seeking to live independently in rental accommodation. The repercussions could impact upon a person's housing security for years to come.

The introduction of a waiting period - for as long as six months - before being eligible for government assistance, and a six month cap on assistance in any 12 month period of unemployment, would put pressure on families to provide for younger relatives who find themselves jobless. It assumes that parents will be able to, and will want to support adult children who fall on hard times. But this isn't always true. In any case, many people under 30 already live independently in the rental market.

But with no guarantee of income support, a person under 30 will become an automatic risk for landlords, so under 30s may face discrimination when applying for new tenancies. Real estate agents already have access to birth dates through licences, passports and other forms of personal identification. They can determine employment status through pay slips and calls to employers.

As part of their responsibilities to landlords, real estate agents must determine the ability of potential tenants to pay the rent. Changes to income support for under 30’s might lead to prejudice against even highly paid under 30s working to contracts or in casual jobs, as income support may not be assured if those jobs dry up. If applicants are already unemployed, there is little incentive for landlords to take them at all, as there may be no guarantee of income past six months.

The problem is, this discrimination will only be able to be speculated on, as the way that tenancy applications are assessed makes it impossible to know the reason why an application is rejected. Unsuccessful applicants will never know who they were up against or what criteria was used to rule them out, making it all but impossible to demonstrate if discrimination is unlawful.

Changes to income support would mean that even if real estate agents and landlords don’t stop taking under 30s as tenants, they might start putting them on shorter term leases to coincide with their employment contracts or limiting those on income support to 6 month agreements. They might also look to introduce “rental guarantees” or asking under 30’s to declare assets in the case that they are unable to pay the rent, to make it easier for landlords to take debt recovery action.

For those under 30s who are in fixed term residential tenancy agreements, proposed changes to income support could be catastrophic if their employment situation tanks. Two weeks rent arrears is sufficient to start the eviction process. Even those unemployed with good employment histories are looking at a waiting period of 4 weeks if they lose their job. It is safe to anticipate that under 30s will have to utilise break-fee clauses to leave properties they can no longer afford to rent, or to apply to the NSW Civil and Administrative Tribunal to terminate on hardship grounds (which is not without the risk that compensation will need to be paid to the landlord). If tenants are unable to pay break-fees (6 weeks in the first half of the fixed-term, 4 in the second half) there is the risk of being placed on a tenant database for outstanding debts. These databases are regularly searched by agents prior to selecting tenants and listing last for years, and a listing remains until the debt is paid.

While these income support measures are being considered in Canberra, we are experiencing a rental crisis across Australia, and a massive shortage of affordable housing. Housing support is stretched to the point where only the chronically unemployable will receive assistance to secure an affordable home. The National Rental Affordability Scheme, which seemed to promise some relief, has been discontinued by the Australian Government. In an additional blow, the NSW Government has delivered a funding shake-up to homelessness services across Sydney.

Applying the proposed income support measures for under 30s in the current climate would be setting young people up to fail. Many Australians are already struggling in a hostile housing market, and it can be difficult to achieve permanent employment in the jobs market as it is. Proposed changes to income support simply direct the focus away from housing and employment policy failings, and seem ambivalent to the impact these measures could have on future demands for social welfare.

For more on proposed changes to income support in Australia, check out the Welfare Rights blog at www.welfarewrites.org

2 comments:

  1. I don't need to worry - my Daddy got me a scholarship that was not even advertised -

    ReplyDelete
    Replies
    1. Ah... Anonymous. But as it says in the article: this isn't always true!
      Cheers,
      Ned.

      Delete

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