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.

Building to let

The concept of "building-to-let" seems to be gaining some traction as a solution to Australia's housing affordability woes. As the name suggests, building-to-let happens when a developer builds residential dwellings - presumably apartments - with the intention of renting them out rather than selling them off once complete. As circumstances (aka house prices) are forcing many of us to re-imagine the great Australian dream, this is just the kind of blue sky thinking we need.

Imagine...! A landlord who is interested in a relationship with tenants rather than property! Who won't cringe at the thought of picture hooks, curtains, a new light fitting. Who will let you keep a pet, subject to reasonable by-laws. Who won't put the rent up just because everyone else is doing it. Who won't kick you out because they want the place for their kids, or to sell it, or simply for no reason at all.

Just imagine!

Perhaps the reason this would appeal to so many Australian renters is that it is the polar opposite of what our private rental market currently delivers. As we discussed in a recent post, Australia's landlords are

... mostly one-off or small-time investors, "mums and dads" who are more interested in property for its capacity to generate wealth than providing homes for families. They'll hang onto a property for maybe five years or so then sell it, banking the gains or putting them towards their next investment. For the most part, Australian landlords are not interested in building large portfolios, and they don't want to concern themselves with the day-to-day workings of property investment. They tend not to engage with things like renting laws, tribunal procedures, or tenants' rights unless they have to. Many are happy to ignore these aspects of investment altogether, handing them all over to real estate agents who know only too well they won't have anyone looking over their shoulder as long as the rent rolls in and the outgoings stay under control.

Building to let offers a genuine counter to this. At least, it does in theory.

But there's a problem, and it's one of culture. Australia's approach to housing is built on the assumption that you rent when you're young, then you buy a home, and then you buy an investment property. There's been a recent shift in this assumption, at least for some, so that you rent when you're young and then buy an investment property so you might be able to afford a home when you retire.

No doubt the sudden emergence of this build-to-let discussion is an indicator that whatever underpins these assumptions is faltering. That in itself is a very interesting development. But it will take a great deal more to change Australia's values when it comes to renting versus owning your own home for the long term. This is important, because it affects the rules and regulations under which our rental markets operate, and how they might change.

The establishment of "build-to-let" schemes could aide in the evolution of Australia's renting laws, as a new class of landlord emerges with interests that are somewhat less in conflict with tenants' than our millions of "mum and dad" investors' are. On the other hand, pushing against long-established cultural norms may prove all too difficult, or even undesirable, for such landlords. As always, the proof will be in the pudding.

Institutional investment does not mean investment in tenants' interests. For all the good they may do, consider the dearth of support from community housing landlords for a simple proposal to make renting fair: more than eighty organisations from across New South Wales are calling on the Government to end unfair evictions by removing no-grounds notices of termination and expanding the list of reasonable grounds available for landlords to use when a tenancy must be brought to an end - but socially responsible, not-for-profit landlords are notably absent from that list. You might think institutional landlords with a mission to improve outcomes for the households who need it most would be the first to engage with such ideas, but evidently the status quo suits.

So when you read statements from major developers who say things like

I believe, and based on the experience in other parts of the world, institutional grade multi-family housing tends to streamline the process of renting by providing tenants with the stability to live long term in rental property, should they elect to do so, without the risk of the owner selling, greater reaction time to any repairs and maintenance, access to modern properties within sought after locations and security in tenure over the property

Or

Creating a sustainable, affordable housing market in NSW means providing a diverse range of housing options and build to rent could be a viable choice to provide certainty and security of tenure to people who want to rent rather than buy

... without reference to tenancy law reform, it should be taken with a grain of salt. If we can't even get our social housing landlords to commit to improved security of tenure for renters, what hope do we have for the private sector?

Consider comments attributed to Treasurer Dominic Perrottet while discussing the NSW Government's possible support for build-to-let schemes recently, that "finding ways to give renters that security without excessively curtailing the rights of property owners is a fine line to walk". Evidently the build-to-let solution has already surrendered to Australia's established housing culture.

Again, the proof will be in the pudding. We're aware that some developers in Sydney are already building to let - we know this because we sometimes hear from their tenants. What we're hearing are stories of unlawful, non-refundable "pet licenses", and evictions without grounds.

We'd like to see building to let flourish in New South Wales. A genuine market intervention from institutional landlords could be just what many of Australia's long-term renters need. Unfortunately, for the time being at least, it looks like it would be just another sideline for developers.

Economically viable supply

Speaking at a Sydney Alliance assembly on housing affordability last night, the NSW Minister for Planning and Housing, the Hon. Anthony Roberts MP, dismissed targets for affordable housing in new residential developments as a simplistic and unrealistic housing solution. "In reality all these targets do is reduce the supply of affordable rental housing because it makes many developments economically unviable." Instead, he talked up the Government's intention to solve Sydney's housing affordability crisis by rezoning large swathes of the city and fast-tracking new supply.

Inclusionary zoning is like a box of chocolates...?

This is a curious position for a Housing Minister in the Berejiklian "housing-affordability-matters" Government to take, given the overwhelming evidence suggests a single-minded focus on new supply is a simplistic and unrealistic housing solution.

Since the beginning of 2017 - dubbed "the year of the renter" by Domain as there will soon be more renters than homeowners in Sydney - we've discussed the issue of housing affordability and supply many times on the Brown Couch.

In late January we released a Rent Tracker report, which highlighted how rents have gone up even in suburbs where large numbers of properties are being added to the rental market. In February we discussed how Sydney's new housing development is producing the wrong kind of supply, driven by the demands of investors rather than householders and home makers. In April we noted the findings of Anglicare's seventh Rental Affordability Snapshot, showing that rental affordability is as bad as it has ever been and still gets worse every year.

In May the latest Rental Affordability Index was released, confirming what Rent Tracker and the Rental Affordability Snapshot had already suggested about deteriorating rental affordability despite increasing residential development activity. We dug in a little to look at exactly what's going on, exploring how the wrong kind of supply has changed the shape of the rental market. It produces higher rents rather than improving rental affordability.

In June we joined the dots on housing affordability, looking at how the NSW Government's housing affordability package is likely to impact upon the market for supply. We suggested it might be combined with both the NSW Opposition's housing affordability package, which includes targets for affordable housing, and some of the Australian Government's Federal Budget measures, which includes a method for funding new affordable housing, to help keep residential property developers afloat while ensuring at least some new supply is delivered into the affordable rental housing sector.

Also in June we discussed the release of data from the 2016 Census, which shows that the renting population is still growing faster than the population generally, and the stress of high housing costs affects renters far more than it does homeowners.

Something we haven't yet discussed is the Australian Housing and Urban Research Institute's recent report into "Housing supply responsiveness in Australia". This report found that most of the growth in Australia's housing supply has been taking place in the mid-to-high price segments, rather than low price segments, and suggests "there seems to be structural impediments to the trickle-down of new housing supply". It also says that "targeted government intervention might be needed in order to ensure an adequate supply of affordable housing." The report hasn't received a lot of attention other than a quick report in the Guardian when it was released earlier this year. It could do with some more, so we'll take a closer look at it when we can.

In the meantime, let's get back to the Minister's words from last night. "In reality all these targets do is reduce the supply of affordable rental housing because it makes many developments economically unviable."

On the other hand, current developments are causing rental affordability to deteriorate again, and again, and again. So at what point do we stop and wonder - if we still can't afford to live in them, what is the value of an economically viable development after all?

The answer to that question might make more sense to someone who values housing as nothing more than a financial asset, rather than a place to call home.

The wrong kind of supply

When it comes to housing affordability, we have a bit of a mantra here at the Brown Couch: it's not supply and demand, but the type of supply and demand that matters.

Jennifer Duke's recent article in the Sun Herald shines another light on this. Drawing on data provided by Don't Rent Me's Anthony Ziebell, Duke writes:

The vast majority of apartments in NSW are two-bedrooms – with 2298 – followed by 1322 one-bedroom apartments. And in many suburbs, one-bedroom apartments aren’t substantially cheaper than two-bedroom apartments, forcing some tenants to change their wishlist.

Ziebell is a friend of the Brown Couch, and he's run his data by us as well. He points out that more than half of new rental listings across the eastern states of Australia are 1 and 2 bedroom units. In New South Wales it was at 56 per cent the last time he pulled this data, which he obtains by regularly scanning online rental advertisements. This data comes hot on the trail of our own Rent Tracker report, which last week showed how rents have climbed even in parts of Sydney where thousands of new rental bonds have recently been lodged, indicating growth in rental supply.

So what's going on?

Ziebell suggests activity in Australian housing markets places too high a focus on investors' interests, rather than housing need. From Duke's article:

Don’t Rent Me founder Anthony Ziebell warned too much of a focus on investors, rather than those who will actually be living in the properties, is leaving Sydney filled with “inappropriate” homes.  

“Sydney’s rentals are the smallest in the country,” he said.

“If you’re building an apartment block, how many one-bedroom apartments can you sell compared to three-bedroom apartments? 

“It’s not about providing suitable housing, it’s about getting the maximum profit. This is leaving renters without anywhere suitable to live,” he said.

He's onto something. But before we get to that, let's back-track to October 2013 - when first home buyers were still vaguely a thing, and Catherine Cashmore penned an article for Property Observer called Investors or owner-occupiers: who are we really building housing for?. (Hint: it wasn't owner-occupiers then and it's not owner-occupiers now.) Cashmore was talking about conditions in Victoria, but the general themes could be applied anywhere:

The relatively small one and two bedroom units featured as 'affordable' tend to fall into the investment sector of the market, not just because of tight lending restrictions banks impose on first home buyers for this type of accommodation, but also due to high owners’ corporation fees set aside to service the lifts and other security features.

A great deal has happened since 2013, including the steady decline of first home buyer activity and a slowly rising interest in the plight of the poor old renter. But as we can see, those still standing in our dysfunctional housing system are yet to catch on. Or perhaps they just don't want to?

Like others, we've often cited the ABS Lending and Finance data, as we did in December 2013, to show that about 92% of money lent to property investors goes towards established dwellings. The remaining 8% contributes to new supply, as landlords are far, far more likely to trade in existing housing stock than invest in new construction. Property investment finance has more or less continued in these proportions despite recent development activity.

Even so there are considerable chunks of money being poured into new apartment blocks by investors, and this has been particularly so in areas close to jobs and transport over the last couple of years. Whether these dwellings are purchased by investors 'off-the-plan' or through a subsequent sale is beside the point for this discussion. What's not beside the point is that development is being propped up - if not driven - by this investment, and investment is being driven by something other than what Australian households need.

So what's driving investment?

We've written extensively about the impact of federal tax settings on the type and nature of investment in Australia's residential property, so we won't go over it again today. Suffice to say that it has changed the shape of the rental market. Investors purchase dwellings with prospects for capital gains in mind rather than any consideration of need or demand from tenants.

The recent insights from Don't Rent Me and the Tenants Union are yet more evidence of this.

Full houses

Vancouver is currently in the process of implementing an empty homes tax to try to make sure that the city uses its existing house stock more efficiently. As one of the most unaffordable cities for housing in the world, Vancouver's mayor is desperate to bring these costs under control and is prepared to try inventive policies to achieve it. Sydney is more unaffordable than Vancouver, so it's unsurprising that when Jessica Irvine asked economists and planners whether the idea would work here, she found little opposition.

In Vancouver, all property owners will need to declare whether the property is vacant, and if it is, then the owner will pay an annual tax of 1% of the property's value. The median value in Vancouver is $1million Canadian (roughly equivalent of Australian dollars), so the tax on a median dwelling would be $10,000.

A vacant dwelling is defined as a property that is not either a principal place of residence, or a property that is rented for more than 180 days in a year, in periods of at least 30 consecutive days.

Owner-occupiers and others already have to make a yearly declaration that they reside in the property in order to receive the exemption from paying land taxes, so this extra paperwork isn't much of a big deal. If an owner fails to declare their property's status, it is deemed empty, and the 1% tax applied.

There is a good incentive, then, to declare the property "not vacant". Perhaps some owners will be tempted to fib, and make the claim even if the property is vacant. To address this, the city will conduct both targeted and random checks of properties each year to assess the validity of such claims. If a declaration is found to be false, the fines can be $10,000 a day. The cost of administering the scheme, including enforcement, is budgeted at $1.5million.

Of course, there are exemptions - 8 of them. Properties may be vacant without attracting the tax if:

• The property is undergoing major renovations, or is under construction or redevelopment (with permits).
• The registered owner (or other occupier) is undergoing medical or supportive care.
• The owner is deceased and grant of probate or administration is pending.
• Ownership of the property changed during the previous year.
• The property is subject to existing strata rental restrictions.
• The registered owner uses the property for six months of the year for work purposes but claims principal residence elsewhere.
• The property is under a court order prohibiting occupancy.
• The property is limited to vehicle parking or the size, shape or inherent limitation such that a residential building cannot be constructed.

These exemptions and the nature of enforcing a scheme like this leaves open the possibility of a property owner taking steps to avoid the tax. One obvious way would be to keep properties furnished to give them that "lived in" look, and sign sham tenancy agreements with people who charge less than $10,000 a year for their trouble.

Vancouver is doing this to address something up to 20,000 possibly empty homes. They've identified around 10,000 homes as empty, and there are another 10,000 they're not so sure about. Many will get exemptions. So the possible revenue from the tax is up to $200m, and it's likely a lot less than that. But even if the city only receives this tax from 3,000 median homes that's $30m odd more than the administrative costs of the program. The process would hopefully have made the other 17,000 property owners think about what they're doing, and perhaps bring some back into the rental market.

Vancouver is quite small, half the size of Adelaide, so 20,000 homes is quite significant. Proportionally, it's about on par with the roughly 80,000 empty homes that Prosper Australia finds in Melbourne each year.

With vacancy rates for rentals across Sydney stuck below 2% for many years now and rents at all time highs something needs to change. Addressing the problem of wasted property is a good idea. It is a better supply-side solution than naively relying on developers to deliver tens of thousands of apartments all at once to create a market shock, rather than staging releases to ensure maximum prices, and having little impact as population grows to meet the new supply.

An even better idea is a broad-based land tax which encourages the productive use of all properties, not just empty ones. Land tax is very easy to collect (and hard to avoid), and is more reliable than stamp duty as a revenue source for government. But an Empty Homes Tax could be a good first step towards a fairer approach to housing taxation.

The rent myth: measurement and supply

Domain are running an interesting article today, suggesting it's only a matter of time before apartment rents start to dwindle and we can all live happily ever after.

It starts:

Record high-rise building in Sydney has yet to provide any relief for renters, with apartment rents jumping sharply in the June quarter, data shows. 

The median weekly advertised rent for an apartment in the harbour city is now $520 a week, just $5 cheaper than houses, according to Domain Group’s Rental Market Report released on Thursday. 

But experts are predicting the trend will turn around as a record surge in apartment developments are built, mainly owned by investors looking for tenants.

This raises a couple of points worth exploring.

The first is the way organisations like the Domain Group measure rents - they check the property pages to see how much landlords are asking. This gives a skewed view of rents, as landlords don't always get what they want, and rents are not always quite as high as these reports suggest. Not only can this paint a misleading picture of life on the treadmill, but it can lead to inconsistencies in the reports themselves. For instance, the Domain Group's report from June 2015 had house rents at $530/wk, but by September this had been revised down to $525/wk. The latest report has kept house rents at $525/wk for that period but says they are now at $530/wk, showing an increase of 1% over the year. We're not sure why they do this exactly, but it happens from time to time. No doubt they have their reasons.

A much better way to measure rents is to look at how much tenants are actually paying, and it's possible to do this in New South Wales by checking the bonds that are being lodged with the Rental Bond Board. Our Rent Tracker series does just that - it's worth a look if you're ever wondering how actual rents have been moving in your area.

The second point is that building new blocks of apartments does not automatically reduce the rent - especially not before they're finished. To be fair, the Domain article does acknowledge that the bulk of new building has not yet been finished, with First Home Buyers Australia's Taj Singh saying:

Despite the record levels of apartment building … a lot of the new supply will be coming onto the market later in 2016, with most of the supply to come on the market 2017.

Singh is right - it really is too early to say how "record levels of apartment building" will impact on rents across the board. But we can look at parts of Sydney where the private rental market has grown, and see what the effect has been there. Looking at the number of bonds lodged between 2010 and 2015, as well as how much rents have increased over that time, tells us that a growing rental market does not always bring the rent down:

• Camden saw a 57% increase in the number of bonds held, and rents went up by 21%
• Botany Bay saw a 52% increase in the number of bonds held, and rents went up by 45%
• Auburn saw a 41% increase in the number of bonds held, and rents went up by 20%
• Maitland saw a 36% increase in the number of bonds held, and rents went up by 9%
• Blacktown saw a 34% increase in the number of bonds held, and rents went up by 19%

By comparison, the following areas saw much lower growth in the rental market:

• Blue Mountains saw a 1% decrease in the number of bonds held, and rents went up by 25%
• Leichhardt saw a 1% increase in the number of bonds held, and rents went up by 20%
• Waverley saw a 2% increase in the number of bonds held, and rents went up by 21%
• Mosman saw a 3% increase in the number of bonds held, and rents went up by 23%
• Manly saw a 3% increase in the number of bonds held, and rents went up by 30%

An article from the AFR earlier this year looked into this in some depth from the perspective of a Chatswood bound house-hunter - it begins: "A long queue is usually a sign something of value is at the end of it. That wasn't the case in Sydney's Chatswood on Saturday". It's worth revisiting.

There are two problems at play here. The first is that it would take even more "record levels of apartment building" to make up the required shortfall, and the second is that new supply is usually dropped into the mid- to high-end of the market, coming at the expense of more affordable homes that have been demolished to make way for something new.

We'll have a closer look at these two problems a little way down the track.

State Budget 2016: extra duties for foreign purchasers

The NSW Government will hand down its 2016-17 State Budget on June 21. That's... tomorrow!

But announcements on new spending and policy are already finding their way out of Macquarie Street. One matter of some interest to tenants - and more than a few landlords, we bet - concerns changes to stamp duty payable by foreign purchasers.

Investors not ordinarily residing in Australia will be obligated to pay an additional 4% surcharge on the purchase of residential real estate. This is considerable. As The Sydney Morning Herald noted, the duty payable on a home purchased for the median Sydney house price of $995,804 would all but double from $40,305 to $80,137. It is expected to raise an extra $1 billion over four years.

The official rationale is that the surcharge serves the broader community interest by raising funds for public amenities. Or, as Victoria, which recently implemented its own surcharge, puts it: as capital growth in residential property is largely attributable to an area's quality of life, foreign purchasers (who are unlikely to pay much if any tax to Australia on income, consumption, and so on) should make a fair contribution to the public spending that delivers that quality. 

But from a tenant's point of view, the move is less interesting for the official line as what else it might say about our housing market. Office of State Revenue figures show that the NSW Government has been riding high on stamp duty revenue for the last several years - from collecting $3.3 billion in 2011/12 to well over $7 billion in 2015/16. But, of course, this is inexorably linked to sharp growth in sales prices, in Sydney especially. And the latest Rent and Sales Report suggests prices flattening or slightly declining in a number of LGAs across Greater Sydney. Many well-placed commentators are warning of more of the same - including the Reserve Bank, OECD, property analysts CoreLogic, and ratings agency S&P from last week alone. 

Shadow NSW Treasurer Ryan Park said of the surcharge, "We're very concerned that this is a very short-term move based on the fact that the Government knows that the [property] market is cooling, based on the fact that we're all the more reliant on stamp duty."  And tenants may have reason to share that concern. Because a reliance on sharp and perpetual growth in property sales to fund spending is a reliance on housing speculation. That is, the same speculation that has sparked price growth to lock tenants who would be homeowners out of the purchase market - in many cases for good. As we explained in one of our favourite posts on the Brown Couch, those frustrated homeowners are not the only tenants missing out. They also tend to be more competitive in the rental market in which they are forced to remain than those on lower incomes - forcing up rents across the board. 

Of course, restraining this speculative frenzy is not a matter for State Government alone. It's also a major Federal Election issue, and part of the focus of the excellent Vote Home campaign. But you can be sure tenants would benefit much more from efforts to create a more equitable and accessible housing market than from an extra $1 billion skimmed from foreign participants in our speculative housing market.

On the other hand, some developers have declared that the surcharge will actually have the unintended consequence of driving house prices down. There's precious little evidence to support the position.

There's one more thing to consider: we've also heard our share of stories about foreign purchasers buying properties off the plan, only to leave them empty. The alleged practice would allow the dwelling to be sold as new, negating any need for the purchaser to spend on maintenance or property management. It also restrains rental supply - thereby helping to drive up rents even as new homes are delivered to market. There's nothing definite to establish just how widespread the practice might be, but the UNSW City Futures Research Centre has raised concerns about what it says are up to 90,000 unoccupied dwellings throughout Sydney. A surcharge on stamp duty could function as a disincentive against the practice; As most purchasers will be required to pay tens of thousands of dollars more, they could be driven to take the extra steps required to attain a rental income to help cover it.

Battlefield: rent

A number of large and powerful real estate agencies look set to recommend landlords increase your rent if Australia votes for changes to negative gearing and capital gains tax discounts on July 2nd. We're not sure how else to read the "Negative Gearing Affects Everyone" campaign that's recently attracted media attention.

The agents will smite you if you vote for tax reform

The campaign suggests that "should current taxation arrangements for property be changed, as many are suggesting, rents could be expected to rise substantially". It provides nothing to support this theory, other than a couple of lines about supply and demand:

Because the incentive to buy property to rent out will be severely curtailed, fewer people will buy residential investments, meaning the supply of rental stock will contract: fewer houses means higher rents charged to those who don't own their own homes.

Nobody can argue with these fundamentals, right? Well...

When you're thinking about taxes, housing supply and rents, it's important to remember these two things:
1. Where rents and real estate are concerned, supply and demand dynamics get complicated by the tax system.
2. No matter what federal tax settings look like, the only way your rent can go up is if your landlord serves you with a valid notice of increase.

Let's explore this.

This "incentive to buy property to rent out" that the real estate agents' campaign refers to is, of course, capital gains. According to the campaign authors, the way to keep our rents down is to ensure that property values continue to go up. The idea is obvious enough - increasing property values draws more people into the housing market to buy investment properties, so more properties become available to rent. That's supply taken care of, right?

Well, no, because around 90% of money lent to landlords each year goes to purchase established dwellings. The majority of "new" supply into the rental market is actually existing housing that's just being recycled - moving in from the owner-occupier market or just transferring from one landlord to another. Even if it is new to the rental market, it probably isn't a new home, in which case it can't really be considered new supply. It's just borrowing from Peter to pay back Paul.

But even if we pretend not to notice this glaring hole in the real estate agents' logic, they still have a problem with their argument. The idea that rising prices can put downward pressure on rents is not just counter-intuitive - it's also demonstrably wrong. And it's not merely a question of ever increasing prices (landlords' expenses) dragging up rents (landlords' income), it's about which properties find their way into the rental market, who ends up paying to live in them, and how much they are willing to spend.

In short, it's the the type of supply and demand you're getting in the market that matters. Negative gearing and capital gains tax discounts actively distort the market by affecting supply and demand.

This happens in a couple of different ways.

First, these tax settings affect the supply of rental housing, by manipulating investor demand. The "incentive" to buy properties to rent causes landlord's to pick and choose their purchases based on the prospect of gains. Or, as the real estate agents' campaign authors have put it in another part of their website, to make "strategic investments":

If negative gearing is abolished on all but newly-built dwellings, investors will no longer be able to buy strategic investments, looking to acquire high value properties in prime locations that will realise the best gains over time.

We've talked about what this kind of "strategic investment" does to the shape of the rental market before, but here's a quick reprise: landlords don't buy the cheap stuff because the prospects for gains just aren't the same. 15% of 100 is better than 15% of 10, even at the same rate of growth. Rents at the lower end of the market are increasing faster than rents at the top, because affordable rental housing is actually disappearing from the market.

The shape-shifting private rental market: driven by gains

For six long years Anglicare's Rental Affordability Snapshot has told us what this means for low income households. In the latest snapshot there were only 902 properties advertised across Sydney at what could be considered affordable for a family whose income is made up of a minimum wage and some Family Tax Benefits. 902 properties, or 6.4% of what was advertised for rent during the snapshot period. For a single person on Newstart allowance, there was not a single property advertised during the snapshot that could have been considered affordable. Nada. Zip. Nothing.

National Shelter's Rental Affordability Index provides a somewhat more rigorous analysis. In it's inaugural release in November 2015 it noted that New South Wales faces "rental unaffordability across the board, and a dire situation for low income households".

Second, these tax settings affect the demand for rental housing, by reducing the supply of affordable housing to buy. Negative gearing encourages landlords to carry month-to-month losses by reducing their pay-as-you-go tax liabilities, while capital gains tax discounts increase the chances of these losses being fully recovered in the long-run. Thus landlords can afford to take on greater amounts of debt than their competition, the owner-occupier. They outbid would-be owner-occupiers for properties they do not intend to live in, using them instead to build wealth. This pushes prices higher, faster (and encourages more people to follow this investment strategy if they can).

This is generally understood to be a problem for first-home-buyers, and it is this concern that seems to be driving the current political discussions around tax reform. What these discussions fail to address is that most of these frustrated home-buyers are making homes in the private rental market in the meantime, as tenants. They're earning a decent enough income and can manage the high rents, even if they can't keep up with landlords bidding against them at auction. Then there are those who have simply given up on home-ownership: as house prices scale new heights, they simply wonder how they could ever come up with a deposit in the first place. They're still earning decent money, though, and they're contributing to demand for rental housing while dragging up rents because of what they can afford to pay.

Our housing market dynamics have been working to these conditions for many, many years. They are entrenched. Giving our federal tax settings a few necessary tweaks will not result in immediate or drastic change. Fundamentally, tax reform will not reset the incentive for buying and renting out property. Instead, it should alter the way capital gains are achieved, providing for more tenant friendly "strategic investment" by landlords. The system would adjust. New, more functional dynamics would emerge. But this would take time.

Nobody should expect wholesale rent increases in the short term, unless landlords strategically decided to put them up. We'll come back to that soon, for further discussion.

Who wants an affordable rent?

Private market rents and low-incomes don't mix. We'd like to say this is a recent phenomenon but Anglicare's annual Rental Affordability Snapshot - which has consistently shown affordable rental properties for low-income workers and those receiving income support are practically non-existent across Sydney and other major Australian cities - is now in its sixth year. But the latest report, released today, shows rental affordability continues its decline across regional New South Wales as well.

We're sad to say the problem is entrenched. But is it intractable?

We're often told that the way to improve housing affordability is to increase the supply of housing. Take this comment from NSW Treasurer, Gladys Berejiklian, in the AFR earlier this month:

While we are open to further tax reform, including looking at stamp duty, we believe that the most effective way of tackling housing affordability is to increase supply.

If we apply this logic to the private rental market, what might be required is an increase in the supply of residential property investors who are willing to buy newly constructed dwellings. Now, as we know from our most recent exploration of tax data, an increase in investment does not necessarily mean an increase in the number of landlords, as the rate of second, third, fourth, fifth and sixth-time investors is growing faster than the rate of first-timers. But we also know, and it is well established, that around 90% of new lending and finance to landlords goes towards the purchase of established dwellings rather than new builds. Even so, there are blocks of new units going up all over Sydney and surrounds right now, but as Anglicare's Rental Affordability Snapshot reminds us, rents aren't coming down. Other research confirms the supply of housing does not put downward pressure on prices.

Source - Prof. Peter Phibbs, Shelter NSW seminar New Directions for Housing Fairness"December 2015.

This calls for an exploration into what drives landlords to buy - and the early verdict is that it ain't cheaper homes. It's more expensive ones. Property investors want house prices to rise because they're buying into a kind of superannuation scheme, hoping to replace wages and salaries with rents and access to "financial products" as their portfolios grow in value. Our whole housing system is geared towards the provision of wealth, rather than the provision of homes. Homes for people with a little less money in their pockets? No, that's not what housing is for.

Our federal tax settings are a case in point. Much has been discussed throughout this election year about negative gearing and capital gains tax discounts, and their impact on house prices and rents. What's not been talked about is the impact these tax settings have on our housing system more generally, and the assumptions upon which they feed. Negative gearing and capital gains tax concessions are just the type of policy settings that encourage an increase in the supply of residential property investment. But whether it is for the first, second or sixteenth time, or in new or established homes, the reasons for investment are the same. It ain't cheaper prices and affordable rents.

Of course, the banks deserve a mention for their part in this housing system, because it's where most of their lending business comes from. As landlords lodge their tax returns each year, we can see their most significant holding cost - and the reason why landlords make consistent losses on their property investments, despite charging unaffordable rents - is the payment of interest on loans. That means our tax system, which subsidises these landlords' losses, is also a boon for the banks.

Throughout all this discussion, tenants have rarely gotten a word in. We'd like to see this oversight addressed, because we make up a significant proportion of the population. Reports such as Anglicare's Rental Affordability Snapshot provide a good opportunity to talk about rents, and what it really takes to find your way in an unaffordable housing system. We can use these moments to remind landlords, journalists, economists and policy-makers that the private rental market is not just the nation's cash cow. It's where we live.

Social housing and its bold new future

Today the NSW Liberal Government has announced a new 10 year social housing strategy, Future Directions for Social Housing. The Sydney Morning Herald has called it "an historic decision to privatise public housing in New South Wales". We call it an incentive to fix the Residential Tenancies Act 2010.

It's true that one of the main thrusts of the strategy will be the redevelopment of estates, with all the uncertainty and anxiety that brings for tenants who start to wonder whose homes will be next to go... But it will also place an ambitious degree of faith in the private rental market to more or less "rescue" tenants from social housing.

Like the discussion paper that came before it, the strategy is based around three key pillars -

• More social housing
• More opportunities, support and incentives to avoid and/or leave social housing
• A better social housing experience

Under each of these, the Land & Housing Corporation and FACS Housing will be given a series of tasks.

More social housing means:

• the Land & Housing Corporation will increase their estate renewal and redevelopment activities. This will be "in partnership with the private sector" through the Communities Plus program. We'll be keeping our ear to the ground for details as each new development is announced, and making notes on our Clearing House blog. The strategy says "FACS will work closely with communities to avoid unnecessary disruption to tenants' lives". We certainly hope so.
• ownership or management of more properties will be transferred to community housing landlords. The strategy aims to increase the proportion of social housing owned or managed by the non-government sector to 35%, and will require community housing landlords to assist with the Land & Housing Corporation's relocation needs when redeveloping estates. They'll also be required to report on tenant outcomes according to a set of targets - we'll be keeping an eye out for those.
• the Government will be relying on proposed new funding models, such as the Social and Affordable Housing Fund and Social Impact Bonds - which means attempting to bring private finance into the construction of new and renewed social housing.
• further attempts at tackling "under-occupancy".

More opportunities, support and incentives to avoid and/or leave social housing means:

• Family and Community Services will "remove work disincentives" for public housing tenants. This includes revising policies that create work disincentives, and reviewing the rent setting model and eligibility criteria. This is really the good news.
• trying to improve educational and employment opportunities for social housing tenants. They'll do this through the allocations system - providing houses for people who can work or study in areas with better access to jobs and schools. It sounds like a good idea, but it's just as likely to create further residualisation and stigma for those who miss out. They'll also try to create new employment opportunities for social housing tenants through new repairs and maintenance contracts.
• introducing "Personal Support Plans" - where a "client" agrees to "realistic goals" in exchange for tailored supports and services. The architects of the Housing First model must be scratching their heads in wonder, and we're concerned about how these plans will interact with a residential tenancy agreement. What will happen to tenants who fail to achieve their goals? Will they lose their housing, as well as their tailored supports and services?
• increasing the budget for Private Rental Assistance products, to try and convince more tenants to try and survive in the expensive and chronically insecure private rental market (which the government considers a form of "independence") where they will not need to rely on social housing assistance.
• collaboration across the Whole of Government to better coordinate assistance. The problem is, FACS have forgotten to include NSW Fair Trading in the list of agencies they'd like to work with - even though they are in the midst of a review of the Residential Tenancies Act 2010 and could work towards giving tenants greater stability, liveability and affordability in the private rental market.

A better social housing experience means:

• improving customer service and using more methods of communicating with tenants.
• implementing new repairs and maintenance contracts.
• mandatory evictions for tenants who get caught up in criminal activity.

It's a big plan - it reflects a high degree of ambition, for better or worse. It will present new opportunities as well as risk - particularly for public housing tenants, who will start to wonder just how secure their current tenancy is. But unless changes are made to the Residential Tenancies Act to give greater stability to tenants in the private rental market, the answer remains "comparatively so". Decamping to the private rental market should remain an option of last resort.

Most of all, this new strategy comes with a great big list of things to do. We'll be keeping a close eye on how FACS and the Land & Housing Corporation begin to work through its implementation, and how it progresses from here.

Things to look out for in 2016

Welcome back to the Brown Couch for what we expect will be another big year.

Here are some of the things we'll be watching out for in 2016...

1. The current review of the Residential Tenancies Act 2010

We spent quite a bit of time talking about this over the last half of last year - and thanks to the NSW Greens Member for Newtown, Jenny Leong, a few people spent the holiday period talking about it as well.

NSW Fair Trading's discussion paper is still open for comment, so if you haven't already put pen to paper and sent in your thoughts about renting in New South Wales, please do so soon. They'll be taking submissions until January 29th. If you're stuck for something to say, have a look at the TU's Quick Guide to the review - available here.

Fair Trading will produce a report on the Act, based on its discussion paper, for the responsible Minister to table in Parliament. This must be done before the middle of the year, so we'll know soon enough where the NSW Government stands on stability, liveability and affordability for the one-in-three of us who live in rented homes.

2. Sensible discussion about tax reform in a federal election year

Our views on tax reform are long held and oft stated - we'll be pretty disappointed if 2016 delivers an increased GST at the expense of more sensible changes to our tax regime.

NSW Opposition Leader, Labor's Luke Foley, has recently said he'd consider supporting an increase of the GST from 10% to 15% in order to fund schools and hospitals, and this puts him at odds with his Federal counterpart. If we're going to see a federal election based on tax reform - which has always looked likely - we'd like see the discussion re-focus on winding back the generous tax concessions we give to amateur landlords.

As for schools and hospitals - we'd like to see those funded, too. Perhaps the NSW Opposition Leader could take another look at our land tax proposals, rather than call for a bigger tax on consumption, while on his quest for a new source of revenue.

3. Implementation of last year's "antisocial behaviour" reforms for social housing tenancies

We spent a bit of time talking about these reforms last year, too - including our discovery that the legislative changes commenced just in time for the summer holidays.

The laws are now live - which means the Tribunal is already bound to consider them - but we're still waiting for FACS Housing and other social housing landlords to finalise the policies that will determine how and when they will use them. We're expecting FACS Housing to finalise their policies towards the end of February, but we're not sure where most of the 30 or so registered community housing landlords that might use these laws are up to. Let us know if you come across anything.

We'll be keeping a particular eye on the use of "one strike evictions" and the mandatory 28 day limit for vacant possession orders whenever a social housing tenancy is terminated in the Tribunal. The legislative provisions relating to these policies must be reviewed between December 2017 and December 2018, so we'll be keeping tabs.

4. Developments in the social housing portfolio "strategy", particularly as it relates to estate redevelopment and urban renewal

2015 ended with a spate of announcements about increasing the social housing portfolio in New South Wales. We've covered these on our Clearing House blog - with news so far concerning Macquarie Park, Glebe, and Waterloo; along with more general announcements about the way social construction is to be delivered through Communities Plus and the Social and Affordable Housing Fund (SAHF).

We're expecting further announcements about the SAHF early this year, and we're also hearing rumours that a report from the Social Housing discussion paper of late 2014 might finally be released. There's a high likelihood that this will lead to further divestment in tenancy management by the NSW Government, with more tenanted properties to be transferred from FACS Housing's watch to registered community housing landlords. We'll have to wait and see...

In any case, the growth of community housing landlords is set to continue. We'll be keeping an eye on reports from the Registrar of Community Housing's office, as the first compliance checks under the National Regulatory Code start to happen.

5. New repairs and maintenance contracts for public housing tenancies, and a Parliamentary Inquiry into their management

Late last year we mentioned that the NSW Legislative Assembly's Public Accounts Committee is conducting an inquiry into the management of public housing repairs and maintenance contracts - submissions close in early February

We also mentioned that the Land & Housing Corporation was in the process of changing the way it does business with repairs and maintenance contractors. We now understand that new contracts are ready to roll, and we expect to hear more about this soon. But there are many problems with the way public housing is maintained, and these new contracts alone won't fix everything. The Parliamentary Inquiry could produce some important insights into how this system functions, and how it could be improved.