A slow-burning crisis

When a Blue Mountains landlord allegedly told his agent last week to increase the rent because ‘there will be a lot of people who’ve lost their homes looking for temporary accommodation', Premier Barry O'Farrell stepped forward and slammed the 'bastard'.

Said the Premier:

“This sort of low act will not be tolerated and I warn people even thinking about it that the NSW Government [will] come after you.

“Anyone seeking to cash in on this crisis is a heartless grub. Just don’t do it.

“Not only will they named and shamed, they’ll face a fine of up to $220,000 or $1.1 million for corporations.

“We will have no hesitation in going after these people and I know Minister for Fair Trading Anthony Roberts has ordered his inspectors to be on the ground in the bush fire zones on the lookout for this behaviour.

“Whether you’re a landlord, tradesman, or retailer – don’t try it on because it won’t be worth it.

It appears to us that the Premier and the Fair Minister are contemplating the use of the Australian Consumer Law's 'unconscionable conduct' provisions. We're not aware of any previous instances of these provisions being used against landlords exploiting a crisis like the recent bushfires, and we applaud the NSW State Government for taking this line of response. We've no doubt that most other persons in the community would support it too.

The bushfires are a particular kind of crisis. As a housing crisis, the fires have removed two hundred dwellings from the stock of housing, but there's more to it than just that. They've instantly turned settled lives upside down. They were genuinely, physically frightening. For those of us not in the midst of the fires, they were still an inescapable presence: you couldn't look out of window, or take a breath outside, without of thinking of what was happening in the mountains, or in the fires up and down the coast. The fires also drew a magnificent, courageous effort from hundreds of professional and volunteer firefighters, and a generous response from the wider community too.

For many years, we've been talking about another crisis relating to the supply of housing – the critical lack of rental housing affordable for people on low incomes. This is a different kind of crisis – a slow-burning crisis, so to speak – that has not sprung up in an instant, and is not so insistently noticeable to those outside it. But for those who are caught in it, it wrecks lives.

Some numbers, from the Rental Bond Board. In 2006, across New South Wales 131 929 private tenancies commenced at rents that were affordable to low-income households (ie the rent was not more than 30 per cent of the 40th percentile household income); in 2010, just 82 220 affordable tenancies commenced – almost 50 000 (or 38 per cent) fewer affordable tenancies than four years previously.

Across Sydney,  there were 36 472 (51 per cent) fewer affordable tenancies commenced in 2010 compared with 2006.

In the Blue Mountains, 775 (42 per cent) fewer affordable tenancies were commenced.  

This loss of affordable rental opportunities is a big part of the reason why 65 per cent of low-income renters in New South Wales are in housing stress (ie paying more than 30 per cent of their incomes in rent) and 28 per cent are in housing crisis (ie paying more than 50 per cent). To pay these rents, many skip meals, or go without medical or dental care, or things like school excursions for their children.

Then there are the families who don't get into even unaffordable rental housing. For the human face of this aspect of the loss of affordable rental opportunities, watch this documentary, shot in the Blue Mountains for the ABC's Four Corners program in 2009. 'Last Chance Motel' records the ceaseless stress of lives spent shuttling between real estate agencies, Housing NSW offices, and temporary motel rooms. It is tough viewing – but it absolutely deserves your time.

We've discussed the causes of this problem previously: speculation in housing, encouraged by tax breaks for capital gains and negative gearing, has distorted the rental market, as landlords have brought high-value/high-rent stock into the rental sector, and allowed low-value/low-rent stock to drop out of it. Such low-rent stock as has remained in rental has become scarcer, and landlords are charging more for it.

We're not saying that governments should whack these landlords with unconscionable conduct prosecutions too. Rather, the challenge is to apply some of the emotional response we've all felt to the crisis of the bushfires – the concern and compassion, and some of the righteous anger too – to tackling our slow-burning housing affordability crisis, before it does very much more damage. 

Goodbye from OPTS

From December, the Tenants Advice and Advocacy Program (TAAP) – administered by NSW Fair Trading, using tenants' money – will no longer fund a separate resource service for older tenants, and the Older Persons Tenancy Service (OPTS) will regretfully close its doors.

From OPTS's legendary tenants advocate Dr Robert Mowbray, a final postcard.

*

OPTS, along with the Park and Village Service, has received the chop. 

With the loss of OPTS from the TAAP, over 80 years of worker-experience in the community sector may be lost ... and much of this has been in the area of tenant advocacy! But, more importantly, there will be significant gaps left by the chopping of OPTS. NSW Fair Trading advises that TAAP will continue to assist older tenants and park residents, particularly social housing and vulnerable tenants/residents in the same way as previously. But this is nonsense.

Regarding OPTS, what particularly will be missing is support to direct services on older persons issues (for example, dementia, capacity, hoarding), and the complex casework OPTS previously did; for example, with protected tenancies, long-term tenants and older tenants in unusual circumstances. This is a real concern. The changing demographics of renters shows an increasing number of older persons living in the private rental market. Indeed, recent research identifies older, single females in the private rental market as the 'new poor'. Research by the Australian Housing and Urban Research Institute found that renting is no longer temporary but permanent for increasing numbers of people, who have been priced out of the housing market. Indeed, 30 per cent of long-term tenants were aged 45-64. Dr Stone, the researcher, said the potential cost of this older group was a 'policy bomb waiting to go off'!

Direct services generally with no additional funding will not be able to provide the same level of support with complex casework.

Some of OPTS achievements are reflected in a selection of its case studies. Here are some really complex recent matters where OPTS assisted … 

A protected tenant 

Jock has lived in a terrace house in Kirribilli since 1974. The landlord has done little repairs over these years.  Jock paid rent of $300 per week. He contacted OPTS after his real estate agent served a 14-day termination notice, alleging he was 30 months behind in rent and owed $28,000.

OPTS advised Jock that he was a protected tenant and, because his landlord had never lawfully increased the rent, he was liable to pay what he did back when he started his tenancy. Simple arithmetic showed he was in rent credit of over $200,000. Putting this another way, his rent was paid up for another 800 years!

OPTS and his client met with the real estate agent prior to a Consumer, Trader and Tenancy Tribunal hearing. OPTS convinced the agent that the tenant was a protected tenant. The agent withdrew his application.

The owner promptly changed real estate agents and this real estate agent promptly organised a builder’s report which identified works required to bring the property up to scratch. OPTS organised second builder’s and pest controller’s reports and these reports stated that remedial work could be done without the need for Jock to move.  These reports were provided to the real estate agent. Jock sought to settle this matter by proposing repairs being undertaken, regularising a rent increase by signing a ‘17A Agreement’ and a 3-year fixed term lease. In return, Jock would not pursue overpaid rent for the last six years (the maximum period for which he can recover overpaid under the law).

A year later negotiations have led nowhere. The new real estate agent is seeking to have the local government council condemn the house. Council advises that the landlord is known for not doing repairs. Council does not wish to see the tenant out in the street. OPTS has referred Jock to a solicitor for action on overpaid rent and repairs … but Jock is still willing to negotiate a settlement. 

Asbestos in premises 

OPTS tested Section 52(3) of the Residential Tenancies Act 2010 that covers landlord’s complying with statutory obligations relating to health and safety of residential premises. The tenant had been living with asbestos fibres since March 2013. The asbestos roof was breaking down and fibres were falling into the premises because there was no ceiling. The tenant stayed with friends from this date and did not pay rent from that time. OPTS relied on the Division of Local Government's ‘Model Asbestos Policy for NSW Councils’. OPTS argued the asbestos policy is sub-ordinate legislation with powers under Sections 33A and 159 of the Local Government Act 1993.

A copy of OPTS submission was sent to the landlord’s solicitor before the formal Tribunal hearing. He stated the landlord would negotiate an agreement. Consent orders were made that 12-weeks rent be waived until the tenant formally vacated, the tenant’s $750 asbestos report be paid for, whole rental bond be paid back and tenant’s removal costs be covered. 

A Court of Appeal decision revisited 

For some time OPTS has been assisting a group of people who, many years ago, bought their houses but ever since have paid rent for the ground on which they stand. In this case, Lithgow Valley Colliery Company, a mining company, owned land and allowed its workers to build houses on its land. These houses subsequently were transferred to relatives or sold to others. In 2000 the Colliery sold the land to a developer (Ceedive) who sought to evict residents. 

The Court of Appeal decision in the case of May v Ceedive Pty Ltd [2006] NSWCA 369 (15 December 2006) held that the buildings were fixtures and the ‘ground rent’ agreements were agreements for the lease of ‘premises’. The Court further held that this meant that residents who had ground rent agreements and ‘bought’ their houses prior to 1 January 1986 may be tenants covered under the provisions of the Landlord and Tenant (Amendment) Act 1948.  

Recently OPTS assisted Brendan, a resident in a similar situation, whose parents ‘purchased’ their house but not the land in the 1950s. Following the death of his mother, Brendan became what is known as a 'statutory protected tenant'. Nevertheless, the owner served him a termination notice under the 2010 Act, citing the death of the tenant. OPTS represented Brendan in three hearings of the Consumer, Trader and Tenancy Tribunal. Prior to these hearings it sought advice from a barrister in the May v Ceedive case, which became the basis for the submission to the Tribunal. The questions before the Tribunal were whether the premises are covered by the Landlord and Tenant (Amendment) Act 1948 and whether sections 83A and 83C of that Act apply. The decision on the first question flows from the decision of May v Ceedive. The decision on the second question relates to an occupant becoming a 'statutory protected tenant' following the death of the tenant. The respondent was successful on both accounts.

Housing NSW and heritage property 

An elderly couple contacted OPTS because they required major repairs, including replacement of the roof, to their heritage-listed cottage – built in the 1850s, now owned as public housing by the NSW Land and Housing Corporation (LAHC). OPTS sought to negotiate directly with LAHC who advised that they would do temporary repairs until the place becomes unlivable. At that point in time, Housing NSW will provide an alternate residence for the tenants. OPTS obtained pro bono assistance from a heritage architect who provided a report and a barrister who drafted a letter and agreed to represent the tenants in any proceedings in the Land and Environment Court. Immediately after receipt of that letter, NSW LAHC advised that they already had agreed to replace the roof! Work on a new roof was completed a few months later. The tenants are thrilled. 

A hoarder 

Margy is nearly 80 years of age. Last year her friend rang OPTS stating that sheriff officers were evicting Margy the next morning. Two workers from OPTS attended the premises just before the sheriff officers were due. Clearly, Margy was a hoarder. She wouldn’t allow OPTS into her unit … the unit, the foyer and her unregistered car were chock-a-block with all manner of things.

Shortly afterwards the sheriff officers arrived and then the police. After prolonged negotiations, on the instructions of the sheriff officers, the police removed Margy from her premises. They allowed her to pull together a few possessions to take with her. Over many weeks OPTS negotiated with the owner’s solicitor moving some of her possessions to a storage facility. Much was placed in a skip. Her car was towed away.

Margy organised alternative accommodation at a local backpackers hostel. She started bringing things back to her room. This made it difficult for others who were sharing the room.  She was finally asked to leave and the manager of the backpackers hostel found her a room in a boarding house.

It was clear Margy was neglecting her health and she had difficulty making day-to-day decisions. OPTS organised support through a Boarding House project attached to a neighbourhood centre. Both liaised with a local community care team who made application to the Guardianship Tribunal and a guardian was appointed. The guardian organised for Margy to be admitted to the hospital for a health check and assessment, with the intention of moving her to an aged care facility where she will receive the appropriate care.

At the time of going to hospital her room in the boarding house had become chock-a-block with all manner of things … After thorough assessment in hospital Margy moved to a low care facility in the inner west. 


But not all of OPTS cases are so complex...  

A quandary about water bills 

OPTS has a protected tenant in her 80's who's been in hospital for three months and now finds the landlord has failed to pay the water bill. Sydney Water has disconnected the water supply and this will delay her return home.  (As a protected tenant she is not liable for water usage charges.) Section 62 of the Sydney Water Act 1994 allows her to pay the outstanding bill (including reconnection charges) and count it as rent.

But how does she make this payment, because Sydney Water no longer has a physical location that anyone can visit in order to pay bills? She can't pay it at the Post Office without knowing the Account Number and Sydney Water will not give it to her because she is not the customer. She can't pay it over the telephone unless she has a credit or debit card which she doesn’t have. OPTS discussed this with officers of Sydney Water who were apologetic but said they were unable to do anything.

OPTS resolved this quandary by using its own credit card and paying the amount over the telephone.  The tenant reimbursed OPTS with a cheque.

(Postscript: The tenant has now returned home to running water and rent paid many months in advance with her rent! The landlord is refusing to collect letters sent by ‘Registered Post’ stating that the payment to Sydney Water is rent.) 

Jim can now use his washing machine 

Jim is an older bloke who lives in a social housing property in a rural northwestern town.  He had been living in the property for nearly a year and had no key to the power box in the laundry so he could use the washing machine. Also, there was only one garbage bin for four units.  OPTS was contacted by the local hospital regarding Jim after they learned of his situation. Jim suggested to his neighbour that he also contact OPTS because he had exactly the same problems. OPTS made representations on behalf of both clients to the Housing NSW office and the Housing NSW Contact Centre.  Some 10 months after OPTS first contacted Housing NSW, things finally moved. Jim reports he and his neighbor are now using the washing machine and have extra garbage bins.  

OPTS’s legacy

OPTS’s casework has made a profound impact on the lives of many older renters.  But its legacy is more than just its casework. It developed an expertise second-to-none on ‘protected tenancies’ and long-term tenant matters. Its accumulated knowledge on protected tenancies is recorded in a revised guide to protected tenants that will be used by workers with TAAS. It has also produced a CD that provides an oral history of protected tenants in New South Wales. Over many years it has also resourced the network of TAAS on older persons issues, such as dementia, capacity to make decisions, and hoarding. 

Grattan Institute on housing subsidies

We were just saying in Anti-Poverty Week how our housing system, in the absence of a genuine housing policy, enriches some while it impoverishes others – now the Grattan Institute puts some numbers on the problem.

The Institute's report, 'Renovating Housing Policy' looks at the cost and allocation of subsidies provided by Australian governments and delivered through the private housing system.

The winners are home owners, recipients of $36 billion (on average, $6100 per household) in tax expenditures and other benefits each year. These subsidies come from the exemption of owner-occupied housing from capital gains tax, land tax, income tax (on imputed rents), and the assets test for the Age Pension, and the First Home Owners Grants. Take a bow, home owners.

Runners-up are the landlords, recipients of $6.8 billion (on average, $4500 per household) in subsidies per year. These subsidies come from our generous tax treatment of capital gains and negative gearing.

And limping in in third place: private renters, whose Commonwealth Rent Assistance is worth, on average, $2900 per household per year.

All in all, more than 90 per cent of housing subsidies go to property owners. Some further dimensions of the inequity of our housing system are also made clear in the report.

First, rates of home ownership are declining, particularly amongst younger and lower-income households, so access to these subsidies is concentrating amongst older households and higher-income households.

Secondly, amongst owner-occupiers and landlords, the largest subsidies go to the households with the highest incomes.

The report concludes with a call for the renovation of housing policy, including such sensible measures as a broad-based land tax, a reduction in the preferential treatment of negative gearing and capital gains, and tenancy law reform to improve tenants' security and freedom of choice (for example, the choice to keep a pet).

A final thing: you might wonder where social housing fits in housing subsidy league table. The report doesn't say, but according to the most recent data from the Australian Institute of Health and Welfare, of public housing households who receive a rental rebate, the average amount is just under $6300 per year. Which puts their level of housing subsidy just ahead of most home owners, but still behind the level of subsidy that goes to homeowners in the top 20 per cent by incomes.

What's up with Generation Rent?

Not so long ago, the Australian Housing and Urban Research Institute (AHURI) released its final report into long-term private rental in a changing Australian private rental sector. This report shows that the number of long-term renters - that is, people who have rented for ten years or more - is growing across Australia's private rental markets, and an increasing proportion of these long-term rental households are families with children. It makes some other interesting observations, too: long-term renters are really no worse-off when it comes to their health, but do tend to move more often, and are generally less optimistic about their financial and social well-being than their counterparts in other tenure types such as owner-occupation.

Moving house and maintaining a connection to community?

Yes, it can be done...

The report was released to minimal fanfare at the end of July, and was given a cringe-worthy run in the press by one of the usual suspects in late September. It was said:

An alarming number of Australian families are losing sight of the home ownership dream, and being forced into long-term rental situations and struggling to provide security for their children.

Oh, dear no... not the children!

But more recently it has been picked up by other sources, and has prompted a couple of outbursts about an emerging global demographic that is being called 'Generation Rent'. (And for clarity, let's not assume that Generation Rent is actually a generation. It includes a growing number of people across a range of age groups).

One of the first mentions from a mainstream news source - that we came across, at least - was a tweet from SBS News, to which we characteristically replied with a link back to the Brown Couch:

.@SBSNews Question the assumption- Why avoid it? A renting population is only a problem if we treat renters poorly. http://t.co/eknW2eM298
— Tenants Union of NSW (@TUNSW) October 5, 2013

Since then we've seen a run of articles on the issue from the Sydney Morning Herald (here and here) as well as the ABC, among others. It's worth having a brief look at these articles. There are some interesting differences in the way each approaches this issue, but they all follow the same theme: home-ownership is the dream to which all Australians aspire, notwithstanding the current obstacle of ridiculously high prices. Renting is fine, under the circumstances, but we all know it's better to own your home if you can.

Even celebrity tenant/tabloid economist Jessica Irvine, in her 'defence of Generation Rent', admits that she will one day look to buy. As she explains:

The most compelling argument for homeownership is a consequence of policy. Australians have also built our homes into excellent tax shelters. You pay no tax on any profit you make on your principal home, unlike shares or cash.

Eventually, the tax advantages of home ownership mean I will probably look to buy.

... and she's hit the nail on the head. There are compelling reasons to prefer home ownership over renting, and they are all the result of policy.

There is tax policy, as Irvine suggests, and we've spent quite a bit of time talking about this elsewhere on the Brown Couch. These tax policies are driven by our welfare system or, more specifically, our superannuation system, which is designed to ensure our ageing population remains as self-funded as possible throughout its retirement.

Such policies are the product of both our experience and our expectations. It is, after all, deeply ingrained in the Australian psyche that we should load up on housing costs while we are young, and able to make good money. As we age into our fully-paid-off homes, we reassure ourselves, we can retire into relative financial independence. We will not become a burden on others. Our pensions will be enough to sustain us if our housing costs have already been met.

It has been this way since time immemorial - well, since about the end of the Second World War, with a quick glance back over the shoulder at the Great Depression. We have long since conditioned ourselves that the best way to save for the future is by taking on debt to buy property.

No doubt it is a strategy that has worked well for many. So well, in fact, that the idea of not buying property has a kind of incredulous stigma attached to it - even if it is sometimes quite nuanced. The idea that you can live a meaningful, socially and financially fulfilled life as a tenant is as foreign to many Australians as the desire to buy property seems natural. As the ABS points out in its report into Measures of Australia's Progress (2010):

Home ownership is a widely held aspiration in Australia, providing security of tenure and long term economic benefits to home owners. Owning a home can also bring social and cultural benefits such as a sense of belonging.

By implication, not owning a home can bring social and cultural detriment, and perhaps some kind of existential crisis. Because what good can come of a world where nothing belongs to nobody no more? News outlets screeching about "families struggling to provide security for their children" are more the norm than the exception, and articles like the one in the Herald often come as a bit of a surprise. If we accept this as the normal state of affairs it is not hard to see why long-term renters would self-assess their social or financial well-being in an unfavourable way, when approached by an AHURI researcher.

... and this brings us to another reason to prefer home ownership over renting: tenants' rights. Renting is regarded as a transient form of tenure, often by tenants as much as by anyone else. Strengthening the rights of tenants is rarely at the front of anyone's mind - and if it is, it's usually only for as long it takes to say "you mean my landlord can actually get away with this?"

While it is true that consumer protection for tenants covers a lot of bases in New South Wales, there are three fundamental issues that stand in the way of renting as a secure and sensible form of long-term tenure. The first is that rights around repairs and maintenance can be difficult to enforce, so that rental housing can be in pretty poor condition, while attempts to have it brought up to standard can be fraught. That's because the second issue is that rents can be increased almost at will, without regard to affordability, leaving it up to tenants to demonstrate that an increase is excessive according to the market. And the third is that tenants can be asked to leave a tenancy without any good reason.

And, when you think about it, these issues are borne of the same reasons that our tax policies so heavily favour owners. Because it stands to reason that if owning your own home is a pathway to financial independence, then owning other peoples' homes is as sure a way to wealth in your retirement as you will find. Right? So, from the outset, renting laws have set out to strike a balance between those who live in houses, and those who seek to profit from them in order to fund their retirement. That's a tricky set of interests to balance against one another at the best of times, let alone when the players on one side are so structurally fragmented. What we're left with is a system that further entrenches the very assumptions by which it is caused: renting is not good for your long-term social or financial well-being.

This has been escalated over the last decade or so. A large cohort of our population marches towards retirement age, and our governments have looked into the coffers, over there at the pension office, to find they're running a little dry. Tax policies have been tweaked to entice more and more people into residential housing markets. They've been tweaked again to reward the faithful with all-but-assured capital gains. As first home buyers struggled to keep up, more money was poured into this system by way of grants, so that they too still had a chance to get on board. But none of that extra money was targeted to the creation of new supply, and it just pushed up prices further still. This constant upward movement quickly took the wind out of the first home owner grants' sails: in many parts of Australia these are now part of a suite of grants payable on new builds only. First home buyers are, for now, pretty few and far between.

The withdrawal of first home buyers from the market is of course offset by the continued rush of investors (or as they should be rightly known, speculators), all too eager to get in while interest rates are at record lows. Which means that Generation Rent - that 'new' demographic formerly known as First Home Buyers - should not expect their supply of highly-indebted landlords to run dry any time soon.

What they can expect, though, is long-term insecurity of tenure, and, if they're not careful, a view of themselves that is missing some magical secret ingredient that only the truly propertied may possess. Which brings us back to our reply to that tweet from SBS News.

What can we do to avoid 'Generation Rent' becoming a fixture of modern Australian society? Question the assumption.

Question the assumption - as perhaps Generation Rent has started to do - that home ownership is a pathway to financial independence. At today's prices, that's far from assured. You might be no better off going into retirement with a massive mortgage to service than you would be if you continued to rent - particularly if prices do start to taper off and capital gains become eroded. And as the following slides demonstrate, there has been a steady decline, over a number of years, in the rate of homeowners paying off a mortgage before retirement age.

Source - Shelter NSW Conference 2013 "Housing Crossroads",

presentation by Dr Ben Spies-Butcher.

... and, once you've gotten your head around that, question the assumption that renting should be inherently transient. Some simple changes to our renting laws - and with them, our attitude towards tenants in general - could see Generation Rent quite comfortably reunited with their sense of social and financial well-being.

Bushfires

Our thoughts are with everyone in bushfire-affected parts of New South Wales.

Amongst those who have lost their homes are tenants. It's usually assumed that tenants don't have so much invested in a place as owners, and – this is one of the benefits of renting – that when disaster strikes they can more easily move on. That's probably right a lot of the time, but we also know that there are many tenants – especially in properties off the beaten track – who are heavily invested in their tenancies, through work they've put in, or because of their own personal property there – particularly animals. They'll be feeling losses, or the threat of losses, keenly.

For any questions about the legal side of things, please contact your local Tenants Advice and Advice Service. They'll be able to refer you to other kinds of assistance too.

Anti-Poverty Week 2013

It's Anti-Poverty Week.

(Encore!)

At the Brown Couch we see poverty in the context of the housing system, which enriches some while it impoverishes others. Our anti-poverty wish is for the housing system to be governed by a housing policy – we don't currently have one, either at Federal or State levels of government – with the objective of housing all citizens affordably, securely and to appropriate standards, and with housing tenure made a matter of genuine individual choice.

As it is, the kindest thing that can be said is that our housing system is governed instead by retirement incomes policy – and it is a pretty shabby sort of policy, being about transferring wealth to older households who already own property and are approaching retirement looking for a quick super fix.

It's hard on younger property-buying households, from whom wealth is being transferred, because of the debts they'll shoulder longer into their lives, without the assurance of rising asset values – or indeed, rising incomes – in an economy hollowed out of productive capacity because too much of our capital and credit has been sucked up the housing wealth/retirement spending transfer tube.

And it is hard on those households – young and old, but particularly the older households – who don't own property, and who won't in retirement have access to the transfer mechanism that retirement incomes policy is counting on.

That's big picture stuff, and there's lots to do to address it and effect a genuine housing policy. But there are a couple of particular things governments could do now to reduce housing-related poverty:

• First, the Federal Government could lift the caps on the maximum amounts of Rent Assistance. (ACOSS recommends a $15 per week increase – total cost $500 million.) This is a targeted reform – not an across-the-board increase, but rather an increase for those at the pointiest end of the rental affordability crisis.
• Second, the NSW State Government could repeal Housing NSW's policies for moderate income rental rates, and reviews as to continuing eligibility, which stop public housing tenants from seeking work, on pain of confiscation of half their earnings and eviction.   

'What are we doing...' Minister Goward on our 'broke' public housing system

Family and Community Services Minister Pru Goward has given The Australian a big-picture briefing on the state of public housing in New South Wales. According to the paper's precis of the Minister's comments, 'the public housing system in NSW is broke, incapable of breaking the cycle of disadvantage and an institution from which people need to be "freed".'

Minister Goward is quoted:

"What are we doing when 47 per cent of people in public housing are employable but aren't employed . . . I find that statistic to be shocking, just shocking."

Quite right that it's shocking – and worse, Housing NSW makes it so. 'What we are doing' is making it hard for public housing tenants to get and stay in work.

Two policies are especially to blame. The first is the policy of increased rent rates for tenants on 'moderate incomes'.

As we discussed recently, most public housing tenants pay a rebated rent of about 25 per cent of their household income. However, if you get a job that puts your income into the 'moderate income' range, the rate slides up to 30 percent (depending on where you are in the range). That might sound like a modest increase, but it's not, because that higher rate applies to all your income, not just the amount that's in the moderate range. Expressed as a marginal rate, the moderate income rent rate is a punishing 50 per cent – in other words, 50 cents in each additional dollar earned in the moderate income range goes to Housing NSW in rent. Then there's income tax, reduction of Centrelink payments, and other costs of working. A public housing tenant who works could easily lose more money than they earn.

The second policy is that of reviews as to continuing eligibility for public housing, which applies all public housing tenants who have since 2005 signed up to fixed term agreements. This policy means that if towards the end of your fixed term your income is found to be above the moderate income range, your tenancy will be terminated, and you'll be looking for housing in the private rental market instead, which is both less secure and more expensive than public housing.

Faced with that prospect, very few public housing tenants fail the review: to stay housed, they stay poor. Staying poor also means that fewer tenants are moving out of their own volition: since 2007-08 (the first year of the reviews), exits from public housing have declined by 25 cent.

So not only are public housing tenants missing out on jobs and incomes, people on the waiting list are missing out on public housing.

We've spoken with public housing tenants who have grappled with these work disincentives, and come down with a decision to knock back work opportunities because of it. They don't like the decision, but it is rational, even wise, in the mad context of these policies.

There's lots to be done to fix our broken public housing system, but this first repair could be done in an instant: let public housing tenants work without fear of loss.

Happy International Tenants Day

The first Monday in October is International Tenants Day. It's a fluke that the day falls on the Labour Day public holiday here in New South Wales – the International Union of Tenants sets the date to coincide with the United Nation's World Habitat Day. The purpose of World Habitat Day is to 'reflect on the state of our towns and cities and the basic right of all to adequate shelter.'

(Tenants make cities!) 

Your Tenants Advice and Advocacy Services work for the realisation of that right throughout the year. In the coming year, however, the work will get tougher, because we'll be without two services that do exceptional work for special groups of tenants and their advocates in the TAAS network.

In the next funding period for the TAASs, there'll be no Park and Village Service and no Older Persons Tenancy Service. The Sydney Morning Herald has an article on the case of PAVS; we'll post word from OPTS in coming days.

A portion of the funding that these two services have previously received is to be rolled into the contract for the general resource service for the TAASs (currently, the Tenants' Union), for the provision of specialist support in relation to residential parks and older tenants. But it won't be the same level of service as provided by PAVS and OPTS.

The other part of the money that used to go to PAVS and OPTS will go instead to the Aboriginal TAASs, who certainly need additional funding, but they'll be the first to say that it shouldn't have to be at the expense of services for park residents and older persons.

Overall, the total amount of funding provided to TAASs will remain the same as under the funding period just ending. It hasn't increased in real terms for 10 years, despite the number of rental households growing by 25 per cent over that time. TAASs are funded from interest earned on tenants' money: bonds lodged with the Rental Bond Board, and monies held in real estate agents' statutory trust accounts. (Actually, just a small fraction of the interest goes to TAASs; much more goes to the State Government.)

Tenants, on your day, remember it's your money, and your services.

New terms lodged in boarding house agreements

Yesterday, residents of registrable boarding houses were granted new terms in the contracts they have with the proprietor of the boarding house.

Accommodation in registrable NSW boarding houses has had to be in accordance with the Occupancy Principles since July 1st this year but yesterday the flick of a legal magician's wand also inserted adherence to the principles as contractual rights in every agreement between a boarder or lodger in a registrable boarding house and their proprietor.

This means a number of remedies for breaches of the agreement have become available to boarding house residents though without protection from retaliatory terminations many residents may be understandably hesitant to bring action against the proprietor.

556 premises have registered on NSW Fair Trading's Boarding House Register so far- we congratulate those proprietors. There are many many more who have not yet registered. Homelessness NSW made a ballpark estimate that there could be as many as 20 000 boarding houses in NSW- the problem is, they can be very hard to find. ABS only recorded 627 boarding houses in NSW in the 2011 Census. Homelessness researcher Chris Chamberlain found the ABS methodology in Melbourne resulted in a significant undercount. By comparing his work with the 2011 Census count for Melbourne we can see that at best 16% of boarding houses were counted. If we apply the same multiplier here in NSW then we get a figure of at least 3700 boarding houses.

Some are recognisable, and known to be boarding houses, but many are not. A quick search of Gumtree's room share advertisements found more than 1400 ads- a large proportion of which are apartments and houses that fit the definition of a registrable boarding house, but don't necessarily identify as such. The proprietors may not even think of themselves as boarding houses- this is where it will take some time and effort from local councils and NSW Fair Trading as well as industry groups to ensure that registration occurs. 

The good news for residents of places that are unregistered, but registrable, boarding houses is that not registering does not change the law for residents. The occupancy principles apply, and are now contractual terms, whether or not the boarding house is registered, and whether or not the agreement is in writing.

For more information on the way the Boarding House Act affects residents rights, see our factsheet or call your local Tenants Advice and Advocacy Service!