Postcard from Victoria - Pets, Repairs and Airbnb

If you've been paying attention to renting news this year you'll have seen a number of court and tribunal decisions about renting in Victoria getting quite a lot of attention. Here's our roundup of the decisions and what they mean for us here in New South Wales.

Okay, not that Victoria.

Pets

In great news for pet lovers, the Victoria Civil and Administrative Tribunal ruled that apartment blocks cannot have a blanket ban against pets. If there is a good reason to disallow a particular pet (keeping an elephant in a studio, for instance) then it is still open for the body corporate to refuse the pet.
As the Tenants' Union of Victoria said: "A blanket ban that says you're not even allowed to own a goldfish is clearly ridiculous."

What it means for us:
Some of the legal working in Victoria's strata legislation and ours is quite similar, so it is possible that similar blanket bans here are not legal. However, we wouldn't recommend running out to bring home a new pet just yet. Even if strata cannot block you, which is still a very big if, your landlord remains the biggest barrier between you and your new best friend. We've written about that side of things quite a lot on here.

Repairs

Victorian tenants now have the ability to force a landlord to carry out repairs, even if they knew they were moving into a property that wasn't in good repair. Often tenants with little choice are forced to accept substandard accommodation - this decision gives them a little more power. As Victorian Legal Aid's Dan Nicholson said, "Ms Shields had little bargaining power in the market and was desperate to put a roof over her head... no one in Victoria should live in the conditions that Vikki Shields did for five years."

Renovator's delight... Full of character!

What it means for us:
NSW landlords already had the obligation that Victorian landlords now do - the obligation to both provide and maintain the premises in a reasonable state of repair and fit for habitation. There is no validity to the claim some landlords make that you take a property as is.
However, many tenants still live with repairs issues, often for the whole of their tenancy, so what gives?
The reason is fairly simple - many tenants know that a landlord holds a trump card over them. In NSW, as well as in Victoria, landlords can force you to leave without a good reason. In fact without any reason at all, which means that if you push too hard for repairs (and sometimes too hard is not very hard at all!) they can avoid the issue by forcing you to leave. Even being in a lease is no protection if its ending anytime soon. In the meantime, they still haven't fixed the leak keeping you up at night.
Ms Shields in Victoria had little bargaining power and many tenants in NSW feel the same way, with good reason.

Airbnb

There is a lot to talk about with Airbnb, and we'll be doing more over the next few months. Right now, we'll just focus on the two cases this year concerning Airbnb in Victoria. The first, ultimately decided that a tenant is subletting (and therefore in breach of the agreement) if they vacate the premises while the short term guest stays, even if its only for a short period.
The second, determined that the owners corporation of an apartment building cannot have a blanket ban on Airbnb style lets.

'Rent Street' Millers Point

What it means for us:
It is not clear yet what the two rulings mean for NSW residents. We agree with our colleagues in Victoria who said "Tenants should have the right to utilise the property as they wish, so long as they are upholding their responsibilities as a tenant.” However, knowing what those responsibilities are can get a little muddy.
A fairly perverse outcome of deciding that a two or three night stay constitutes a lease is that, much to the chagrin of many currently gleeful property owners, Airbnb guests could potentially claim full tenancy rights under the Residential Tenancies Act. Our Act contains an exclusion for holidayers, but not (for instance) for workers on a short trip.
The inability to have a blanket ruling against Airbnb largely affects the building owners more than tenants, and as it rests upon the particular workings of the strata legislation in Victoria, it may not apply here. If it does, tenants will still need to deal with the issue of whether or not they are subletting and need their landlords permission.

Keeping an eye on what happens in other jurisdictions is often very useful for our own state, but when you read articles in the paper remember that not all states in Australia are the same!

Competition, contestability and informed user choice in social housing

The Productivity Commission's Preliminary Findings Report on introducing competition and informed user choice into human services makes for interesting reading, not least because social housing has topped the list of "services identified as best suited for reform".

The Commission has been asked "to examine the application of competition and consumer choice to services within the human services sector and develop policy options to improve outcomes". This preliminary report identifies six types of human service it considers might benefit from reform - social housing, public hospital services, specialist palliative care, public dental services, human services in remote indigenous communities, and grant-based family and community services. It invites public comment before further investigation and final recommendations will be made.

Before it gets into the guts of it, the Commission's report explores a couple of key issues. First, it considers the role of government in the provision of human services, acknowledging that there are several levels of government delivering and funding a range of complex services in a multitude of different ways. It acknowledges that people who use human services are diverse in their needs, and suggests there are varying degrees of capability around exercising informed choice for consumers. It falls short of discovering that informed choice is just as often limited by a lack of opportunity than by diminished capacity.

It then delves into what it describes as governments' "stewardship role" - identifying policy priorities and intended outcomes, designing models of service provision, and ensuring services meet standards of quality, accessibility and suitability for users. Somewhat ironically, given the later attention it pays to social housing and grant based family and community services, the report asserts that government involvement in the provision of human services comes with a community expectation that services should meet a minimum standard. "If governments do not adequately discharge their stewardship function," it says, "the effects can be damaging to service users, providers and governments".

Evidently a range of successive governments have missed that particular memo, especially when it comes to services that might be considered as some form of "welfare". The report cites vocational education and training reforms to demonstrate its point, but we suggest social housing and income support could each have made a more impressive case study. Governments who take this "stewardship role" to heart should have no trouble justifying the associated costs of welfare, instead of taking every opportunity to rationalise while looking for alternative "solutions".

Finally, the report considers just what "competition, contestability and informed user choice" might even actually mean. Competition involves services striving against one another to attract users, by reducing the price they charge, improving the quality of their service, innovating, or otherwise tailoring services to meet the needs of users. In a human services context, this usually means a voucher system, where users are able to choose from a range of providers based on their preferences. In the absence of any discernible range of human service providers, competition devolves to the point where service providers compete for government contracts, and services users simply take whatever they can get.

Contestability means ensuring that service providers do not get too comfortable, by placing upon them a "credible threat of replacement if they underperform". The report outlines several criteria for beneficial contestability: ongoing performance monitoring of providers, alternative providers or management teams that pose a credible threat of replacing an incumbent, and a mechanism to replace underperformers. At its very worst, this amounts to micromanagement, which simply distracts service providers from the provision of all but the most measurable of service. They must focus instead on securing their continued funding, and when combined with the kind of competition that comes from scarcity this helps to explain why service users are so rarely able to find a range of services from which to choose.

Which brings us to "informed user choice". That's all about ensuring consumers are empowered to be actively involved in decisions about the services they use - placing users at the heart of human services delivery. Of course, we'd say the same should go for service design and determining policy objectives as well. But achieving such things is all but impossible without strong, funded commitments to the provision of service in the first place.

Taking into account all the filters and complexities through which informed user choice sometimes needs to exist (capacity, agency, identifying needs, etc), the report suggests that "governments may need to facilitate the flow of information about services to the user and provide support to users to help them act on that information". With respect, they may also need to get their heads around competition and contestability properly first.

Then, with all of that behind it, the report looks at the scope for reform of its six identified human services. At the top of the list is social housing. It concludes:

Introducing greater competition, contestability and user choice could improve the effectiveness of the social housing system in meeting tenants' needs.

• There is substantial room for improvement in the current social housing system. There are long waiting lists, poorly maintained and underutilised properties, and a lack of information available to allow governments to select and monitor the performance of service providers.

• Four out of five social housing properties are managed by government entities, yet there are a large number of housing providers - both not-for-profit and for-profit - that could perform this service. Community housing providers outperform public providers on some indicators, including tenant satisfaction and property maintenance.

• There are currently not enough social housing properties to meet demand, limiting the housing choices available to social housing tenants. Nonetheless, approaches implemented internationally allow social housing tenants greater choice of home. Reform options could be explored in Australia to address supply constraints and increase the housing options available for prospective social housing tenants.

There's a lot to unpack in there, and we'll come back for a closer look as soon as we can. In the meantime, you can download the report here. If you'd like to lodge a submission in response to the preliminary report, you can do that here. Submissions are due by October 27th 2016.

Building policy that resonates

A couple of weeks ago we mentioned the looming possibility of a rental bonds scheme for new public housing tenancies. We now know that FACS Housing have been feverishly working away on this, putting in a great deal of time and energy to build the policy's operational framework.

You see, the Social Housing Minister's office decided to go with a rental bonds scheme somewhere after the 2015 NSW State election, and although this was never formally announced they stuck a quick mention of it in the 2016 document Future Directions for Social Housing. Thus, the policy was born.

But here's the problem: the Future Directions strategy is a reflection of a 2014 discussion paper concerning Social Housing in NSW that was subject to very broad consultation. It was initiated by Gabrielle Upton when she was the Minister for Housing. The discussion paper asked no questions about rental bonds for public housing tenancies, so of course none of the participants raised any issues or concerns about such a scheme. This is significant, because the idea had been raised before - way back in 2012, when Greg Pearce was the responsible Minister.

It was not until late April 2015 - some 3 months after the close of the Upton-lead discussion paper's consultation period (a period during which New South Wales not only went to the polls but also saw a Cabinet reshuffle that brought in a new Social Housing Minister) - that the idea of bonds for public housing tenancies came up again. This was in a Daily Telegraph "exclusive". Now, that can hardly be seen as an invitation to comment, if indeed it was intended as a serious policy announcement.

Then the initiative was slipped into the Future Directions document and became part of the ten-year Social Housing strategy, that was supposed to have been informed by the 2014 discussion paper.

The upshot of all of this is that FACS Housing have embarked upon a significant shift in policy that will have implications for their own work, the lives and livelihoods of their future tenants, and the State of NSW's budget (yes, this is likely to come at a cost to Government). They have taken this bold step without asking anyone these two simple questions: is this a good idea? ... and ... how would it work alongside our existing tenancy management and debt recovery frameworks?

The answers to such questions could surprise them, and perhaps that's why they've not been asked. Then again, perhaps they're just taking their lead from the tabloids and the shock-jocks rather than the people this policy would affect. It wouldn't be the first time a Government and its agencies did that.

For our part, we can see a couple of significant problems meandering along behind this proposed scheme. Notwithstanding our principled objection to the idea in the first place - rental bonds are about cash-flow for small time landlords with mortgages to worry about, not public housing departments with budgets in the hundreds-of-millions - there is a great deal of work to be done to ensure the public housing landlord's approach to tenant liabilities and debt recovery processes is properly suited to a rental bonds scheme.

Built on incorrect assumptions, this scheme could well go the way of the Tacoma Narrows Bridge.

The Millers Point Millions - where are they now?

Yesterday we noted Shelter NSW's publication of Professor Alan Morris's report "A contemporary forced urban removal: The displacement of public housing residents from Millers Point, Dawes Point and the Sirius Building by the New South Wales Government".

Image credit: Lachlan Bennett

The report is timely since Minister for Social Housing Brad Hazzard, and several of his counterparts in related portfolios, have recently been quizzed in the Budget Estimates hearings, including questions on issues surrounding Millers Point. This gives us an up-to-the-minute insight into the Government's views on the sell-off, and why they have persevered despite the community's anguish that has now been documented by Professor Morris.

Here's the transcript of an exchange between Minister Hazzard and the Hon. Paul Green, MLC:

The Hon. PAUL GREEN: Can you update the Committee with regard to the current public housing situation at Millers Point and how the Government has responded to the needs of those vulnerable housing tenants, ensuring they are adequately housed and not displaced from ageing in place? 

Mr BRAD HAZZARD: It is a challenge. It is a difficult issue. The Government took a view which was that those particular properties were worth so much—as you are aware, when I became Minister I had a chat to the Premier and others about this issue. Initially the view was that each one of those properties could sell for between $1.5 million or $2 million, and possibly $5 million or $6 million. The $2 million sale of one very old property—usually more than 100 years old, with challenging maintenance issues, and often with an elderly individual living in it—could lead to the rehousing of six families or individuals from the waiting list of 60,000.

Just on this point, the residents' in Professor Morris's report speak at some length about the maintenance issues in their homes. For example, one resident says:

I think there was a long-term plan … As I say there's an upstairs and downstairs in High Street and about every six months they had to re-tar the roofs up there you know … because the heat would make it bubble up and crack and once it cracked it was you know leaking with the water with the rain coming in. So they had to resurface it … and that’s what the Maritime [Services Board] used to do. When Housing took over there was none of that and as I say the water just went right through the places. So there was a long-term plan [of neglect] I'd say, yeah.

 And another says:

Yeah, it was obvious they were never going to fix any of the properties. Some of the properties were in such a terrible state of repairs, [but] it wouldn’t matter how many times we called them, they wouldn’t come and attend to anything. I don’t know if it was purposely intended to demoralise us. I think it was their plan for a very long time that they were going to sell the buildings, so there wasn’t any point in fixing them up. I mean it sort of became more apparent especially when the news broke that we were all getting moved.

But back to the Minister's response:

As much as that was a difficult decision for the Government, the fact was that the sale could raise half a billion dollars and build about 1,500 new homes. That was the policy decision that was taken to try to address the very long public housing waiting list ... I do not know whether you have seen the really good Auditor-General's report from three or four years ago. I was fascinated to read it because he talked about the fact that the former Government had been forced—as governments sometimes are—to make the decision to reduce the amount of public housing because it had to pay maintenance on the properties. In a sense, it was eating public housing.

It's a good analogy - the idea that public housing was eating itself in order maintain its bloated remnants is a compelling picture of where the portfolio was headed under the previous administration. But we can apply a similar analogy to the current Government's policy. Instead of eating itself, the public housing portfolio is chewing itself up, before taking aim and spitting itself out into somebody else's backyard.

We've been trying to keep track of the number and location of new properties being built with the Millers Point Millions. In recent correspondence, FACS Housing informed us that:

So far, nearly 650 properties have either commenced construction or have been completed utilising the proceeds of the Millers Point sales program.

... which rather sounds like they've just rolled the Millers Point Millions into a couple of their existing projects. Still, as long as it's all going towards new social housing, and keeping the construction machines well oiled, we should have little to complain about. It's all about the greater good, after all.

But what can you buy with the proceeds of an inner-city suburb?

A quick look at where these new properties are being built reveals this "greater good" means no new social housing within cooee of the community that's being cannibalised.

Download the PDF for a better look.

Of the nearly 650 new properties, 246 are within Sydney's middle-ring, 336 are in the outer-ring, and 58 are in Wollongong. Evidently, social and economic diversity is no longer an inner-city aspiration, despite the continuing demand for social and affordable housing in Sydney's inner-ring.

And we're still none-the-wiser about which specific projects are being paid for with the Millers Point Millions, and in what specific amounts. How many bedsits? How many 2 or 3 bedroom flats? How many family homes?

To date, the sale of 94 public housing properties in Millers Point has netted the Government around $264million. That's about a third of the properties that have been earmarked for sale, and it's already more than half of what the Government has anticipated it will gain.

Brutal ... how residents describe the actions of Housing NSW in Millers Point

You will recall that in March 2014 Housing NSW decided to remove all public housing tenants from the suburb of Millers Point. The Tenants' Union of NSW has written extensively about this situation and you may read our accounts  here  and  here.

Many former residents of Millers Point and those still remaining have been far from happy and their experiences have just been documented in a paper by Professor Alan Morris, Institute for Public Policy and Governance, University of Technology  Sydney. His paper is entitled ‘A contemporary forced urban removal: The displacement of public housing residents from Millers Point, Dawes Point and the Sirius Building by the New South Wales Government’.

What is so powerful about Professor Morris’s documentation is that he allows the residents to tell the story of their displacement in their own words. This paper concludes:

What is evident is that the actual and intended removal of public housing residents from Millers Point unleashed a great deal of hardship and distress. ... In sum, the way the New South Wales government has gone about the move was viewed by most interviewees as brutal. ... The announcement that all residents were to be moved was catastrophic for some residents and precipitated extreme anxiety and depression.

You may read Professor Morris' s full report which has been published by Shelter NSW here.

The above stories contrast with what appears on the website of NSW Family and Community Services. Here you will find the stories of four former residents who appear happy with being forced to relocate.  You will find these stories here.

Following Professor Morris's documentation of the experience of residents, he wrote a thought provoking article entitled 'Why moving out public housing tenants is a tragedy for Millers Point and for Sydney' for The Conversation and in this article asks some very important questions. Check it out here.

The Tenants’ Union of NSW again has argued that the actions of the NSW Government in Millers Point are a form of systemic elder abuse. You can read its submission to the Australian Law Reform Commission's 'Elder Abuse Inquiry' here.

However, it is not too late for the NSW Government to review the situation and allow the remaining residents to stay, especially the older folk who should be able to age-in-place. We've said this before and we say it again. Over to you, NSW Government!


This posting was updated on Monday, 12 September 2016. It now includes references to Professor Alan Morris's article entitled 'Why moving out public housing tenants is a tragedy for Millers Point and for Sydney' published in The Conversation on 12 September 2016 and the Tenants' Union of NSW's submission to the Australian Law Reform Commission's Elder Abuse Inquiry, also published on 12 September 2016.

Does complaining make a difference?

Last week Fair Trading's Complaints Register was launched and the first months data is available. Unsurprisingly, four of the top 10 most complained about businesses are real estate agencies and their franchises. Those 4 companies shared 69 complaints about tenancy management, which was 21% of the complaints made about the 20 businesses on the register. Only the wide ranging "retail" category had more, covering computers to baby products across 8 businesses.

But what does this tell us about the impact of making a complaint to Fair Trading in New South Wales? We've had a look at the enforcement actions taken and total complaints made over the last year, which are also published by Fair Trading. We've had to make some broad assumptions in order to make the two lists comparable - enforcement actions are expressed as belonging to particular pieces of legislation, where complaints are categorised by complaint topic. For instance, there is some potential overlap between the two - a real estate agent misleading a tenant might fall under the Australia Consumer Law as well as the Residential Tenancies Act, and therefore could go under both Consumer and Tenancy topics below.  You can scroll over each column to see how we've categorised complaints and enforcement action.

Although tenancy and consumer issues are two of the most complained about topics, they receive much less attention when it comes to compliance and law enforcement.

The lion's share of compliance action by Fair Trading NSW is carried out in relation to either the Property, Stock and Business Agents Act (which we have labelled Property) or the three laws relating to trades - the Home Building Act, Plumbing and Drainage Act and Electricity (Consumer Safety) Act. Despite only taking up 7% of the complaints made to Fair Trading over the year, they made up 70% of the enforcement action. Conversely, tenancy made up 9% of all complaints to Fair Trading, but only 0.25% of enforcement.

One way of explaining this gap is that there are different methods to deal with different kinds of complaint. For instance the NSW Civil and Administrative Tribunal is the primary way for tenants to address their issues with landlords and, by extension, real estate agents. Unfortunately, the Civil and Administrative Tribunal hasn't been publishing its annual statistics like its predecessor the Consumer Trader and Tenancy Tribunal did, and it misses much of the detail. The Tribunal's 2015-16 report has not been published yet but in 2014-15 we know that 58,360 applications were made concerning these topic areas (and others) and that more than three quarters (46,351) were about renting. What we don't know is who made those applications - but from historic data we know about 85% of Tribunal applications are made by landlords. So perhaps roughly 7,000 applications are made by tenants each year. This exceeds the 4,500 complaints made by tenants to Fair Trading, and dwarfs the 2 enforcement actions taken in relation to the Residential Tenancies Act.

This suggests to us that some people are expected to enforce the law themselves, and some can expect government will enforce the law on their behalf. The difference, it seems, is whether or not you are a renter.

We encourage tenants to make complaints, even if enforcement action is pretty thin on the ground. At the very least, complaints make Government agencies directly aware of the issues that people face. Fair Trading can use their complaints data to help them understand these issues and relate it to their public policy work, including current work around reforming the Residential Tenancies Act.

You can find sample letters that can help with writing complaints to Fair Trading at this link: here.