Theresa May shows Gladys the way on eviction reform

Theresa May’s government has shown that supporting a fairer, balanced renting system is possible for conservative governments.

Last week May and Housing Minister James Brokenshire announced that legislation was to be written to end unfair ‘no grounds’ evictions. Landlords will no longer be able to end tenancies either at the end of a fixed-term or outside a contract period without giving any reason at all. Instead, there will be a list of reasonable grounds where although the tenant has not breached the lease, the landlord will be able regain possession of the property.

Reasonable grounds will be determined through consultation but may include a landlord wanting to move back in to the property or carry out major renovations. A landlord or a new owner will still be able to regain possession where the tenant has breached the lease terms. 

These are nearly identical proposals to the reforms sought in Australia by the state-based Make Renting Fair campaigns and tenant representative groups. Progressive parties in most states as well as New Zealand have already accepted the need for reform. Victoria has largely implemented the change and both Queensland and ACT are looking likely to move soon. With the UK now joining the 21^st century, Australia will soon be the only Commonwealth country still using ‘no grounds’ evictions despite inheriting the concept from England.

In NSW last year Premier Berejiklian’s government declined to implement the reform. But perhaps in a new term they can take inspiration from their British counterparts.

Prime Minister May said in her announcement that the reform will give tenants ‘the long-term certainty and the peace of mind they deserve’. Minister Brokenshire also talked about the stability that change will bring.

Their language shows that neither side of politics should feel apprehensive about making things fairer for tenants. Conservatism in the Menzies tradition was about giving people a stake and a sense of ownership in their community. Now tenants are the forgotten people - refused the opportunity to feel the connection because of the instability caused by policies like no grounds evictions.

Current Energy and Environment Minister Matt Kean MP indicated his willingness for reform as Innovation and Better Regulation Minister in 2017 when he told the Herald that "no grounds evictions, retaliatory evictions, all these things are currently undermining renters' rights in NSW”.

However later Kean noted that the government did not feel there was sufficient evidence for change. So what evidence did the British government rely on? The primary reason the government has been giving is that no grounds evictions have repeatedly been found to be the leading cause of homelessness amongst families. 

In New South Wales, we have experienced rapid growth in homelessness – 37% in 5 years, much faster than any other state – and the Premier has made a commitment to reducing street homelessness by 50% in just a few years. Ending no grounds evictions would make that task significantly easier.

Even agents in the UK have begun to realise that blocking reform leaves them on the wrong side of history - with one, David Alexander,  describing the reform as "long overdue" and noting that industry resistance to reform is often without merit. Referencing Scotland's reforms to no grounds evictions in 2016 and reform of fees tenants could be charged in 2012 Alexander said "despite some opposition to these changes at the time they have all been introduced and the [private rental sector] has not collapsed or disappeared."

Giving tenants a greater sense of belonging to their communities, and preventing homeless, with no impact on the state budget? Theresa May has shown Gladys Berejiklian and her new Innovation and Better Regulation minister Kevin Anderson one way to make a big statement in her first term as elected leader of the state. The more than 2 million tenants across this state also deserve the stability and piece of mind now being promised to English tenants.

What you need to know about renting reform in NSW: Part 2

We're back with more information about the Residential Tenancies Amendment bill and what it will mean for renters in NSW. If you haven't already, check out Part 1 and Part 3. Many of these proposals are good, or have potential to be so. Whether they strike the right balance will often depend on whether unfair 'no grounds' evictions remain in the Act. Others have short-comings which will need to be revisited in the future.

Disclosure of information to tenants

Currently the Residential Tenancies Act 2018 mandates that a landlord must not make false representations, must disclose any planned sale and mortgagee repossession actions and give tenants an information statement before they enter into an agreement.

The proposal before government is two-fold. First there is an expansion of the information to be provided so that prospective tenants of strata schemes be given a copy of the by-laws for that scheme and also be advised if a strata renewal committee has been established for the scheme before entering into a residential tenancy agreement. We welcome this proposal.
The second is that a tenant can vacate without penalty if a landlord breaches section 26 - they can either serve a notice of termination and vacate, or seek orders ending the tenancy early from the Tribunal. However, a tenant will not be able to seek any compensation as a result of the landlord's failure to disclose information.

Our recommendation

Our recommendation is that all of section 26 (proposed and existing) be made a term of every agreement and that tenants should be able to seek compensation for the landlord’s failure to disclose in the circumstances outlined in the existing legislation, i.e for false representations, disclosure of sale or mortgagee actions and information statements to be given to tenants before the tenant enters into the agreement, as well as in the above proposed circumstance in regard to strata.
This must be made into a term of every agreement in order for it to have any meaningful impact. Our experience is that currently the disclosure requirements are not well adhered to and where non-disclosure is discovered, tenants often have little option but to accept it. As it stands, whilst a tenant can vacate without penalty if disclosures do not occur, they are unable to seek compensation for the landlord’s failure to disclose. The potential losses to the tenant could be considerable and include – moving costs, reconnection fees and any other losses that would not be recovered under the current proposal.

Access generally by landlord to residential premises without consent

Currently there is no reference in the Residential Tenancies Act 2010 to landlord taking photographs or making visual recordings of tenants’ homes for any purpose. To date the standard advice to tenants has been that if a tenant requests that a landlord desist from taking photographs and they ignore such a request, then the landlord may place themselves in breach of section 50(2) ('Tenant's right to quiet enjoyment') of the Act and face a penalty of up to $1,100 if prosecuted in the Local Court. They may also face a claim for compensation awarded to the tenant in the NCAT.

The proposal before the government is that the landlord can access the residential premises without consent for the purpose of taking photographs or a video recording for the purposes of advertising the residential premises for sale or lease no more than once in the period of 28 days preceding the commencement of marketing the residential premises as long as the tenant is given reasonable notice and a reasonable opportunity to move their possessions out of the frame of the photo or visual recording.
The landlord or agent can publish the photos taken with the tenants written consent - the tenant cannot unreasonably withhold that consent. If in the landlord or agents opinion the tenant refuses consent unreasonably, they will either - apply to NCAT for orders requesting consent be given, evict the tenant for the breach of unreasonably withholding consent, or if they are unsure (or can't be bothered) of whether it was unreasonable, evict the tenant for no grounds. Even tenants with strong reasons to withhold consent for publication will be in a vulnerable spot.
If the landlord or agent goes ahead and publishes anyway, there is a $2200 fine that may be applied. However under current practices Fair Trading is very unlikely to apply such a fine. For the entirety of 2017-18 Fair Trading issued penalties to just 9 people for 10 offences under the Residential Tenancies Act. This lack of enforcement operates to undermine the effect of penalty provisions in the Act.

Our recommendation

We do not support this proposal as it discourages negotiation between the parties and may result in possessions that cannot be reasonably moved out of frame being photographed. Whilst the proposal does take survivors of domestic violence into consideration and allows these tenants to withhold consent in circumstances where domestic violence exists, the definition of domestic violence may be too tight. Even for survivors of domestic violence the proposed system will mean that tenants will most likely need to apply to the tribunal for protection and may not be able to prevent publication of identifiable photographs.

Guidelines relating to reasonable times for repairs

Currently there are no guidelines relating to reasonable times for repairs. Whilst urgent repairs are defined there is no timeframe for these or general repairs and maintenance to occur other than that landlords are required to act with reasonable diligence. ‘Reasonable diligence’ is not defined.
The proposal is to add guidelines for reasonable time frames for repairs to occur. It is not known yet exactly what format but it is likely it will determine time frames based on the seriousness of the needed repair - unsafe electrical work will be a shorter time frame than aged paintwork.

Our recommendation

In the absence of any proposed guidelines it is difficult to comment other than to say that this proposal has the potential to be a very good change if the guidelines are done well and reflect the real time frames for a landlord acting with diligence. If they are not done well the proposal has the potential to be harmful to tenants as it will actually delay required repairs.

Fair Trading inspections and rectification orders

Currently many of the complaints to NSW Fair Trading about renting are in relation to repairs. While Fair Trading can take the complaint and talk to the landlord or real estate agent, there is no mechanism that allows for Fair Trading to either inspect the premises or tell the agent they must carry out the necessary work.

In a nutshell the proposal before the government is that a landlord or tenant can make an application to Fair Trading to investigate a concern about the premises. For landlords this will be because they believe the tenant has caused damage to the residential premises. For tenants, whether the landlord has breached their repairs and maintenance obligations under the agreement. A landlord rectification or a tenant rectification order can then be ordered with time frames for work to be done. This Fair Trading issued order will be used as the basis of an NCAT order for non-compliance.

Our recommendation

This has the potential to be a very good change but operational and funding decisions will determine if the potential is realised. There is a risk of the scheme draining other parts of the renting system by taking funds that could be spent on improving other aspects.
Several years ago Fair Trading implemented a dispute resolution system which has had positive results in relation to repairs - it is amazing how many agents will ignore a tenant asking for repairs, but when the same information comes from the regulator, it is taken seriously. However there is still a number of major hurdles for tenants, including the ever-present threat of eviction.

Fair trading inspections and rectification orders could particularly have good implications for social housing tenants who are not as susceptible to retaliatory evictions but increasingly face other barriers to enforcing their rights - such as limited resources and energy.
Likewise, the new mechanism could have the potential to free up the time of invariably overworked tenant advocates in under-resourced and underfunded services who often end up providing the time and resources to run such cases.
The scheme would be much improved if rectification orders were kept in a register, and were binding on the landlord even if the current tenant leaves. Currently tenants move in to premises with no reliable information about the condition of the premises. The condition report and a visual inspection is rarely a good guide to the real condition and history of the premises. A searchable register of rectification orders made regarding a property would be an authoritative and simple way to begin resolving this information asymmetry.

Minor alterations

Currently the Act provides for tenants to make alterations with the consent of the landlord. A landlord cannot unreasonably withold consent for alterations of a minor nature. These types of alterations are not defined.

The proposal is for regulations to prescribe the kinds of alterations that are of a minor nature in relation to which it would be unreasonable for a landlord to withhold consent.

Our recommendation

Clarifications and the signal sent from government are potentially a good step but it does not substantially change the current system. We await consultation on the changes, though there are some obvious issues which need to be included.
The system would be improved further by allowing tenants to make the minor alterations without needing to first seek landlord's permission, but rather give the landlord opportunity to state what is inappropriate. For instance, an improved disclosure statement or condition report which allows a landlord to state that a particular wall is not appropriate for nails or screws of more than a certain size. Another alternative is for tenants to give a notice of intention of alteration rather than a request, where a landlord must raise an objection for some good reason within a reasonable time frame.

Renting laws debated in parliament

Yesterday was a huge day for renting law in  NSW.

At lunch together with Everybody's Home, we organised an event today at Parliament bringing together renters, housing academics, campaign supporters, and MP decision makers.

We heard from Keith – a renter who has lived in seven homes over the last ten years.

"I am sick and tired of being forced to move. I’ve figured out that each time we move it has cost us around $3000. No grounds evictions have totally disrupted my family’s life."

Dr Emma Power spoke about her research on the experiences of older women renters and the hardships they face. Russell Rodrigo, a property investor, spoke about how the proposed reforms are actually in landlords' interests - because they will foster better relationships and improved stability.

Russell, Dr Emma Power, Dr Chris Martin and Keith Young.

Then at around 5pm the fun really started. The debate started for the Residential Tenancies Amendment. As expected, the Government spoke to their bill and emphasised the positive steps it is taking.

Labor spoke strongly for the need to end unfair no grounds evictions and made clear that while there other issues in our renting system, that getting the fundamental fix of ending no grounds evictions would be the focus of their work on this bill.

Jenny Leong for the Greens moved 20 amendments to the bill raising a number of issues that so many tenants raise. Her amendments ranged from big ticket items like pets and rent increases, to more focussed improvements to the current bill, like a number of additional minimum standards.

The three Legislative Assembly Greens were joined by Alex Greenwich of Sydney to vote and support these amendments. With independents Joe McGirr of Wagga Wagga and Greg Piper of Port Macquarie. joining them for some issues, like supporting an end to blanket bans for tenants to keep pets.

Labor did not support these various amendments in the current bill, but made several commitments throughout the night to return to many of these issues and we look forward to discussing those issues with them soon.

Once the Legislative Assembly completed their deliberations, the bill was immediately raced over to the Legislative Council. The parties made generally the same points again. But significantly, Paul Green speaking for the Christian Democratic Party stated:

We believe this bill, for the most part, strikes a good balance... However, I encourage the Government to acknowledge the challenges faced by tenants regarding no grounds termination and implore it to approach such terminations based only on reasonable grounds. I have contacted the Government about this matter but is chosen not to go that way. I give an early indication that we will listen very carefully to consideration of amendments moved by Labor and The Greens in Committee. We feel that we are compelled to do so, given the Government has fallen short of supporting some of the State's most vulnerable people.

We applaud the CDP for making this statement. It reminds us all that good law-making is the responsibility of all within Parliament. A commitment to that responsibility is not confined to any one party, or any one approach. 

But with that, the debate was adjourned - it will be back on October 16. This is a crucial time for renters rights in NSW. Get involved with the Make Renting Fair campaign to hear about how you can help bring this thing home.

What you need to know about renting reform in NSW: Part 1

This week saw the introduction of the Residential Tenancies Amendment law reform. Overall it attempts some very positive things, with only a few parts we quibble with. Unfortunately it's effectiveness will be let down as it does not address the fundamental imbalance in our renting laws caused by unfair 'no grounds' evictions. We support the bill being passed, but with amendments to ensure the reforms can do their job. The Make Renting Fair campaign is asking supporters to email key members of the Legislative Council to ensure the reform is effective and fair.

But let's take a closer look at the bill and what it will mean for renters in NSW. Here's five of the biggest changes. We'll return with the remainder of the proposals in Part 2 and Part 3.

Domestic Violence provisions

We will leave this to our phenomenal colleagues at Women's Legal Service who have led the way on these reforms. They said in their media release the following.

These are the ways the Bill will make a significant difference in the lives of domestic violence  victims-survivors:

Victims-survivors of domestic violence will be able to terminate their tenancy immediately without penalty when they provide a domestic violence termination notice to the landlord and each other co-tenant.

The notice must also include evidence of domestic violence which includes:

a domestic violence order, or
a personal protection injunction under the Family Law Act, or
a copy of a certificate of conviction in proceedings against the relevant domestic violence offender for the domestic violence offence, or
a declaration by a ‘competent person’ as prescribed by the regulations. A ‘competent person’ includes only medical practitioners.

Perpetrators of damage to property will be liable for that damage. A victim of violence or another tenant who is not the relevant domestic violence offender will not be liable for damage to residential property caused during the commission of a domestic violence offence.
A victim-survivor of domestic violence who terminates their tenancy by providing a domestic violence termination notice cannot be listed on a residential tenancy data[base] list.

While we would have liked the reforms to have gone even further with an expanded list of ‘competent persons’ beyond just medical practitioners being able to provide evidence of domestic violence through a declaration, the reforms included in the Bill are a major step forward and we believe will make a significant difference in the lives of domestic violence victims-survivors and their children.

We at TUNSW agree with the Women's Legal Service.

Minimum standards

Currently landlords are required to provide premises in a state that is 'fit for habitation'. However, what constitutes 'fit for habitation' is not defined and it can be quite hard to work out what it does mean.

The proposal before government is a start on clearly defining what fit for habitation might mean. The government's proposal is a good first step and includes some features which moves to reflect a modern understanding of fit for habitation.

Premises must be structurally sound, which means if the floors, ceilings, walls, supporting structures (including foundations), doors, windows, roof, stairs, balconies, balustrades and railings:

(a) are in a reasonable state of repair, and
(b) with respect to the floors, ceilings, walls and supporting structures—are not subject to significant dampness, and
(c) with respect to the roof, ceilings and windows—do not allow water penetration into the premises, and
(d) are not liable to collapse because they are rotted or otherwise defective.

Other requirements are to ensure premises:
- have adequate natural light or artificial lighting in what we might call living spaces, such as bedrooms, living rooms and kitchens.
- have adequate ventilation, and
- are supplied with electricity or gas and have an adequate number of electricity outlet sockets or gas outlet sockets for the supply of lighting and heating to, and use of appliances in, the premises, and
- have adequate plumbing and drainage, and
- are connected to a water supply service or infrastructure that supplies water (including, but not limited to, a water bore or water tank) that is able to supply to the premises hot and cold water for drinking and ablution and cleaning activities, and
- contain bathroom facilities, including toilet and washing facilities, that allow privacy for the user.

Our recommendation
In order to really create homes which are fit for habitation we also recommend including requirements to ensure there are:
- adequate cooking or food preparation facilities,
- adequate laundry facilities,
- adequate waterproofing in bathroom, kitchens, laundry areas,
- free from infestation by vermin, mould or other biotoxins,
- adequate insulation and weatherproofing.

Many people are also often surprised that there is no obligation to ensure premises are safe apart from things which are legislated elsewhere like smoke alarms. This could be fixed up in a number of ways, but one of the simplest is simply to insert safe into the current obligation (section 52) so that it become: “A landlord must provide the residential premises in a reasonable state of cleanliness, safe, and fit for habitation by the tenant”.

As a first step, parliament should pass this current proposal but we would support amendments to the bill to make it even stronger and more effective.

Fairer 'break fees' for leaving tenancies early

Occasionally tenants find that for work, personal or other reasons they can't maintain the contract until the end of the fixed term. When they leave, there is compensation payable for breaking the contract early - known as 'abandonment'. The current system is a confusing, two-tiered one which often has no relationship with the actual costs to the landlord of the tenant leaving early.

Currently landlords choose one of two compensation systems. They can choose a 'break fee' of either 6 weeks or 4 weeks (depending whether abandonment occurs in the first or second half of the agreement) as a fixed compensation.  Alternatively they can rely on a compensation scheme which comprises of rent until new tenant moves in, advertising, any relevant agents re-letting fee. This method involves adjusting the fees depending on how far through the contract the tenant is, as well as 'mitigation of loss' for landlords not attempting to raise the rent or being overly picky about choosing new tenants knowing that the outgoing tenant is picking up the tab while they choose.

Ensuring the proper amount is charged requires a lot of time and effort by the outgoing tenant.  At the moment, landlords choose whichever one they think will get them the most money.

The proposed change is to require the tenant to pay a fee more closely related to how far through the contract they are. Either, 4, 3, 2 or 1 weeks rent as a penalty depending on which quarter of the agreement (up to 3 years) they are in.  This is much closer to the real costs experienced by landlords once costs are considered in Tribunals.

Our recommendation

We think this much better reflects the average costs payable in 'abandonment'. It does have downsides for tenants who are in high demand areas - they may well pay more in break fees than under the 'compensation' scheme. However we think this is a fair trade for the certainty in not having to keep a close eye on the property once you've left and fighting unfair compensation claims in the Tribunal. A tenant's time and energy should be respected!

This proposal should be passed without change.

Changes to rent increases

Currently in NSW the rent can be increased at any time outside a fixed term, and can seek any amount. It is up to the tenant then to dispute whether the increase is excessive. Often this is very difficult as most of the information required to dispute an increase is in the hands of the real estate industry who may well charge for access. Not only is the landlord or agent more likely to have the funds to pay for the information, but this is an expense that can be written off as a tax deduction by the landlord or agent. Tenants on the other hand, are simply out of pocket.

The government is proposing two changes - one representing a little step forward, and one representing a step back.

Rent increases in periodic agreements will only be able to be increased once every 12 months. This is a good step on its own terms as it provides much more certainty about when increases will come. However, there are two issues - first, that it does not address the information asymmetry, and second that it does not apply to fixed term agreements. A landlord wanting to use rolling 6 months agreements will be able to increase the rent every 6 months.

Indeed the second change makes this issue even worse. In some contracts, landlords or agent write a future rent increase into a fixed term contract of less than 2 years. So long as the date and amount of increase is included, the government's proposal is that the landlord will not have to then issue another rent increase later on. Currently, very few landlords offer leases of more than 12 months (other than the state's biggest landlord - FACS - which generally offers 5 or 10 year leases, without break fees).

A landlord who wants to avoid the 12 month restriction on rent increases in periodic will now be incentivised to move to rolling short fixed term leases, which allows more frequent rent increases. The Minister, Matt Kean, claims one reason they have not acted on no grounds evictions is that retaliatory rent increases are the bigger issue for tenants. We might disagree about which has a bigger impact, but if it is true, these two proposals taken together mean tenants are still very much vulnerable to retaliatory rent increases.

Our recommendation 

Rent increases should be more balanced in two key ways. A time restriction on rent increases should apply regardless of the contract term and be restricted to 12 months since the beginning of the tenancy or the last increase.

There also should be a sharing of the onus of proof around excessive increases. Where the landlord wants to increase the rent above a fair marker, like the Consumer Price Index, we think it's reasonable that they should provide the evidence to support the claim. If the increase comes in at or below CPI, then the tenant can choose whether or not they agree with the claim and demonstrate the evidence for why the property doesn't meet that level. This is a far more equitable approach. 

As a first step, Parliament should pass this current proposal but we would support amendments to the bill to make it even stronger.  

Repairs inspectors assess the need for repairs and make rectification orders

This change would see Fair Trading take a much more active role in repairs processes. At either the tenants or landlords request, an investigator will attend the premises to assess the repairs and make rectification orders. If the rectification order is not followed the Tribunal can make further orders and penalties may apply.

While this idea has potential, its success will mostly rely on whether it is adequately funded - especially for tenants in regional areas where wait times could potentially render it unusable. Where the funding comes from will also be crucial - it would be unacceptable for it to come from the Rental Bond Board whilst Tenants' Advice and Advocacy Services remain grossly underfunded and have been told for many years there is simply not enough money (despite there being a $60million surplus!).

Our recommendation 

We really need to see a more concrete details around how this plan will be implemented - it has capacity to be a game-changer or a dead rubber. It is certainly worth giving a chance.

A longer lease on life: issues for older renters

With a surplus of $3.9 billion for 2016-17, the 2018 NSW State Budget had its winners and losers. The latter include seniors and renters. This blog examine some of the issues confronting older renters.

How does one define 'older person'. There is a helpful discussion of the definition of 'age' in the Australian Law Reform Commission's Discussion Paper on 'Elder Abuse'. Paragraphs [1.33] and [1.36] read:

The idea of someone being an ‘older’ person is a relative concept — chronologically, medically and culturally. It does not have a precise definition and specific ages may be used for particular purposes. For example, the Australian Bureau of Statistics (ABS) groups people into population age cohorts, and differentiates between ‘15 – 64’, ‘65 years and over’ and ‘85 years and over’. People over 65 are generally classified as ‘older’ for ABS purposes.

Family and Community Services’ NSW Ageing Strategy 2016-2020 (pp 26-28) identifies older people’s ability to live in affordable, accessible, adaptable and stable housing as a priority of the NSW Government. It asserts:

... older people increasingly prefer to ‘age in place’ and grow older in their own communities – close to friends, family and services.

The NSW Government does not have an explicit ‘ageing-in-place’ policy. Certainly, it would be worthwhile implementing an explicit policy and, further, establish benchmarks against which wider Government policies can be measured regarding consistency. The value of this will become obvious further into this blog.

Nevertheless, a number of significant documents commissioned as part of the NSW Ageing Strategy refer to it, where a basic principle underlying it being that older people know what is best for their own lives and have the right to make decisions on their own behalf. An ‘ageing-in-place’ friendly policy provides the incentives for individuals to remain living in a community to which they have a strong attachment, either in their existing residence or alternate accommodation, with service supports.

Dire circumstances

Alan Morris’s book entitled The Australian Dream: Housing Experiences of Older Australians draws on the stories of 125 Australian pensioners and compares their experiences with the trends and needs of an ageing Australia. He probes the growing divide between older private renters, those who live in social housing and pensioners living in their own home. Here's an excerpt about private renting:

It's like a pressure cooker. You don't know where to go or what to do.' ... 'It was so desperate, the search for affordable accommodation, that I went down with a heart thing and was rushed to hospital.

On 26 October 2016, quoting from Alan Morris's publication, Jennifer Duke says that at least 100,000 older Australians in the private rental sector are living in 'dire circumstances' ... and this figure is expected to grow substantially if current policies and approaches to housing affordability aren’t changed.

On 12 December 2016, Alan Morris penned an article for The Conversation entitled ‘Why secure and affordable housing is an increasing worry for age pensioners’. He writes:

An increasing proportion of older Australians on the age pension will be dependent on the private rental sector in coming decades ... and the prospects for this group are grim.

An increasing number of older women in the private rental market face homelessness and have been described as ‘the new face of poverty. Read an article called ‘Older renters: the new face of poverty’. It reads:

The evidence mounts. The number of older, single women in the private rental market increased by a massive 50 percent between the 2006 and 2011 ABS Censuses.

The private rental sector across Australia has grown in size and significance in the last 30 years. Between 2001 and 2010 about 1.7 million Australians dropped out of home ownership and shifted back to renting. More than one in three did not return by 2010.

Private rental now provides long term tenancy for a growing and diverse number of Australian households. If large numbers of long term renters aged 45-64 years remain in the rental sector, they could swell the number of long-term private renters aged 65 years and above quite substantially in the coming decades.

Many older women experiencing a housing crisis or homelessness have led conventional lives and never previously had a housing crisis. As private renters, especially in tight housing markets like Sydney and some regional centres, they are at great risk of unaffordable rents, insecure housing, eviction and homelessness.

Also, an excellent essay by Anwen Crawford picks up this same theme. She writes about 'Nowhere to go – older women and housing vulnerability’ and finds:

The number of older women who are rental tenants in Australia is growing, and these women ... are increasingly vulnerable to poverty and homelessness ... Housing affordability and security for rental tenants will only become a more pressing issue as Australia’s population continues to age. And with more people unable to afford to buy a home, changes to housing policy now will help to determine the living conditions of tenants in the future.

2016 Census

The 2016 Census found a significant increase in the number of people renting in New South Wales. Indeed, there was a slight shift away from home ownership towards renting. There were 826,922 renter households at the 2016 Census, which was 83,870 more than there were in 2011. To put this into context, that's almost double the increase we saw between 2006 and 2011. It also means our renting population has gone up in percentage terms since 2011, too - from 30.1% to 31.8% in 2016. It also means that more people are renting for longer. Read more here. On top of this, Australia’s population is ageing. Those aged 65 years and over now account for 16% of the total population, compared to 14% in 2011. The median age has increased to 38 years, after remaining at 37 years for the past decade. Read more here.

Following the release of the 2016 Census, there have been a number of reports highlighting the problems of life-long renters.

In March 2017, The New Daily examined the most recent population statistics. Australia is ageing and life expectancy is greater. The stats show that from 2012 to 2016, the proportion of the Australian population aged 65 and over increased from 14.14 to 15.27 per cent.

Kirsten Robb writes: 'Life-long renters face financial stress in retirement'... according to a paper by Swinburne University, which found more Australians are renting in retirement and facing financial stress. The report that she refers to is one by Andrea Sharam, Liss Ralston and Sharon Parkinson of Swinburne Institute for Social Research. They found:

The proportion of aged persons in Australia is set to increase significantly, posing many challenges. Amongst these is the growing number of households who lack housing security in retirement. ... Our findings indicate that social change, and adverse ‘critical life events’ have significant impacts on households by and at midlife, and beyond. Of particular concern is that the housing market itself is a key source of wealth accumulation and dispossession. A very marked outcome is that to be private renter at 45 years of age is likely to mean being a renter and highly impoverished, in retirement.

Teresa Somes of Macquarie University writes for The Conversation: 'More and more older Australians will be homeless unless we act now.'

Eileen Webb and Gill North write: 'Suitable, affordable housing is key to our population ageing well'.

Ben Phillips of the Australian National University writes for The Conversation:

... the more pressing social problem for Australia remains the lack of affordable rental housing for lower-income families that is close to jobs and services in our capital cities. ... An ageing population with potentially lower home ownership rates will add to this problem in future years.

And Ned Cutcher of Shelter NSW writes that more people are renting much later into life.

More recent media

You will find recent media coverage, reports and publications on older renters in this document.


What is the reality for older renters?

Various words have been used to described the plight of older renters: Overlooked, A distinct financial disadvantage, Condemned, Vulnerable and Financial stress … and that’s just for starters.

As discussed above, there are many issues confronting older renters. So here's my summary:

• Shortage of affordable housing in well serviced locations. True for all renters, but compounded if you are older ... Check out Anglicare’s annual rental affordability snapshot ... and National Shelter’s Rental Affordability Index, published in May 2018.

• Weak security of tenure. True for all renters, but compounded if you are older ... check out Choice’s publication entitled ‘Unsettled’. Read about it and find a link here. Also, check out the ‘Make renting fair’ campaign. Indeed, Australia fairs poorly in an international comparison of security of tenure for renters.

• Only token acknowledgement of ‘ageing in place’ ... The redevelopment of old public housing estates poses real hardships for many older tenants. The forced relocation of residents of Millers Point in inner Sydney highlights the failings of Government when only lip service is given to ‘ageing-in-place’. Read the blog in The Brown Couch here. In 2015 and 2017 the Tenants' Union of NSW made submissions to Elder Abuse Inquiries of both the NSW Legislative Council and the Australian Law Reform Commission (ALRC) here and here. We argued that a government policy, in itself, may constitute a form of elder abuse. We submitted that the NSW Government’s decision to relocate all the social housing tenants in the suburb of Millers Point is an example of systemic elder abuse.

• Restricted access to home modifications ... private landlords have little incentive to modify properties to suit the needs of older tenants. Older renters are forced to move as dwellings are no longer appropriate to their needs and residential tenancy legislation fails to adequately address this. Here’s the current state of play.

• Residential land lease communities (also called ‘residential parks’) as an alternative for older people ... Today business is viewing residential parks as money-making ventures, with some being promoted as an alternative to retirement villages. But, homes in residential parks, once seen as a cheaper option, now are regularly sold for amounts over $300,000. Indeed in 2016, two on the North Coast of NSW sold for over $1 million. Residents may own their home, but they do not own the land and remain vulnerable should the park be sold from under them.

• Pets is an issue with particular meaning for older tenants. Check out this site. Recently, there has been increased media coverage of this issue in Australia. Read Wendy Squires’ article called 'Landlords, have a heart and let your tenants have a pet'. The Tenants Union of NSW wants to see the decision to keep pets to sit with the tenants rather than the owners.

What can we do?

For an excellent discussion on what to do in order to address the more dire needs of older renters, check out the 'Ageing on the Edge’ report released on 29 November 2017. It contains thirteen recommendations that the NSW Government can act on now. The Tenants’ Union of NSW is represented on the ‘Ageing at the Edge’ Working Group in NSW. You will find a summary of the report here and the full report here.

Postscript on 26 July 2018

Here's three new links which are food for thought ...

Allison Worrall writes: 'Choice of food or rent: Housing crisis deepens.' Read her article here.

Isabelle Lane writes: 'Older Australians are falling off the housing ladder and face spending their retirement as renters, with the situation expected to worsen for coming generations.' Read her article here. You may check out Grattan Retirement Incomes Model (GRIM) here.

AHURI provides an excellent analysis of the situation facing older low income tenants in the private rental sector. This link also points to some current research. Check it out here.

More news from down the Hume

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How do you solve a problem like Airbnb?

With the deadline for comments on the Government's options paper around short-term holiday letting in New South Wales drawing near - they're due at the end of October - we're starting to see a resurgence of articles and musings about the impact of short-term holiday listing companies on Australia's fragile housing system. We thought we'd weigh in with some early thoughts.

The week kicked off with a comment from Stephen Goddard, strata lawyer and spokesperson for the Owners Corporation Network, in Domain. The OCN advocates that strata lot owners should be given the right to make rules about short-term letting at the micro-level - that is, owners within each individual apartment block should be able to decide for themselves whether they will allow short-term lettings in their building, and under what conditions. Goddard makes some strong points, and it's hard to disagree with the notion of short-term lettings being regulated at that very local level as far as strata is concerned.

It's worth pulling out a couple of items for further discussion. The first is that strata laws in New South Wales don't allow tenants to have any meaningful representation on strata committees, which is where by-laws that would include rules about short-term lettings would be made. Once a by-law is made, tenants can't really challenge them - only the owner of a lot can do that. This presents a problem for the "local democracy" model: those residents who do not want their building to allow short-term letting, and who rent, would be excluded from any discussions or decision around the relevant by-laws. On the other hand their landlords - who may not reside in the same town or city, let alone within the strata complex - would be invited to contribute. That means decisions about short-term lettings would be influenced by people who have no direct interest in the day-to-day concerns of their strata community. The issue could be fixed with a few tweaks of the Strata Schemes Management Act 2015, along the lines argued by the Tenants' Union prior to the Act's implementation, to allow tenants greater say on the management of their strata schemes.

The second is Goddard's comments about the impact of short-term letting on housing affordability more generally. On this he cites research from the University of Sydney's Urban Housing Lab which he says "recently found that short-term letting platforms have removed 6,000 properties from the long-term rental market throughout NSW". He links to an earlier article in which the research was discussed - it quotes the Housing Lab researcher and provides further context around the findings - but we'll have to wait until the research is published before we can get a clear look at what it tells us. Given the fluidity of Australia's housing markets, where properties are traded back and forth between owner-occupiers and investors with relative frequency, the growth of short-term letting raises some interesting questions around the interplay between existing and emerging residential property uses.

The journalist who wrote the earlier story also sought comment from the Tenants' Union prior to publication. Our remarks were not included in the piece, but reference was made to our own research into the impact of Airbnb on Sydney's rental market. This research found no clear correlation between rising rents and an increase in listings in Sydney's Airbnb hot spots, suggesting that deteriorating rental affordability across the city is not necessarily down to Airbnb. This is in keeping with other analysis we've presented about declining rental affordability and the changing shape of the private rental market.

Not surprisingly, vocal opponents of short-term letting are unimpressed with our report, and we've been accused as recently as last week of "cosying up to Airbnb". To be fair, Airbnb Australia has taken to citing our report as part of their arsenal in fending off claims about their company's negative impact on housing affordability - and well they might. But let's be clear, where short-term lettings are concerned the impact on rental affordability is not the only game in town. Far more concerning is the impact on housing security for people who rent, and who can be evicted without grounds by landlords who might consider themselves simply experimenting with a new investment strategy by trying their luck with short-term letting. To be fair again, our "cosying up" accuser has agreed with us on this point.

As our report highlighted, listings for short-term lettings tend to spike during peak tourist times, and many listings do not result in numerous or frequent bookings. This is in keeping with Airbnb's repeated claims that the majority of people listing on their platform are just ordinary folk looking to cover their own costs while taking time away from home. Available data doesn't tell us how many listings are made by owner-occupiers or renters, and how many are made by investors, so we're only able to guess as to the specific impact of landlords turning away residential tenants over the summer in order to take on short-term holiday makers. But there can be no doubt such an impact has long been felt in popular tourist areas across New South Wales, and there can similarly be no doubt the increased ease by which property owners can solicit short-term lettings by using Airbnb is making this worse. Reforming the Residential Tenancies Act 2010 to ensure tenants can't be evicted "without grounds" to allow experimentation with short-term lettings will be critical to solving this problem.

Even with the above-mentioned reforms in mind, there will still be a need to regulate the short-term letting sector. Findings in our report suggest landlords would need to operate on a more-or-less commercial basis if they are to make short-term letting a viable financial alternative to simply renting a place out, but of course there are some who are already doing that. With various examples of third-parties offering their services to manage such operations there is a huge risk this practice will grow, particularly in high demand tourist areas that are already struggling with affordability issues. This is clearly a problem. A commercially operated short-term letting business should only be allowed subject to local government approval, and there should be clear guidelines as to what constitutes a "commercial operation" and the conditions under which it will be approved.

We'll return here to Airbnb's oft quoted claim that the majority of their hosts are not commercial operators, but everyday people simply sharing a spare room for extra cash or keeping their homes lived in and looked after while taking some time away - all part of the global "sharing economy" that some are even calling a financial lifeline. As far as a corporate narrative goes, it's not a bad one, but it clearly sidesteps some of the problems that are created or exacerbated by this highly profitable business. If they were genuine about the claim, they could very easily make it true by limiting the number of bookings a host could solicit via their online platform. There is no doubt they'd lose listings, as the commercial operators would take their business elsewhere, but they'd recover some credibility and perhaps even restore a little faith in their so-called sharing economy. They could trade a bit of money for some moral high-ground. But they don't.

Make sure you get your response to the Government's short-term holiday letting options paper by October 31st.

Tenants’ Union welcomes Labor’s flagged shift on renters’ rights

The Tenants' Union of NSW has released the following statement about reported changes to the NSW Labor Party's Sustainable Communities platform

NSW Labor has flagged a new policy agenda that could change the game for renters, says Tenants’ Union NSW.

Over the weekend, the NSW Labor party’s conference recognised a growing number of families rent their homes in New South Wales, and pledged to modernise rental laws to provide certainty, balance and fairness in the rental market. Early reports suggest this could include placing limits on rent increases, ending unfair evictions, and strengthening rights for renters with pets.

“These would be significant reforms, they’d be welcomed by renters right across New South Wales,” said Ned Cutcher, Senior Policy Officer with the state’s peak body for renters. “The Tenants’ Union of NSW has been calling for this kind of reform for years and it is extremely encouraging to see the discussion taking prominence.”

Mr Cutcher was quick to point out that the NSW Labor party changing its platform at conference time, while in opposition, does not necessarily lead to reform.

“The timing is good because the Government has still not brought in the changes it promised over a year ago, following a statutory review of our renting laws,” Mr Cutcher said. “We’re obviously following that pretty closely, and now we’ll be watching to see how Labor responds when those changes are brought through.”

“We know the NSW Greens have a strong renters’ rights platform so it makes for some healthy debate in Parliament when the time comes.”

Mr Cutcher said a limit on the frequency of rent increases would bring New South Wales into line with the rest of the country, but ending unfair evictions and strengthening rights for renters with pets would be genuine innovations in the Australian context.

“All over the country tenants can be evicted without a good reason, and all over the country families are prevented from making decisions about keeping pets because their landlords say no. For the growing number of renters across Australia these rules seem pretty harsh,” Mr Cutcher said.

“We’d love to see this change in New South Wales and we’ll happily work with NSW Labor to help develop these policies.”

For that matter, we’d love to work with Minister Matt Kean and the NSW Government on this all the more.

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.