Disrupt landlords

This is a slightly modified version of opening comments I made to the recent AHURI conference Disrupting the housing market in a session called 'New technologies, ethics and regulation'. Check out all the presentations here:

L-R: Sidesh Naikar, DSS; Nerida Conisbee, REA Group; Leo Patterson Ross, TUNSW; Prof Chris Pettit, UNSW City Futures. Photo Credit: AHURI

I frequently find myself arguing both against particular disruptions that show up, while wishing for serious disruption in our housing sector which is failing so many. In my few minutes I’ll make some observations about why we aren’t getting what we need.

We need to examine each change to our housing system with eyes open. It can be obvious to examine who benefits or suffers from change, but sometimes we can forget to also examine the impact of retaining the status quo.

We rightly point out that rent-bidding apps like Rentberry are not nearly as transparent as they claim and forces tenants to compete with other tenants to pay the highest rents possible. What we can miss is that allowing a real estate agent to set the rent based on what they think the market will bear is definitely untransparent and forces tenants to compete with other tenants to pay high the highest rents possible.

Similarly with online platforms which allow ever greater information to be gathered – they allow discriminatory behaviour. But it is naïve and demonstrably wrong to think that pen and paper applications and face to face viewings don’t also facilitate this.

The problem is with our competitive private rental market, which encourages people to use pre-existing biases as a shortcut to choosing a tenant, rather than the particular apps themselves.

It can also be easy to identify issues only within the frame of how a disruption is impacting the system without acknowledging the pre-existing systemic issues the disruption may highlight or exacerbate. This has been an ongoing issue in studies but particularly in media reporting around short-term letting.

In many ways, this relates to the democratisation of data - it is rarely put in the hands of practitioners or people with lived experience who ask different questions of the data.

Most data concerning the private rental sector in Australia has been created by and for the real estate industry, to aid investors who seek to enhance their investment decisions. The data is held in the hands of people who seek to profit from either holding the data or from the decisions which can be made from the data.  Controlling the data helps control the narrative which is a key tool used by all those in power – this is why rent increases are often reported in positive ‘growth’ terms rather than a negative phenomenon of loss.

The government and NFP sectors are not immune from this either, holding great data sets which are not made available to the public, or are made public only after being sanitised and asked the questions which are safe to ask from the data holder’s perspective. Given both the importance of providing shelter, as well as the degree of subsidy the public provides governments, community orgs, private investors and academics, there should be no reason why data created with the benefit of those funds shouldn't be as open as possible.

So, what do we need to do? So far disruption in Auatralian housing has ultimately designed to maintain the status quo. assist landlords and investors not tenants. it's interesting that Airbnb and Uber, as much as they are problematic otherwise, both set out to disrupt the service provider, hotels and taxis, not the traveller or the passenger. In Australia, tenancy disruptors like TrustBond, Snug, and others try and present as being for tenants, but I believe they realised that the power rests heavily with the service provider and since they don't have a plan to disrupt the physical supply of rental housing, they have sought to either reduce service provider costs without any benefit flowing to end user or eke out essentially private taxes from end users. This is particularly been the case with alternative bond loan products which claim to replace cash bond but actually protect current landlord interests by maintaining their current costs and risk profile, while extracting a fee from the end user tenant to access the product.

We need to disrupt landlords, of all sorts. The disruption needs to happen at three levels – first the current legal and social framework needs rewiring by either people or governments. We need to rebalance the relationship between landlords and tenants and recast the provision of housing as an essential service to be delivered to the people who need it when, where and how they need it. This will be the great disruption for many landlords. While we do that, we open up the data and let people ask the questions that need to be asked of our housing system. Those two things open up opportunities for disruptors, whether for profit or not, to seek to improve tenants lives, rather than just joining in the pile-on of people seeking to rake money off them.

Renting with pets: a canary in the coal mine

To keep, or not to keep a pet? Ever since we raised the issue in our contribution to the review of NSW renting laws, debate has raged about whether this should be a decision for investors or homemakers to make. Unless you've got a particular love for, or an aversion to animals yourself, the side you come down on will perhaps be influenced by whether you spend your time talking to landlords or tenants.

Our views on this issue have been clearly and firmly put, and are a matter of public record. Today we're going to step back a little to explore what this discussion tells us about the state of our housing market. Our conclusion is that the "renting with pets" debate is a study in all that is wrong with our housing system, and a clear indicator of why it needs to change.

There are two stories to tell here. The first is how the private rental market has become the long-term landing place for a growing number of Australians looking to establish a new home, with limited prospects for debt-free home-ownership in the lifetimes of many. The second is how the residential property market remains dominated by small-time investors who are not motivated by the needs of householders, nor any broad sense of social responsibility, but by capital gains.

In New South Wales, there were 83,870 more rented dwellings at the 2016 Census than there were in 2011. Compare this to owner-occupied dwellings, which grew by 35,362 over the same period - with 19,649 more owned outright, and 15,713 more owned with a mortgage. The number of unoccupied dwellings grew by 19,403, which means any new dwelling built in the last five years, or established dwelling that changed hands during that time, is more likely to have become a rented home than anything else.

Of the 2.15 million renters in New South Wales at the Census, almost 90% were in the private rental market relying on so-called "mum and dad" investors for a place to call home. That's up from about 83% in 2011. The lion's share of renters are aged between 20 and 40, and a quarter are aged between 40 and 65. 41% of renter households are families with children, making them the single largest group of renters, while 20% are couples making a home together. 27% of renters are single and living alone, and 9% are sharing with others. Many would like to bring a pet into their homes.

Analysis from the 2011 Census confirmed that a growing number of households are renting for ten years or longer - not necessarily in the same home - and we expect to see this pattern continue as academics and researchers crunch the 2016 data. The proportion of dwellings that are owner-occupied is in slow decline, but those that are rented is rising more sharply, showing that fewer renters are now exiting the market to take on home ownership.

Critically, the number of people taking on debt to achieve home ownership has tapered off quite considerably. The growth of homes owned with a mortgage has slowed in each Census period since 2001. Compared to rented dwellings, for which that sharp rise has been recorded, this growth has been particularly slow in the last five years.

The number of homes owned outright has recorded similarly slow growth, which provides an ominous sign for the growing ranks of long-term renter households - even if you do manage to buy a home some day, chances are you'll never pay it off. In a nation that has defined itself as egalitarian and propertied, that's a source of frustration in its own right. Add the lack of agency Australia's renter households have over basic questions such as whether to plant a tree, paint a wall, or keep a pet, and it's easy to see why the "renting with pets" issue continues to flare up. For those who would write these frustrations off as mere indulgence, bear in mind that for the large numbers of tenants who are grown-up, pursuing long-term relationships and raising families in their rented homes they are simply the issues of the day. In another ten or fifteen years from now we may well be wondering why our aged-care and retirement systems - designed with a home-owning population in mind - have simply collapsed in a heap around us, but for now the "renting with pets" debate is a clear sign that all is not well and those most affected are not going to forget it anytime soon.

On the other side of this equation are our landlords, who by definition do not find themselves in the position of having "missed out" on property ownership. It's a little harder to get a handle on them, but we can use statistics from the Australian Tax Office to paint ourselves a picture. The last data we have available is from the 2014/15 financial year, and it tells us that the vast majority of Australia's tax-paying landlords own only a single rental property or two.

They're 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.

Because they're not building economies of scale, landlords tend to stick to a simple and rigid formula. The tax data also shows that while they're holding property, almost two-thirds of Australia's landlords are operating at a loss.

They do this because they can count their investment losses against non-investment income, such as salaries and wages, for income tax purposes. By running at a loss, landlords can reduce their day-to-day tax liabilities, masking the expense of holding property. They also expect property to go up in value, providing tax-discounted windfalls when they sell. In a sense they're gambling - losing a little money today in the hope of making it all back and more in the future, and our tax system encourages this through negative gearing and capital gains tax discounts. But in the meantime the majority of Australia's landlords are still running at a loss, which makes them highly sensitive to unanticipated expenses.

For many, this sensitivity is built into their investment strategy, such that they will be overly concerned with the type of household they will rent their property to - and just as importantly, who they wont. Tenants with pets are seen as a risk, even though they are clearly liable under renting laws for any damage their pets might cause. Our renting laws are less clear on whether a landlord can over-rule a tenant's decision to keep a pet, but many take this as a given. It is common practice for tenancy agreements to include a "no pets" clause at the insistence of the landlord or their agent.

The "pets and renting" debate helps us identify key changes we need to make to our inequitable housing system in order that it may provide greater equality of experience. At the federal level we need to rethink the way property is taxed, and find ways to foster a view of investment that delivers homes for families rather than just bricks and mortar. At the state level we need to revisit renting laws, and give tenants greater agency over the decisions they may make, and the responsibilities they take on, as householders.

Caveat Rentor 2 - Tenancy Economics

Today's post is a guest entry from our Principal Solicitor, Grant Arbuthnot. Grant has more than 20 years experience advising tenants, their advocates, and has worked for the Tribunal and community legal centres as well as the Tenants' Union. Here are his thoughts on tenants as consumers.

Economists and accountants both agree this joke stinks. 

The assumption a healthy consumer market has suppliers competing on price, quality and service for the business of consumers allows another examination of our rental market.

At present, there is a shortage of supply of affordable premises for rent. Competition between prospective tenants for available premises is understandable.

Consumers competing for the business of suppliers is not healthy. Consumer competition means that pricing favours the suppliers, and that quality and service are not significant issues.

Tenants might expect that once a tenancy has been secured the competition will cease. However, this is not the case. Sitting tenants compete with prospective tenants to retain their tenancy.

In a fixed term tenancy, tenants are aware that they can be required to leave at the end of the fixed term. Fixed terms are rarely greater than a year. In a periodic tenancy the vulnerability is present and constant.

This is because the law allows landlords to dispose of tenants without having to give a reason.

Tenants who demand contract performance by the landlord risk being replaced from the surplus of prospective tenants.

This is usually about repairs. It is the most popular breach of contract by landlords. The likelihood of receiving a termination notice (without grounds) is increased by demanding repairs.

It is not surprising that many tenants put up with expensive and substandard premises to avoid the stress, cost and inconvenience of having to move house.

Amending the Residential Tenancies Act cannot undo the problems of supply and demand. But abolishing no grounds termination can relieve sitting tenants of the constant competition with prospective tenants. They might even get some repairs done.

To find out more about how tenants are affected by unfair evictions, visit Make Renting Fair.

How will your tenancy end?

There are over two-dozen ways your legal interest in property - aka your tenancy - could end if you're renting in New South Wales; even more if you're in social housing.

In most cases, your tenancy doesn't end without you relinquishing the property to the landlord. In all cases, a trigger of some kind is required. A tenancy doesn't end simply because the fixed-term period concludes - after the fixed period your tenancy continues as a "periodic agreement" under the same conditions as before.

Some triggers for termination are less common than others. For instance, your tenancy might end if your landlord's interests become vested in you - perhaps if you were to marry, or form some other legal union under which all your property interests merge. Or it might end if a person with superior title, such as a mortgagee, becomes entitled to exclusive possession of your home. Similarly, your tenancy might end if a person succeeding title, such as the beneficiary of a reversion of your landlord's property rights, becomes entitled to the property at the exclusion of others.

Your interest in a tenancy ends if a final apprehended violence order that excludes you from the premises is ordered against you.

Your tenancy could end if you die.

Your tenancy could end if your home becomes unlivable through no fault of your own or the landlord's - for example a severe storm taking out part of the property.

Your tenancy could end by returning the property to the landlord by prior agreement. For that matter, it could end by returning the property to the landlord without prior agreement - although that method will generally always cost you something.

You could end your interest in a co-tenancy by giving notice and moving out. You could end your co-tenant's interest by taking them to the Tribunal and getting an order, in exceptional cases.

You could trigger the end of your tenancy by obtaining a Tribunal order for termination on hardship grounds. Your landlord could do the same.

You could end your tenancy because the landlord isn't keeping their part of the bargain. If you're not meeting your own obligations, your landlord could do the same.

Your landlord could apply to the Tribunal to end your tenancy if you've been using the place for an illegal purpose. They could also do that if you've threatened, abused, intimidated or harassed them, or if you've caused serious damage to the place or injury to them or a neighbour. They'd have to prove it, though...

You could end your tenancy if the landlord decides to sell. Your landlord could end your tenancy if they do sell, and the buyer wants to move in - but only if you're in a periodic tenancy.

You could end your tenancy if you need to move into an aged-care facility, or are offered a place with a social housing landlord.

If you're a social housing tenant, your tenancy could end if you become ineligible for social housing, or if your landlord wants to move you to another place and you decline. Strict procedures are to be followed in either of these scenarios.

You could end your tenancy because the rent is increased, if you're in a fixed-term agreement of two years or more (but hardly anybody is...)

You could end your tenancy without a reason, at the end of a fixed term or during a periodic agreement. Your landlord could do the same.

But there is always a reason to end a tenancy.

As a tenant, being able to end a tenancy "without a reason" is appropriate, as it allows you the basic freedom to relocate as your housing needs change. In general, there is no reason to justify those needs to your landlord, or explain to them how your circumstances have changed such that you now wish to move house. Your landlord should have no concern beyond knowing when the property will become available to them again, so that the comparatively simple process of finding a new tenant can be commenced.

On the other hand, landlords being able to end tenancies "without a reason" is bad public policy. It undermines tenants' abilities to establish their homes with any certainty. As we see it, landlords tend to use the "no reason" option in one of three circumstances: where they have a good reason that the law does not accommodate, where they have a good reason but would rather not be put to the trouble of proving it, or where they have a questionable reason that they'd rather not go into.

A fairer renting law would give landlords a couple of additional reasonable grounds, and remove their ability to end tenancies without a good reason. With this in mind the Tenants' Union of NSW, along with more than 40 allies and supporters, are calling on the Government to Make Renting Fair. Visit rentingfair.org.au to find out more.

2016 Census confirms housing unaffordability is for renters

Population and housing data from the 2016 Census has been released today, which means it's time to get your nerd on.

There are three critical things it tells us about housing in New South Wales.

First - there's been an increase in the number of households living in our state over the last five years, up from 2,471,305 in 2011 to 2,604,320 in 2016. The number of unoccupied dwellings has also increased, from 265,338 to 284,741. In percentage terms, unoccupied dwellings have risen from 9.7% to 9.9% of all dwellings. The idea of a sustained influx of foreign investors who leave properties empty is looking a little shaky on these numbers, but even so we're going backwards. It's clear we should be doing more to encourage property owners to put those empty dwellings to use, like taxing the unimproved value of land rather than transactions and transfers.

Click for full size!

Next - there's been a significant increase in the number of people renting in New South Wales. 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. There are more owner-occupiers, too, but as a percentage they've gone backwards. Households who own outright have gone from 33.2% to 32.2% of the population, while households who own with a mortgage have gone from 33.4% to 32.3%. That means home ownership across New South Wales has declined overall since 2011, from 66.6% to 64.5%. It also means that more people are renting for longer.

Finally - it will come as no surprise that making the rent is a growing struggle. The median rent across New South Wales has risen from $300/week in 2011 to $380/week in 2016. More telling is the number of renters whose rent takes up more than 30% of their income - that's gone up from 11.6% to 12.9% of the renter population. On the other hand, the number of home owners with a mortgage who find themselves in similar financial circumstances, paying more than 30% of their income towards their loan, has decreased from 10.5% to 7.4%. In case it wasn't already clear, low interest rates are great for those who already own a home, but they're not so good for anyone hoping to join their ranks in the foreseeable future. As much as they might appreciate grants and stamp duty discounts, what prospective homeowners need most is to be able to save.

So, here's our take-home message for policy makers at all levels: there can be no housing affordability without fixing the rent.

Ever the forgotten people

It's been some time since we marked an anniversary on the Brown Couch, and clearly this won't do. We can remedy this today, as it is the seventy-fifth anniversary of Sir Robert Menzies' delivery of the Forgotten People speech. On 22 May 1942 Robert Menzies broadcast his speech over the wireless, as part of a series of "fireside chats".

The speech remains an important touchstone for Australia's political and cultural narrative, because of the role it played in establishing the dominance of the two major parties in our parliamentary system. It preceded the formation of the Liberal Party of Australia that Menzies himself would lead, and it summarised the political philosophy that has more or less captured the centre of Australian politics ever since. At its heart was a forgotten middle class - "those people who are constantly in danger of being ground between the upper and the nether millstones of the false [class] war; the middle class who, properly regarded represent the backbone of this country."

Menzies' and the Liberal Party would go on to win government in 1949. He remained the Prime Minister of Australia until 1966, making him the country's longest serving leader. Those who seek to reach similar heights within the Liberal Party often pay tribute to his rhetoric, as Joe Hockey did when he referenced "lifters and leaners" in the 2014 Federal Budget; or his legacy, as Julie Bishop did when she joined Prime Minister Turnbull in challenging Tony Abbott for the party's leadership in 2015. But perhaps more importantly Menzies' rhetoric of the "forgotten middle class" continues to set the tone for politicians, journalists and commentators who wish to occupy and define the politically fertile middle ground. "John Howard's battlers" and even "Tony's tradies" come straight out of the Forgotten Peoples' playbook, while the Australian Labor Party puts its focus on "values" and the dignity of work, rather than its origins in late nineteenth century class consciousness and historical links to organised labour, as it strives for middle-ground appeal.

The Brown Couch took an in-depth look at the Forgotten People speech back in 2012. We discussed how the text of the speech - particularly as it concerns the notion of "home" - might be interpreted through a housing policy lens. We saw how Menzies' conception of "homes material" was a precursor to the 1956 Commonwealth State Housing Agreement, under which fewer public housing dwellings would be built or retained and more funds were provided to building societies and state banks to aide "the habits of frugality and saving "for a home of our own."" In this way, the post-war experiment of public housing for Australia's returned soldiers and working families began its drawn-out end. Australian homes would no longer be built by governments but by the forgotten middle class.

We explored Menzies' notion of "homes human", in which the home is construed not by its four walls and hollow rooms but by the people and relationships emerging from within. Noting that Menzies seems to have excluded renter households from his ideal here, we examined the history of Australian home-ownership, and the policies and economic conditions that have supported it over a number of generations. In particular we saw how the continuing political interest in supporting home-ownership gradually morphed into support for homeowners. We might now say this has shifted further still to support home values, given so much of the nation's economic wellbeing is tied up in our homes' worth as financial assets. Whether or not they are owned by the people who make them their home should now seem immaterial to this idea.

Finally, we looked in on Menzies' "homes spiritual", where one's sacrifice, frugality and saving to make a home is the very expression of a "fierce independence of spirit". Here we noted that, as far as housing is concerned, saving and frugality had long since given way to borrowing with the expectation of accelerated capital gains. We might now also say that drawing on said gains to fund high levels of consumption not only ensures a home-owner's independence is spiritually rewarding, but financially so as well. And not just for the individual - it could prop up an entire economy if everything else falls apart.

All the more concerning, then, is the exclusion of long-term renters in Menzies' conception of the middle class - those forgotten people he implores us still to forget. The steady decline of first home-buyers and the rise of second, third, fourth and fifth home-buyers must be eroding the very soul of this nation of once fiercely independent folk. More concerning still, from an economic point of view, is the likely concentration of wealth into fewer and fewer sets of hands, and the loss of a key driver of confidence and consumption, if current housing trends continue.

When we looked at the Forgotten People speech five years ago, the Australian property market was going through something of a wobble. It appeared at the time that house prices might have started to peak, and a correction about to begin, so we questioned the very idea that purchasing homes for capital gains amounted to savings. We all know how that turned out. But in our conclusion, we proposed that those with the best claim to live in Menzies' "home spiritual" of responsibility, savings and frugality are tenants. Capital gains in housing may not since have fallen away, but we're inclined to stand by this conclusion. For tenants, that fierce independence of spirit comes from scrimping and saving each week to make the rent, from constructing the best possible home even though it could all come to an end with a simple notice in the mail. From living a full life while making do, staying under the radar to keep that roof over one's head, and moving on with good grace when the time sadly does come.

Whether or not you're in a well paid job - or any job at all - there is deep satisfaction in knowing your home is something you work hard for. Homeowners must feel this, too. No doubt they feel it even as they pass the point where their home's value starts spitting out two or three times more than what goes into it each week, or as prices start to gain more in a year than one can earn doing most ordinary jobs. Sure, there's risk in borrowing against the family home, but as long as you can service the debt and the property's value keeps going up it will more pay for itself in the end. Who wouldn't be satisfied by that?

But taking some of that hard-earned free money and investing it in more housing, where it can work towards the accumulation of more free money? That's not hard work. That's just skimming off someone else's hard work, which is why we don't think Menzies had landlords in mind any more than he did tenants when making his point about "homes spiritual".

Here we might stop to mark some other important anniversaries. It is precisely 219 days since Bernard Salt had a short article published in the Weekend Australian, in which he lamented that young people are eating too much smashed avocado on toast in expensive cafes when they should be putting their money towards home loan deposits instead. And it is now eight days since Tim Gurton said on 60 Minutes that he didn't turn his inheritance into a rich property portfolio by spending $40 a day on smashed avocados and coffee, and not working.

As we have seen, the idea that a home is built on sacrifice is a theme that runs deep throughout Australia, but the reaction to this characterisation of stupid and improvident youngsters not doing enough to get on the housing ladder suggests that, at least in its current form, its time might soon be up. Menzies' forgotten people could put nice things on hold in order to save and acquire a first home; so too their children and many of their grandchildren. Millenials suspect that when it comes to housing they've already missed out. Their future already sacrificed, they're having nice things instead. They needn't give up on "homes spiritual" or "homes human" in the meantime.

Far from spurring the hapless youngsters of Australia on, comments like Salt's and Gurton's may be just what's needed to galvanise another emerging class - that of the long-term renter. This takes us right back to the opening passages of Menzies' speech, and the idea of a forgotten middle class that occupies a space between opponents in a fictional class war. Perhaps its time this middle class was redefined, its challenges reassessed? As we reflect upon this anniversary of the Forgotten People who continue to influence our nation, it's worth asking - who among our political leaders would be brave enough to do that today?

Caveat Rentor - Tenants as consumers Part 1

Last month Jessica Irvine, senior economics writer for The Age and the Sydney Morning Herald, delivered the Ruby Hutchinson Memorial lecture hosted by the ACCC and Choice. It is worth listening to the whole speech as Irvine addresses the need for changes in housing, childcare and disability care. Today however, we'd like to extend and explore one of the most important lines of Irvine's speech.

"Renters are consumers too. They're consuming a service and they're getting a very poor one in many cases"

Jessica Irvine is absolutely correct - renters are consumers. However, a large part of the problem with our renting laws is that they consider renters to be just like other consumers. This means the legislation makes assumptions about relationships between landlords and tenants - as service providers and consumers - that lead to really unfair situations.

Part of the reason renting isn't like other consumer transactions is the scarcity of the service being offered. If you need some food, or some clothes, or white goods, you have many alternatives and probably a range of products to choose from. It is a rare grocer who only has one banana on the shelf, but tax data tells us about 70% of landlords only own one property, and 90% own two or less.

You might say "but there are over a million landlords, which means there must be over a million properties in the rental market - how can that lead to scarcity?" Even if we take all the properties as a whole, they are not all in the same place, of the same configuration, or the same quality. Remember the last place you rented? There is only one property like that property in the world. Whereas you could go to a competitor of your nearest white goods store and find another fridge just like the last one you looked at, you can't do that with a home.

The other factor is the importance of the service. It's much easier to make do when some of the food in your fridge goes bad, or you get a really bad rip in a pair of jeans, than it is getting by without a home. For instance, you have the right to a refund for a fridge if it's faulty. The shop or manufacturer might give you a new one (just like the old one), or the cash value of the entire purchase price so that you can go and buy a new one. This is true regardless of whether you bought it last week or 6 months ago. If your rented property is faulty you don't get an exchange or a full refund, because the landlord knows two things. First, there isn't another home in the warehouse for them to simply hand over. It will be significant effort on your part to find a new home. And second, you would generally rather stay in the faulty home than sleep on the street.

In many ways this is why our tenancy laws are so inadequate. Assumptions are made about the way parties interact which assumes a regular consumer - business relationship, and that all is required of the law is to "balance the interests" of these parties. But landlords are not like other businesses. They generally only own one or two rental properties, so they are not transacting with their "consumers" with much regularity. If they're really churning through tenancies they might be transacting on average once every six months or so, but given most tenancies last for at least couple of years it's likely to be far less frequent than that. They have no concern for branding, or public relations because they have so few interactions. They are not concerned about moving product because they don't really have much of it to move. They know their "consumers" need it so they don't even really need to promote themselves as a "business". Even their agents - who do provide a service but not for tenants - are more concerned about how landlords perceive them because of the low number of interactions compared to potential "customers".

Added to this, consumers in the private rental sector don't even have the same ability as other consumers to enforce their rights.  Imagine going to fast food restaurant, like McDougall's and they refused you service because one time you took their competitor, Starving Jill's, to the Tribunal for serving a mouldy burger. Bizarre yes? But this is exactly what tenants face:

Ultimately, we need tenancy laws that recognise that tenants are consumers, but at the same time that renting your home is a special kind of consumer service. Renters are consumers, but at the same time, they are families, workers, and community members. The inadequacy of the service is in large part due to the failure to recognise this dual role - which doesn't exist when you buy a new fridge or choose to eat a different type of apple. Changing this will mean having the courage to stand against the claim that the property owner's investment decision is more important than the tenants' home.

We also need to rethink the assumption that a landlord is not "in business" for the purpose of the Australian Consumer Law. There is need for a bit of guts to stand against the sad puppy-dog eyes of investors who are only too happy to receive the benefits of negative gearing (a tax deduction for making investment in your business), but not submit themselves to the consumer protection that should come along with it.

Why landlords should support pets in rentals

The Daily Telegraph has published an article about a push from the left of NSW Labor for a ban on "no pets" policies in rentals. We've previously discussed why reforming no pets clauses is a really good idea. This is a good signal that significant parts of the Labor party are realising that property ownership is not the be all and end all of the way we create homes. For many people, creating a home includes caring for a pet.

The NSW Greens have held renter positive policies for a while now, and the push from Labor left indicates that the political appeal of renters across the spectrum is growing. We encourage all parties to adopt these kinds of policies. To help in this effort, we'd like to address the landlords in the room, and talk about why you should support this push, and whether you support Labor, Liberal, the Greens or the Christian Democrats, let your representative know that you are on board.

It is better for the animals.
Even if you don't like your tenants, from an animal welfare point of view this is a no-brainer. The RSPCA has been calling for these changes up and down the east coast - and their interest is clearly on the animal welfare side of this issue. Our shelters are full, and there is a large and growing population of people crying out to help.
No one is proposing Palominos in penthouses, or Angus cattle in apartment complexes. A reasonable restriction on the types of animals allowed in homes is acceptable - but should be set with the animal's welfare and needs of the community as the guide.

It is better for your insurance.
Every sensible landlord holds insurance on their investment. For most good insurance policies these days, pets are covered - but only if you have declared them to the insurance company.

The pets are here, whether you know about them or not. While many tenants don't have pets for fear of being caught and losing their loved one, sometimes tenants who owned a pet before moving also couldn't face the thought of their companion being put down in the shelter - so they conceal them or pretend they belong to neighbours. Isn't it far better that tenants can be honest and tell you about their pet and you can enjoy the confidence knowing that even if there is some damage over the bond, your costs will be covered?

And in all likelihood, it won't cost you.
Tenants pay bonds. Less than 10% of bonds are claimed in full by landlords, and in our experience the majority of those claims are actually made on rent arrears or tenants leaving the lease early. That means you've got a whole lot of bond to give you comfort around the more minor every day costs like fumigation, and extra wear and tear on carpets or floorboards. Most pet owning tenants pay for these things before it gets to the bond anyway, but the system is there.

Even if you do need to make a claim, no worries - us tenants have already subsidised your tribunal application. We pay $14 million a year from the interest on our bonds to the Civil and Administrative Tribunal to make sure your costs aren't too high.

In the end, the question you really need to ask yourself is - would you vote against this face?

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!

Welcome to 2017 - the year of the renter

Welcome back to the Brown Couch for 2017. It's been a swell (at times sweltering) break - now it's time to dust off the old keyboard and get ready for another big year.

Domain's Jennifer Duke has dubbed it "the year of the renter" on account of the rising population of Australians who are long-term tenants, tipped to outnumber home-owners in parts of the country during 2017. Duke opines that "... if the growing group of tenants are to be housed with security and decency, fixing the rules that surround the rental market is something that has to be done now." We couldn't agree more.

While we're firmly in the "every year is the year of the renter" camp, we must admit there's a growing interest in tenants' rights across the country. The perennial housing affordability conversation is slowly starting to explore the costs and conditions of long-term living in the private rental market. Of course, there's still a long way to go, but there's a noticeable change in the air. For one thing, our own engagement with the mainstream media has never been higher, and we're getting a far more sympathetic ear than we might have expected even just a year or two ago... For example, check out our spot on ABC News 24's Weekend Breakfast program from late last year:

There's a long way to go, but there will be a couple of big opportunities to push the discussion further as we move through this current year of the renter. For one, we'll have a new Premier who has listed housing affordability as a key priority area, and while we don't yet know what this means for the Social Housing and Fair Trading Ministerial portfolios, we'll have to take it as a positive sign as the Government considers the final stages of the statutory review of renting laws, and pursues its ambition for Social Housing reform. Fingers and toes crossed, just for good measure.

We can expect some of the 2016 Census data to start coming through towards the middle of Autumn, which will tell us just how much our renter population has grown over the last five years. And we're expecting a report from a national survey of tenants that was conducted late last year by Choice, National Shelter and the National Association of Tenancy Organisations, so watch this space. In the meantime the next issue of Rent Tracker is just around the corner, and we'll have more to say about the impact of Airbnb on the Sydney rental market in the coming weeks.

2017 is set to be another big year, full of opportunities to join the push for a better deal for tenants. Keep an eye out for us, and jump in where you can.

Running repairs? The cost of longer term tenancies: part 1

Recently we reported on a round table meeting convened by the Minister for Innovation and Better Regulation (which includes Fair Trading) to discuss options for longer term residential tenancies. One of the ideas that was kicked around at the round table was that if landlords agreed to offer longer term leases they should get something in return – for example, tenants taking on the responsibility for repairs and maintenance of the premises.

We don’t think tenants giving up their established right to repairs is a very good idea.

In general housing available to renters is of lower quality than housing for owner occupiers. It is more likely to be in need of repairs, and almost three times more likely to require ‘essential and urgent’ repairs (ABS 2002).

So renters who trade away their right to repairs, if allowed, should generally expect that they will need to front up for repair costs through the year. But how much?

Estimating repair costs for a rental property is not an easy ask – the age of the house, size, fixtures, and number of people who might be living in it all need to be taken account of.

Property management ‘experts’ advise landlords to put aside funds for repairs and maintenance costs each year. They offer a range of methods to calculate what this amount should be, including for example:

• a percentage (e.g. 5%) of rental income 
• ‘the 1% rule’, i.e. a percentage of the value of the property 
• ‘the square metre’ rule (putting aside say $10 for every square metre) 

Following these methods, if a tenant was considering how much to put aside for repairs for this recently listed Kogarah rental – a 2 bedroom house on a 300m square block of land, advertised for rent at $550 a week, and estimated to be worth around $900,000 - they’d be looking at around:

• 5% of rental income: $1,430 annually 
• 1% of value of property: $9,000 annually 
• ‘Square metre rule’: $3,000 annually 

These methods of estimation assume that while the tenant may not spend the full amount one year, they might be up for higher costs the next (or vice versa). Note the significant variance in the figures above. Despite this, experts do not recommend any one method above another - reinforcing the point that there is no clear or reliable method for predicting what repair and maintenance expenses might be. The only thing that a tenant can confidently predict is that as the property and the fixtures within it age, repair and maintenance issues will come up more often. And they may cost more to fix.

Alternatively a tenant could look at how much has previously been spent annually on repairs for rental homes. The most recently available data on this is from the Australian Tax Office from 2013 – 2014. It indicates that around 75% of NSW landlords did repairs to their rental properties during this period and on average they spent around $1,200 (if you are keen to look at these numbers in closer detail you can download the 2013 - 2014 ATO tax statistics on rental income here). This tells us how much landlords claimed as deductible repair expenses during this period (so a rough guide to how much was actually spent by landlords over the year), but might not be the most accurate indicator of how much should have been spent on repairs each year.

Renters often call up their local Tenant Advice and Advocacy Service because their landlord is avoiding or attempting to minimise the amount they spend on repairs for a rental property. Perhaps a more accurate figure then comes from an older source – the ABS Australian Social Trends report on ‘Housing Stock: Housing condition and maintenance’ from 2002. This reports that on average an owner-occupier household spent $1960 each year (i.e. this is the amount home owners spent repairing the home they live in). Allowing for inflation this would suggest tenants could more reasonably expect to pay around $3,115 every year on repair and maintenance costs.

These figures are averages. So while some tenants who agreed to take on repair costs during their tenancy might expect to pay less, some could be facing considerably more.

Of course, tenants will be hit harder by repair costs than their landlords were. Repairs undertaken by landlords for a rental property can be claimed as a deductible expense against a landlord’s taxable income – so landlords effectively pay less to repair the property than a tenant would.

And the impact of taking on repair costs in tenancies would not be felt equally by all tenants. Low income tenants would be disproportionately hit by repair and maintenance costs. They generally rent older, lower quality housing - but while their housing or the fixtures within it might be of a lower standard, it won’t necessarily cost them any less to repair or maintain the property. In fact they will likely face repair and maintenance costs more frequently, and have to pay more for these repairs (ABS 2002).

Let’s look at some common scenarios regarding repairs while renting. What could each of these end up costing a tenant?
                                             
Problem: Your phone line or internet is playing up        

Costs start from: Phone technician (Telstra?) call out costs start at around $150

Problem: Toilet clogged up or leaking
Costs start from: Plumber call out costs start at around $150

Problem: Gas oven won’t light
Costs start from: Electrician call out costs start at around $150

Problem: hot water system’s broke
Costs start from: Electrician call out costs start at around $150

Problem: Cockroaches start creeping out of the woodwork
Costs start from: Professional pest control packages start from around $149

Problem: Lock not locking
Costs start from: Locksmith call out costs start at around $135

These are just the starting costs. In each example a spare part, or additional labour could be required. Perhaps a fixture (dishwasher, ceiling fan, oven, etc) needs to be replaced altogether – so just start adding on the dollars from there.

Many tenants are already close to or at their budget limit for housing costs in rent (especially given the current lack of affordable rentals across NSW). Tenants may not have the financial resources to attend to repair and maintenance issues as and when they occur. Perhaps not even for the duration of their lease. Instead they may be forced to live with housing in a state of disrepair throughout the remainder of their lease, and then be hit up with a very large bill to complete these repairs when they move out.

Tenants certainly want more security. They want stability so they can confidently make a home for themselves and their family in their rented housing. They shouldn’t be forced to trade away established rights at considerable cost just to get this.

Who would benefit from long fixed term tenancies?

Questions raised in the recent review of the Residential Tenancies Act included "what incentives would encourage the use of longer term leases?" and "what are the key challenges for landlords in offering longer term leases?"

For our part, we offered in response a reprise of an old Brown Couch favourite: long fixed terms are not the solution. Tenants would be better served by expanding the list of grounds upon which tenancies can be brought to an end, and getting rid of the "no grounds" provisions that allow landlords to end tenancies without a good reason.

But the review concluded with a report recommending:

The Act’s provisions in relation to no grounds terminations should remain unchanged. The Government should consider other ways of improving security of tenure in the rental market, including through facilitating the use of longer fixed term leases (recommendation #17).

... and:

That the Government give further consideration to other changes that could be made to the Act to further incentivise the use of longer fixed term tenancies (recommendation #16).

It was with these recommendations in mind that the Minister for Innovation and Better Regulation, whose portfolio includes Fair Trading NSW and the administration of the Residential Tenancies Act, recently convened a round table meeting to discuss options for long term residential tenancies. The Tenants' Union scored an invite, as did the Property Owners' Association, the Real Estate Institute, and a number of other interested parties.

Despite our reservations, we entered the discussion with an open mind. We hoped some useful and interesting ideas for reform might emerge, given the growing acceptance that the private rental market is doing such a poor job of delivering secure homes for those who live there. Instead, we got raw insight into what landlords would be looking for in exchange for long fixed term tenancies: more money/reduced costs, minimal loss of control, and a right of veto. Anything short of that, and apparently landlords would all go on strike.

In other words, landlords won't be compelled to offer secure tenancies - they'll only do it when it suits them, and interested tenants would have to make it worth their while. It's almost as though they know they've got tenants over a barrel, and they can sense a way to juice them for just that little bit extra...

This might include asking for a higher rent, or being allowed to levy extra charges, in exchange for a long fixed term tenancy. Or it might include asking tenants to trade off some of their established rights, like agreeing to attend to the property's repairs and maintenance needs for the duration of the agreement. The law already allows for some "mandatory terms" to be varied in agreements that are for a fixed term of 20 years or more, but to date nobody seems interested. It is hoped that landlords might offer longer tenancies, and tenants sign up to them, if such terms could be varied for a more realistic five year fixed term.

Our worry is that optional long fixed tenancies, with reduced rights for tenants, would be offered on a take-it-or-leave-it basis. Tenants seeking properties at the higher end of the market might be able to strike a decent enough bargain for themselves, securing a long term tenancy by virtue of their relative economic wellbeing - but of course that is already possible. Those in need of low cost housing, probably considering properties with higher repairs and maintenance needs, will be in less of a position to bargain. They could find themselves locked into long term agreements they don't necessarily need, and lumped with costly obligations that would be difficult to fulfil. They might be slugged with a hefty repair bill at the end of the tenancy, if they fail to live up to the landlord's expectations about how the the property would be maintained. For that matter, they might still have their tenancy ended without grounds once the long fixed term is up.

But even if we could ignore that possibility, we can't ignore this basic proposition: landlords would have a scheme that requires households to purchase a secure tenancy. Only some households, though, and only at the landlord's discretion. Others would have to stick with rolling short fixed terms or insecure periodic tenancies, and the ever-present fear of eviction without grounds.

It appears the New South Wales Government may give serious thought to this option.

So... something to think about in the meantime: what's a secure tenancy really going to be worth?

The Australian Dream

The following is taken from Dr Robert Mowbray's remarks when launching Professor Alan Morris’s book on Tuesday, 25th October 2016. Robert is the Project Officer, Older Tenants with the Tenants’ Union of NSW.

Professor Alan Morris with his new book - The Australian Dream

It’s good social research ...
In Alan Morris’s Preface he quotes Professor George Ritzer (Explorations in the Sociology of Consumption: Fast Foods, Credit Cards and Casinos, 2001) who said (and I paraphrase):

There is a great need for sociologists to do work that can be read by a more general audience. Sociology should be interesting and relevant ... and should inform public dialogues on a wide range of important issues.

This quote reminded me of what two prominent Australian sociologists, Colin Bell and Sol Encel (Inside the Whale, 1978) said nearly forty years ago:

Social research should be linked with the public issues of the wider world. It cannot be value-neutral. Good social research reflects social and political concerns first and techniques later, if at all.

Alan’s book is, firstly, very readable because it lets those struggling in the housing market tell their own stories ... and secondly, it meets Bell and Encel’s criterion of ‘good social research’ because it reflects social and political concerns foremost.

Recent publicity about older renters ...
Over the last month the plight of older renters has been highlighted in both newspaper and magazines. Some examples:

27 October 2016: Peter Martin writes 'We are condemning more and more Australians to retirements burdened by rent'. He continues: ‘One of the barely stated reasons why house prices have been climbing out of reach of new buyers is many of us have been becoming richer. Would-be investors poured into the market. One in every six taxpayers became a landlord. To get there and stay there they've had to outbid would-be residents.'

10,11 October 2016: Kirsten Robb writes 'Life-long renters face financial stress in retirement'... according to a paper released on Monday by Swinburne University, which found more Australians are renting in retirement and facing financial stress. The authors of this report, Dr Andrea Sharam and others, 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. ... A very marked outcome is that to be a private renter at 45 years of age is likely to mean being a renter and highly impoverished, in retirement.’ 

4 October 2016: A great essay by Anwen Crawford who writes about 'Nowhere to go – older women and housing vulnerability': '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.'

4 October 2016: An excellent article by Kim Arlington, entitled 'Over-55s are the forgotten homeless': In this article Ms Yeoman, Chief Executive of Mission Australia said: 'older women can face a housing crisis for the first time in later life ... previously they may have had a stable housing history but even small changes in their financial circumstances – a rise in rent or utility bills or unexpected health costs – could propel them into homelessness.'

So Alan Morris’s book is well timed ...
Quote from Elsie, private market tenant:

‘... I think when people get to 65 and they’re on a Centrelink pension and in private rental, they should be entitled to take their life if they wish ...’

Quote from Rhonda, private market tenant:

‘I hate it because you’re more or less at someone else’s mercy all the time.’

Quote from Dan, public housing tenant:

‘When you know your accommodation is right, this is especially when you’re older, you can pursue other interests. You’re more relaxed ... you’re in for a longer life.’

Quote from Marlene, home owner:

‘It [home ownership] just gives you security ... It gives you freedom of expression ... Your home is an extension of your personality.'

Alan documents how, over the last two decades, the private rental sector across Australia has once more become substantial. It presently accommodates about one in four households. A major shift is that, for many households, renting in this sector is no longer a transitional stage. And the proportion of the population aged 65 years and older, like all developed economies, has increased significantly and is continuing to do so. Many will be become trapped in the private rental sector. Indeed, for a number of reasons, many will ‘fall out’ of home-ownership. Alan’s premise is that the capacities of Australians who are dependent primarily or solely on the Age Pension for their income are shaped fundamentally by their housing tenure. He places the 'meat on the bones', with real people telling their stories.

Alan conducted 125 interviews and highlights that many of the older private renters in his study were battling to purchase everyday necessities. They fare very poorly and, indeed, they are the new face of poverty in this country.

Alan’s book is divided into chapters that, by tenure, examine the cost and standard of accommodation, consumption and living a decent life, social ties, leisure, health including dental care and pharmacist costs ... and so on.

Alan found that, for older private market renters, the cost of their accommodation and negligible security of occupancy were primary concerns ... and this fundamentally shaped their everyday lives and dispositions. For most of the private renters, the cost of their housing was a considerable burden and provoked a great deal of stress. Indeed, this contrasts to almost all of the social housing tenants who felt that their rent was reasonable and manageable and that it left them enough disposable income to live a decent, albeit frugal life. But many of the older private market renters were in a dire situation due to the high cost of their accommodation. Many were having to use more than half of their income to pay for their accommodation. The high cost of their accommodation restricted their consumption and made it difficult for them to lead a decent life. Alan concludes that extreme frugality and self-deprivation were central features of many older private market renters’ lives.

He found that many private market renters were not able to buy fruit, fish and meat regularly and were dependent on unhealthy processed food. Also, any unexpected expense was a major blow and precipitator of anxiety. And, so medical expenses were seen as a serious burden by a substantial proportion of older private market renters and it was evident that there was a tendency to avoid health services.

Alan found that mental health was a major issue, with most of the private market renters reporting that they lived in fear of being asked to vacate or being subject to an untenable rent increase. There is a constant fear and much trepidation. As a consequence, everyday life is often enormously stressful. He says minimal security of occupancy, financial stress, inadequate accommodation and inappropriate neighbourhoods contributed to many of the older private renters being plagued by these high levels of stress. This contrast to homeowners and social housing tenants.

It’s the same story on all accounts. Home owners and public housing tenants on the Age Pension fair well, but private rental market tenants on the Age Pension struggle. (The noticeable exception here is public housing tenants in Millers Point, Sydney, who are being forced to relocate.) Except for those who receive support from family members, older private renters are very much an abandoned lot!

A digression ...
Here I would like to reflect on one of the three key pillars of the NSW Government’s ‘Future Directions in Social Housing in NSW’ strategy. It talks of ‘providing more opportunities, support and incentives to household to avoid and/or leave social housing.’ It talks of a system where, in the future, 'housing assistance is seen as a pathway to independence' and, to do this, placing increased reliance on private rental assistance.

This is placing an enormous degree of faith in the private rental market. But hold on!

Firstly, from The Sun-Herald (23 October 2016) comes the story of Ankita who is forced to show savings of a year's rent in advance before her application for a tenancy is even considered. Those interviewed by Alan provide graphic accounts of the type of accommodation they have been forced to rely upon in the private rental sector … and this is the private rental market on which Future Directions relies as an alternative to expanding social housing.

Secondly, Family and Community Services’ website states that Future Directions is backed by the whole of Government – including Health, Education, Justice, Planning and Environment, Industry ... but there is no mention Fair Trading! Indeed, Fair Trading has been reviewing the very legislation that can provide all tenants with greater security of tenure, for example, by repealing ’no-grounds’ eviction provisions. The omission of a reference to Fair Trading on this website page suggests that one arm of government was not speaking to another arm of government when Future Directions was being formulated!

Further, the Federal government is a key player here. Private renting will only be a reasonable long term option when our taxation regime discourages speculation in housing by ‘mum-and-dad’ investors and encourages institutional investors. Such a change is loudly rejected by the Federal Government. Discouraging speculation is picked up in a recent editorial in The Sydney Morning Herald (25 October 2016) which reads:

Mr Morrison says the objective of his approach "is to have policies that mitigate the artificial inflation of asset prices". That artificial inflation derives from negative gearing and the CGT discount.

And again, in recent days, Lucy Turnbull, Chief Commissioner of the Greater Sydney Commission, said greater institutional investment in housing, alongside stronger legal protections for tenants, could help to make renting a more attractive option.

Alan Morris’s book is an indictment of our political masters’ failure to acknowledge the changes necessary to make private renting a more attractive option ... along with years of neglect of public housing.

Alan Morris’ skills assist public housing tenants ...
And, of course, after Alan forwarded his manuscript to the publisher, he used the same skills in pulling together Shelter NSW’s Brief entitled ‘A contemporary forced urban removal: The displacement of public housing residents from Millers Point, Dawes Point and the Sirius Building by the New South Wales Government’. The power of this document is that, again, the residents tell the story.

Let’s launch Alan Morris’s book ...
Firstly, let me acquaint you with two little known facts about Alan. He is a serial letter writer to The Sydney Morning Herald, with another letter on 25 October 2016, the day of his book launch, where he writes: ‘Social housing as a viable option for low-income households needs to be revived’.

Also, he is a veteran of forced urban removal, having worked alongside of the victims of such in Apartheid South Africa. Back in 1986 The New York Times described Alan as ‘a white activist from the Transvaal Rural Action Committee, a group that monitors forced removals.’

Alan Morris’s book is more than a contribution to the current housing debate:

• It is an affirmation that past government housing policies regarding home ownership and public housing have led to satisfied outcomes for older persons on low incomes. 
• It is a warning ... indeed a dire warning ... to present and future governments that a weakening of security of tenure in social housing (including any re-run of what has occurred in Millers Point over the last two and a half years) and a reliance on the private rental sector as it is currently constituted will led to immense hardship for older persons on low incomes in future years.

Congratulations to Alan Morris for such an easy to read and compelling publication and a big thank-you to the 125 people who shared their experiences with all of us.

You may read a review of Alan Morris’s book in the Huffington Post on 5 October 2016 and some media around the book launch here.