Factchecking the fourth estate

Media reporting of housing issues is a mixed bag. It certainly has gotten much better over time, and journalists and readers are becoming more educated. Over the last week there have been three instances we thought it was worth picking up on.

It was incredibly disappointing that in the same week that Choice, National Shelter and National Association of Tenants Organisations launched 'Disrupted' with excellent coverage across the nation, both of Sydney's main papers had a crack at our public housing tenants. And then the ABC dropped a clanger on Sunday.

The Sydney Morning Herald

Nine's Sydney Morning Herald

First on Tuesday, the Sydney Morning Herald ran with a story based on an Audit Office report which amongst many other elements found that the repairs bill in public housing had risen to $413million in the 2017-18 year.

The story opens with the line; "Cleaning up rubbish when tenants move out and maintaining ageing properties are pushing up social housing bills, with new figures showing expenses have soared 50 per cent in four years."

Does the claim stack up?

First the costs. They certainly have increased over the last few years. It is noticeable that since the current maintenance contracts started in April 2016 the costs have ballooned.

The Audit Office are pretty sharp, so they noticed the increase in costs, asked the Land and Housing Corporation for an explanation.From the report

LAHC advise the following main reasons for higher expenses:
• more calls from tenants requesting maintenance as they now have direct access to the contractors’ call centres
• reduced call response time
• regular pop-up events with contractors on hand at social housing sites
• age of residential portfolio and the increasing costs to maintain
• higher costs due to damage and rubbish removal from properties when they become vacant.

So LAHC advised four other reasons for increased expenses before anything related to tenants potentially acting to create repairs costs. All four also have an element which can reasonably be argued to have increased costs since the contracts started. The most interesting is the apparent latent demand from tenants needing repairs done - the claim from LAHC is that they were not previously calling, or perhaps their calls not being picked up. This suggests that the maintenance bill should actually have been much higher in previous years, and what we see now is in part a catch up. This makes a lot of sense given NSW's infamous and ongoing shortfall in maintenance budget.

The higher costs due to damage and rubbish removal on the other hand doesn't necessarily follow the same path - is LAHC claiming tenants are causing more damage and leaving behind more rubbish? It appears that the Audit Office accepted these claims without any evidence, or at least the evidence is not included in the report.

It would have been worth asking for instance, if the damage and rubbish removal costs are before or after seeking the tenants contribution. These are ordinarily costs that the tenants' would be held liable for and money sought to be repaid. It is pretty important to check whether this is the remainder, or if in fact it is the gross amount - before tenants have paid any money back.

The Herald journalist also accepted the claim without question, and in our opinion unacceptably, promoted this last point to be the leading cause of the increase.

This claim does not stack up. It vilifies public housing tenants and the Sydney Morning Herald needs to take responsibility for its role in boosting a spurious claim and taking an unfair and unevidenced swing at public housing tenants instead of scrutinising the claim itself.

The Daily Telegraph
Perhaps vexed by the Herald stealing its traditional patch of giving oxygen to baseless claims about repairs, the Telegraph stole back attention on Friday with this headline.

Murdoch's Daily Telegraph

The article is really talking about a trial in 20  units  which will run over the next three years. Check out what we know about that here.

What we're more interested in is the headline and opening paragraphs. This is entirely misleading. First, applicants will not have to 'get a job'. It's not even a possible outcome of the trial. Even the most feverish anti-tenant commentators acknowledge there are many people for whom that's just not appropriate.

Second, no public housing homes are funded by tax-payers. As we've said before: not one dollar of money raised from taxpayers is paid to public housing tenants or otherwise credited to their rent accounts. Not one dollar. Tenants pay money to FACS, not the other way around.

This claim was not only untrue, but also needlessly mean and irresponsible. It has caused immense distress amongst public housing tenants who are now afraid that though they may be old, living with disabilities or caring full time for dependants or children they will be forced to either find employment or be forced from their home

The ABC does it better

Oh Aunty, why are you in this list? Okay, they didn't engage in tenant-bashing, but they did pen this article on renting reform in Queensland (which sounds like it is going very well indeed - NSW is really starting to look left behind). 

But the article originally included this tidbit.
 "Last year, more Australians bought their seventh home than those who bought their first." Sounds legit - we all know that buying property is easy if you lay off the avocado. But...

The claim really doesn't stack up. Over the last year 115000 bought their first property to live in, according to the ABS (http://www.abs.gov.au/.../Detai.../5609.0September%202018...). And in total the ATO reckons there were 20,000 people who owned 6 or more properties in 2015-16 (the latest data available. Check it here: https://www.ato.gov.au/.../taxation-statistics-2015-16/)

While the property market is changing and we are seeing more landlords consolidating the number of properties they own is changing, it is very unlikely to have changed so dramatically in just two years. The number of Australian residents who are landlord (or more specifically, are disclosing rental income) has grown from 7.3% of the population in 2005-06 to 8.7% in 2015-16. People receiving rental income from 6 or more properties is almost literally still the domain of the 1% - from 0.06% of the population in 2005-06 to 0.08% in 2015-16.

What may have happened is that someone looked at the 20,000 people who owned 6 or more properties and added all their properties up - collectively, they own more than 120,000 properties. This is higher than the number of people who bought their first property - but this is not the claim that was made, and doesn't tell us much anyway since they didn't all buy their properties in just the last year.


To their credit the ABC corrected the line to show the source of their information:
 

The Minister has not yet disclosed where he got his figures from, or whether they might be mistaken. Why would the minister want to draw attention to this? And why are we, with a clear interest in better renting laws calling attention to it?

It is for two reasons. First, because it is an attempt to set up greedy corporate landlords as a bogeyman to avoid dealing with the trickier issue that in Australia we have created millions of people as small-holding landlords who only have one or two properties. In many cases quite unwillingly, these landlords are being used to justify not implementing the necessary reforms for a fair renting system. It is much easier to set up a bogeyman - but in doing so we may end up implementing policy proposals which avoid dealing with the issues. One good example of this is a semi-frequent call to limit negative gearing to one property per person. 

It also furthers the cultural idea that buying property is a good thing to do. Pushing back on that idea may be quite subversive in property-obsessed Australia, but it is necessary to get buying property back to it being at least a neutral endeavour.

By the way, people don't buy homes. They buy property. People make homes by living in them. Fact check that!

Update: The claim that more people bought their 7th property than their first has also been comprehensively factchecked by both The Conversation and The New Daily and found to be lacking by them as well. The ABC has deleted the reference entirely from the original article.

Tell us what you really think, Belle

Thanks, Belle Property. This charming little reminder of how some real estate agents really view us tenants was dropped in our inbox this morning.

Clearly it’s supposed to be funny. Can you imagine your landlord finding it in their letter box and having a little chortle? How hilarious that it is so easy to remove someone from their home, like changing clothes. Perhaps they even hoped for some controversy! There’s no such thing as bad publicity, right?

Hey landlords, don’t like your tenants anymore? Did they ask for repairs, or question a rent increase? Maybe you just don’t like they way they look. No worries, just get your agent to give ‘em the flick. As non-property owners they’re vermin, barely human, certainly not worthy of a home. Its rare that such a dismissive attitude is so clearly drawn out.

What’s most frustrating about these kinds of attitudes prevailing in real estate agencies is that avoiding them is easier said than done. When you’re looking down another 30 applications, eviction day is coming up fast and at least this place doesn’t have obvious mould problems, knowing your property manager thinks your vermin doesn’t rate as highly.

The thing is though property managers need tenants. Sales agents don’t, except to use our furniture to make a place look homely. But a property manager without tenants is like a mouse without cheese, scrounging around looking for some other way to make a living. We might be vermin to you, but we pay your wages.

UPDATE 20/11/2016. Belle Property has responded to this post with the following message.

"We apologise if any offense was taken as a result of these Property Management flyers, it was never the intention. We in no way believe tenants are comparable to vermin and we apologise that it has been interpreted in this way. It was intended as a fun light-hearted message, which evidently wasn’t achieved. We are happy to discuss this further offline if there are any further queries. We will cease to use this marketing material effective immediately."

Also posted as a Facebook note here on our Facebook page. Like us for all the latest from the TU!

Apartment residents fined, locked out of their homes: reform needed.

In the first of a series of guest contributions, the Brown Couch welcomes guest contributor Tom McDonald. Tom is a Tenants’ Advocate at the Inner Sydney Tenants Advice & Advocacy Service at the Redfern Legal Centre.

If you live in NSW, it is becoming more and more likely that you will live in an apartment, flat or unit rather than a traditional freestanding house. It is also becoming more likely, therefore, that you will live in a place where strata laws apply.

The most noteworthy thing to say about strata laws is that they allow for each apartment building to have an owners corporation: a body run by a small number of elected individuals tasked with the job of setting and enforcing the building rules. Owners corporations have been called the ‘fourth-tier of government’. Its an apt label.

Owners corporations and their rules are generally a good thing for residents. Sensible rules help to promote harmonious (or at least functional) buildings. But not all rules are sensible. In their haste placate a particular group of residents or tackle a problem they believe is occurring in the building, owners corporations will occasionally introduce rules that are unreasonably harsh or oppressive on one or more (or all) building residents.

One problem currently giving headaches to a number of owners corporations and building managers is overcrowding in their apartment buildings. For the media attention that overcrowding attracts, we don’t know much about the extent of the problem, much less the best way to tackle it.

The owners corporation of the sprawling Regis Towers complex in Sydney’s CBD (reportedly the largest strata plan in the country) is now taking to locking its own residents out under the banner of tackling overcrowding and illegal activity that it says is rife in the building.

Tenants are having their electronic swipe cards (ie. their house keys) cancelled without warning over matters as trivial as lending the card to a visitor so they can go out to buy a carton of milk. For tenants to get back into the building they have to pay a swipe card ‘reactivation fee’ of at least $150. Some tenants have been locked out for days on end and it is understood that others have had to pay accumulated penalties in the thousands of dollars just to get back in to their homes. Many, if not most, of these tenants have nothing to do with overcrowding or ‘illegal activity’.

These kinds of blunt measures, while being potentially lucrative for an owners corporation’s coffers, are probably unlawful in much the same way as it is unlawful for a debt collector to stand at your front door and block you from entering your home until you pay them the money they say you owe.

You can bet that other owners corporations with similar problems are looking at what is happening at Regis Towers with great interest. Many buildings, after all, now have electronic key systems that allow for the locking out of residents at the stroke of a keyboard. Locking people out has never been easier.

Perhaps the most unfortunate thing for Regis Towers residents is that, so far, the law has been of little assistance. NSW Fair Trading has said, for example, that current legislation does not empower it to take action in these types of cases. Residents have the option of either pay the fee or pay to kick-off a potentially expensive and lengthy legal process. When you’re locked out of your home, it’s not much of a choice.

Compare this to a situation where a landlord unlawfully locks out a tenant. In these cases, there are very clear legal provisions that allow tenants to seek reasonably quick, affordable and effective redress in the NSW Civil & Administrative Tribunal, with offending landlords facing fines of up to $22,000. The law correctly identifies unlawful lockouts by landlords as a cardinal ‘no-no’ and there is no reason why it shouldn’t do the same regarding lockouts by owners corporations and building managers.

With the government currently reviewing the State’s strata laws and a draft bill expected sometime this year, now is an opportune time to make this reform. 

It is time for a provision that protects all apartment residents (both tenants and owners) against unreasonable interference with access to their homes by the owners’ corporations and building managers. This is not about creating new rights, but improving accessibility to a basic right that has long been recognised in the law.

This is not to say that owners corporations shouldn’t be able to take measures to address overcrowding in their buildings, just that those measures should not extend to preventing innocent tenants from accessing their homes.

This article first appeared in the April edition of Tenant News - the TU's regular newsletter.

The Brown Couch's Budget Reply Speech

It is with regret that the Brown Couch, having applauded the Federal Government's second stimulus package in February, must now issue a strong boo in reply to its Budget.

(Boo!)

The booing is deserved for two reasons.

The first, of course, is the decision to extend the Boost to the First Home Owners Grant until the end of the year (albeit at a reduced amount for the last three of the six months). So first home buyers can continue to pay too much for their housing for the next six months (and, because almost all of them also borrow heavily, they will also be paying too much for the next three decades or so).

I understand the argument that the Boost, as it applies to newly-built dwellings, stimulates employment in the building industry. But that argument doesn't hold in relation to existing dwellings, which is where most of the Boost money goes. (And I think the housing industry lobby agrees. In the pre-Budget speculation about the fate of the Boost, they were implicitly saying: keep the newly-built-dwelling-Boost and, if you must, ditch the existing-dwelling-Boost.)

The Boost, as it applies to existing dwellings, doesn't keep builders and tradies employed. Let's call it for what it is: it's part of Australia's own housing-bubble bailout. This is a bailout of house-price speculators, partly financed by the taxpayer through the FHOG Boost, and partly debt-financed by first home buyers. And for many of the latter, as the recession hits harder and they lose their jobs, their participation in the bailout will end in tears.

The second reason for booing: what the Budget does in relation to pensions and other social security payments – or more accurately, what it does not do. One feels a bit curmudgeonly for begrudging Age Pensioners their increase, but not all of them need it so much as the social security recipients who rent privately do. These folks include Age Pensioners, but also Single Parent Payment recipients, Newstart recipients and others, and their housing costs have recently much more than the housing costs of Age Pensioners who own their homes or who rent in social housing.

The better way to go would have been to increase these citizens' incomes through the Rent Assistance payment. In particular, the Government should have lifted the maximum amount of Rent Assistance a person can be paid, because currently it is capped at amounts that leave some recipients in severe housing stress. This would entail no across-the-board increases, nor any expansion of eligibility, so shouldn't inflate rents generally – instead it would be targeted assistance to people who desperately need it. But no, they'll not be getting it from this Budget.

House prices and 'saving'

The good news about house prices (see yesterday's post) is reported again today, with the usual daft crying and carrying on. I won't go over that again, but one particular bit of reportage has particularly nettled me.

Clancy Yeates in the Herald characterises falls in house prices as 'eroding the wealth households have stashed in bricks and mortar.'

Wealth stashed away in bricks and mortar conjures images of gold bullion in the wall cavities, but it's actually not too bad a description of the strategy pursued by many in the housing market. Let's be clear, though: while there is a degree of literal truth in this description (some households really have bought more bricks and more mortar and built great big houses), the 'stashing of wealth' is figurative. What households have done is spent a lot on housing – they've paid higher prices – and they call this 'wealth' because they think some other household will come along later and pay even more.

Yeates goes on:

The slowing property market is welcome news to first home buyers, but it also lowers the net wealth of property owners because many households put most of their savings into their home.

Okay, I have to draw the line at describing this strategy as 'saving'.

Spending lots of money – that isn't saving.

Borrowing lots of money from the bank to do so – isn't saving.

Paying lots of interest on all that borrowed money – isn't saving.

Boo to Clancy Yeates and everyone else who tries to bestow dignity upon house price speculation by calling it 'saving'.

(Boo!)

Mortgagors and mortgagees

A quick grumble - in today's Herald Jessica Irvine and Phillip Coorey write that:

MORTGAGE holders will be about $1000 a month better off in total next week

Leaving aside the problem of the assumptions underpinning this prediction, the use of the term 'mortgage holders' is wrong.

Irvine and Coorey mean to refer to persons who have borrowed money from banks. These persons are not mortgage holders. They are mortgage givers, or 'mortgagors'. It is the banks who are the mortgage holders, or 'mortgagees'.

A mortgage is an interest in property. It gives its holder certain rights over the property in certain circumstances. A property owner can, so to speak, carve out a mortgage from their own interest in the property, and give the mortgage to another person. Typically they will do so in return for the other person having lent them money.

So:

• mortgagee = lender
• mortgagor = borrower

Boo to Irvine and Coorey, and double boo to their subeditors at the Herald.

(Boo!)