Victoria's rental revolution - how does New South Wales compare?

Yesterday we celebrated Victoria's proposed tenancy law reforms, and reflected on some tired old lines that turn up every time we give serious contemplation to improved rights for renters. Today let's take a closer look at just what the Victorian Government's "Rent Fair" package includes, and how it compares to our own laws in New South Wales.

Victorian landlords: ready to cross the border at the first sign of tenants' rights

Victoria's proposed reforms are many and varied. They've been categorised into six different groups: rental security, tenants' rights, faster payments and rental bonds, fair priced rent, pets are welcome, and modifications.

Let's dive in.

Rental security
This includes the big one: landlords must give a reason to end a tenancy. This should be rolled out in every Australian state and territory, except Tasmania where it already applies. Along with others from the community sector we've been actively campaigning on this issue here in NSW (find out more at Make Renting Fair NSW). Allowing landlords to end a tenancy without a stated reason actively undermines tenants' confidence in renting laws because they worry they'll be evicted unfairly if they make a fuss or stand up for their rights. By now this should be well established, but if you still need some convincing we recommend a quick look over the recent Unsettled report published by Choice, National Shelter and the National Association of Tenants Organisations. Three cheers for Victoria for announcing this change!

We should note that Victoria already has a long list of reasonable grounds available for landlords to use, and their "no grounds" notice comes with 120 days notice. In New South Wales we are missing some key grounds, such as where the landlord needs to recover the property for their own personal use; and our notice period is a full month shorter at 90 days. Any suggestions we can fix our own laws in New South Wales by expanding the list of grounds for termination and leaving the "no grounds" option intact just took a bit of a hit.

But here's where it starts to get flakey: the law will limit the use of the ‘end of fixed term’ notices to vacate. This will allow landlords to use what is effectively a "no grounds" notice of termination at the end of the first fixed-term period (usually six or twelve months), but not in any subsequent period if the fixed-term is renewed rather than proceeding on the basis of an open ended agreement. Make no mistake, this would be an improvement and we'd welcome a similar change in New South Wales. But in practice it will turn fixed-terms into a "probationary" period. Tenants who stick up for their rights during an initial fixed term would still have no protection against an unfair eviction, so might hold off reporting repairs and maintenance needs, or raising other concerns about their tenancy, until after the fixed term expires. It would be better to just ban the use of no-grounds notices altogether, perhaps with an exception for longer fixed-terms of say three years or more (in the spirit of compromise). This might be something the Victorian lawmakers will consider as they're working out how to encourage more long term leases, which is also included under this heading.

As for the rest of the reforms under this heading - prohibiting false, misleading or deceptive representations and requiring pre-contractual disclosure of the presence of asbestos or an intention to sell, Victoria is mostly just catching up with New South Wales, but taking a few steps further while they're at it. The need for New South Wales landlords to disclose material facts prior to entering into a tenancy agreement was introduced with our Residential Tenancies Act 2010, but it wasn't given any measures for enforcement. We're still hoping this will be fixed - along with adding the presence of asbestos in the property as a fact for disclosure - as per the recommendations of the recent review of our own renting laws.

Tenants' rights

There are two proposals under this heading. A commissioner for residential tenancies who will "champion the rights of Victorian renters in the private sector" strikes us as an interesting idea, but we'll wait and see how that plays out for awhile before we get too hung up on it. A landlord blacklist seems like an odd thing for a government to introduce, when they could just encourage greater compliance with the law by investigating complaints and issuing penalties, but we'll keep an eye on this one as well.

Faster payments and rental bonds

A move to allow a 14 day automatic bond repayment is more or less in keeping with what we've long since known and loved in New South Wales - if you can't get an agreement and both signatures on a bond claim form, then either party can make a unilateral claim that will be paid out after 14 days unless the non-claiming party raises a dispute and takes it to NCAT. Sensible, although we do think it would be better if only tenants were allowed to make a unilateral claim, allowing landlords to dispute the claim or apply to NCAT after a reasonable time if they felt they were entitled to it. Changes  to the way the early release of bond works in Victoria will be of little consequence to us in New South Wales - our law allows this at any time as long as all parties agree, or the requesting party is handing it all over to the other, whereas the Victorian proposal will extend the right to an early refund to be available in the last fourteen days of a tenancy, rather than the last seven days. The same goes for updated bond cap & up-front rent cap for most properties - these are already in place in New South Wales, where a bond may not exceed four weeks rent and no more than two weeks rent in advance can be required regardless of the type of property or amount of rent payable. The move for faster repairs reimbursement, where tenants can seek reimbursement for the cost of urgent repairs they have effected because they couldn't wait for the landlord, is a small step ahead - Victorians will be entitled to this within seven days of a request, while we could still be waiting up to fourteen days. That is, of course, assuming we've followed the process correctly - never effect an urgent repair without reading up on the law first, because failing to follow all the steps could see you permanently out of pocket.

Fair priced rent
Victoria has announced a very modest change here, that will leave us in their dust. Rent increases are already restricted in Victoria - they can't happen more than once every six months, and under the proposal this will change to once every twelve months. Meanwhile, in New South Wales, there is no limit or cap on the frequency of rent increases. In theory, your rent could go up daily and there ain't a damned thing you could do about it - provided you've been given the proper notice on each occasion - other than apply to the Tribunal and argue that a proposed increase is "excessive". Limiting rent increases to a maximum of once a year would be alright in New South Wales, but we'd also need to rework the way tenants can respond to them. It should be up to the landlord to show that a significant increase is reasonable, rather than the tenant to show that it is excessive.

This plan also proposes cracking down on rental bidding, which is something we can all get behind. The law in New South Wales is not really clear on whether it's lawful for landlords to solicit bids, but it seems okay to accept a higher rent if a tenant jumps in first. Just because you can pay more doesn't mean you should, and landlords shouldn't dangle properties in front of desperate tenants with a wink, a nudge, and a sign saying "pssst, make me an offer" hidden in the top drawer. Victoria says it will prohibit landlords from "inviting" bids, which is bad news for a couple of rent bidding apps that are sniffing around at the moment, but perhaps it could go a little further. We should be clear - in an era when governments are relying on the private sector to make up the shortfall created by chronic under-investment in social and affordable housing, allowing those with greater means to push up prices for the rest of us should be well and truly outlawed.

Pets are welcome

Pets in rental property will be allowed by right of every Victorian tenant! Or will they? The proposal says tenants will need the landlord's written permission first. It also says the landlord won't be able to unreasonably refuse, but that leaves a lot of grey area around just how rigid this new "right" will be. Further, this seems to be more of a right for people who rent and want a pet than people who have a pet and want a home to rent. Landlords will still be able to discriminate at the point of application by simply declining to rent to people with pets.

A better way to give tenants the right to keep pets would be to take a "don't ask, don't tell" approach. We should confirm once and for all that landlords have no business making decisions about who besides themselves shall get to keep a pet, and prohibit including a "no-pets" clause in tenancy agreements.

Modifications
Ensuring that tenants can make minor modifications to their home is the final piece of news coming out of the Victorian proposals. It makes good sense, and again it brings Victorian laws in line with ours in New South Wales. With this kind of reform the devil is in the detail, as questions of who gets the value of an improvement if the tenancy ends prematurely will need to be considered thoughtfully. We haven't quite gotten this right in New South Wales yet, either.

More news from down the Hume

There's been massive news out of Victoria over the weekend, with the Andrews Government pledging to make renting fair!

The announcement refers to an "unprecedented package of tenancy reforms" that includes doing away with the Victorian equivalent of unfair evictions, preventing discrimination against tenants with pets, and cracking down on rental bidding. All of these sound pretty good to us here on the Brown Couch, and we look forward to seeing further details as these proposals are implemented by amendment to Victoria's Residential Tenancies Act 1997. Early details are available here.

Of course, not everyone was happy with this announcement. ABC online reports:

The Real Estate Institute of Victoria (REIV) said the changes would force up costs, which would be passed on to renters. 

"Rents will go up, people will leave the market, there'll be less supply and that's only going to push people out of the rental market and make it more difficult for those who are seeking to rent premises cheaply," chief executive Gil King said.

But our colleague from the Tenants' Union of Victoria, Mark O'Brien, wasn't having any of it:

"Every time there's reform of the residential tenancies law, the institute claims it's the end of the world as we know it and that's never what occurs," he said.

O'Brien's view is supported by a great deal of research, which suggests property investors tend to be motivated by financial considerations rather than tenancy laws.

Still, it's a line the investor lobby and landlord advocacy groups like to trot out at times like this and we expect a similar conversation will emerge in New South Wales when at last the results of our own review of renting laws make their way towards Parliament. We've been expecting this would occur before the year is out, but now that's looking unlikely. This means we've still got time to convince our own government they should be following Victoria's lead to make renting fair - you can lend your support to our claims here.

But it also means our own landlords' and real estate agents' groups will have more time to practice their lines about tenants' rights leading to all sorts of doom and gloom for renters. "Careful what you wish for," they might say. "The changes will force up costs, rents will go up, people will leave the market, there'll be less supply and that's only going to push people out of the rental market and make it more difficult for those who are seeking to rent premises cheaply".

The thing about all this is that there's not much stopping rents from going up as it is. For a quick refresher on why this is, have a look at our earlier post about why rental affordability continues to deteriorate.

But back to the specifics of the claim. The Real Estate Institute of Victoria seems to have skimmed over their suggestion that rents will go up to offset an increase in landlords' costs. Perhaps they've cottoned on that such claims are a furphy, because even though most landlords would go out backwards without them rents are a function of what tenants can pay rather than what landlords' choose to spend when buying and holding property. Or perhaps they just don't think the Victorian proposals will add significantly to their costs so they've steered clear of any further detail. Either way, they've put their emphasis on the slightly different argument of "people will leave the market, thereby reducing supply".

We should keep an ear out for this one in New South Wales, too. It's the idea perhaps that fair renting laws will take all the fun out of property investment, so landlords will take their money and spend it on other, much simpler things. Keep in mind the same argument was made when our current laws were drafted in 2009/10, and the private rental market was hands down the most likely place for a property in New South Wales to turn up in following sale or construction between the 2011 and 2016 Census events.

Still, given the prices property owners could expect at the moment it stands to reason some might be tempted to cash out. Some might even use the prospect of law reform as a cover for their decision. Rest assured they'll be factoring in capital gains before all else, and nobody likes to sell before hitting their targeted windfalls unless they really, really have to.

Those who do sell will be doing immediate damage to their sitting tenants - just as any landlord does when selling for any other purported reason. That is, unless they sell to another investor who is not so concerned about law reform (or other purported reason), and will keep the tenancy going. Given it's mostly an investors' market at the moment this scenario is becoming more and more likely. But, on the off chance an investor cashes out by selling to a first home buyer, the net impact on supply will be zero if the buyer is leaving the private rental market in order to take up home-ownership. And if a whole lot of investors suddenly decide to sell up all at the same time, prices might start to come down a little and first home buyer activity might find some renewed vigour.

It's the landlords who take their properties with them when exiting the market that are the real problem. These are likely to be in the very small minority, since most landlords run at a loss for tax purposes, and rely on any rental income to cover their main costs which includes the interest on their loans. Nevertheless, this risk could be easily countered with a vacant property tax, the likes of which the Victorian Government has also recently proposed. The revenue from such a tax could be used to fund new social housing dwellings.

Despite what we can expect to hear from the investor lobby in the coming months, the NSW Government would do well to start taking notes on Victoria's tenancy law reform proposals.

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.

Unsettled - life in Australia's private rental market

Last year Choice, the National Association of Tenant Organisations* and National Shelter conducted a survey of Australian tenants. It asked questions about life in Australia's private rental market, like how easy it is to find a place to live and what it's like applying for a tenancy, what condition is your home in and how easy is it to get the landlord to follow through with repairs, how often do you move and why, and how much does it all cost?

Today the findings from this survey will be published in UNSETTLED - Life in Australia's Private Rental Market.

It makes for interesting reading. From the report:

Our survey indicates that for the increasing number of Australians who rent, housing is frequently poor quality, insecure and unaffordable. Many tenants feel they are not catered to when searching for a new home. Some face discrimination on a range of grounds. Rental properties are not always in an acceptable condition and landlords are not always responsive to requests for repairs and maintenance needs. Tenants can be reluctant to ask for repairs or complain about their housing, because they're concerned about eviction or a rent increase they can't afford.

Key findings include:

• 83% of renters in Australia have no fixed-term lease or are on a lease less than 12 months long
• 62% of people say they feel like they can’t ask for changes
• 50% of renters report experiencing discrimination when applying for a rental property
• 50% of renters worried about being listed on a residential tenancy database
• 20% renters experiencing leaking, flooding and issues with mould 
• 8% of renters are living in a property in need of urgent repairs

Sound familiar? Australia's housing system is doing a poor job for tenants in the private rental market. That accounts for about a third of the population, but tenants experiences rarely feature in discussions about national housing policy. These discussions need to focus on more than just affordability and whether or not we'll ever be able to buy - Australia needs to take a good look at just what we're getting when we pay the rent.

***

Discussing the report this morning, CHOICE CEO Alan Kirkland said:

For Australians who don't own a home, renting should be a secure and affordable option free of fear and discrimination. Unfortunately, the research reveals a significant power imbalance between tenants and landlords, leading to a culture of fear that means many renters stay silent when something goes wrong. 

It’s deeply concerning that common features of everyday life like having children, receiving a government payment or owning a pet can be major barriers for renters trying to find a home.

NATO spokesperson Ned Cutcher said:

All too often, we hear that people are reluctant to complain to agents or landlords because they’re worried about rent increases or eviction. This research shows that this fear is widespread with 50% of renters worried about being listed on a so-called “bad tenant database". 

When people do raise an issue with a property, landlords and agents can really drag their feet before they fix the problem with 21% of renters waiting over a week to get a response about an urgent repair request.

National Shelter's Executive Officer, Adrian Pisarski said:

Tenants are often the last group to be asked about the housing challenges Australia faces. This research has tenants talking about their experiences of the system in a way that’s not often considered in debates about housing. 

Renters face constant insecurity, 83% are without a fixed-term lease or are on a lease less than 12 months long.

As more Australians enter the rental market, we need a national plan to boost supply, especially for low income households, whilst also addressing security, rights and amenity.

Download the report here

*TUNSW is a member of the National Association of Tenant Organisations.

Why all politicians should support tenants' rights

Yesterday the Australian Senate passed a motion seeking the implementation of a national minimum standard of tenancy rights. Senators Lee Rhiannon of the Greens, and Doug Cameron of the ALP introduced the motion, and Senator Rhiannon tweeted about it after it passed.

The full text reads that the Senate:

a) Notes that: 

i) The proportion of Australians leasing in the private rental housing market is the highest in over 50 years; 

ii) Long-run structural changes in Australia' s housing system are leading to increasing numbers of households choosing to rent on a long-term and in some cases, a permanent basis; 

iii) Comparative international studies, including a 2011 study by the Australian Housing and Urban Research Institute, show that tenancy laws administered by the Australian States and Territories perform poorly in the provision of tenant protections against arbitrary eviction, excessive rent increases and allowing tenants the full enjoyment of their home; 

iv) In the absence of affordable owner-occupied housing, life-long renting is now a prospect for many people; 

v) Australian tenancy laws may no longer be fit for purpose; and

b) Calls on the government to: 

i) Work with the States, Territories and relevant non-government organisations to set national minimum tenancy standards to ensure that tenants' rights are protected in relation to matters including fairer processes around lease terminations and evictions, fair standards to govern the amounts by which rents can be increased and provide for long-term residential leases that enable households the full enjoyment of a secure home.

This is a welcome development - while the states and territories administer their own tenancy laws, the cultural conceptions and attitudes towards renting are fairly common throughout the country. Each of the laws reflect this. No state in Australia has banned "no grounds" evictions as a way of promoting long-term residential leases, though the ACT and Tasmania have come the closest. No state in Australia effectively protects tenants against excessive rent increases, though again the ACT comes the closest.

What this motion really tells us is that the changing profile of households renting their home is beginning to make a difference in electoral politics. In the last NSW election, we saw the seat of Newtown won by the Greens' Jenny Leong who, among other things, ran on a tenants' rights platform. As the number of people affected by poor renting laws grows, the conversation of how we as a community value the safety and stability of a rented home will only grow as an electoral issue. It will especially grow away from the inner city.

Indeed politicians of all parties should take note as the profile of whole electorates will change with the growth of the tenant population. We noted before the previous Federal Election, some particular marginal seats and their renting populations. It will be interesting to do the same again in April with new Census figures and the current parliament. The increasing inaccessibility of property ownership through ever rising prices means the pool of landlords may also begin to shrink. Already some are reporting an increase in the size of individual landlords' portfolios, and this is something we've noted ourselves before, too.

More people staying in the rental market for longer - particularly those whose upbringing might have delivered an expectation of home-ownership at some stage in life - means an increasing range of political views and allegiances will start to converge on the question of tenants' rights. Voters from across the spectrum will inevitably begin to question why the law allows them to be removed from their homes when they have done nothing wrong. While it can be easy to point people further and further from the city in search of affordable home ownership as their means of achieving some security of tenure, this will not last long as a solution.

Perhaps they will even question why it is that investors appear to be living quite so large on the public purse - through tax breaks that cost the national budget literally billions of dollars each year - without ever having to justify the results. And while many will retain the aspiration and appetite to invest in property, if they are not lucky enough to come from a property owning family the barriers to entry will continue to grow faster than they can keep up. This will leave some wondering whether their vote is worth leaving with any political parties who may continue to have a tin ear to their plight.

Some politicians are starting to cotton onto this, and that's a good sign for those of us working for better tenancy laws across the country. Let's keep it up!

Postcard from Victoria - Pets, Repairs and Airbnb

If you've been paying attention to renting news this year you'll have seen a number of court and tribunal decisions about renting in Victoria getting quite a lot of attention. Here's our roundup of the decisions and what they mean for us here in New South Wales.

Okay, not that Victoria.

Pets

In great news for pet lovers, the Victoria Civil and Administrative Tribunal ruled that apartment blocks cannot have a blanket ban against pets. If there is a good reason to disallow a particular pet (keeping an elephant in a studio, for instance) then it is still open for the body corporate to refuse the pet.
As the Tenants' Union of Victoria said: "A blanket ban that says you're not even allowed to own a goldfish is clearly ridiculous."

What it means for us:
Some of the legal working in Victoria's strata legislation and ours is quite similar, so it is possible that similar blanket bans here are not legal. However, we wouldn't recommend running out to bring home a new pet just yet. Even if strata cannot block you, which is still a very big if, your landlord remains the biggest barrier between you and your new best friend. We've written about that side of things quite a lot on here.

Repairs

Victorian tenants now have the ability to force a landlord to carry out repairs, even if they knew they were moving into a property that wasn't in good repair. Often tenants with little choice are forced to accept substandard accommodation - this decision gives them a little more power. As Victorian Legal Aid's Dan Nicholson said, "Ms Shields had little bargaining power in the market and was desperate to put a roof over her head... no one in Victoria should live in the conditions that Vikki Shields did for five years."

Renovator's delight... Full of character!

What it means for us:
NSW landlords already had the obligation that Victorian landlords now do - the obligation to both provide and maintain the premises in a reasonable state of repair and fit for habitation. There is no validity to the claim some landlords make that you take a property as is.
However, many tenants still live with repairs issues, often for the whole of their tenancy, so what gives?
The reason is fairly simple - many tenants know that a landlord holds a trump card over them. In NSW, as well as in Victoria, landlords can force you to leave without a good reason. In fact without any reason at all, which means that if you push too hard for repairs (and sometimes too hard is not very hard at all!) they can avoid the issue by forcing you to leave. Even being in a lease is no protection if its ending anytime soon. In the meantime, they still haven't fixed the leak keeping you up at night.
Ms Shields in Victoria had little bargaining power and many tenants in NSW feel the same way, with good reason.

Airbnb

There is a lot to talk about with Airbnb, and we'll be doing more over the next few months. Right now, we'll just focus on the two cases this year concerning Airbnb in Victoria. The first, ultimately decided that a tenant is subletting (and therefore in breach of the agreement) if they vacate the premises while the short term guest stays, even if its only for a short period.
The second, determined that the owners corporation of an apartment building cannot have a blanket ban on Airbnb style lets.

'Rent Street' Millers Point

What it means for us:
It is not clear yet what the two rulings mean for NSW residents. We agree with our colleagues in Victoria who said "Tenants should have the right to utilise the property as they wish, so long as they are upholding their responsibilities as a tenant.” However, knowing what those responsibilities are can get a little muddy.
A fairly perverse outcome of deciding that a two or three night stay constitutes a lease is that, much to the chagrin of many currently gleeful property owners, Airbnb guests could potentially claim full tenancy rights under the Residential Tenancies Act. Our Act contains an exclusion for holidayers, but not (for instance) for workers on a short trip.
The inability to have a blanket ruling against Airbnb largely affects the building owners more than tenants, and as it rests upon the particular workings of the strata legislation in Victoria, it may not apply here. If it does, tenants will still need to deal with the issue of whether or not they are subletting and need their landlords permission.

Keeping an eye on what happens in other jurisdictions is often very useful for our own state, but when you read articles in the paper remember that not all states in Australia are the same!

Reform of the Federation and housing

Fun Federation fact! The 'Father of Federation', Henry Parkes, was a tenant.

In his final years, Parkes rented 'Kenilworth', one of the 'Witches' Houses' on Johnston Street Annandale.

Now, almost 120 years after Parkes' death, and 115 years after the federation of the colonies as States in a new Commonwealth of Australia, the Federal Government is preparing a White Paper on the Reform of the Federation. As part of the process, an issues paper on 'Roles and Responsibilities in Housing and Homelessness' has been produced – it is well worth a read.

The stated objective of the White Paper is to make the Federation more efficient and effective, simpler and clearer, supportive of increased productivity and economic growth.... and 'to ensure that, as far as possible, the States and Territories are sovereign in their own sphere.'

And that, the Government explains, means 'limiting Commonwealth policies and funding to core national interest matters, as typified by the matters in section 51 of the Constitution.'

Which really is begging the question. Should we assume that making States 'sovereign in their sphere', and limiting the Federal policies and funding to section 51 matters, will actually lead to more efficient, effective government and economic growth?

It strains common sense to treat section 51 as a timeless touchstone of good federalism. There's some very important matters on the section 51 list – for example, taxation (s 51(1)(ii), defence (s 51(1)(vi)), currency (s 51(1)(xii)), banking (s 51(1)(xiii) – and some arguably less important ones too (lighthouses (s 51(1)(vii); astronomical observations (s 51(1)(viii)). And some very important matters are not specifically named on the list: in particular, housing.

Parkes's fellow founding fathers drafted section 51 without the benefit of any special insights into housing policies for the 21st century, or even the 20th century. For what it's worth, Parkes's own ideas about housing policy were indicated in the 1860 report of the Select Committee of Inquiry into the Conditions of Working Classes of the Metropolis, where he recommended that the construction of model dwellings by private capital should be encouraged, by awards of 'medals or diplomas of distinction' – not subsidies.

When section 51 was first drafted, there was no social housing anywhere in Australia, and very little anywhere in the world. What there was a lot of was truly awful housing.

For the first half of the 20th century, State and local governments in Australia made a few stabs at housing reform, but enduring, systemic improvements in the design, construction and provision of housing to households on low-moderate incomes, were achieved only after 1945, when the Federal Government committed funds to State housing authorities through the Commonwealth-State Housing Agreement.

Of course, funding for social housing isn't the only thing the Federal Government does that affects our housing system. As we've often discussed – and the issues paper makes this point too – the Federal Government's tax settings impact hugely on the housing system. In particular, the exemption of owner-occupied housing from capital gains tax, the discounted rate of capital gains tax on other assets (including rental housing), and generous treatment of negative gearing, all operate to direct a lot of private money into the housing system, where it has pushed up prices and distorted the composition of the rental market, to the benefit of those who have already paid for their housing, and to the disadvantage of those who have not.

Now, this is something that the Federal Government does not propose to change, and in terms of the Reform of the Federation process, it passes the section 51 test (being taxation – subsection (1)(ii)).

So one's left with the impression that 'reform' on these terms would really mean the Federal Government continuing policies that benefit people who are wealthy in housing, and pulling out of programs that deliver some assistance to the housing poor.

Could States 'sovereign in their sphere' step up to funding these programs themselves? What if, as the reform process contemplates, there was also a move to address what it calls the 'vertical fiscal imbalance' between the Federal Government and State Governments?

That's a false hope. The difference in the fiscal powers of the Federal Government and State Governments is not one of mere degree (as 'vertical fiscal imbalance' implies), but a difference in kind.

As the issuer of the Australian currency (section 51(1)(xii)), the Federal Government is not fiscally constrained: it can buy anything that is for sale in the currency, can pay any liability that is due in the currency, and never run out of money. Its power to tax is vital to ensuring the acceptance and use of the currency, and the way it taxes is very important to the economic decisions of citizens, but Federal tax revenues don't actually fund Federal spending.

State Governments are categorically different: they are currency users, and as such face financial constraints that really do not apply to the Federal Government.

In our Federation, the Federal Government has, through its position as issuer of the Australian currency, a unique ability to mobilise labour and other economic resources and put them to work for the purposes of public policy. Those purposes should include the provision of housing, homeless services, and other support services and community activities that improve people's lives – and not merely defence forces, lighthouses, astronomical observances and those other matters about which legislative power was allocated to the Federal Government all those years ago.

Affordable Housing Reform Agenda launched

Last week our colleagues at ACOSS, National Shelter, Homelessness Australia, the Community Housing Federation of Australia and the National Association of Tenant Organisations launched 'An Affordable Housing Reform Agenda' at Parliament House in Canberra.

The agenda addresses Federal and State tax reform for improved affordability, subsidies for affordable rental housing, funding for homeless services, urban planning, Rent Assistance and tenancy reform.

Download a summary or the full paper for the Affordable Housing Reform Agenda.

Badgerys Creek tenants get marched out of Tribunal – and out of special provisions for long-term tenants

So the mystery of the Federal Government's 'Commonwealth tenancy dispute legislation' is becoming clearer. Aside from Defence Housing tenants, there are also dozens of tenants of the Department of Infrastructure and Regional Development at Badgerys Creek.

And we understand that as many as 30-40 Badgerys Creek tenancies are now subject to termination applications in the Federal Circuit Court. The matters will be before the Court this Friday.

We also understand that all these tenancies have been on foot for more than 20 years. This would ordinarily mean that section 94 of the Residential Tenancies Act 2010 (NSW) applies, which provides that if the Tribunal terminates the tenancy, the tenant must get at least three months from the date of termination to the date for possession.

Now, the Federal Circuit Court (Commonwealth Tenancy Disputes) Instrument 2015 says that in these Commonwealth tenancy disputes the applicable law is still the Residential Tenancies Act 2010 (NSW)... except the Federal Circuit Court can set a date for possession as it thinks appropriate (cl 8(2)).

This displaces the usual requirement that 20+ year tenancies get at least three months to the date of possession. It is open to the Federal Circuit Court to terminate the tenancies and give orders for immediate possession.

When the legislation was before the Joint Parliamentary Committee on Human Rights, the Attorney-General, Senator George Brandis, stated to the Committee:

I understand that concerns have been raised about application of the protections that exist for lessees under state and territory law. It is important to note that state and territory law will continue to govern tenancy arrangements where the Commonwealth is a lessor. This includes protection about unlawful and unjust eviction. This position is intended to be clarified through legislative instruments made under proposed paragraph 10AA(3)(b) of the Bill.

The intention of the Bill is not to remove any of these important protections, but simply to introduce a new option for resolving Commonwealth tenancy disputes in a low-cost and easily accessible forum where jurisdictional arguments would not require consideration.

In fact, the Federal Government has not only bumped these tenants out of the NSW Civil and Administrative Tribunal into the less accessible and more costly forum of the Federal Circuit Court, it has also bumped them out of the modest protection afforded by section 94 to long-term tenants.

Defence Housing tenants get marched out of Tribunal

[UPDATE: this blog post is the subject of a correction.]

A curious development in New South Wales tenancy law, courtesy of the Federal Government: it appears that tenants of Defence Housing Australia in New South Wales no longer have access to the NSW Civil and Administrative Tribunal for resolution of tenancy disputes. Instead, they'll now have to go to the Federal Circuit Court of Australia.

These marching orders come in the form of the Federal Circuit Court (Commonwealth Tenancy Disputes) Instrument 2015, made last week by Federal Attorney-General Senator George Brandis, under new section 10AA(3) of the Federal Circuit Court of Australia Act 1999 (Cth), as amended last month by the Federal Courts Legislation Amendment Act 2015 (Cth).

The legislation gives the Federal Circuit Court jurisdiction over tenancy disputes where one party is the Commonwealth – which appears to include Defence Housing Australia.

The instrument deals specifically with residential tenancy disputes involving the Commonwealth in New South Wales, and provides that a party must not make an application to NCAT, but instead go to the Federal Circuit Court. The Court will apply the Residential Tenancies Act 2010 (NSW) in determining the dispute.

Our concern is that because the Federal Circuit Court is more formal and costly than NCAT, Commonwealth tenants – particularly Defence Housing tenants – will have less access to justice.

We do not know why the Federal Government has taken this course; nor do we know whether other States will be affected by similar instruments in the future (the present instrument specifies New South Wales). We're also trying to think of Commonwealth agencies other than DHA that enter into residential tenancy agreements – if you can think of one, please let us know.

In any event, as they affect access to justice for the several thousand DHA tenants in New South Wales, these changes should be reconsidered.

Happy New Year, Brown Couch readers

And we're back... well, almost. The Brown Couch will be running at holiday pace until the end of January.

The most intriguing news from the holiday period was the story of the tenants and their houses at Welfare Street, Homebush West.

 
The 12 properties were built in the inter-war years to house local abattoir workers and later passed into the hands of the Sydney Olympic Park Authority – along with some long-standing tenancies. Last year SOPA sold all the properties, by tender, to HBW No 1 Pty Ltd, part of the Centennial Property Group, which quickly arranged for each property to be on-sold individually – for almost double what it paid for them.

There were angry scenes at the auctions and some of the tenants are digging in – it appears that they may be protected tenants under the Landlord and Tenant (Amendment) Act 1948, which affords greater protection against evictions (and rent increases) for the relatively few tenancies to which the Act still applies. Proceedings to determine the legal status of the tenants is on foot: the tenants are assisted by our colleagues at the Inner West Tenants Advice and Advocacy at Marrickville Legal Centre, which has a strong record in protected tenancy matters – read more about their work here. The other party is represented by Sevag Chalabian of Lands Legal – read more about his recent work here.

John Birmingham has written a comment on the story so far, and has captured nicely the disparity of the forces involved; he also ties in the other big news of the holiday period, which was the Federal Government's decision to defund the peak housing NGOs National Shelter, Homelessness Australia and the Community Housing Federation of Australia. Read the joint statement of those organisations here.

The decision to defund the housing NGOs comes as the Federal Government prepares White Papers both on the tax system and on the Australian Federation – with specific reference to government responsibilities for housing and homelessness services. The defunding is a rotten decision: bad for housing policy, bad for the millions of people who need housing policy to work better, and bad for our democracy.

Well done Frances Abbott, tenant

The Tenants' Union of NSW congratulates Frances Abbott on asserting her rights as a tenant.

Ms Abbott, formerly resident of Sydney, now of Melbourne, had entered into a tenancy agreement for a flat in Prahran but ended the agreement early because the premises were not secure – amongst other things, the flat had windows that did not lock.

Ms Abbott's landlord claimed instead that the agreement was ended unlawfully, and sued for compensation for loss of rent. Ms Abbott defended the landlord's claim in the Victorian Civil and Administrative by giving evidence as to the poor security of the premises and establishing the grounds for her termination of the agreement.

The Tribunal has not published its decision on the matter, but according to the media reports Ms Abbott was successful (and the landlord is sore about it).

Good on Frances Abbott. All Australian States and Territories have residential tenancy laws that place obligations on landlords in relation to the security of rented premises. The obligations vary between jurisdictions – in Victoria, landlords are specifically required to provide locks on external doors and windows; in New South Wales, the obligation is stated more generally so that landlords must provide locks and security devices to ensure that the premises are reasonably secure – but nowhere can landlords rely on the old principle of caveat emptor to let insecure and unsafe premises.

If you are concerned about the security of your home, seek advice about how you can assert your rights.

Queensland tenants services close

A grim update from Queensland, where Tenants Advice and Advocacy Services are shutting their doors.

The temporary funding from the Federal Government - made available as an emergency measure after the State Government defunded them – runs out at the end of December. A spokesperson for Federal Social Security Minister, Kevin Andrews, says funding for tenants services is 'now a matter for the Queensland government.'

By the end of the month, 21 TAASs will be closed down, all of them in regional Queensland. In Brisbane, two services will battle on without TAAS funding, providing limited services through such bits of money as they can raise otherwise.

The Tenants' Union of Queensland, being a funded community legal centre, will also continue to operate, but only from its Brisbane office, and its staff is almost literally decimated, down to about three full time equivalent positions, with further reductions likely to come.

Queensland tenants' bonds generate about $40 million per annum – tenants' money. A fraction – about 15 per cent – went to TAASs, for services just for tenants. Now that money, and more, will go the the Queensland State Government where whatever it pays for will not be just for tenants.

Our thoughts go to our Queensland colleagues who are losing their jobs, and to Queensland tenants who are losing their services.

A new way home? The National Housing Conference 2013

Last week, while many of my colleagues in the Tenants Advice and Advocacy Program were gathering for their annual Regional Network Meeting in Newcastle, I hopped on a plane to check out the 8th National Housing Conference in Adelaide.

The National Housing Conference is convened by the Australian Housing and Urban Research Institute and is generally considered the prominent meeting of minds on all things housing in Australia. Representatives from numerous Australian governments, universities and other academic institutions, finance corporations, community organisations and housing providers gather for several days to hear of and discuss the latest developments in housing related research and policy.

These are my thoughts based on the sessions I attended and, to be fair, the prejudices of my position. I'm interested to hear from others who might have a different take on the conference. I'm also interested to hear from others who were not at the conference - I'm sure there are countless doers and thinkers within the housing realm who were not in attendance.

***

I approached the conference with equal measures of skepticism and pessimism, knowing that there are a great number of challenges faced by housing policy workers across Australia, and probably always will be. Of course, these challenges pale into insignificance when compared to the standard daily experience of low income 'consumers of housing' - those for whom housing policies manifestly fail. But it is hard to shake the sense that if only 'someone' could talk this or that department into acting on the right advice, even just once, then we could take a step towards a better, fairer housing system...

My interest is in how current housing related research and thinking might be of benefit to tenants, and particularly to tenants in the private rental market. That is, after all, where the bulk of people on low incomes turn for their housing. For that matter, it's increasingly where many people on moderate or high incomes turn for theirs, too. But the more I looked for signs of recognition that the driving force behind our housing crisis is a series of assumptions - that we must deliver financial independence to the relatively well-off by offering incentives to acquire assets that perpetually increase in value - the harder it became to imagine holistic housing policies ever seeing the light of day in this country. All I got were the usual platitudes - how can we arrest the decline of home ownership in Australia? If we can't do this, how can we build more social housing? How can we get 'markets' to take care of the lot, so that we don't have to dip into consolidated revenues? Because it's pretty clear that our governments do not want to pay for housing. (A recurring theme of the conference - occasionally a good suggestion or question came from the floor, where it was met with the usual response: "the political will is not there...")

Perhaps I'm being too hard on the conference... perhaps I should just accept that housing is expensive, and will remain so while ever so much of our economic growth is reliant on its value going up and up and up. The only landlords represented at this conference came from the not-for-profit housing sector; and these 'social' landlords seem to believe they have just as much of an interest in rising asset values as any other speculative investor. The more they're worth on paper, the more cheaply they can buy their next batch of money, the more they can invest in 'affordable housing'.

Maybe that's okay if it means more properties can be rented out to more people down the track at affordable rates, if only we can get our policy settings right in the meantime? Or maybe that's just the kind of paradox that's got housing policy in such a tangle from the start. If that's what we're prepared to accept, then we end up in a very difficult place indeed: the only way that we can deliver affordable housing is to rely on housing becoming more expensive.

But it's not surprising that amateur 'mum and dad' investors were nowhere to be seen. Perhaps it seems naive to even mention this - after all, they're not exactly an organised cohort and their 'consumption' of housing is not really consumption at all - they merely park money there, hoping that it will multiply and expand. Any interest they might have in housing policy is likely to be an afterthought - something to worry about if the market doesn't deliver the kinds of returns they might have been hoping for. Amateur landlords are unlikely to bring much of use to a conference about housing.

The irony is that we need them to. If we're looking for market based solutions to a housing affordability crisis then we need to take a closer look at what the markets are doing. It's no good to simply discuss what we'd like our markets to look like, if only we could... I don't know... if only we could talk this or that department into acting on the right advice. We need to bring these players to the table, to engage with them, to hear from them and learn from them as much as to try to convince them that the part they play in our housing system carries just a hint of social responsibility.

... because right now our markets are not delivering affordable housing. They are delivering wealth to those who are able to buy in. And those who take this option on that basis - and let's face it, that's pretty much every property owner there ever is, was and will be - are making it ever more difficult for others to even consider the option a valid one. This applies to social housing landlords who want to use their growing wealth for social good, as much as it applies to slumlords, amateurs and everyone in between.

The good news is that markets are delivering expensive homes to tenants just as much as they are to owner occupiers. It's just that they do so on very different terms. If we are prepared to accept that this is simply the way of all things, then so be it. But if that's how it is then let's put some thought into what it means for the interests of tenants, and what we might come to expect...

... and if we're not prepared to accept that, how do we build the case for change, given neither governments nor markets are ready to deliver?