Making sense of social housing in NSW

Social housing operates within a complex glob of morphing policies and procedures, prodded by occasional shifts in public policy at both a state and federal level that draw various laws, instruments and agreements into contact with one another in a range of ways. A sound working knowledge of the sector in its entirety can take years to develop, and once established could fall apart within an instant should one glance away at precisely the wrong moment.

A case in point is last year's announcement that the management of large swathes of tenanted public housing properties will be transferred to community housing landlords in New South Wales, in keeping with the Council of Australian Governments' (COAG) National Affordable Housing Agreement (NAHA), which was negotiated during the early days of the Rudd-Gillard-Rudd Government era. The announcement of the Management Transfer Program sparked some discussion here on the Brown Couch, and across the broader sector, about just who these community housing landlords are. How do they come to be in the business of housing people from the public housing waiting list since they're not run by the Government of NSW?

The plot thickens, as the results of the Program's tendering process have now been announced. Over the next couple of years, management of around 14,000 tenanted public housing properties across six different regions is to be handed to nine community housing landlords who are already operating in other parts of the state. So... now is a good time to take a look at what it means to be a "social housing" landlord in New South Wales.

Given we've already mentioned the NAHA, we should note it is the intergovernmental agreement that determines who takes responsibility for what within our housing systems across Australia. As an agreement among the Commonwealth, state and territory governments it is a static document, although it is intended to be renegotiated and updated from time to time. It has been altered quite a bit since its series of predecessors first took form: established in the 1940's as the "Commonwealth State Housing Agreements" as something of a post-war nation building scheme; and it is currently being renegotiated as a "National Housing and Homelessness Agreement".

Regardless of form, or name, these agreements have generally all set out to achieve the same objective: to set the conditions under which the Commonwealth would give funding to the states to run their public housing schemes. These agreements have been broad enough to allow each state and territory to run their housing programs as they see fit, as indeed they do. A strong focus of the current agreement has been to shift the delivery of housing assistance and services away from government to the not-for-profit sector, and successive NSW Governments have responded - indeed contributed - by attempting to consolidate and build our community housing sector. Notably, this included the regulation of the sector in 2010, with a state based scheme that has since been replaced by the National Regulatory System for Community Housing. It also included the establishment of a single waiting list for housing assistance, accessible through a portal known as Housing Pathways, under which any participating landlord could both process applications for and make offers of subsidised rental housing to eligible households.

In this context our language and legislation has come to reflect the idea of "social housing". With this term we could be referencing either or both of its constituent parts: "public housing" or "community housing"; and for practical purposes the only difference is whether the landlord is the government or a not-for-profit agency who has been contracted by government to provide the same essential service. Of course, things become more complicated when we consider the public policy implications of this rhetorical shift, as it gives our still predominantly neoliberal governments easy cover to withdraw from the direct provision of public housing proper, and focus entirely on the setting of policy instead. They do this on the grounds that "community housing landlords are well placed and can do it better", although this is far from an established truth. While we can have no objection to the growth of this community housing sector, the fact that it only ever seems to happen at the expense of our established public housing provider is a simple reflection of the State's entrenched reluctance to pay for and provide social housing. Given the sector has spent the better part of a decade trying to attract private finance to its cause, it reflects a certain level of disinterest in housing-as-shelter from the profit-driven private sector as well - as an aside, it will be interesting to watch how the emerging "build-to-rent" discussion proceeds from here.

Right - so while all of that is going on at the higher level, there is a somewhat consistent legal framework setting the scene in the meantime for social housing landlords and tenants across New South Wales. Although with the right political will the statutes under which social housing policies are determined can be changed - as we have seen throughout the last couple of years with mandatory evictions for social housing tenants and the introduction of concurrent leasing by the Land & Housing Corporation to enable the current Management Transfer Program - keeping tabs on the legislative framework can be a useful way to maintain one's bearings while trying to make sense of social housing.

The Residential Tenancies Act 2010 devotes an entire Part to social housing tenancy agreements, a discrete form of residential tenancy agreement to which a number of additional provisions apply. This Act defines a social housing tenancy agreement as "a residential tenancy agreement where the landlord is a social housing provider", and then defines a social housing provider as:

• the New South Wales Land & Housing Corporation
• the Aboriginal Housing Office
• a registered community housing provider within the meaning of the Community Housing Providers National Law (NSW)
• an organisation for the time being registered under Part 5 of the Aboriginal Housing Act 1998
• an organisation or a member of a class of organisation prescribed by the regulations

This immediately brings a number of other statutes into play. There's the Housing Act 2001, under which the Land & Housing Corporation is established as the legal entity that enters into residential tenancy agreements and other related dealings in residential property on behalf of the government; and under which the income based rental subsidy scheme is established. This is the legislation that gives us public housing, and it is amendments to this legislation that has enabled the emergence and establishment of community housing over many years.

There's the Community Housing Providers (Adoption of National Law) Act 2012, under which regulation of the community housing sector is provided by adoption of the Community Housing Providers National Law. This Act brings New South Wales into the National Regulatory System for Community Housing and, in some circumstances, allows the government to conditionally transfer title from the Land & Housing Corporation to a registered community housing provider. Note this has fallen out of fashion as concurrent leasing has come into play, having been made available by amendment to the Housing Act in 2016. For the time being property is being transferred to the community housing sector using this form of head-lease, but transfer of title under the Community Housing Providers (Adoption of National Law) Act remains an option.

Finally there's the Aboriginal Housing Act 1998, under which the Aboriginal Housing Office is established along similar lines to the Land & Housing Corporation, but with a specific remit to develop policy and deliver subsidised housing for Aboriginal households who rent. This Act also allows regulation of a broader Aboriginal Community Housing sector, for whom the National Regulatory Scheme for Community Housing is also being brought into play. By association, we must mention the Aboriginal Land Rights Act 1983, under which Local Aboriginal Land Councils who provide rental housing to their members may register with the Aboriginal Housing Office or the National Regulatory Scheme for Community Housing in order to have the requirements for approval to run a community benefits scheme that includes the provision of residential accommodation to their members waived by the NSW Aboriginal Lands Council.

The policy framework in which social housing operates is likely to keep changing, and where required legislative changes will sometimes follow. But for now, the above provides an overview of social housing in New South Wales. We'll keep an eye on the development of the National Housing and Homelessness Agreement, and take further note of any impact it might make.

In the meantime we'll do our best to answer any questions left in the comments, or sent through to us via the usual channels.

Hit the pause button

Front page of The Sydney Morning Herald, 26 July 2017

A fortnight ago ABC News reported that Australia looks almost certain to win a seat on the United Nations Human Rights Council. However, do we deserve a seat?

In recent years Australia's human rights record has become very blemished ... not just in the area of treatment of asylum seekers and refugees. Back in August 2014 Ms Kim Boettcher, solicitor for Seniors Rights Service addressed the United Nations' Open-Ended Working Group on Ageing (5th session), and drew attention to the plight of tenants of social housing at Millers Point and The Rocks. She told the Working Group how one of the elderly residents said to relocate her away from her community is ‘one step short of putting you up against a wall and shooting you because it’s saying you are of no value to society. You are worthless.’ You may read her full address here. Indeed, last year The Millers Point Community Working Party and Tenants Union of NSW made submissions to the Australian Law Reform Commission on 'Protecting the Rights of Older Australians from Abuse', arguing that the actions of the NSW Government in Millers Point constitute systemic elder abuse.

The NSW Government's sale of public housing in Millers Point continues. As at 11 July 2017, there have been 151 sales, some of multiple properties. Altogether the sale of 200 properties at Millers Point has raised $422.77 million (with a further $22.09 million being generated in Stamp Duty!). You may check the NSW Government's dedicated website for their figures at the end of June 2017 here.

But at what cost? At the time of the Minister's announcement to sell all social housing stock in Millers Point, there were 579 residents in 399 tenancies in the portfolio.

At 19 July 2017, 16 residents in 10 tenancies remain. So, altogether 563 tenant and household members in 389 tenancies have either vacated or are committed to moving. There are 2 tenants remaining in the Sirius Building. We have previous reported extensively on the impact of forced relocation on the residents.

So when is enough, enough? This once proud and historic community indeed, the only community to have bestowed upon it the status of 'A Living Heritage', has been decimated by the cruel edict in March 2014 to remove all social housing tenants from their community and sell off their homes, resulting in great pain and suffering! The last few surviving elderly, vulnerable tenants ask the NSW Premier, Gladys Berejiklian, to end this abuse of their basic human rights and allow the few to stay, and 'age-in-place'.

A new development gives our Premier the opportunity to redress this great injustice. On Tuesday of this week, the NSW Land and Environment Court made a ruling that the NSW Government's decision not to put the iconic Sirius Building on the heritage list was invalid. This gained wide media coverage on the ABC News , The Sydney Morning Herald and The Guardian . Shaun Carter, Save Our Sirius chairperson, said it was a good day for the building, the local community and the whole of NSW. He urged the Premier to hit pause on the demolition and and sale of Sirius. He said let's talk about the heritage listing of Sirius and how the building could be used for social housing again. He added: 'We are desperately short of social and affordable housing, let's now use it for what it was intended.'

Last two remaining Sirius residents Myra Demetriou and Cherie Johnson
and Save our Sirius chairperson Shaun Carter. (ABC News)

So the question becomes: Will the NSW Government show compassion and allow Myra and Cherie (and the other older residents of Millers Point) to age-in-place in their homes? Yes, stop the evictions, with more residents facing hearings at the NSW Civil and Administrative Tribunal. Yes, seize the opportunity which the Land and Environment Court has provided and let's talk again about the importance of retaining social housing in Millers Point. You have received oodles of cash from the sales to date and you also announced a billion dollar windfall in revenue from stamp duty in this year's State Budget. If you still insist on selling the homes which are not in the Sirius building, then defer this and do so when these few remaining residents don't require them. 

Over to you, Premier! Show the nations of the world that our great state, New South Wales, has a government that leads the way by being fair and compassionate when it comes to its citizens, no matter of age, race or creed! Let's make a seat on the United Nations Human Rights Council more than mere words.

The authors of this post are Barney Gardner, member of the Millers Point Community Working Party, and Robert Mowbray, Project Officer - Older Tenants with the Tenants' Union of NSW.

Economically viable supply

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

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

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

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

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

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

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

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

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

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

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

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

NSW Government's affordability pledge

Hot on the heels of the NSW Opposition's announcement, Premier Berejiklian has brought forward the Government's own plan to improve housing affordability.

Announced yesterday, the policy has three different components: incentives for first home buyers/disincentives for foreign investors; fast-tracking development at higher densities; and building more infrastructure to support communities. Careful observers will note that tenants continue to be the real forgotten people, as rental affordability doesn't even rate a mention.

Tenants who are well-off enough to be pursuing a first home purchase will be pleased, as stamp duty exemptions will apply to all first home purchases up to $650,000 from July this year. That's a big change from the current scheme, which sees exemptions apply only to newly built homes up to $550,000, or land up to $350,000. Further concessions will apply all the way to $800,000, rather than the current $650,000. Additionally, a first home owner grant of $10,000 will apply to the purchase of a newly built dwelling up to $750,000, or an existing dwelling up to $600,000. That's a change from the current scheme that only offers a grant for first timers if they buy a new dwelling.

So, depending on what you're buying, first timers' up-front costs could be reduced by around $30,000. Of course, you'll still have to come up with a substantial deposit before you can borrow the balance, so you'd better keep up with your savings plan just to be on the safe side... and cross your fingers that the market has peaked, so that prices don't go up by another 50 or 60 grand before you can take advantage of those extra incentives. Then again, if you're already that close to buying into this market perhaps a correction, and protracted negative equity, is the last thing you want to contemplate right now... To which we say not to worry, with an army of reanimated first home buyers ready to let loose upon the market - each with a $30,000 spring in their step - it shouldn't take long for prices to start climbing again.

First home buyer incentives are only half the story, as changes to taxes and grants will also impact upon investors. Foreign investors will bear the brunt of it as they'll have to pay an increased surcharge on their stamp duty - doubling from 4% to 8% - as well as an increased surcharge on land taxes - increasing from 0.75% to 2%. But all investors will lose the New Home Grant, which was introduced in 2012 to encourage investors to increase supply by purchasing off-the-plan instead of established dwellings. And investors will no longer be able to defer their stamp duty liabilities when purchasing off-the-plan. The new policy could be an attempt to shift domestic investors back to trading in second hand stock - or perhaps it simply acknowledges that this is really what they're most interested in after all - while trying to keep new supply up by encouraging first timers to jump in off-the-plan. We'll need to keep on eye on the impact of this.

As for new supply, we'll take a look at the second and third aspects of the Government's housing affordability plan - fast-tracking supply and delivering more infrastructure - as soon as we can.

Evictions begin at Millers Point

Words and pictures from John Dunn, Friends of Millers Point

This morning the NSW Government is taking action against public housing tenants in Millers Point.

FENCE AROUND SIRIUS

At Sirius the assets branch of the NSW Government is erecting a cyclone wire fence around the site. Family and Community Services (FACS) has informed residents that the fence is being installed to improve public safety.

The fence around Sirius appears to be poorly located for protecting public safety but it is well located if it is in preparation for demolishing of Sirius and its ground-floor courtyards. In the meantime it alienates more of the common areas of Sirius from its residents. Effectively, the government is evicting the remaining tenants of Sirius an inch at a time.

All of the interior common areas have been locked away from the tenants of Sirius. Recently, senior FACS officers cancelled Myra's booking of the Phillip Room which had been booked for a studio session in which people were to draw her. The Phillip Room was subsequently covered in black plastic so that it could no longer be used. Myra's drawing studio sessions were moved to the courtyards of Sirius and proceeded with great success and without incident. Similarly, Myra has had guests for Friday Night Sirius, a barbecue event in the courtyard. Myra has been looking forward to the next Friday Night Sirius barbecue on 2 June. Also during the past few months, the Sirius Foundation has conducted dozens of tours of Sirius which have been booked by more than 1000 people and are conducted by Tao Gofers, the leading architect of Sirius. Initially tours were allowed inside Sirius, but as their success has grown, the areas they are allowed into have contracted.

Watching the fence being erected at Sirius one is reminded of the Berlin Wall going up. If Sirius represents the Heart of Sydney, the NSW Government appears determined to destroy it.

EVICTING A MILLERS POINT RESIDENT

This morning the sheriff was scheduled to evict Peter Muller from 32 High Street, Millers Point. Currently he remains in his home, surrounded by residents and supporters. The staff from the assets branch of the NSW Government were keeping a close eye on proceedings from a safe distance.

IPART review of social housing rents, etc

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

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

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

From IPART's draft report, page 14

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

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

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

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

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

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

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

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

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

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

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

From IPART's draft report, page 34

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

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

***

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

New Ministers

New NSW Premier Gladys Berejiklian has announced her first Cabinet and front bench.

The Tenants' Union congratulates our new Minister for Innovation and Better Regulation (covering Fair Trading NSW as part of the portfolio), the Hon. Matt Kean MP.

Member for Hornsby and
Minister for Innovation and Better Regulation,
the Hon. Matt Kean MP

Kean was elected to the Legislative Assembly in 2011, as the Member for Hornsby. He served as a Parliamentary Secretary for Community Services in 2014-15, and more recently for Treasury in 2015-17, but this marks his first Ministerial position. According to the Register of Disclosures by Members of the Legislative Assembly, Kean is a tenant, and his appointment comes as the NSW Government prepares to introduce legislation to amend the Residential Tenancies Act 2010 following the statutory review of the Act. We understand drafting is well underway so we don't expect this Ministerial reshuffle to have too great an impact on the reform process - especially since Kean's predecessor, the Hon Victor Dominello MP, will take on the more senior Finance, Services and Property portfolio under which Innovation and Better Regulation sits.

(On that note, we offer our congratulations and thanks to Minister Dominello as well. Dominello held the Innovation and Better Regulation portfolio since April 2015, making him one of the longest serving Ministers for Fair Trading in recent history. During his time in the portfolio he introduced Rental Bonds Online, which allows tenants to deposit their money with the Rental Bond Board directly before entering into a residential tenancy agreement. He presided over the review of the state's renting laws, and while this will not deliver stability, liveability and affordability for tenants Dominello did commit his Government to improving the law for survivors of domestic violence who need to end a tenancy. He'll no longer take carriage of this reform, and it remains to be seen just how it will be implemented, but we acknowledge his consultative approach to its development, and his dedication to seeing it through. Finally, Dominello also oversaw the drafting and implementation of the state's new strata laws. While these laws are not without controversy, they've taken a useful step towards better representation for tenants in the operation and management of strata schemes in New South Wales.)

The Tenants' Union also welcomes the return of Pru Goward to the Family and Community Services portfolio. Goward resumes this portfolio along with Social Housing, while retaining her appointment as Minister for the Prevention of Domestic Violence and Sexual Assault.

Member for Goulburn and
Minister for Family and Community Services
Minister for Social Housing, and
Minister for the Prevention of Domestic Violence and Sexual Assault,
the Hon Pru Goward MP

When Goward previously held the Family and Community Services portfolio there was no Minster for Housing, with responsibility for Social Housing split between Family and Community Services and Finance and Services. This didn't work so well, and a discrete Social Housing portfolio has since been created. It sits alongside the Family and Community Services portfolio, reflecting the Government's view that a Social Housing tenancy is a form of welfare dependency.

Since Goward last held the Family and Community Services portfolio, with shared responsibility for Social Housing, the Government has launched its Future Directions for Social Housing strategy. As a ten-year strategy, there is still much to be done in developing and implementing many of its key proposals, and Goward will now take charge of these. Most notably, she will preside over discussions arising from the current IPART Review of Social and Affordable Housing Rent Models. She will also oversee the Government's efforts to grow the social and affordable housing portfolios for the first time in many years.

Finally, the Tenants' Union congratulates Anthony Roberts - himself a former Minister for Fair Trading - on his appointment as Minister for Planning, Minister for Housing, and Special Minister of State.

Member for Lane Cove, and
Minister for Planning,
Minister for Housing and
Special Minister of State,
the Hon. Anthony Roberts MP

The inclusion of a Housing Ministry is not new, but it hasn't been done since Frank Terenzini held the portfolio in Kristina Keneally's administration, circa 2010-11. Back then, a Housing Minister was really just a Social Housing Minister with a shortened title, so what is new is the inclusion of both a Housing portfolio, with links to the Planning portfolio, and a Social Housing portfolio tied to Family and Community Services. No doubt this broadened focus reflects Berejiklian's much publicised ambition "to make sure that every average, hard-working person in this state can aspire to own their own home", and it bodes relatively well for housing policy discussion during Berejiklian's time as Premier. Of course, we mustn't forget that now former Planning Minister for Rob Stokes once took a swipe at negative gearing and capital gains tax discounts for their contributions to housing unaffordability. His departure from these policy discussions doesn't bode quite so well...

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.

Please, may we have some more?

The proposed transfer of 18,000 Public Housing properties to Community Housing landlords is as fine an example of placing your policy burden on somebody else's bottom line as ever you might see...

We hear every so often from the Australian Government about its debt and deficit worries. The significance of that debt is questionable, and it's low by international standards, but for the sake of the argument let’s accept the need for budget repair.

The NSW Government, on the other hand is completely debt free. It's hoarding a handy $4.7billion surplus, largely from a buoyant stamp duty take on the back of Sydney's eye-watering house prices over the last few years. Stamp duty has rapidly grown from about 20% of the state’s tax revenue just a few short years ago, to nearly 30% today, increasing from $4.5billion to $8.3billion in the last tax year.

One of the selling points of transferring properties to Community Housing is tapping the de facto subsidy for Community Housing landlords that's known as Commonwealth Rent Assistance (CRA). For people on low incomes, such as a Centrelink benefit or a minimum wage, CRA helps offset the high cost of renting in Australia by adding a few extra dollars to your take-home payments. Community Housing landlords calculate the rent to maximise their tenants' CRA entitlements, then take the lot. This is a nifty way for a state government to draw on federal money to fund their agreed Social Housing responsibilities.

The media release in which Minister Hazzard announced the Social Housing Management Transfer Program suggested it would give Community Housing landlords an extra billion dollars over the next twenty years. That's a billion dollars of federal money, delivered via individual tenants on account of their entitlements to CRA, in case we hadn't made that clear.

If the NSW Government, rich with the take from Sydney’s sustained property largesse, wanted to chuck a lazy billion dollars at the Social Housing system in order to improve it for tenants, it could very easily do so without adding to our apparent federal spending woes - or at least, without dipping into the only national scheme designed to assist tenants in the private rental market. If it really wanted to, it could do this more than once every twenty years or so without putting too much strain on the bank.

It's just a matter of priorities.

Understanding the Housing Legislation Amendment Bill 2016

People often ask us what we mean when we talk about Social Housing. How does it differ from Public Housing? Where does Community Housing come from? Aren't they different names for the same thing? And is there even really such a thing as Affordable Housing? What about housing co-ops or housing that's owned and managed by Aboriginal Housing Corporations or Local Aboriginal Land Councils?

We'd love to write something that sorts all this out once and for all, but there's a problem: the whole kit and caboodle just keeps changing.

Don't look now, but it's about to change again. Yesterday the Minister for Disability Services, Ageing and Multiculturalism, John Ajaka, introduced the Housing Legislation Amendment Bill 2016 into the Legislative Council of NSW.

If passed, the bill will do two things:

... amend the Housing Act 2001 with respect to the entry of concurrent leases; and amend the Community Housing Providers (Adoption of National Law) Act 2012 with respect to the registration of, and provision of assistance to, community housing providers that cannot be registered under the Community Housing Providers National Law (NSW).

So - what does all of that mean?

The first thing - concurrent leases - concerns the transfer of Social Housing tenancy management from Public Housing to Community Housing. The Minister for Social Housing, Brad Hazzard, recently announced the transfer of an additional 18,000 tenanted properties (approximately) "to ensure a better experience for tenants in Social Housing". Critically, Hazzard announced that "tenants' lease length and lease conditions will remain the same, their income after rent will remain the same and FACS will keep tenants fully informed as their areas transition to community housing providers".

But the Housing Legislation Amendment Bill 2016 makes it clear that, under the proposed property transfer scheme, tenants will not be given a choice. Many of their counterparts in previous schemes did have a choice - albeit a limited one. Some tenants were able to decline to participate in an earlier property transfer program, such as a group in South Coogee in 2009. Others were not, and there are now entire areas across New South Wales where FACS Housing no longer operates as a landlord. The properties, and the tenants, remain, but now they have a Community Housing landlord. Returning for a moment to Minister Hazzard's announcement, it looks as though four new areas are to be added to the list: the Shoalhaven, Northern Sydney, Mid North Coast and Hunter/New England (excluding Newcastle and Lake Macquarie LGAs). We expect many tenants in these areas will have found this news unsettling, and the lack of choice to be afforded them insulting.

But the introduction of "concurrent leases" potentially resolves some of the pragmatic concerns that tenants would factor into their choice, if they had one. A concurrent lease allows those property rights and interests that have not been passed on to, say, a residential tenant, to be transferred to a third party. Lawyers would think of it as a division of the "bundle of rights" that are attached to property, in a way that retains a clear hierarchy of interests and concerns - property owner > concurrent lessee/landlord > residential tenant/occupier. Rights that are tied to a residential tenancy agreement are not affected by a concurrent lease, and this is what the Minister is getting at when he suggests "tenants' lease length and lease conditions will remain the same".

Strictly speaking, the Land & Housing Corporation (the Public Housing landlord) has been setting up concurrent leases all over the place, as it has already transferred the management of around 28,000 Public Housing properties to Community Housing landlords since about 2008. But it's not been done in such a clear-cut way before. In the past, tenants have been asked to rip up their residential tenancy agreements with the Land & Housing Corporation, and enter into a new one - perhaps with new, less favourable terms - with the Community Housing landlord.

Concurrent leases may take some of the sting out of the coming property transfer scheme, but that's not the end of the story. Different Social Housing landlords apply different tenancy management policies and, while it is true that the existing terms of a tenant's residential tenancy agreement should remain intact, this application of different policies might make for some startling changes to tenants' experiences. For instance, Community Housing landlords set their rent in a way that requires tenants to claim Commonwealth Rent Assistance, but the Land & Housing Corporation does not. On paper, this will look like a hefty rent increase. In practise, tenants will have to pay 100% of their Rent Assistance to their Community Housing landlord. This is what the Minister is getting at when he says "their income after rent will remain the same".

To add another layer of complexity to our understanding, but perhaps a simplification to the system itself, the Housing Legislation Amendment Bill 2016 will provide that, as a matter of law, Public Housing that is transferred over to Community Housing by way of a concurrent lease will no longer be considered Public Housing. We'll add that to our list of things to write about...

But what of the second thing - "the registration of, and provision of assistance to, community housing providers that cannot be registered under the Community Housing Providers National Law (NSW)"? We won't go into in too much detail on this today, because we've already taken up enough of your time. But as we understand it, it is designed to solve a problem for Local Aboriginal Land Councils who run Social Housing schemes, and who want to register as an Aboriginal Community Housing Provider with the Aboriginal Housing Office. Currently they're unable to. As statutorily constituted bodies who own their own properties they cannot meet the conditions of registration, which would require them to transfer their properties to another registered provider in the event of winding up.

The Housing Legislation Amendment Bill 2016 would solve this issue by requiring the Social Housing Minister to establish a "local system of registration" that would mirror the national system as much as is possible. In other words, the Minister must create a whole new registration system that looks a lot like the existing one, but leaving aside one or two things that prevent some current Social Housing landlords from becoming registered. The trick will be to ensure the "one or two things" doesn't become too broad, giving potential new entrants a sneaky back-door into the Social Housing system and undermining the integrity of the existing registration scheme.

We'll be watching all of this closely as the bill makes its way through the Houses of Parliament.

Bonds for public housing? Credit where it's due...

We recently grumbled about the lack of consultation leading up to the proposed introduction of bonds for public housing tenancies.

Since then, FACS Housing has expanded the handful of non-government housing peaks it has asked to comment on a draft operational framework, and the Minister for Social Housing himself has invited several of us to meet with him to discuss our concerns.

It's entirely possible that none of this would have happened if not for our grumble, but it's likely the grumbling of others has had a fair bit of impact, too. We know we're not the only ones put out by the proposal, and we're not the only ones who've said as much.

This is an indication that the NSW Government is prepared to stop and listen when it aims wide of the mark on policy, and we've got to give them credit for that. But even so, the Minister has confirmed his commitment to bonds for public housing tenancies.

Numerous advocacy groups have implored him to reconsider, and this includes the TU. Our comments on the draft policy and operational framework can be found here.

Building policy that resonates

A couple of weeks ago we mentioned the looming possibility of a rental bonds scheme for new public housing tenancies. We now know that FACS Housing have been feverishly working away on this, putting in a great deal of time and energy to build the policy's operational framework.

You see, the Social Housing Minister's office decided to go with a rental bonds scheme somewhere after the 2015 NSW State election, and although this was never formally announced they stuck a quick mention of it in the 2016 document Future Directions for Social Housing. Thus, the policy was born.

But here's the problem: the Future Directions strategy is a reflection of a 2014 discussion paper concerning Social Housing in NSW that was subject to very broad consultation. It was initiated by Gabrielle Upton when she was the Minister for Housing. The discussion paper asked no questions about rental bonds for public housing tenancies, so of course none of the participants raised any issues or concerns about such a scheme. This is significant, because the idea had been raised before - way back in 2012, when Greg Pearce was the responsible Minister.

It was not until late April 2015 - some 3 months after the close of the Upton-lead discussion paper's consultation period (a period during which New South Wales not only went to the polls but also saw a Cabinet reshuffle that brought in a new Social Housing Minister) - that the idea of bonds for public housing tenancies came up again. This was in a Daily Telegraph "exclusive". Now, that can hardly be seen as an invitation to comment, if indeed it was intended as a serious policy announcement.

Then the initiative was slipped into the Future Directions document and became part of the ten-year Social Housing strategy, that was supposed to have been informed by the 2014 discussion paper.

The upshot of all of this is that FACS Housing have embarked upon a significant shift in policy that will have implications for their own work, the lives and livelihoods of their future tenants, and the State of NSW's budget (yes, this is likely to come at a cost to Government). They have taken this bold step without asking anyone these two simple questions: is this a good idea? ... and ... how would it work alongside our existing tenancy management and debt recovery frameworks?

The answers to such questions could surprise them, and perhaps that's why they've not been asked. Then again, perhaps they're just taking their lead from the tabloids and the shock-jocks rather than the people this policy would affect. It wouldn't be the first time a Government and its agencies did that.

For our part, we can see a couple of significant problems meandering along behind this proposed scheme. Notwithstanding our principled objection to the idea in the first place - rental bonds are about cash-flow for small time landlords with mortgages to worry about, not public housing departments with budgets in the hundreds-of-millions - there is a great deal of work to be done to ensure the public housing landlord's approach to tenant liabilities and debt recovery processes is properly suited to a rental bonds scheme.

Built on incorrect assumptions, this scheme could well go the way of the Tacoma Narrows Bridge.

Brutal ... how residents describe the actions of Housing NSW in Millers Point

You will recall that in March 2014 Housing NSW decided to remove all public housing tenants from the suburb of Millers Point. The Tenants' Union of NSW has written extensively about this situation and you may read our accounts  here  and  here.

Many former residents of Millers Point and those still remaining have been far from happy and their experiences have just been documented in a paper by Professor Alan Morris, Institute for Public Policy and Governance, University of Technology  Sydney. His paper is 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’.

What is so powerful about Professor Morris’s documentation is that he allows the residents to tell the story of their displacement in their own words. This paper concludes:

What is evident is that the actual and intended removal of public housing residents from Millers Point unleashed a great deal of hardship and distress. ... In sum, the way the New South Wales government has gone about the move was viewed by most interviewees as brutal. ... The announcement that all residents were to be moved was catastrophic for some residents and precipitated extreme anxiety and depression.

You may read Professor Morris' s full report which has been published by Shelter NSW here.

The above stories contrast with what appears on the website of NSW Family and Community Services. Here you will find the stories of four former residents who appear happy with being forced to relocate.  You will find these stories here.

Following Professor Morris's documentation of the experience of residents, he wrote a thought provoking article entitled 'Why moving out public housing tenants is a tragedy for Millers Point and for Sydney' for The Conversation and in this article asks some very important questions. Check it out here.

The Tenants’ Union of NSW again has argued that the actions of the NSW Government in Millers Point are a form of systemic elder abuse. You can read its submission to the Australian Law Reform Commission's 'Elder Abuse Inquiry' here.

However, it is not too late for the NSW Government to review the situation and allow the remaining residents to stay, especially the older folk who should be able to age-in-place. We've said this before and we say it again. Over to you, NSW Government!


This posting was updated on Monday, 12 September 2016. It now includes references to Professor Alan Morris's article entitled 'Why moving out public housing tenants is a tragedy for Millers Point and for Sydney' published in The Conversation on 12 September 2016 and the Tenants' Union of NSW's submission to the Australian Law Reform Commission's Elder Abuse Inquiry, also published on 12 September 2016.

Sydney's stone, cold heart

We're saddened by the weekend's news that Sydney's iconic Sirius Building will not be listed on the NSW Heritage Register, despite the unanimous recommendation of the Heritage Council of NSW back in February.

Minister for Environment and Heritage, Mr Mark Speakman, announced on Sunday that he would not list the site on the Heritage Register, as to do so would reduce its resale value and deprive the State - or perhaps more specifically, pockets of Sydney's west - of money to build more social housing. This is despite the higher than anticipated earnings from the sale of other properties around Millers Point, and the remaining properties that would see in excess of $880million brought in if prices continue at current trends.

Minister Speakman says:

I am not listing it because whatever its heritage value, even at its highest that value is greatly outweighed by what would be a huge loss of extra funds from the sale of the site, funds the government intends to use to build social housing for families in great need.

This is a slap in the face for the community of public housing tenants who have made their homes in the purpose-built Sirius Building, which is part of what has given it its Heritage value in the first place. And it's a huge blow to the remaining tenants of Millers Point who still look to Sirius with hope that it could hold what's left of their community together.

It also raises that nagging question about social mix in New South Wales - why do we fall all over ourselves to open up "welfare dependent" communities of public housing in Sydney's western suburbs, by handing it over to private interests for "renewal", while clearing low-income tenants out of those parts of Sydney we'd rather just flog to the highest bidder? It's not like they couldn't benefit from a bit of social and economic diversity in those parts themselves. No, scratch that. It's not like they haven't benefited, with Millers Point recently finding its way into the top-ten of a "liveability index" for Sydney's suburbs, on account of its "rich history and culture". Although how you can define a suburb as "liveable" while most of its long-term residents are in the process of being shipped out by a cash-strapped landlord is perhaps a matter for debate.

As for Sirius, we'll always regard it as part of what makes Sydney great. The lives, the characters, the community that is attached to that building must never be forgotten, even if they are to be lost. True, the Government hasn't quite sold it yet, and there's still time for them to reconsider their plans. But the decision not to list it on the Heritage Register is as clear an indication as you'll get that they would allow all this to be destroyed.

So who will buy it? What will they do? There are calls for a new Green Ban to be imposed on the site, again reflecting part of its very history that gives it Heritage value. We'd like to see that, if such a thing is possible in this day and age. Because even if you leave the question of heritage aside altogether, the day the Sirius Building comes down is the day Sydney's loses its heart.

NSW renting laws - change is recommended

Wedged between a state budget and a federal election, the NSW Minister for Innovation and Better Regulation's report on the Residential Tenancies Act 2010 could not have come at a worse time for those of us who love a good old chat about tenancy law reform.

We've all been busy discussing other things - like what will become of the social housing system as more and more government assistance is designed to keep people in the private rental market, or indeed how the market might respond if we change the way negative gearing and capital gains taxes work... Anyway, last Thursday the report was tabled in Parliament, and it's time we gave it another look.

We might have to wait until next week before any of the usual media services pick it up - or indeed before Fair Trading puts the report up on their website. You can find it in the Hansard records until then. In the meantime here's what's going on:

The good
There are a couple of very good recommendations in the report. For instance, it recommends a suite of changes that would improve renting laws for victims of domestic violence, and bring NSW into line with a number of other Australian jurisdictions. These include:

• allowing victims of domestic violence to end their tenancy immediately by giving notice to the landlord and any co-tenant, along with evidence of domestic violence (such as a provisional, interim or final AVO)
• allowing a tenant to change locks and security devices where necessary to protect themselves from domestic violence
• ensuring liability for damage is not attributed to a victim of domestic violence, resting instead with the perpetrator, where the damage is the result of domestic violence
• ensuring that victims of domestic violence cannot be unjustly listed on a residential tenancy database

Other recommended improvements to the law include preventing tenancy database operators from charging tenants to find out if they have been listed, shifting the "reasonable diligence" defence in repairs and maintenance matters from the question of breach to whether a remedy will be available, ensuring that tenants have some recourse if material facts are not properly disclosed by a landlord prior to entering into a tenancy agreement, coming up with a single method for calculating a lease-break fee, and making it clear what seperately metered premises means when landlords pass water and utility charges on to tenants.

The bad
There are some recommendations in the report that we're less fussed with, such as proposed changes to the way a tenancy that is established as part of an employment contract can be brought to an end, allowing landlords to photograph a tenant's home for use in a sales campaign, and persevering with the "frequently failed to pay" complication to the otherwise useful "pay and stay" rent arrears provisions.

Some much needed changes to the law are missing from the report's recommendations, too. In particular, there's no proposal to fix the way rent increases work, no prohibition on landlords inserting "no pets" clauses into tenancy agreements, no requirement for landlords to occasionally inspect their investment properties and report on prospective maintenance needs, and no mention of increased funding for Tenants' Advice and Advocacy Services.

Most importantly, the report has declined to recommend putting an end to landlords' use of "no grounds" notices of termination, focusing instead on oft-promised, never-delivered "longer fixed-term tenancies". We'll come back to that in a moment.

The curious
The report makes several recommendations that warrant further investigation, and we're doing our best to find out more. These include working out what to do about share-housing tenancy agreements and marginal renters not covered by the Boarding Houses Act, and making minor amendments to the Act that "have merit".

Also in this category are recommendations to use the interest on tenants' bond money to fund "consumer protection more generally" - will this be at the expense of tenants getting More Bang for Your Bond? ; and make Rental Bond Board data available through an "open data project" - but this shouldn't impede the continuation of our new Rent Tracker series.

Unfinished business
Seems it wouldn't be a complete review of the Residential Tenancies Act without putting security of tenure into the "too hard basket". This is very easily done by making recommendations like "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".

The thing about this is that landlords don't want to offer long fixed term leases, and tenants don't want to accept them. Not in the current climate, with a rental market driven by gains-motivated investors who'd sooner have vacant possession for a quick sale than a long-term, steady tenancy. The report even notes this, characterising it as the "tax settings in Australia and the tendency to purchase a property to make a capital gain rather than to collect rental income contributing to landlords' reluctance to enter long term leases".

This is interesting in the context of the Federal parties' stated views on those very tax settings. If the NSW Government wants to encourage more long fixed-term tenancies in the private rental market - and this is a long-stated aim that we can trace back to the 2005 review of the Residential Tenancies Act 1987 - they need look no further than the way negative gearing and capital gains tax concessions encourage the wrong kind of investment. They should insist whoever next takes Federal office take the appropriate action and reform these tax concessions. After all, as the saying goes - if you want less of something, you tax it.

The process from here
We expect further consultation to occur on some of these recommendations before any legislation to amend the Residential Tenancies Act is put to Parliament. The report gives no indication of expected timeframes, but even if Government moves quickly it could be several months before we see further details of the proposed changes. Of course, this means Government has plenty of time to consider the report's recommendations, or indeed revisit those important changes that did not make the list.

We'll keep you posted.

NSW Budget: Private rental subsidies

With NSW budget night behind us, the fourth and final entry in our series on the 2016-17 State budget looks at a suite of new and expanded rental subsidies for targeted groups in the community.

Rent money features heavily in the 2016-17 budget

The largest announcement is that funding for 'Start Safely' will be increased dramatically - from $43 million to $100 million over four years. The Start Safely rent subsidy assists women leaving domestic violence to move from crisis accommodation to the private rental market. The additional funding will allow the Department of Family and Community Services to extend the maximum length of the subsidy from 2 to 3 years, and raise the income eligibility threshold - though by what amount is not clear. It should also free up spaces in crisis accommodation in turn. 

Also prominent is the creation of two new rental subsidies. 'Rent Choice' is a medium-term subsidy that will require recipients to engage with education/or employment, as well as unspecified 'relevant supports'. The 'Youth Private Rental Subsidy' will be available to persons aged 16-24 and at risk of homelessness, and may also require engagement with education and/or employment programs. The full value of these new subsidies is not yet clear.

Both Start Safely and the new rental subsidies were flagged in the 'Future Directions' roadmap for Social Housing from 2016-2026.

Thirdly, the Government has allocated $1.1 million in 2016-17 for rental assistance products to support the Commonwealth Government's one-off increase to Australia's refugee intake. The Family and Community Services budget briefing provides that these funds will support the existing 'Rentstart Bond Loan' and 'Rentstart Advanced Rent' programs. Respectively, these provide recipients with interest free loans for payment of a rental bond, and assistance with rent payments to establish a tenancy. Though this initiative was not canvassed explicitly in Future Directions, it is reflective of the plan's intention to 'promote the uptake of existing rental assistance products'.

Though exact figures are nebulous, it's clear that tens of millions of dollars towards helping prospective tenants establish and keep tenancies will leave these most deserving groups markedly better places. This should not be discounted nor understated.

Nonetheless, question marks remain. Most notable is an issue of overarching policy direction - is the private rental market best-placed to be doing the 'heavy lifting' of housing especially vulnerable, low income groups? Certainly, there is a strong argument on value for public expenditure. That land and construction costs are exceedingly high in NSW is well-established; though it indexes national prices, The Economist's global house price index reflects this as starkly as any source. In this respect, rent subsidies are an easy fix, given they require no State investment in land or capital works. But as we have noted time and time again, the private rental market lacks stability, liveability, and affordability - including in comparison to Social Housing, which has traditionally housed many in these groups. This particularly impacts tenants that are already vulnerable for other reasons. To use an obvious example, will a landlord that issues a no-ground notice of termination consider that their rent-subsidised tenant may be particularly affected as a result? And though NSW Fair Trading's review of the Residential Tenancies Act may deliver some improvements, it appears it will be a case of incremental rather than revolutionary progress. 

There is also the question of how precisely Rent Choice and its youth-oriented offshoot will function. If participants fail in their obligations to engage with supports and 'opportunities', will subsidies be decreased or even removed? Available information suggests this is a distinct possibility. Though educational and employment opportunities for these groups should certainly be welcomed, jeopardising their security of tenure in this manner should not. 

Finally, we note that it appears possible that NSW will house the majority of the 12,000 refugees arriving in Australia as part of the on-off increase in the national intake, and resettlement could occur over a period of 1-2 years. Accordingly, we hope that the modest allocation of $1.1 million for refugee-specific programs is sufficiently large - and will be carried over if arrivals are staggered over future budget cycles.