Tuesday, January 29, 2013

The case against the case for negative gearing

Negative gearing is an issue that is rather close to our hearts. We're not the biggest fans of this tax break for landlords, and we've talked about it a fair bit over the last couple of years. We understand that many landlords don't feel the same way about it - about 1.12 million of them, in fact. Whenever the question of its efficacy gets a run in the press, we start to see many of its supporters pointing to the calamity of 1985-1987, after the Hawke government trimmed it a little.

(Bob Hawke and Paul Keating
had a bit of a go at negative gearing in 1985)

During that time, rents went on a bit of a rampage. It is often claimed that this is because investor sentiment was so damaged by the restrictions to negative gearing (losses could only be offset against rental income, not other income) that landlords simply started to abandon the market. In the face of serious pressure from the propertied classes, the government capitulated, and negative gearing was reinstated in full.

We've always thought that this was a bit of old hokum, and we're not the only ones. In April 2011, while the world was gearing up for the National Tax Forum, Saul Eslake pointed out that it was extremely low vacancy rates in Sydney and Perth, and not a nationwide landlord strike, that caused all this trouble with rents. More recently Tim Lawless, head of RP Data's research and analytics team and friend to all Australian property speculators, has published a spiel that appears to support the idea that the great rent rise of '85 was not the result of changes to negative gearing.

Lawless refers to this graph:

Source: Tim Lawless, via Michael Yardney's Property Update

... which shows that rents were already well and truly on the rise before any changes to negative gearing were made in 1985. It also shows sharp increases during the mid-nineties and mid- to late- noughties.

He also refers to data from the Australian Bureau of Statistics, on loans for property investment over the period in question. He says:
The total value of investment finance commitments in September 1987 was 41.5% higher than in September 1985.  These figures seem to suggest that at that time there was no weakness in demand for investment housing ...
... The reason why negative gearing was reinstated in September 1987 was that it was proclaimed that rents rose sharply on the back of a fall in housing market investment.  However, it doesn’t look as if investment in the housing market dried up throughout this period. Rents clearly did rise quite sharply throughout as demonstrated.
Lawless offers no alternative ideas as to why rents rose so sharply during that time, but we're inclined to agree with Eslake. Steady increases in rents are more likely to be linked to vacancy rates than to the way we (un)tax the nation's landlords. Well might you argue that disinvestment by landlords en masse could have an adverse effect on vacancy rates, but the reality is likely to be otherwise. Landlords are, in the main, not a particularly riotous bunch. They tend not to burn down their houses as they exit the market - it's far more orderly than that. When they opt to bail out, they sell, and some other body usually moves in in the end...

But the main point of Lawless' article was not to exonerate those who have decried the myth of disinvestment, and to join the chorus of voices calling for reasonable tax reform. Instead, it was to put an alternative argument in support of negative gearing. The argument is: if not for negative gearing, landlords would not invest in new houses, so there wouldn't be enough to go around. This would be a disaster for taxpayers because it would fall to the government to pick up the shortfall.

Let's have a closer look at this argument.

Lawless looked at the ABS dwelling approvals numbers, and saw that in the 12 months to October 2012 there were 145,515 dwelling approvals granted to private interests, compared to 2,065 granted to public housing providers.

He then checked the census data, and saw that 29.6% of Australians live in rented accommodation.

He concluded that the private sector must have built and let 43,684 new homes, because that's 29.6% of the houses built in the period (adjusted to allow for the 2,065 new public housing tenancies).

He checked the median home price for October 2012, which was $386,000. He multiplied 43,684 by $386,000 and got a little over $16.86 billion. This is how much it would cost the government to build all those homes for tenants.

He compared this to the tax foregone by negatively geared landlords: estimated at $4.81 billion over the 2009-10 financial year - as good a figure as any to rely on.

He concluded that the government would not be able to use the increase in tax revenue to build enough houses to make up for a projected shortfall, if negative gearing was abolished.

This logic may appear sound, but it relies on a heck of an assumption - that almost 30% of newly built housing is commissioned by landlords, to be rented out to tenants. Quite simply, this is wrong. As Chris pointed out some time ago in his analysis that negative gearing is not your friend, only a small proportion of the money borrowed by landlords is used to fund new construction. Eslake has spotted this, too, and he puts this figure at 8%.

(RBA Table D06)

That means Lawless is going to have to review his argument.

Let's make a start for him:

If 8% of privately commissioned newly constructed housing goes straight into the rental market, and we apply that to the 2012 dwelling approvals numbers Lawless has used,* we end up with a figure of 11,641 dwellings built by private landlords. If we multiply this by his median house price, we find that the government would have to spend a shade above $4.49 billion in order to keep pace. This falls in just below the $4.81 billion of foregone revenue that we can attribute to negative gearing.

But we can take this further. A recent independent report into the Social Housing Initiative of the Nation Building Economic Stimulas Plan tells us that the government can build houses somewhat more cheaply than private landlords can. In fact, the figures suggest that the government can build houses at a cost of around $266,000 per dwelling - having procured 19,699 new dwellings out of the $5.238 billion spent on social housing across the stimulus package. In order to build those 11,641 new houses for tenants, the government would have to spend a little under $3.1 billion. Perhaps we could have houses, and a budget surplus, too?

That report tells us that there are many other economic benefits when the government invests in social housing, and we've spoken before about some of the social benefits, too. Spending tax dollars on social housing is very clearly a good thing to do.

But we're mindful of the fact that there are still 133,874 new dwellings that we're yet to account for in our example here - those properties that are built by/for owner/occupiers. Of course these purchases would not, we'd assume, contribute to any negatively geared property portfolios. But does the construction of these properties have any bearing on vacancy rates in the private rental market? And what, if anything, is the impact of negative gearing on the cost or availability of those old houses that are left behind?

We're not going to be able to answer these question in any definitive kind of a way, but we can certainly explore them a little. Let's see how far we can get...

We'll look at the ABS' feature article First Home Buyers In Australia for some data and analysis. First, it tells us that, in the three years before 2009/10, there were 429,000 first home buyer (FHB) households in Australia. We must note that changes to the First Home Buyer Grants scheme that came with and since the Nation Building Economic Stimulus Plan will cause this figure to fluctuate over time - the previous three year window saw 318,000 FHBs enter the market, and we're likely to see a drop in the next period following the winding back of FHB grants schemes in some parts of the country (late in 2012). We must also expect fluctuations to have occurred within each three year period, so it would be wildly inaccurate to simply divide the latest number by three in order to get a yearly uptake of FHBs. But, for the sake of the discussion, let's do it anyway... 429,000/3 = 143,000. So let's say there are roughly 143,000 Australian first home buyers in any given year.

Next, we can see that of Australia's FHBs, 18% of them bought newly constructed homes in 2009/10. Again, this number is hardly indicative of long-running trends - the 2007/08 period saw 9% of FHBs in newly constructed homes. Changes to grants schemes - and a wealth of other factors affecting Australian housing markets - will ensure these numbers continue to move around from year to year. But let's take the latest figure again, just because it's there. 18% of 143,000 is 25,740. So let's say roughly 25,740 new homes are purchased and occupied by first home buyers in any given year.

Now, we can also see that, in 2007/08, 63% of Australia's FHBs moved out of a dwelling rented from a private landlord, in order to take up in their new digs. We'll have to make some more bold assumptions here: a) that this number is fair enough to compare to other data from the 2009/10 period, b) that this number applies across purchases of both new and existing dwellings and c) that every FHB household to exit the rental market is equal to one household of tenants. These assumptions are clearly wrong, but let's make them anyway. 63% of 25,740 is 16,216. So let's say roughly 16,216 rental properties are vacated each year due to FHBs building new homes and exiting the rental market.

16,216 new rental vacancies that negative gearing had nothing to do with? Imagine that! No doubt that's a foolishly optimistic conclusion, but it's a train of thought that's worth pursuing...

But what of the 108,134 new properties that are still unaccounted for in our example? We'll just have to assume that most of these are purchased by established mortgagors - upgraders who are looking to move into a nicer place. This means that, as part of the day-to-day cycle of second-hand house trading (and continuing with our rather clumsy simplification of the numbers), about 108,134 established dwellings will be added to the market by vendors each year. These houses will be bought by either investors or owner/occupiers - and it's fair to assume that many first home buyers would be looking at getting a hold of one of these if they could. But with 92% of landlords - the vast majority of them negatively geared and willing to borrow up big - competing with 82% of first home buyers, it's not hard to see why FHBs might struggle to keep up...

So, after all that, we're left with a combination of FHBs and upgraders paying overs for a new home, and negatively geared landlords gobbling up second-hand properties to rent out to those who've missed out. We refer again to earlier analysis from Chris, and quote:
  • negative gearing does not cause an individual landlord to charge less rent;
  • negative gearing does not create net additional rental housing;
  • negative gearing has contributed to more higher-income households renting, which both pushes rents up, and pushes lower-income households out of lower rent properties;
  • negative gearing has contributed to low-value proprties dropping out of the rental market, which pushes up the rent for those that remain in rental; so therefore
  • negative gearing is not your friend.
Policies that encourage the construction of new dwellings - whether by governments or by private interests (indeed, can't we have both?) - do a great deal more for the rental market than negative gearing ever will.

*Nb - Lawless uses the number of "dwelling approvals", which include renovations and alterations as well as new builds. These numbers must all be taken with a grain of salt.

Friday, January 25, 2013

A day for survival, idle no more...

We trust that you are all enjoying the beginning of your long weekend.

Although to many Australia Day is simply a day of celebration, barbequed meats, beer and cricket, to many more, it is a day of contention, confusion and contemplation.

This is the first year that my son has taken any notice of this particular holiday. When he asked what we were doing for Australia Day, a silence fell upon our usually noisy car and the slow formulation of a carefully contemplated answer stirred through my mind.
I began with a discussion of what Australia Day celebrates, my son quickly caught on to the idea that it may not be particularly nice for a nation to celebrate the date that marked the beginning of the demise of the inhabitants and caretakers of the land on which we all now live. At its most basic level, Australia Day is one group of people celebrating what was a really shitty day for another group of people.

So then came the explanation about why, as Aboriginal people, we will be going to Yabun in Victoria Park to celebrate the survival of our people since invasion, and the continuing strength of Aboriginal people in a society where we are treated like second-class citizens. 

Ending on a high, I stopped the conversation there and the back seat returned to its usual noisy level, but in my head, the conversation continued…

I thought about the Idle No More campaign, a movement originating in Canada but now moving around the globe and spreading the message that Indigenous peoples should no longer sit in silence while their sovereignty is denied and the land that they have cared for over thousands of years is destroyed to fill the pockets of those who already have more than their fair share… Thinking about this and about what this day represents does not make me sad, or angry... To me, this is not a day of mourning but a day of celebration. Celebration of the fact that despite the constant battles and opposition that Indigenous peoples all over the world have faced constantly throughout colonial history, we can band together globally and celebrate our future despite the challenges of the past.

On this day last year, resident blogger Ned told the story of a visit he made to an Aboriginal community where the tenants felt ignored and neglected. Where despite having generations of connection with the land they were living on, and despite allegedly having a say and some stake in that land (it being land council property), the community were living in conditions that most would consider unacceptable.

So, a year down the track and where are they now? Well, I can tell you that the tenants are still living in the same conditions but over the past year, the residents have faced eviction in the tribunal and won. The tenants are now armed with a copy of the Tenants’ Rights Manual and are confidently representing themselves in the tribunal when asserting their rights as tenants.

The stories of Aboriginal tenants in NSW are stories of survival and solidarity and on a day like January 26th, which is an anniversary of dispossession, I like to think of those who are still, against all the odds, fighting to stay in their home.

Always was, always will be, Aboriginal land.

Aboriginal Legal Officer @ the TU 

TAAS is good for tenants. We're good for students, too.

An article in 'The Australian' today profiles community lawyer Jacqui Swinburne, formerly of the Inner Sydney Tenants' Advice & Advocacy Service, and chronicles her career with Redfern Legal Centre.

Swinburne pays tribute to the value of TAAS, by sharing her own account of accessing a tenancy service when in need of advice, which lead to her ongoing interest in legal work:
It struck me that there I was, an educated person who had no idea about the laws and protections for tenants. I realised how difficult it would be for other people and I got really interested in the area.
She recalls her time as a volunteer, and later as a tenants' advocate, and taking those experiences with her into her studies in law:
Working for tenancy services is a great way to get experience, as you can give advice without the need for a law degree, and support clients by going along to the relevant tribunal as an advocate.
Working in a legal field while studying was a huge help. You can put things into context quite quickly.
We couldn't agree more with Ms Swinburne, and her comments in the paper today have got us thinking  more broadly about the contribution TAASs make to the legal profession in New South Wales.

There are many examples of law students taking up residence in a Tenants' Advice & Advocacy Service, and gaining vital experience of the law in full swing - while providing a service to tenants that makes a genuine difference by putting their interests above all else.

Some of these students have gone on to become great lawyers for community legal centres and Legal Aid, or to do fantastic pro-bono work with major law firms and barristers' chambers. Some have moved into government roles, where their experience and understanding of justice helps to inform policy. Many keep in touch, and remain friends of the TAASs (and, for that matter, the Brown Couch) to this day.

Then again, some never see the need to move on - there are some great lawyers currently working as tenants' advocates in New South Wales as well...

Of course, not all tenants' advocates are lawyers, and we'd be doing ourselves a disservice if we didn't acknowledge the breadth of experience and interests that makes our network so strong. But, for today at least, with thanks to Jacqui Swinburne for kicking off the conversation, we tip our hats to the lawyers, past and present, of the Tenants Advice & Advocacy Services.

Tuesday, January 22, 2013

Tenancy culture studies: Barack Obama's 'Dreams from My Father'

Congratulations to former tenants advocate Barack Obama on his second inauguration as the 44th President of the United States of America.

In his own words, President Obama's prior career was as a 'community organiser' in the public housing estates and other poor neighbourhoods of southside Chicago in the early 1980s. (An unusual sort of prior career for a world leader, but not entirely unprecedented: Clement Attlee, Prime Minister of Britain 1945-51 and architect of the welfare state, started out as a social worker in the slums of East London in the early years of the twentieth century.)

Obama's own words about his experiences are recorded in his thoughtful, well-crafted memoir, 'Dreams from My Father', first published in 1996.  He sets the scene:

The Altgeld Gardens public housing project sat at Chicago's southernmost edge: two thousand apartments arranged in a series of two-storey brick buiuldings with army-green doors and grimy mock shutters. Everybody in the area referred to Altgeld as 'the Gardens' for short, although it wasn't until later that I considered the irony of the name, its evocation of something fresh and well tended – a sanctified earth.
True, there was a grove of trees just south of the project, and running south and west of that was the Calumet River, where you could sometimes see men flicking fishing lines into darkening waters. But the fish that swan those waters were often strangely discoloured, with cataract eyes and lumps behind their gills. People ate their catch only if they had to.
To the east, on the other side of the expressway, was the Lake Calumet landfill, the largest in the Midwest.
And  to the north, directly across the street, was the Metropolitan Sanitary District's sewage treatment plant. The people of Altgeld couldn't see the plant or the open-air vats that went on for close to a mile; as part of a recent beautification effort, the district maintained a long wall of earth in front of the facility, dotted with hastily planted saplings that refused to grow month after month, like hairs swept across a bald man's head. But officials could do nothing to hide the smell – a heavy putrid odour that varied in strength depending on the temperature and the wind's direction, and seeped through windows no matter how tightly they were shut.
The stench, the toxins, the empty, uninhabitated landscape. For close to a century, the few square miles surrounding Altgeld had taken the offal of scores of factories, the price people had paid for their high-wage jobs. Now that the jobs were gone, and those people that could had already left, it seemed only natural to use the land as a dump.
A dump – and a place to house poor blacks. Altgeld may have been unique in its physical location, but it shared with the city's other projects a common history: the dreams of reformers to build decent housing for the poor; the politics that had concentrated such housing away from white neighbourhoods, and prevented working families from living there; the use of the Chicago Housing Authority – the CHA – as a patronage trough; the subsequent mismanagement and neglect. It wasn't as bad as Chicago's high-rise projects yet, the Robert Taylors and the Cabrini Greens, with their ink-black stairwells and urine-stained lobbies and random shootings. Altgeld's occupancy rate held steady at ninety percent, and if you went inside the apartments, you would more often than not find them well-kept, with small touches – a patterned cloth thrown over torn upholstery, an old calendar left hanging on the wall for its tropical beach scenes – that expressed the lingering idea of home.

Public housing tenants and workers in New South Wales might see similarities between Altgeld and public housing estates here: parallel trajectories from promise to disappointment; planning failures that always put these places behind the eight-ball; present states of isolation and neglect. We should be careful, however, not to overdo it. Part of the problem of places like Altgeld is the historical legacy of the racial segregation of American cities, first written legally into the fabric of cities by racially restrictive covenants in property, then economically by the phenomenon of 'white-flight'. As divided as our own towns and cities are, and as sorry as a lot of our history of race relations is, there's no direct parallel to the historical legacy in American cities. Nor has there been here anything quite like the American culture of patronage and spoils in the administration of housing and other services.

What's really recognisable in Obama's account of community work is its human face, and its emotional inner life.

He describes insightfully the continuing search of workers and residents for a common interest that motivates and sustains community organisation – and for their own individual way through the various contending motivators and ideologies for meaningful work. For the young Obama, the civil rights movement and the ambitions of his own absent father are shifting lodestars; he also recounts what he learned of the motivations of some of the residents he worked with:

I remember, for instance, sitting in Mrs Crenshaw's kitchen one afternoon, gulping down the burnt cookies she liked to force on me every time I stopped by. It was getting late, the purpose of my visit had begun to blur in my head, and almost as an afterthought I decided to ask why she still participated in the PTA [Parents and Teachers Association] so long after her own children had grown. Scooting her chair closer to mine, she started to tell me about growing up in Tennessee, how she's been forced to stop her own education because her family could afford to send only one child to college, a brother who would later die in World War II. Both she and her husband had spent years working in a factory, she said, just to see to it that their own son never had to stop his education – a son who had gone on to get a law degree from Yale.
A simple enough story to understand, I thought: the generational sacrifice, the vindication of a family's faith. Only, when I asked Mrs Crenshaw what her son was doing these days, she went on to tell me that he had been diagnosed with schizophrenia a few years earlier and that he now spent his days reading newspapers in his room, afraid to leave the house. As she spoke, her voice never wavered; it was the voice of someone who has forced a larger meaning out of tragedy.

Obama also observes the pitfalls of burnout, cynicism and petty jealousies in community organisations and service providers; the struggle of residents' hidden strengths and skills against lack of education and lack of confidence; and the importance of the occasional flash of inspiration or victory. He tells the story of working with a group of young parents from Altgeld who were concerned about asbestos in their buildings. After getting the brush-off from the management at Altgeld, they took themselves and their children to the CHA's head office. Under the gaze of the assembled local media, they got a meeting with the director's assistant.

Without a word from me, the parents found out that no tests had been done and obtained a promise that testing would start by the end of the day. They negotiated a meeting with the director, collected a handful of business cards, and thanked Mrs Broadnax [the director's assistant] for her time. The date of the meeting was announced to the press before we crammed back into the elevator to meet our bus. Out on the street, Linda insisted that I treat everybody, including the driver, to caramel popcorn. As the bus rolled away, I tried to conduct an evaluation, pointing out the importance of preparation, how everyone worked as a team.
'Did you see that woman's face when she saw the cameras?'
'What about her acting all nice to the kids? Just trying to cozy up to us so we wouldn't ask no questions.'
'Wasn't Sadie terrific? You did us proud, Sadie.'
'I got to call my cousin to make sure she gets her VCR set up. We gonna be on TV.'
I tried to stop everyone from talking at once, but Mona tugged on my shirt. 'Give it up, Barack. Here.' She handed me a bag of popcorn. 'Eat.' I took a seat beside her. Mr Lucas hoisted the children up onto his lap for a view of Buckingham Fountain. As I chewed on the gooey popcorn, looking out at the lake, calm and turquoise now, I tried to recall a more contented moment.
I changed as a result of that bus trip, in a fundamental way. It was the sort of change that's important not because it alters your concrete circumstances in some way (wealth, security, fame) but because it hints at what might be possible and therefore spurs you on, beyond the immediate exhilaration, beyond my subsequent disappointments, to retrieve that thing that you once, ever so briefly, held in your hand. That bus ride kept me going, I think. Maybe it still does.

There's more to the story of the campaign, and Obama is honest enough not to give it an altogether happy ending.

Looking again to our own social housing neighbourhoods, the difficulties, disappointments and rewards of tenants organising to get the services they and their neighbours need are documented, in very different language, in a new briefing paper by Shelter NSW, 'We Look After Our Neighbours Here' (download in pdf here).' In their different ways, both it and Obama's memoir are well worth a read for the student of housing and community work.

And let's hope, too, that the leader of the world's greatest economic and military power still sometimes thinks back to his bus trip with the public housing tenants from Altgeld.

Monday, January 21, 2013

Public housing amnesty for unauthorised additional occupants

Do you live in public housing or Aboriginal Housing Office Housing? Do you have someone living with you who Housing NSW doesn't know about?

If you do, you should think about informing Housing NSW under its amnesty for unauthorised additional occupants.

The amnesty runs from today, 21 January, to 17 March 2013. Housing NSW states that 'if you make a report relating to an unauthorised additional occupant residing in your property during the amnesty you will be protected from prosecution and won't have to pay back rent or be worried about being evicted.

Housing NSW will use the information you provide to recalculate your rental rebate according to its policy – so you will pay a higher rent, going forward.

But the amnesty may still be a very good deal, because ordinarily Housing NSW will, upon finding out about an unauthorised additional occupant, cancel your rental rebate, backdate the cancellation to when they reckon the person moved in, adjust your rent account accordingly to create a mountain of arrears (we've seen cases where tenants have been presented with arrears well over $100 000), and then give you a termination notice on the ground of the arrears.

The amnesty could save you a lot of trouble – we urge you to consider it. If you've any questions, please speak to your local Tenants Advice and Advocacy Service.

A few things to note:
  • For the amnesty to apply, the information has to come from you. Housing NSW says if you get dobbed in by someone else, you'll be told and given one opportunity to 'fess up. If you do, you're covered; if you don't, you're not protected and can expect Housing NSW to proceed against you in the usual way.
  • The amnesty relates to unauthorised additional occupants, not other factors in incorrect rental rebates (for example, your own undeclared income).
  • The amnesty is for public housing tenants and Aboriginal Housing Office tenants only; it does not apply to community housing tenants or Aboriginal community housing tenants.
[UPDATE: Check out our updates on the amnesty here.]

Tuesday, January 15, 2013

A note on database listings and the CTTT

A quick update on CTTT proceedings concerning the removal of residential tenancy database listings:

The Residential Tenancies Act says that a database listing should be removed after three years. It also says that tenants can apply to the Consumer, Trader & Tenancy Tribunal (CTTT) to resolve any dispute about a listing. This includes seeking orders for the removal of a listing that is more than three years old.

In a recent example that was handled by a Tenants' Advice & Advocacy Service, the landlord responsible for the listing could not be located. Instead, the database operator was listed as the sole respondent in the tenant's CTTT application.

The Tribunal didn't accept this. Instead, they rather unexpectedly located the landlord and served them with notice of the Tribunal hearing. They also removed the database operator as a respondent.

At the hearing, the Tribunal Member assured the tenant that the database operator would have to comply with any order made, notwithstanding that the operator was not a party to the proceedings. The Member relied on section 217 of the Residential Tenancies Act 2010 in reaching this conclusion:

217   Disputes about listings
(1) ApplicationA person may apply to the Tribunal for an order under this section if personal information about the person has been ... listed in a residential tenancy database.
(2) Grounds for orderThe Tribunal may make an order under this section if it is satisfied that:
(a)  the residential tenancy database includes personal information about the applicant that … has been listed on the database for longer than the applicable period specified in section 218
(3) Orders by TribunalThe Tribunal may order personal information about a person in a residential tenancy database to be wholly … removed … The Tribunal must give a copy of the order to the landlord, tenant and database operator.
(4) Orders affecting other personsIf the Tribunal makes an order directing a person other than a landlord or agent to remove … information in a residential tenancy database, the Tribunal must give a copy of the order to the person.

The result was that, once the CTTT hearing commenced, the tenant found it relatively easy to obtain an order for the listing to be removed. After three years the landlord was no longer concerned about the listing, and the database operator was never brought into the discussion.

(We should note here that, as the law is clear on the three year limit for database listings, there is no good reason why the order should not have been made anyway. But it's always nice to get a remedy in the Tribunal without being backed into an argument about whether or not you're entitled to it).

Our next lot of questions will concern the database operator's compliance with this order, and what the tenant might do to enforce it if the listing is not removed. We'll be keeping an eye on this.

More information on residential tenancy databases can be found at this link on the Tenants Advice & Advocacy Services' website.

Parenting Payment to Newstart: National Day of Action for single parents and their kids

Tuesday 5 February is a National Day of Action in support of families affected by the Federal Government's decision to cut single parents' entitlement to Parenting Payment and put them on the unemployment payment, Newstart, instead.

The change will substantially reduce the incomes of about 80 000 households already doing it tough, and push many of them towards homelessness.

Raise your hand in support of single parents and their kids at one of the rallies being organised across Australia: see the Single Parents Action Group for more details.

Wednesday, January 9, 2013

Tenancy culture studies: the National Public Housing Museum (Chicago)

Having last year observed the centenary of the public housing system in New South Wales, including with an Institute of Tenancy Culture Studies tour of significant public housing sites in Sydney, we bemoaned Housing NSW's neglect of the centenary and the forgetting of our public housing history.

By contrast, in Chicago, Illinois, the history of public housing is being remembered and celebrated, in the new National Public Housing Museum.

In its own words, the Museum

promotes and fosters the deep cultural understanding through artifacts, photos, archival documents, social history, public policy, and other material objects spanning seven decades. It is the first institution dedicated to interpreting the experience of public and social housing and the illumination of resilience of poor and working class families of every race and ethnicity.

The Museum is to shortly find a permanent home in a conserved building that was part of the Jane Addams Homes, Chicago's first federally-funded public housing project. Take a virtual tour:

Congratulations and best wishes to all involved in the inspiring work of National Public Housing Museum.

Tip of the hat to Robert Mowbray.

Tuesday, January 8, 2013

Does my landlord have to provide air-conditioning?

Bit hot today.

There might be a few of you wondering whether you can make your landlord install air-conditioning.

The answer is: maybe, there's an argument for it, but it depends.

The Residential Tenancies Act 2010 does not say anything specifically about air-conditioning. (It does, however, contemplate that facilities for 'cooling' (and, for that matter, 'heating') may be 'essential services' that justify an urgent repair in the event of a breakdown).

The most relevant provisions for sweltering tenants are the contractual obligations the Act places on landlords to provide the premises 'fit for habitation' (section 52(1)) and to provide and maintain the premises 'in a reasonable state of repair, having regard to the age of, rent payable for and prospective life of the premises' (section 63(1)).

The 'fit for habitation term' and the 'reasonable state of repair term' are, apparently, two separate obligations. The Tribunal has pondered their relationship and differences here.

The fit for habitation term is the more objective: it means that the premises are safe and reasonably comfortable. This comes from the nineteenth century English case of Proudfoot v Hart (1890) 25 QBD 42, where the words 'fit for habitation' were held to mean that 'the premises might be used and dwelt in not only with safety, but with reasonable comfort, by the class of persons by whom and for the sort of purpose for which, they were to be occupied'. As the Tribunal observes, consideration of 'the class of persons' should now be dispensed with as anachronistic, and instead a generally observed, contemporary standard of safety and reasonable comfort should be applied.

The 'reasonable state of repair' term is more relative: the standard here may vary according to the rent payable for the premises, and to how much longer the premises are to remain standing. This means, in particular, that the standard of repair for relatively expensive premises may be relatively high – higher than what might be required to be merely 'fit for habitation'.

A case for air-conditioning could be made under either of these obligations, but it will depend very much on the circumstances.

For example, it's possible to think of premises – for example, a west-facing flat, with fixed windows and no insulation, somewhere that regularly gets hot – that will not be reasonably comfortable without air-conditioning, so the case might be made that air-conditioning is required for those premises by the fit for habitation term.

On the other hand, in other premises – say a $5000 per week penthouse in a luxurious new building – air-conditioning might be required under the 'reasonable state of repair' term, even if the discomfort is not so bad as to make the premises uninhabitable.

In any event, the extreme weather conditions today will be a poor test of what's required by these obligations. For today, keep a T-shirt in the fridge. If your place gets uncomfortably hot even in ordinary weather, consider asking your landlord to do something about it. 

Monday, January 7, 2013

New Year, new Boarding Houses Register

Happy New Year, Brown Couch readers.

As the new year commences, so do parts of the new Boarding Houses Act 2012. On 1 January, the parts that establish the new Register of Boarding Houses commenced operation. (Other parts of the Act, such as those relating to occupancy agreements, will commence some time later.)

At the moment, the Boarding House Register is a slim volume. Over the next six months it should start to fill up. Proprietors of registrable boarding houses already operating have until 30 June 2013 to register. New registrable boarding houses, and new proprietors, must register within 28 days of starting operations.

For more on registration and other aspects of the new Act, see NSW Fair Trading's website.