Tenancy culture studies: Andy Capp

After a long break, welcome back to the Brown Couch's Institute of Tenancy Culture Studies. The subject of today's study is the most famous cartoon tenant in Hartlepool, if not the world – Andy Capp.

(Andy Capp, by Reg Smythe)

Since Reg Smythe launched his comic strip in the Daily Mirror in August 1957, Andy Capp and his wife Flo have been the tenants of the premises at 37 Durham Street, Hartlepool, in the north of England. Andy's tenancy has been mined repeatedly for jokes about crumby housing, noisy neighbours and, especially, about paying the rent – or rather, not paying.

(Daily Mirror, 25 June 1958)

(Daily Mirror, 29 December 1961)

(Daily Mirror, 6 November 1961)

One might think that because of Andy's rent-dodging antics he would be fondly regarded here at the Brown Couch. Unfortunately, no. I say 'unfortunately' because I like the idea of Andy Capp: the twisted logic of that third gag is okay, and the whole idea of millions of newspaper-reading households meeting over their breakfasts each morning a chronically unemployed man and his cleaning-lady wife seems kind of radical... but there's no getting past the domestic violence.

The abuse and violence inflicted by Andy Capp upon Flo is a big part of the comic strip and, horribly, its humour (running 'Andy Capp domestic violence' through the British Cartoon Archive's database turns up no less than 73 strips from the period 1957-1962 alone – half as many again as the tenancy-related strips).

(Daily Mirror, 20 August 1957

(Daily Mirror, 24 September 1962)

One gets a bit of chill to think that fifty years ago these hateful little works were presented by newspapers the world over for the amusement of their readers.

Perhaps this is unfair on Smythe, who is said to have later regretted all the DV gags... but I don't think so, and instead think of how many beaten women would have read the papers and got the message loud and clear that they should expect to be beaten and for no-one to help stop it because sometimes it's the right thing for a man to do and sometimes it's just funny. Perhaps we're being unfair to Andy, who after all got given violence and alcoholism by Smythe along with unemployment, soccer, pigeon-racing and tenancy to make him the complete stereotype of the marginal working class Northern English male. But still too many women suffer from the compounded effects of domestic violence and insecure housing to make dismantling the stereotype the first order of business.

Let's consider Flo. If she and Andy lived in New South Wales, Flo could apply to the Local Court for an Apprehended Domestic Violence Order against Andy, which 'may impose such prohibitions or restrictions on the behaviour of the defendant as appear necessary or desirable to the court' (s 35(1) Crimes (Domestic and Personal Violence) Act 2007) – including prohibiting access by Andy to any premises occupied by Flo, 'whether or not the defendant has a legal or equitable interest in the premises or place' (s 35(2)(b)). In other words, Flo could get Andy excluded from the premises of which he is a tenant, if the court was satisfied that this was necessary to her safety.

As the law presently stands, however, Andy's tenancy would not be terminated, so Andy would still be in a position to make life difficult for Flo. The difficulty depends on Flo's own tenancy status: if she and Andy are co-tenants, the difficulty is that there is no straightforward way for Flo to change the tenancy agreement so that she alone is the tenant; if she is merely an occupant under licence, Andy could terminate her licence and have her evicted.

The draft Residential Tenancies Bill would fix these problems. In particular, a final ADVO that excludes a co-tenant from the premises would terminate that co-tenant's tenancy, while leaving the rights of the remaining co-tenant unaffected (so, Andy would legally be out of the picture, and Flo would have the tenancy in her name only). And in the case of an occupant in premises from which a tenant has been excluded by ADVO, the draft Bill would allow the occupant to apply to the Tribunal for an order vesting a tenancy in the occupant on such terms as the Tribunal thinks appropriate (so, Andy would be out of the picture and Flo could get an order for a tenancy in her name only).

Two good practical ways of helping survivors of domestic violence take the steps they need to get safe and get on with their lives, and two good reasons for passing the Bill.

Service or speculate?

Last week ABC's Radio National breakfast show did a neat report on the cost of housing, giving an overview from a number of different perspectives. Your correspondent offered one of them, but I'll draw your attention particularly to another.

Mr Saul Eslake, previously chief economist of ANZ, stated clearly one aspect of the madness of how we tax housing – but if Eslake wasn't clear enough, see the front page of today's Herald for an illustration. This is the story of a house in the inner Sydney suburb of Annandale, purchased for $1.3 million in December 2008, and 15 months later for $1.8 million. And what did the owner do to get this cool $500 000 profit? Says the agent:

''They just repainted, recarpeted, tidied up the garden and made a slight improvement to the kitchen area. That's pretty much it.''

Alternatively, they might have actually done something useful and rented the place out. Doing so might have generated an income for the owner of, I don't know, $50 000 for the fifteen months (it's a pretty schmick house).

And as Eslake says, this income would be taxed at the owner's top marginal tax rate. But the owner's profit from doing nothing productive and simply on-selling will be taxed at half that rate, thanks to the capital gains discounting provisions introduced by Treasurer Costello in 2000... and now retained by Treasurer Swan in the face of alternatives suggested in the report of the Henry Review.

What to do: provide a valuable service, or speculate? The tax system says, resoundingly: speculate.

The shell-less snails of Taipei: Colebatch

Tim Colebatch follows up his recent excellent article on housing and tax with another on the consequences of a housing bubble – this time looking at lessons from Taipei, where the so-called 'snails without shells' – young persons priced out of the owner-occupied housing market – are protesting unaffordable housing.

(Snail and friends in unaffordable Taipei.)

Colebatch's article also refers to another recent controversy: whether Australian house prices have been pushed up by foreign buyers, which reportedly had been given a filip by the Federal Government when it relaxed the regulation of such purchases by the Foreign Investment Review Board last year.

Here at the Brown Couch we watched with amusement as the TV current affairs shows tried to report this one, not sure whether to appeal to the presumed racism of their audience (ie 'cashed-up Chinese are buying all our houses – boo!'), or their presumed greed as house-price speculators (ie 'cashed-up Chinese are buying all our houses – hooray!').

The Government is now moving to tighten the regulations up again. The Urban Taskforce, the developer lobby group, liked the relaxed approach. Its Chief Executive, Aaron Gadiel explained:

a renter will not be fussed if their landlord lives in Australia or overseas – they just want a home. By allowing foreign investors to purchase new housing, more apartment development is made possible, which in turn means more homes available to renters.

Fair enough – up to a point. This position holds only in relation to investment in newly built housing, not purchases of existing stock. It is not clear that overseas landlords have done any better than their Australian counterparts in building new stock, rather than just buying and bidding up the price of homes already in existence.

The Housing Debt Mountain

This afternoon Steve Keen commences his long walk from Parliament House to Mount Kosciuszko, turning a losing bet about house prices into a campaign against the mad financing – and daft government policies, like the First Home Owners Grant – that makes housing unaffordable.

(Mount Kosciuszko)

(Mount Debt)

The Brown Couch wishes that the wind is at his back.

Congratulations, Murdochs

Double congratulations from the Brown Couch to glamorous Sydney couple, Lachlan and Sarah Murdoch.

(The Murdochs)

Congratulations first on the announcement today of the birth of their third child... and secondly on the news that they have entered into a two-year fixed term agreement for Coolong, the handsome Vaucluse pile. The Murdochs are tenants.

(Coolong)

Better do the condition report very carefully.

The Murdochs are one of the 40 per cent of New South Wales renting households with dependent children. In fact, at the 2006 Census, 16 per cent of all New South Wales residents living in rental housing were children aged under ten.

Subletting: how the draft Bill would work

The REI has been banging on about the subletting provisions of the draft Residential Tenancies Bill again. They just don't get it. As a service to confused agents, here's how the subletting provisions would work.

For the purposes of the exercise, I'll need to employ a couple of educational aids. Meet Tina Tenant and Sally Subtenant:

(Tina Tenant (left) and Sally Subtenant (right))

Now meet Lenny Landlord:

(Lenny Landlord)

Let's begin.

Scenario 1: Tina is thinking of subletting to Sally without Lenny's consent.
The draft Bill says: she better not. If she did, Tina would be in breach of her tenancy agreement. Lenny could, if he so chose, give a notice of termination on this ground. (This is the same as the current law.)

Scenario 2: Tina is going overseas for six months. She asks Lenny if she can sublet the entire premises to Sally while she is gone.
The draft Bill says: Lenny can refuse consent – no ifs or buts. He can refuse even if it is unreasonable to so. (This is the same as the current law.)

Scenario 3: Tina wants Sally to move in with her. She asks Lenny if she can sublet the spare room to Sally.
The draft Bill says: Lenny can refuse consent, but not unreasonably. (This is a change from the current law – and a pretty minor change at that.)

Let's look more closely at what the draft Bill says about 'reasonable refusal'.

Scenario 3a: Tina asks Lenny's consent to sublet the spare room to Sally. Lenny knows about Sally – and he would never give a tenancy to her if she applied for one.
The draft Bill says: Lenny can refuse consent. The draft Bill expressly provides that a landlord may refuse consent to a subtenant if the landlord would not have approved that subtenant for a tenancy.

Scenario 3b: Tina asks Lenny's consent to sublet the spare room to Sally. Lenny says 'no no, I don't care who it is, I'm not even going to consider it.'
The draft Bill says: Tina may not go ahead and sublet the spare room – that would be a breach. However, she may, if she so chooses, apply to the Tribunal for an order allowing her to sublet the spare room. The Tribunal will decide whether Lenny's refusal was unreasonable.

This is what the agents have been making so much noise about. Not that big a deal, is it?

Caught in the cogs of the tax regime: Colebatch

Just a note directing Brown Couch readers to the terrific piece on housing affordability and tax by The Age's Tim Colebatch.

While housing is a tax shelter, more and more money will flow into it. That money will keep bidding up prices, pushing them further out of reach of aspiring home buyers.... Remove the two big tax distortions of the market. End the exemption of the family home from capital gains tax. End the tax break for negative gearing - or limit it to new homes built by the investor. And, at the very least, require temporary residents to report their property purchases, so we can know whether we have a problem or not.

Follow that link!