Big numbers and good intentions: Labor's Affordable Housing Plan

The Federal ALP conference is happening in Adelaide at the moment, and one of the big early announcements was a plan to build a lot of 'affordable' housing. This can probably be treated as the first big housing announcement of the coming election campaign. Check it out here.

It has been met with near-rapturous support from community housing providers and their supporters, like the Everybody's Home campaign. Others, like ACOSS have been more circumspect. And some on twitter have raised some concerns. Let's dig in to what the policy is, and what we might expect to deliver.,

At its heart, this would be a reboot of the National Rental Affordability Scheme launched in 2008 by the then ALP government. Originally intended to create 50,000 'affordable housing' dwellings, the program was ended in 2014 with less than 40,000 properties either delivered or approved. The first dwellings built are coming to the end of their 10 year commitment this month, making this announcement from Labour timely. This NRAS 2.0 follows a similar model, scaled up to creating 250,000 'affordable housing' dwellings, though with some notable exceptions.

NRAS	'NRAS 2.0' proposal
Open to individuals and corporations	Only open to corporations
Must be managed by an 'approved participant' - can be for profit or not-for-profit	Must be managed by a 'registered community housing provider' - most, but not all, are NFP
Leased to people on low to moderate incomes, at 80% or less of market rent	Leased to people on low to moderate incomes, at 80% or less of market rent
No restriction on resident's immigration status	Not open to "international students, foreign workers and other non-residents"
Scheme length: 10 years per dwelling.	Scheme length: 15 years per dwelling.
Subsidy in 2018/19 dollars - $8335.75 pa from federal government, and $2,778.58 pa from state governments.	Subsidy in 2018/19 dollars - $8,500 pa from federal government. No detail on whether state governments will also contribute.
TOTAL $111,921.30*	TOTAL $127,500 (plus any state contribution)

*It is open to the investor to exit the scheme at any time without penalty (apart from no longer being paid the subsidy) and we are aware of some instances where they did, or where the property stopped being eligible for the subsidy. It is unclear whether the proposal will operate similarly.


While a commitment to addressing housing issues is welcome, this is a limited model in a number of ways. There may be good reason to doubt whether it will deliver the 250,000 dwellings promised, and whether 80% of market rent is any kind of good way to ensure the dwellings are actually affordable.

The subsidy is very generous - anywhere on market rent of $815 or less receives more in subsidy than they give up in discount. At lower rents (anything below $407) the owner receives more than double the discount.

By closing access to private investors Labor are clearly hoping for more 'institutional investors'. This does not mean not-for-profit housing necessarily, nor necessarily better-behaved landlords. Just under half of the current NRAS properties are managed by for-profit providers.

There are a few obvious paths to funding. The federal National Housing Finance and Investment Corporation acting as a bond aggregator might lend to community housing providers for them to build and operate "NRAS 2" properties directly. The subsidy from this proposal would make the financial viability of those loans much easier to meet.

Inclusionary zoning models of the type able to be required under planning mechanisms like SEPP70 are also likely to utilise the proposal. Property developers in areas using inclusionary zoning rules will need to set aside some housing in large developments for affordable housing, and this payment will in many cases more than repay the lost revenue from that requirement. That's not an excellent result, as it is merely cost-shifting from the private sector to the public sector.

It is also very likely to form part of for-profit build-to-rent models because it will make those development propositions much more attractive.

There is a big question mark then over how many properties will actually be built. Labor promises to deliver 250,000 dwellings, but they aren't building them - the private sector is building. Labor has flagged the return of the National Housing Supply Council - a very welcome move - to help make sure properties are delivered in areas of need. But limiting properties to particular areas, and particular investors, means it is less likely that a match will occur and the right investor will be able to build in the right location. Will this limit how many properties actually get built?

What else can Labor do? Frankly it is an indictment of Australia's housing policy environment that they don't seem to be considering a large public housing build. Recent AHURI research demonstrated how much more sensible a publicly run housing program is, being by far the most cost-effective approach. And after development costs, directly running public housing is already cheaper than the rent. So why pursue such costly approaches?

In large part, it is because of a collective decision for an ongoing, bipartisan and cross-sectoral approach to housing which restricts access to social housing and casts its provision as welfare or even charity. While it is perhaps most enthusiastically pursued by conservative politicians, it is perpetuated by many in the not-for-profit housing sectors from advocacy to academia. One of the key ways this happens is by distinguishing 'affordable' housing from 'social' housing mostly along income lines. Because 'affordable' housing is only to be delivered by non-government organisations, this means that the non-government part of social housing can be subsidised by higher rents collected in affordable housing, but the government part cannot.

Consider that if instead social housing eligibility was opened back up to moderate incomes the cost to both construct and maintain would become much easier to manage. This is far better for all residents. The need for a complicated model such as 'affordable' housing would disappear, as would the stigma attached to social, and particularly public, housing. This is not an easy shift, as it would be important to ensure those on the lowest incomes aren't jettisoned, but with commitment it could happen.

Public housing has many advantages over the private market - it can be built where it is needed, without having to wait for the private sector to determine market conditions are favourable. It can be built in the type most suited - both dwelling structure and size - to the local conditions, rather than to what works out best for an investment manager. It has disadvantages too - shared with other social housing providers - of being a large bureaucracy that can struggle to respond to individual needs and often has nothing to offer tenants in being part of decision-making processes.

What is needed is a real conversation about the ways in which Australia can be housed, and a real vision for our housing system. Who can deliver that?

A longer lease on life: issues for older renters

With a surplus of $3.9 billion for 2016-17, the 2018 NSW State Budget had its winners and losers. The latter include seniors and renters. This blog examine some of the issues confronting older renters.

How does one define 'older person'. There is a helpful discussion of the definition of 'age' in the Australian Law Reform Commission's Discussion Paper on 'Elder Abuse'. Paragraphs [1.33] and [1.36] read:

The idea of someone being an ‘older’ person is a relative concept — chronologically, medically and culturally. It does not have a precise definition and specific ages may be used for particular purposes. For example, the Australian Bureau of Statistics (ABS) groups people into population age cohorts, and differentiates between ‘15 – 64’, ‘65 years and over’ and ‘85 years and over’. People over 65 are generally classified as ‘older’ for ABS purposes.

Family and Community Services’ NSW Ageing Strategy 2016-2020 (pp 26-28) identifies older people’s ability to live in affordable, accessible, adaptable and stable housing as a priority of the NSW Government. It asserts:

... older people increasingly prefer to ‘age in place’ and grow older in their own communities – close to friends, family and services.

The NSW Government does not have an explicit ‘ageing-in-place’ policy. Certainly, it would be worthwhile implementing an explicit policy and, further, establish benchmarks against which wider Government policies can be measured regarding consistency. The value of this will become obvious further into this blog.

Nevertheless, a number of significant documents commissioned as part of the NSW Ageing Strategy refer to it, where a basic principle underlying it being that older people know what is best for their own lives and have the right to make decisions on their own behalf. An ‘ageing-in-place’ friendly policy provides the incentives for individuals to remain living in a community to which they have a strong attachment, either in their existing residence or alternate accommodation, with service supports.

Dire circumstances

Alan Morris’s book entitled The Australian Dream: Housing Experiences of Older Australians draws on the stories of 125 Australian pensioners and compares their experiences with the trends and needs of an ageing Australia. He probes the growing divide between older private renters, those who live in social housing and pensioners living in their own home. Here's an excerpt about private renting:

It's like a pressure cooker. You don't know where to go or what to do.' ... 'It was so desperate, the search for affordable accommodation, that I went down with a heart thing and was rushed to hospital.

On 26 October 2016, quoting from Alan Morris's publication, Jennifer Duke says that at least 100,000 older Australians in the private rental sector are living in 'dire circumstances' ... and this figure is expected to grow substantially if current policies and approaches to housing affordability aren’t changed.

On 12 December 2016, Alan Morris penned an article for The Conversation entitled ‘Why secure and affordable housing is an increasing worry for age pensioners’. He writes:

An increasing proportion of older Australians on the age pension will be dependent on the private rental sector in coming decades ... and the prospects for this group are grim.

An increasing number of older women in the private rental market face homelessness and have been described as ‘the new face of poverty. Read an article called ‘Older renters: the new face of poverty’. It reads:

The evidence mounts. The number of older, single women in the private rental market increased by a massive 50 percent between the 2006 and 2011 ABS Censuses.

The private rental sector across Australia has grown in size and significance in the last 30 years. Between 2001 and 2010 about 1.7 million Australians dropped out of home ownership and shifted back to renting. More than one in three did not return by 2010.

Private rental now provides long term tenancy for a growing and diverse number of Australian households. If large numbers of long term renters aged 45-64 years remain in the rental sector, they could swell the number of long-term private renters aged 65 years and above quite substantially in the coming decades.

Many older women experiencing a housing crisis or homelessness have led conventional lives and never previously had a housing crisis. As private renters, especially in tight housing markets like Sydney and some regional centres, they are at great risk of unaffordable rents, insecure housing, eviction and homelessness.

Also, an excellent essay by Anwen Crawford picks up this same theme. She writes about 'Nowhere to go – older women and housing vulnerability’ and finds:

The number of older women who are rental tenants in Australia is growing, and these women ... are increasingly vulnerable to poverty and homelessness ... Housing affordability and security for rental tenants will only become a more pressing issue as Australia’s population continues to age. And with more people unable to afford to buy a home, changes to housing policy now will help to determine the living conditions of tenants in the future.

2016 Census

The 2016 Census found a significant increase in the number of people renting in New South Wales. Indeed, there was a slight shift away from home ownership towards renting. There were 826,922 renter households at the 2016 Census, which was 83,870 more than there were in 2011. To put this into context, that's almost double the increase we saw between 2006 and 2011. It also means our renting population has gone up in percentage terms since 2011, too - from 30.1% to 31.8% in 2016. It also means that more people are renting for longer. Read more here. On top of this, Australia’s population is ageing. Those aged 65 years and over now account for 16% of the total population, compared to 14% in 2011. The median age has increased to 38 years, after remaining at 37 years for the past decade. Read more here.

Following the release of the 2016 Census, there have been a number of reports highlighting the problems of life-long renters.

In March 2017, The New Daily examined the most recent population statistics. Australia is ageing and life expectancy is greater. The stats show that from 2012 to 2016, the proportion of the Australian population aged 65 and over increased from 14.14 to 15.27 per cent.

Kirsten Robb writes: 'Life-long renters face financial stress in retirement'... according to a paper by Swinburne University, which found more Australians are renting in retirement and facing financial stress. The report that she refers to is one by Andrea Sharam, Liss Ralston and Sharon Parkinson of Swinburne Institute for Social Research. They found:

The proportion of aged persons in Australia is set to increase significantly, posing many challenges. Amongst these is the growing number of households who lack housing security in retirement. ... Our findings indicate that social change, and adverse ‘critical life events’ have significant impacts on households by and at midlife, and beyond. Of particular concern is that the housing market itself is a key source of wealth accumulation and dispossession. A very marked outcome is that to be private renter at 45 years of age is likely to mean being a renter and highly impoverished, in retirement.

Teresa Somes of Macquarie University writes for The Conversation: 'More and more older Australians will be homeless unless we act now.'

Eileen Webb and Gill North write: 'Suitable, affordable housing is key to our population ageing well'.

Ben Phillips of the Australian National University writes for The Conversation:

... the more pressing social problem for Australia remains the lack of affordable rental housing for lower-income families that is close to jobs and services in our capital cities. ... An ageing population with potentially lower home ownership rates will add to this problem in future years.

And Ned Cutcher of Shelter NSW writes that more people are renting much later into life.

More recent media

You will find recent media coverage, reports and publications on older renters in this document.


What is the reality for older renters?

Various words have been used to described the plight of older renters: Overlooked, A distinct financial disadvantage, Condemned, Vulnerable and Financial stress … and that’s just for starters.

As discussed above, there are many issues confronting older renters. So here's my summary:

• Shortage of affordable housing in well serviced locations. True for all renters, but compounded if you are older ... Check out Anglicare’s annual rental affordability snapshot ... and National Shelter’s Rental Affordability Index, published in May 2018.

• Weak security of tenure. True for all renters, but compounded if you are older ... check out Choice’s publication entitled ‘Unsettled’. Read about it and find a link here. Also, check out the ‘Make renting fair’ campaign. Indeed, Australia fairs poorly in an international comparison of security of tenure for renters.

• Only token acknowledgement of ‘ageing in place’ ... The redevelopment of old public housing estates poses real hardships for many older tenants. The forced relocation of residents of Millers Point in inner Sydney highlights the failings of Government when only lip service is given to ‘ageing-in-place’. Read the blog in The Brown Couch here. In 2015 and 2017 the Tenants' Union of NSW made submissions to Elder Abuse Inquiries of both the NSW Legislative Council and the Australian Law Reform Commission (ALRC) here and here. We argued that a government policy, in itself, may constitute a form of elder abuse. We submitted that the NSW Government’s decision to relocate all the social housing tenants in the suburb of Millers Point is an example of systemic elder abuse.

• Restricted access to home modifications ... private landlords have little incentive to modify properties to suit the needs of older tenants. Older renters are forced to move as dwellings are no longer appropriate to their needs and residential tenancy legislation fails to adequately address this. Here’s the current state of play.

• Residential land lease communities (also called ‘residential parks’) as an alternative for older people ... Today business is viewing residential parks as money-making ventures, with some being promoted as an alternative to retirement villages. But, homes in residential parks, once seen as a cheaper option, now are regularly sold for amounts over $300,000. Indeed in 2016, two on the North Coast of NSW sold for over $1 million. Residents may own their home, but they do not own the land and remain vulnerable should the park be sold from under them.

• Pets is an issue with particular meaning for older tenants. Check out this site. Recently, there has been increased media coverage of this issue in Australia. Read Wendy Squires’ article called 'Landlords, have a heart and let your tenants have a pet'. The Tenants Union of NSW wants to see the decision to keep pets to sit with the tenants rather than the owners.

What can we do?

For an excellent discussion on what to do in order to address the more dire needs of older renters, check out the 'Ageing on the Edge’ report released on 29 November 2017. It contains thirteen recommendations that the NSW Government can act on now. The Tenants’ Union of NSW is represented on the ‘Ageing at the Edge’ Working Group in NSW. You will find a summary of the report here and the full report here.

Postscript on 26 July 2018

Here's three new links which are food for thought ...

Allison Worrall writes: 'Choice of food or rent: Housing crisis deepens.' Read her article here.

Isabelle Lane writes: 'Older Australians are falling off the housing ladder and face spending their retirement as renters, with the situation expected to worsen for coming generations.' Read her article here. You may check out Grattan Retirement Incomes Model (GRIM) here.

AHURI provides an excellent analysis of the situation facing older low income tenants in the private rental sector. This link also points to some current research. Check it out here.

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.

@DallasRogers101 @jennacondie is anyone in Australia mapping displacement of low income households? https://t.co/1qDpiIsaSc

— #WeLiveHere2017 (@WeLiveHere2017) November 17, 2017

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.

Joining the dots on affordability

This week is Budget Week for New South Wales. There's still time for the Berejiklian Government to announce the forgotten part of their housing affordability package - the one that tackles Sydney's high rents. So far they've covered tweaking taxes and grants in favour of first home buyers over investors, and fast-tracking supply. But they've left off any policy that would directly affect the rent.

As we've noted before, the shift of incentives from investors to first home buyers is designed to have the strongest impact in the market for newly built properties. We've also previously noted that while the majority of investors do not purchase newly built properties, there has been a significant increase in investor driven demand lately for off-the-plan units. It is worth considering how this change will impact demand for new dwellings over the next few years.

Understanding your standard first home buyer is no easy task. We can go back to the ABS Feature Article from 2012, First Home Buyers in Australia, which tells us that just prior to the height of Australia's post-GFC first home buyer boom there were about 430,000 of them over the three years to 2010. Driven by stamp duty concessions and the Rudd Government's First Home Owner Boost that put either $14,000 and $21,000 into their hands depending on whether they bought an established or new home, slightly less than one-fifth of them bought a newly built property during that time. In the three years prior to that, when the grants were not quite so generous, there were around 320,00 of them with less than one-tenth buying off-the-plan.

This tells us that first home buyers do seem to respond to stamp duty concessions and direct grants, but just like their investor counterparts they are much more inclined to buy established properties than newly built ones. Of course, this is based on how they behaved in the bad old days when property prices were merely exorbitant, but the latest Digital Finance Analytics' Property Imperative Survey suggests these numbers remain in the ballpark - they've identified 330,000 first time buyers in their March report, noting that 80% are buying or intending to buy an established dwelling. But we must note here that an increasing proportion of these first timers identified by Digital Finance Analytics are investors, so they are buying another person's home rather than their own.

Now that prices are scandalous, it remains to be seen if anything much will change after the tweaking of stamp duties and grants. It is possible that 100% of Sydney's first time buyers will rush to the new apartment market to see what they can afford, since the houses they'd evidently prefer to buy are still likely to cost too much. But it's just as likely many will continue to rent the homes they want (or can afford) to live in. Either way, the removal of incentives for investors to buy off-the-plan is likely to see them withdraw from the new apartment market, and this wont be completely offset by any increased demand from first home buyers. Construction activity may well start to fall away in response. If that happens, no amount of rezoning to fast-track supply will save us from the plague of rising rents - assuming it ever could.

This brings us back to the forgotten part of the NSW Government's housing affordability package. Given the recent Federal Budget foreshadows a new Affordable Housing and Homelessness Agreement requiring the states to consider affordable housing targets, along with an Affordable Housing Finance and Investment Corporation that will provide a funding mechanism for the supply of new sub-market dwellings, the Berejiklian Government would do well to adopt planning and zoning reforms along similar lines to those announced by the NSW Opposition a couple of weeks ago. In the face of their own affordability package that might otherwise reduce demand for their services, this could be just the tonic our developers will need - to say nothing of our neighbourhoods and communities who are already crying out for some downward pressure on rents.

NSW Opposition's affordability pledge

NSW Labor announced a housing affordability package over the weekend. It's worth a look.

As reported in the SMH, the Oz, and ABC Online, the headline is that under a NSW Labor Government 25% of government owned land that is earmarked for residential development would be set aside for Affordable Housing. Additionally, 15% of new dwellings or floor space on "privately developed" land would be designated as Affordable Housing, "available for rental or sale to low- to moderate-income households."

As reported in the SMH and ABC Online, with comments attributed to NSW Planning Minister Anthony Roberts, the plan lacks detail. It is unclear just what is meant by "Affordable Housing", although the term does have a meaning in modern housing policy parlance. It generally refers to rental housing that is let at around 80% of the going market rate, and it is usually managed by a registered Community Housing landlord. It is not clear how Affordable Housing "for sale" would be determined, though we note the policy states Labor would "work closely with industry experts, including Community Housing Providers, to formulate the rules around this policy". That's good, but they could include tenants and prospective home buyers in that list of experts as well.

For his part, Minister Roberts says the plan is "totally flawed", and that the NSW Government has already created affordable housing. In comments to the ABC, he is reported to have said:

We are doing it incredibly successfully without destroying the value of peoples' properties, without actually going into the marketplace and providing a level of Government intervention that is no good for anyone.

Presumably he was referring to the Social and Affordable Housing Fund, under which the construction of 2,200 new properties was announced in early March. He might also be referring to the Communities Plus initiative, under which land owned by the Land and Housing Corporation - that's the public housing landlord in New South Wales - is to be "recycled". For the uninitiated, that means knocking down established communities in places like Redfern, Waterloo, Macquarie Park, Telopea and Riverwood, and replacing them with new, higher density neighbourhoods that will include both Social and Affordable Housing. But they'll include more dwellings for sale into the private market than anything else, because that's how this "recycling" model gets funded.

Ignoring the significant upheaval this causes tenants and residents within those communities, Minister Roberts might be right - that is one way to deliver Affordable Housing in parts of Sydney without destroying the city's property values. In fact, it seems designed to encourage further growth in the value of property, while carving out small tracts of affordability for a lucky few. To be clear, that is affordability relative to our extremely unaffordable housing market, as opposed to affordability by any real objective measure. That's good for property owners, but on its own it's not so good for tenants and would be home-buyers struggling to find something they can afford in the places they'd like to live. And it's really not good for the public housing tenants who value their properties in an entirely different way - by making homes and neighourhoods in the communities that are about to be destroyed.

In any event, the scale of Sydney's affordable housing crisis is such that a few thousand extra dwellings here and there won't really put much of a dent in it, even if we do rent some of them out a little more cheaply than the rest. What is needed is a clear and meaningful target for affordable housing to be included in new residential developments right across the city, if not across the state. We need a sustained effort to get more and more of it built with every new development that gets off the ground. On this note we'll give the NSW Labor policy a big thumbs up.

We'll be surprised and disappointed if the NSW Government comes out with a substantially different policy when it announces its own housing affordability package, as it has promised to do in the coming State Budget. Given the recent Federal Budget's focus on delivering Affordable Housing through the proposed National Housing Finance and Investment Scheme, and the reference to aggregate supply targets (including targets for social and affordable housing), residential land planning and zoning reforms, and inclusionary zoning arrangements in the proposed National Housing and Homelessness Agreement, the only real difference we're hoping to see in the Government's plan is a little more attention to detail.

Time will tell.

IPART review of social housing rents, etc

As part of the Future Directions for Social Housing strategy, former NSW Premier Mike Baird tasked the Independent Pricing and Regulatory Tribunal (IPART) with a review of social and affordable housing rent models. Earlier in the week IPART released its draft report, along with a number of draft recommendations and a call for further comments by early May 2017.

Now, it's important to keep in mind that this is merely a draft of the report, and even when finalised it will simply be making recommendations to Government... and who knows how all that will eventually play out? But there are four significant proposals in there that are likely to shape the development of social housing policy and practice in New South Wales.

1. Income related rents are the go, but tenants should pay more
First, there's the recommendation that social housing rents should continue to be calculated as a percentage of a tenant's income, rather than set against market rents or calculated in some other way. IPART found that housing affordability is declining across the board, as both house prices and private market rents are rising faster than incomes. In order to ensure affordability is protected within social housing it recommends its rents stay linked to tenants' incomes.

From IPART's draft report, page 14

IPART found no strong link between income-related rents and work disincentives for tenants, noting that a range of other factors contribute to tenants' abilities and incentives to take on paid work. It recommends continuing to set rents based on a 25%-30% scale, so that tenants on higher incomes pay proportionally more of their income as rent. This may also mean retaining the problem of higher effective marginal tax rates for income earners in social housing, as the scale does not increase progressively. Rather than a higher income earner's rent being based on 25% on the first chunk of their income, sliding up to 30% as each threshold is passed until reaching the market cap, the proportion is simply adjusted to reflect the rate payable at the relevant level of income. IPART hasn't specifically weighed in on this issue, and its modelling suggests members haven't turned their minds to it, but this is where any real work disincentive is currently built into social housing rents. It's not the most significant work disincentive for social housing tenants, though, and IPART's draft report does have a bit to say on policies around tenants' eligibility and renewal of tenancies with this in mind. We'll come to that in a moment.

Still on rents, though, and the draft report recommends some types of income that are currently excluded from rent calculations, or are calculated at a lower rate, should be included and/or brought up to the 25%-30% rate. This would bring a larger proportion of a tenant's Family Tax Benefit payments into their rent calculations, as well as previously untapped income such as the Pension Supplement. For some tenants rents would go up by around $8-$12 per week - netting social housing landlords an estimated $40million p.a. - and the draft report recommends limiting these increases to no more than $10 per week in any given year.

2. Back to the future on eligibility and reviewable fixed-term tenancies
The second significant thing is a draft recommendation to stop using fixed term tenancy agreements for social housing tenancies - that is, we should go back to using "continuous leases" and periodically review tenants' needs rather than their eligibility for assistance. The use of fixed term tenancy agreements that trigger reviews of tenants' eligibility is where the real work disincentive exist within our social housing system, as tenants who move into a higher income bracket are not only faced with increasing rents and higher effective marginal tax rates, they could actually lose their home if they earn too much.

IPART's draft recommendation includes "continuous leases to be reviewed at least every three years to assess whether the dwelling continues to be suitable for the tenant's needs and characteristics". While this leaves some wriggle room as to what exactly would happen if a review came back suggesting that a dwelling is no longer suited to a particular tenants needs, other parts of IPARTs report suggest this would result in relocation rather than eviction. Certainly an increase in a tenant's income would no longer be a factor, as the draft report suggests tenants who earn too much, and do not want to move into the private rental market - even with one-off assistance and a limited right of return - should pay an additional 5% above market rent for the privilege of a tenancy that offers greater security of tenure than can be achieved in the private rental market.

This is an interesting but unwelcome proposition. It plays into similar conversations happening in other parts of the rental housing sector advancing the idea of charging tenants a premium for a more secure tenancy. Of course we'd rather see tenancies made more secure across the board, by making some changes to our renting laws to remove landlords' rights to evict tenants without grounds - and we certainly think that would go much further as an incentive for working tenants to move out of the social housing system. But on this, the notion that social housing tenancies are more secure than the private rental market is a nice idea, but is probably not as true as we'd like it to be. There's a definite trend towards social housing landlords using no-grounds notices of termination when all else is deemed likely to fail. Curiously, IPART's draft report has made no reference to the Residential Tenancies Act in its recommendations or deliberations concerning the transition from fixed terms to continuous leases.

3. Choice based letting
Third on our list is the elusive notion of "matching households to the best housing for their needs", which is code for sorting out this apparent problem of "under-occupancy" within the social housing portfolio. Currently this is addressed through measures such as the vacant bedroom charge, which is applied to any tenant who declines to move to a smaller dwelling when asked to, and limiting additional occupants' rights to be recognised as a tenant if the original tenant goes to prison, or into rehab, or passes on.

IPART's draft report recommends a new approach - making it clear that eligibility for social housing is not tied to any particular dwelling, but to "a dwelling that meets their household's needs". Thus, social housing tenants whose household complements and needs change over time would expect to be moved around to make sure the portfolio can be put to maximum, efficient use. This would be coupled with a choice-based letting system as a way of softening the blow.

Choice based letting has been used in a couple of other places - IPART refers to a Canadian experiment but also notes it has been widely used in parts of Europe - but our experience of it in New South Wales is limited to relocations from Millers Point, Dawes Point and The Rocks. In those instances, some tenants referred to it as the "housing lottery" indicating that it can indeed be seen as something other than an exercise in agency and choice, particularly for those who apply for available properties and miss out.

Nevertheless, IPART's draft report provides quite a bit of detail about how a choice based letting system might work, and we'll spend some time looking over it. Significantly, it suggests tenants awaiting a transfer should be given priority over people on the waiting list, which would be a fair departure from the status quo. Presumably that would apply to tenants who have initiated a transfer as much as those who have been approached to relocate, provided the tenant's "eligibility" review has determined that their housing needs have changed, but this has not been made clear.

What's also not clear is how tenants who have been approached to relocate but decline to participate in the choice based letting scheme would be treated. Here again IPART has made no reference to the Residential Tenancies Act and gives us no indication of how tenancies will end - whether in the case of a tenant who doesn't comply with a request to move, or one who does.

4. Social housing isn't going to pay for itself
Last but not least is IPART's draft recommendation that the New South Wales Government implement a sustainable funding model for social housing providers, noting a current shortfall of close to $1billion. The draft suggests this should be paid to housing providers as an explicit subsidy, rather than an implicit subsidy as is currently the case. This is incredibly significant in the context of a national discussion in which the value of the National Affordable Housing Agreement is being called into question.

From IPART's draft report, page 34

The draft report also calls for the development and publication of a Social Housing Strategy, to be updated annually, outlining how, where and why new dwellings are to be added to the portfolio. It makes a further push for the management of social housing to be handled by community housing landlords, suggesting the role for government is to oversee construction of dwellings and set the policies under which social housing should be managed.

Interestingly, IPART's draft report suggests that the New South Wales Government should steer away from affordable housing programs, focusing on using its available resources to assist those with the greatest need instead. Given discussions at the national level around the development of an Affordable Housing Bond Aggregator, and the potential for Inclusionary Zoning policies to be introduced through a range of planning reforms, it may soon be possible for community housing landlords to pursue growth of their affordable housing portfolios without the direct involvement of a NSW State Government program. In any case, we're inclined to agree that if faced with a choice between growing affordable housing or social housing portfolios, it's social housing that should get the nod.

***

IPART is calling for written responses to its draft report by 12 May 2017. They will hold a public hearing in Dubbo on 2 May 2017, and another in Sydney on 9 May 2017. For more information and details on how to contribute your own feedback, visit their website at this link here.

Federal Budget Watch - priming the pumps

There have been a few developments since we last looked in on expectations for housing affordability measures in the coming Federal Budget. For instance there's the establishment of an affordable housing taskforce to come up with a UK style affordable housing bond aggregator that will suit local conditions, as well as intensifying speculation that first home buyers could be allowed to raid their superannuation funds in order to come up with a deposit before applying for a loan. In his address to the Australian Housing and Urban Research Institute yesterday, Treasurer Scott Morrison all but confirmed he will pursue these policies, which he believes will deliver housing affordability while ensuring house prices continue to soar.

It was an interesting speech, full of all the usual stuff about supply not keeping up with demand. It made a point of noting the majority of investors in the private rental market are small time speculators, holding only a single rental property with a low yield while hoping it will rise in value and deliver a solid capital gain. It suggested that any change to negative gearing would come at a cost to renters (although it didn't go into any detail about what that might be). And it had yet another go at the National Affordable Housing Agreement, suggesting its $1.3billion-ish annual spend is not producing the right outcomes because the effects of unaffordable housing are still being felt by low-income households.

What it didn't do was seriously consider the key drivers of unaffordability in our housing system. It steered clear of the capital gains tax exemptions that encourage home-owners to shovel excess income into their housing rather than other, higher taxed investments. It made no reference to the impact that small-time investors who trade in the same housing market - buying and selling mostly established dwellings - are having on the shape of the private rental market. It didn't even come close to considering what's recently been described as the financialisation of housing - the notion that a dwelling is is not a basic necessity but a means of accumulating wealth - is what's driving up the cost.

Or rather, it didn't consider these things to be a problem. In fact, in focusing on new ways to entice private investment into residential property - through the development of an affordable housing bond aggregator on the one hand, and providing incentives to stimulate home-ownership on the other - it goes so far as to suggest that further financialisation of housing will be the solution.

It's easy enough to see how allowing first home-buyers to dip into their superannuation will put upward pressure on prices. The more people have to spend, and the more competition there is in the market, the higher they'll be able to go. Without curbing existing tax breaks investors will continue to ride on the coat-tails of owner-occupiers, trading in the same market and pushing prices even higher. No doubt this will be to every buyer's satisfaction, once they become an owner, but for those who remain unable to buy despite their (potentially) increased access to debt it will simply exacerbate all the existing problems of relying on rental housing as the only long-term option.

Presumably this is where the bond aggregator and the development of new affordable housing portfolios comes in. According to the Treasurer in his speech yesterday, "the bond aggregator would issue bonds to the market, and on-lend these funds to community housing providers - allowing them to access cheaper and longer term finance". He also said "the goal is for affordable housing to be conceived not so much as a real estate investment, but a longer term fixed interest investment that can comfortably sit within institutional investment portfolios".

Perhaps the Treasurer has missed a point here. While financiers may be able to distinguish between affordable housing and real estate investment, community housing providers will not. They'll be buying, selling and renting into the same rising markets as everybody else. And while ever land values and housing costs continue to rise, so too will the need for "cheaper and longer term finance" for those who would deliver affordable housing to those markets. Community housing landlords may be accustomed to pushing against strong headwinds, but to date they've not had the full weight of Australia's affordable rental housing policies foisted upon them as they do. If we are to expect them to succeed, we may have to offer them more than just cheap debt. Taking some of the heat out of Australia's housing markets might also have to be on the table, and this means reforming negative gearing and capital gains tax concessions.

There's a final point to be made following the Treasurer's remarks yesterday. He concluded, correctly, that "there are no single solutions and the payback is achieved in some cases over a generation - not an electoral or budget cycle". With this in mind, let's acknowledge that whatever measures are proposed on budget night next month will be small consolation to many of the growing number of Australians who currently rent their home. Affordability is one thing, but knowing you can be evicted without a good reason is something else entirely. It's well beyond time to bring our renting laws up to scratch.

News from down the Hume...

The Victorian Government has shown plenty of good form of late, kicking goals by announcing a suite of new housing policies: funds for social housing, new supply, first home buyer grant boosts, stamp duty exemptions, shared-equity schemes, a vacant property tax and long fixed term tenancies! Ticking all the boxes, right? Could this be the game changer Victorians have been waiting for, and should New South Wales promptly follow suit? Or is it yet another case of a government dropping the ball on housing?

Let's take a look.

Reform, growth and better outcomes for social housing
Announced late in February, this includes the establishment of a $1billion Social Housing Growth Fund as part of a collaboration amongst "government, the private and philanthropic sectors", an additional loan scheme to give community housing landlords access to cheaper finance, the transfer of some 4000 properties from public housing to community housing management, and a commitment to push the federal government not to abandon the National Affordable Housing Agreement.

What does this mean?
There has been a long and steady push across Australia, over many years, to move away from Government owned and managed social housing - or what many of us might once have called "public housing" - and place it in the hands of the non-government sector. This is reflected in the National Affordable Housing Agreement and the relatively recent establishment of a National Regulatory Scheme for Community Housing. It explains the continued rise of the Community Housing sector.

Governments are spending less and less on the construction of new public housing, and hoping more and more that the non-government sector will partner with private interests to build and manage it for them. As these partnerships develop, large swathes of our governments' existing public housing stock is being transferred over to Community Housing landlords to manage, and in some cases title has also been transferred. In other places, public housing is being demolished and rebuilt, with Community Housing landlords and private developers dividing up the new stock between them.

Should NSW do this?
Growing the social housing sector by supporting and funding Community Housing landlords makes sense, but it shouldn't come at the expense of our existing public housing system. In New South Wales the horse has already started to bolt. We've got a long history of transferring properties from the Land and Housing Corporation to a range of registered Community Housing landlords, and we have plans to transfer about another 18,000 towards the end of this year. We've established our own Social and Affordable Housing Fund, which looks remarkably similar to the Victorian model, that is intended to give Community Housing landlords access to a guaranteed revenue stream if they build and manage new social housing dwellings without the help of government.

We don't as yet have a guaranteed low-interest lending facility for Community Housing landlords, and our Government has made no public commitment to the National Affordable Housing Agreement. Given the direction our social housing policies are taking, these would both be good things for New South Wales to do.

Unlocking new communities and affordable housing
Also a late February announcement, this is essentially a rezoning package that will allow new residential housing to be built across the outer suburbs of Melbourne. It comes with a commitment to build 100 new social housing dwellings, and makes reference to experimentation with "inclusionary housing".

What does this mean?
New supply means more affordable housing, right? Well, taken on its own that's not always the case. This was explained quite well in a recent article by Peter Phibbs and Nicole Gurran in The Conversation - well worth a look if you haven't already seen it. Essentially, housing markets are not like other markets, where supply and demand are said to impact upon one another in predictable ways. With housing, bringing new supply online tends to coincide with rising prices, because it is rising prices that stimulates demand.

The Victorian Government's mention of inclusionary housing here is interesting. We expect this would require developers to set aside a proportion of any newly constructed housing for Community Housing landlords to manage as affordable rental housing. This usually means setting rents at around 80% of market value, and renting to low income workers. It's not clear what the impact of rezoning and redevelopment would be on rents in affected locations, though, but we can expect them to go up because affordability will be set against the value of newly developed, higher value homes. Thus "affordable housing" rents might actually not be as as affordable as we'd have hoped.

Should NSW do this?
Any discussion about housing affordability should place a strong focus on increasing supply - this is especially especially true for policies at state and local government levels. This is reflected in a number of rezoning and urban renewal discussions around Sydney, such as for Arncliffe and surrounds, the Central to Eveliegh corridor, Sydenham to Bankstown, the Bays Precinct, Riverwood and Telopea, to name a few. As these discussions progress, it is clear that urban renewal and redevelopment must be approached with sensitivity to established communities who stand to lose as much as others might gain. It is also clear that good urban renewal requires well developed transport and infrastructure policies as well as a focus on the design and delivery of good housing options.

The Greater Sydney Commission is toying with small targets for inclusionary zoning as part of its grand new plan. This is great, but it needs to go further. Indeed, our Government could implement an inclusionary zoning scheme that covers even greater parts of the state, so that more affordable housing becomes a feature of every new residential development where it's needed. But, as we've cautioned above, this shouldn't be seen as a solution in isolation because affordability will be set against the value of newly developed homes. Renewal and redevelopment implies bringing higher-value stock into the neighbourhood, and this puts upward pressure on final costs to the householder. It is also not in renters' best interests if new developments are driven by investors' appetite for capital gains, rather than stable housing for families and others who need it.

First home buyer grant doubled for regional Victoria
Announced in early March, the Victorian first home owner grant - or first home builder grant as it might better be known - will double from $10,000 to $20,000 for regional properties from July 1st.

What does this mean?
The grant is only available for first home buyers who purchase or build new homes valued at $750,000 or less. In theory it encourages first time buyers to increase supply by commissioning new construction or buying off the plan - but homes at below $750,000 are getting harder and harder to find. Doubling the grant for "regional" buyer/builders is likely to stimulate construction and development outside of Victoria's metropolitan centres, and give first timers an even shot against investors who are happy to borrow up big and negatively gear. But it's not likely to have much impact in areas where highly paid jobs are hard to come by. It might just end up pushing up prices in parts of the state where housing is still nominally affordable, as the availability of grants are factored into land values and developer costs.

Should NSW do this?
NSW already limits first home owner grants to newly built dwellings, but it doesn't double the grant for regional buyers. The newly announced Victorian scheme does bear some resemblance to the old Regional Relocation Home Buyers Grant, which could be applied to any home 100 kilometres or more from any metropolitan centre in NSW purchased for less than $600,000 (or land under $450,000). It was later amended to apply to homes 50 kilometres or more from a metropolitan centre, to give it a bit of a kick-along. The scheme ended late in 2014 amidst claims that demand for it was weak. Reports at the time confirm this, citing then Deputy Premier Andrew Stonor:

The Regional Relocation Homebuyers Grant - which has no direct tie to employment - has not been as successful as the Skilled Regional Relocation Incentive in stimulating growth and employment in regional NSW and therefore it will not be continued.

So, any inflationary concerns of a first home builders grants aside, it appears attracting first home builders to regional areas is not the best way to develop regional economies. You've got to put jobs there first. Even so, if first home buyer/builders aren't so easily lured from the city to take up an option in the regions, the impact on rental markets in the city will be negligible. On the other hand, rental markets in the regions could start to falter, as local renters move to owner-occupation while increasing supply and creating new vacancies, and this could prompt regional investors to look to city markets instead. Given the majority of investors buy established dwellings rather than newly built homes, and those who do buy off-the-plan buy properties that are not well suited to the needs of renters, this would compound the affordability problems that are already at play for renters in New South Wales' metropolitan centres.

Stamp duty abolished for first home buyers
Also announced in early March, stamp duties will be abolished for Victorian first home buyers on properties valued at under $600,000. Concessions will apply for properties valued between $600,000 and $750,000. Significantly, this will apply to both newly built and established dwellings, while exemptions for investors purchasing newly built homes will be wound back.

What does this mean?
Stamp duties are levied as a percentage of a property's purchase price, on a sliding scale. In Victoria, properties purchased at between $130,000 and $960,000 attract duties of $2870 plus 6 per cent of the value that exceeds $130,000. Thus, a first home buyer purchasing a property worth $600,000 will save around $15,000. Or, as is more likely, first home buyers looking to buy at around the $600,000 mark will feel like they have an extra $15,000 to spend. Set against an investor who is prepared to borrow up big because they can negatively gear, this could help to level the playing field. But it won't make houses more affordable. It will instead bring first home buyers back into the bidding war, with more money in their pockets. As it wont do anything to stimulate new supply, it is unlikely to create new rental vacancies by removing frustrated home buyers from the rental market. They'll most likely be displacing a household and creating new demand for another property anyway.

Should NSW do this?
First home buyers in New South Wales are already exempt from paying stamp duties on the purchase of newly built homes valued at up to $550,000, and concessions apply for newly built homes valued at between $550,000 and $650,000. Exemptions also apply to land valued at up to $350,000, and concessions for land valued at between $350,00 and $450,000. Stamp duties are payable where a first home buyer purchases an established dwelling.

Theoretically the New South Wales exemptions are preferable to those announced for Victoria, because they act as a direct stimulus for new supply. However, property in New South Wales is no more affordable today than it was when these exemptions were introduced in 2012. Stamp duty exemptions and concessions can not rightly be regarded as a housing affordability measure.

Shared-equity schemes
The Victorian Government will set up a new scheme to purchase up to 400 homes and on-sell a 75% stake in them to first home buyers. The scheme will retain the remaining 25% interest in each property.

What does this mean?
There are a number of variables that need to be considered before this can be properly answered - what, aside from equity, does a 75% stake in property get you? Who covers the costs of ongoing repairs and maintenance? Who receives the gain from any capital improvements? Can the property be placed into the private rental market some time down the track?

There's no doubt these questions and more can be answered. There's also no doubt they'll need to be before the scheme can be properly rolled out, and we look forward to seeing the detail. But questions aside, there's still the matter of whether or not it's a good idea. Some have suggested it will encourage home buyers to take on a more expensive home than they might otherwise have considered - or even have been able to afford! - which could have an inflationary impact. We're inclined to agree, but in a policy environment in which house price reductions are never, ever contemplated a well designed shared equity scheme might be about the best a frustrated home buyer could ask for.

Should NSW do this?
There is no comparable program in New South Wales. As we've suggested, we're not entirely convinced it's the best idea ever, but we'll be keeping an eye on it. Again, if it is to have any beneficial effect on the rental market it would need to be directly linked to the construction of new homes.

Vacant residential property tax
The proposed introduction of a Vancouver style vacant property tax has also been announced. This will be a 1% levy on the "capital improved" value of property in Melbourne's inner and middle rings that sits vacant for more than six months in any year. Of course, exemptions will apply, and it will be up to property owners to self-nominate their liability to pay the tax. Exemptions include properties used as a holiday home, those needed for city-based workers who principally reside elsewhere, deceased estates and homes whose owners are temporarily overseas.

What does this mean?
Put simply, habitable properties in Melbourne's inner suburbs, that are left vacant, will attract a new tax. This will encourage property owners to put their dwellings to more effective use, either by selling them or renting them out. But the exemptions may be too broad, and too easily applied, for the tax to have any real impact. Property owners - especially those who do not live in Australia - might be prepared to try their luck and avoid notifying the authorities that their property qualifies for this new tax. Nevertheless, the introduction of a vacant property tax sends an important message.

Should NSW do this?
There is no similar tax for Sydney, and there ought to be. The ideal solution of a broad based land tax that would apply regardless of whether a property is vacant remains our hope, but a vacant property tax is a good step along the way.

Long fixed term tenancies
... and now for our favourite announcement: long term security for tenants and landlords. The Victorian Residential Tenancies Act will be amended so that fixed term tenancy agreements of five years or more are no longer excluded from its coverage, and a new standard long term tenancy agreement will be developed. A website will be developed to help landlords and tenants who want a long term tenancy agreement to find each other.

What does this mean?
Long fixed term tenancies of five years or more are rare throughout Australia, and Victorian tenancies are no exception. The Victorian law reform process seems to have concluded that bringing five year agreements under their renting laws will encourage their use - but actually the opposite is more likely to be true. Not being bound by the provisions of a Residential Tenancies Act means that parties are free to contract with one another as they see fit, and can enter into agreements that are suited to their specific needs. When forming a long term legal relationship as a landlord and tenant, being able to determine who takes responsibility for what, and how proprietary interests are to be shared between the parties without regard to a particular regulatory scheme, should encourage people to negotiate and take on such agreements in much higher numbers. But it has not, which tells us that it is not the prevailing regulatory environment that is hindering the establishment of long fixed term tenancies.

None-the-less, the idea that long fixed term tenancies need to be encouraged by producing "standard long term agreements" that alter the established, legislated rights of tenants and landlords - such as we have recently been discussing in New South Wales - persists. The Victorian announcement suggests a new standard form long term tenancy agreement will be developed in consultation with stakeholders - much as we have been discussing in New South Wales. From what we are hearing, one of the first suggestions to find its way into these discussions is to shift the repairs and maintenance obligations from landlords to tenants - much as we have been discussing here in New South Wales.

Should NSW do this?
Encouraging the use of longer fixed term tenancies is certainly a worthy discussion, but as we've seen it is not really the regulatory environment that will drive them. Our Residential Tenancies Act already covers long fixed term tenancy agreements, and it already allows certain mandatory terms of a tenancy agreement to be waived for fixed term agreements of 20 years or more. But, just like in Victoria, long fixed term tenancies are very hard to come by in New South Wales. Trying to encourage their use by legislating reduced rights and increased costs for tenants who would like one is not something we're comfortable with.

On the other hand, we know that stability and security are critical issues for tenants, so we can understand the appeal of an announcement like this. When people hear "long term tenancies" they probably think "protection against unfair eviction". That's something we'd like to see built into our renting laws, too, and it is possible that long fixed term tenancy agreements could deliver this. But to do that in any kind of meaningful way long fixed terms would need to become the standard, rather than something that could be offered by landlords on a take-it-or-leave it basis. This does not appear to be what's getting traction in Victoria, and it is not what's being considered in New South Wales.

The website is an interesting idea though, and it could be worth setting something up along similar lines and using it to inform any decision about introducing a new standard long fixed term agreement in New South Wales. It would give a clear indication of the demand for long fixed term tenancies, and could also give us some insight into the kinds of terms on which landlords would be willing to offer them. Moreover, it could tell us whether tenants would genuinely accept those terms. For this to be useful, landlords would need to share information and data relevant to the terms they are prepared to offer. For instance, if a long term tenancy is to be offered on the condition that a tenant takes on repairs and maintenance obligations, details of the condition of the property would need to be disclosed. This would include, for instance, an independent assessment of projected repairs and maintenance costs over the course of the agreement.