Bonds for social housing tenancies - part 2

The State's leading journal for social housing policy analysis - the Daily Telegraph - has done it again, announcing today that Social Housing Minister Hazzard is considering bonds for social housing tenancies.

This idea has been rattling around for awhile now - the last time we spoke about it on the Brown Couch was back in 2012, when Greg Pearce was the responsible Minister. Back then, we pointed out that as a landlord, the government doesn't always do a very good job of correctly attributing blame for damage to the housing portfolio. In case you missed it, here's a look at what we said:

...it's pretty clear that there are some issues with the way the government's housing portfolio is being looked after. We're not convinced that fingers of blame should always be pointed at tenants, to whom only a fraction of the problem might actually be attributed even before we start to test any specific allegations of liability.

It's interesting that this time around Minister Hazzard has likened a bond to a warning - 'look after your property, or you'll lose some money'. But tenants are always liable for the damage they cause, and an overwhelming majority are already looking after their homes.

A bond is not a warning, or something to be held over a tenant lest they make off with the silver. It offers a small piece of security to landlords, and it is optional. Where levied, it adds a significant cost to tenants at the commencement of a residential tenancy agreement.

Households entering a social housing tenancy are already facing challenges, and one of those is necessarily a financial challenge. They wouldn't be eligible otherwise. Asking for an additional four weeks rent - no matter how many instalments you break it down to - will only add to that challenge.

As for the security a bond offers... some landlords might need that more than others. A small time speculator operating at a loss might struggle to re-hang a curtain, or repair a kitchen benchtop, without reasonably ready access to a small pot of tenants' money. (Of course, we're assuming the tenant's liability is a given, for the purpose of this little hypothetical...)

But the Land & Housing Corporation, with its operating budget in the hundreds of millions, is not such a landlord. It should always be able to find the money to fix a problem today, and seek to recover from those liable tomorrow.

And remember, when it comes to the housing budget in New South Wales, tenants are already pulling their weight. For every $1.00 that Government puts into public housing, tenants contribute around $5.00 through the payment of rent and other charges.