Which Optus-approved renter are you?

Of all the contributions to The Institute of Tenancy Culture Studies, a report on renting from a Telco giant was one we’d have pegged as most unlikely. And yet, somehow, here we are. On Wednesday Optus released excerpts from 'The Renter of the Future' – a survey that purports to uncover the “attitudes, behaviour and technology trends” of Australia's tenants. Its commissioning and publication are openly driven by a product launch targeting rental households, and there's certainly no shortage of cringeworthy marketing speak throughout. So it’s tempting to dismiss it as a work of highbrow advertorial. But it does make some claims relevant to more than whether you say ‘Yes’ to a new modem, and has been attracting attention, so is worth some unpacking.

'Yes' man Josh Thomas: is this the future of renting?

A central finding of the report relates to how and why tenants are in the rental market. It claims that 27% of tenants are “flexibility renters”, whose status as tenants is attributable to “[liking] the flexibility of moving when they want to”. This is in contrast to the other 73% - “stability renters” who “prefer to stay in one place for a while”.

It also contrasts markedly with our 2014 survey of the NSW rental market. When we asked “Why do you rent?” only 9% of respondents nominated ‘flexibility and mobility’. We gave respondents six options in response to this question - accounting for those priced out of the buyers’ market for now or for good, those who prefer to invest elsewhere, and those who are renting where they can’t buy. Whilst the Optus report contains no information as to the methodologies employed, it would appear that its use of a simplistic dichotomy between ‘renting for flexibility’ and ‘renting for choice’ has created a distorted picture of tenants’ motives.

The Optus study also includes a separate division of the renting population into four ‘personalities’. Only one personality, the “pragmatic homeseeker” comprising 44% of all tenants, rents due to an inability to enter the homeowners’ market. The other groupings are “pragmatic lifestylers”, “tech lifestyers”, and “tech homeseekers” - the latter categories relating to tenants' technological and digital engagement.

But accounting for tenants that cannot afford to buy, those looking to buy or build, and those saving to buy, our study found that 69% of tenants could be termed ‘pragmatic homeseekers’. We’d also note the obvious artificiality in the Optus report's division between tenants shut out of the owners’ market and those interested in the tech industry. Clearly, one can ardently desire home ownership and remain passionately interested in their smartphone. The four ‘rental personalities’ suggest mutual exclusivity where none exists. Perhaps this component of the report is merely a product of its commercial imperatives.

Finally, the Optus report does note that renters move much more frequently than owners – every 1.8 years compared to every 8 years for mortgagors and 18 years for those who own outright. But it fails to consider the disconnect between such frequent moves and the relatively low number of ‘flexibility renters’ (whether you put that figure at our 9% or Optus’ 27%). Could it have something to do with the instability forced upon tenants by our rental laws? We say it certainly could. Our study found that, of respondents who had moved in the last three years, 14% said their landlord telling them to leave was the main reason, 12% nominated a rent increase, and 4% pointed to a disagreement with their landlord. Moreover, a full 92% were worried about having to move in the future. On a national scale, a recent study from the Australian Housing and Urban Research Institute found that 27% of tenants who move house have their hand forced by eviction or unaffordability. 

So proceed with caution - it’s fair to label the key claims of the Optus report as dubious to say the least. We won't pore over its supplementary claims, though in most cases such an exercise would be better suited to an advertising blog. 

But at the very least, the mere existence of this report points to a burgeoning realisation that tenants represent an ever-growing slice of whatever market you're trying to sell into - and that perhaps we should be taking better care of them.

And yes, we also value a high-speed Internet connection as much as everybody else.

Things to look out for in 2016

Welcome back to the Brown Couch for what we expect will be another big year.

Here are some of the things we'll be watching out for in 2016...

1. The current review of the Residential Tenancies Act 2010

We spent quite a bit of time talking about this over the last half of last year - and thanks to the NSW Greens Member for Newtown, Jenny Leong, a few people spent the holiday period talking about it as well.

NSW Fair Trading's discussion paper is still open for comment, so if you haven't already put pen to paper and sent in your thoughts about renting in New South Wales, please do so soon. They'll be taking submissions until January 29th. If you're stuck for something to say, have a look at the TU's Quick Guide to the review - available here.

Fair Trading will produce a report on the Act, based on its discussion paper, for the responsible Minister to table in Parliament. This must be done before the middle of the year, so we'll know soon enough where the NSW Government stands on stability, liveability and affordability for the one-in-three of us who live in rented homes.

2. Sensible discussion about tax reform in a federal election year

Our views on tax reform are long held and oft stated - we'll be pretty disappointed if 2016 delivers an increased GST at the expense of more sensible changes to our tax regime.

NSW Opposition Leader, Labor's Luke Foley, has recently said he'd consider supporting an increase of the GST from 10% to 15% in order to fund schools and hospitals, and this puts him at odds with his Federal counterpart. If we're going to see a federal election based on tax reform - which has always looked likely - we'd like see the discussion re-focus on winding back the generous tax concessions we give to amateur landlords.

As for schools and hospitals - we'd like to see those funded, too. Perhaps the NSW Opposition Leader could take another look at our land tax proposals, rather than call for a bigger tax on consumption, while on his quest for a new source of revenue.

3. Implementation of last year's "antisocial behaviour" reforms for social housing tenancies

We spent a bit of time talking about these reforms last year, too - including our discovery that the legislative changes commenced just in time for the summer holidays.

The laws are now live - which means the Tribunal is already bound to consider them - but we're still waiting for FACS Housing and other social housing landlords to finalise the policies that will determine how and when they will use them. We're expecting FACS Housing to finalise their policies towards the end of February, but we're not sure where most of the 30 or so registered community housing landlords that might use these laws are up to. Let us know if you come across anything.

We'll be keeping a particular eye on the use of "one strike evictions" and the mandatory 28 day limit for vacant possession orders whenever a social housing tenancy is terminated in the Tribunal. The legislative provisions relating to these policies must be reviewed between December 2017 and December 2018, so we'll be keeping tabs.

4. Developments in the social housing portfolio "strategy", particularly as it relates to estate redevelopment and urban renewal

2015 ended with a spate of announcements about increasing the social housing portfolio in New South Wales. We've covered these on our Clearing House blog - with news so far concerning Macquarie Park, Glebe, and Waterloo; along with more general announcements about the way social construction is to be delivered through Communities Plus and the Social and Affordable Housing Fund (SAHF).

We're expecting further announcements about the SAHF early this year, and we're also hearing rumours that a report from the Social Housing discussion paper of late 2014 might finally be released. There's a high likelihood that this will lead to further divestment in tenancy management by the NSW Government, with more tenanted properties to be transferred from FACS Housing's watch to registered community housing landlords. We'll have to wait and see...

In any case, the growth of community housing landlords is set to continue. We'll be keeping an eye on reports from the Registrar of Community Housing's office, as the first compliance checks under the National Regulatory Code start to happen.

5. New repairs and maintenance contracts for public housing tenancies, and a Parliamentary Inquiry into their management

Late last year we mentioned that the NSW Legislative Assembly's Public Accounts Committee is conducting an inquiry into the management of public housing repairs and maintenance contracts - submissions close in early February

We also mentioned that the Land & Housing Corporation was in the process of changing the way it does business with repairs and maintenance contractors. We now understand that new contracts are ready to roll, and we expect to hear more about this soon. But there are many problems with the way public housing is maintained, and these new contracts alone won't fix everything. The Parliamentary Inquiry could produce some important insights into how this system functions, and how it could be improved.

Holiday spoilers - who to call for tenancy advice during the break?

That's it from us for another year - we'll be back in 2016 with more on the review of the Residential Tenancies Act and the inquiry into the management of public housing repairs and maintenance contracts. We'll also be keeping an eye on developments concerning the social housing portfolio over on our other blog the Clearing House.

The Tenants Advice and Advocacy Services will also be taking a break, with the majority of services closing between December 21st 2015 and January 4th 2016. Some services will be closed for longer, pushing out until as late as January 11th in some areas.

Battling the dark side on your own - how does Finn make it look so easy?

But because the forces of darkness don't always take a break, we'll be running our annual Christmas Hotline until Wednesday January 6th. An experienced advocate will be available each weekday, excluding public holidays, between 10:00am & 1:00pm and 2:00pm & 5:00pm.

If you need advice about a tenancy dispute during this time, give us a call.

Tenants' Union of NSW Xmas Hotline

 phone (02) 8117 3750 

or 

1800 251 101

No holiday cheer for social housing

Hear ye, hear ye! By proclamation, and just in time for the holiday season, the NSW government's antisocial behaviour laws have commenced.

You can read more about the substance of the changes in our previous briefings, and see them as written in the Residential Tenancies Act 2010.

If you are approached by your social housing provider about anti-social behaviour, don't hesitate to get in touch with your local Tenants' Advice and Advocacy Service. This is a new process for your landlord, and there is a lot to keep an eye on.

There are no more hearings set down for 2015, but these laws can potentially affect all undecided social housing cases that are in the Tribunal at the moment as well as any new matters that may arise in the new year. FACS- Housing NSW has not yet published their policies concerning the use of these new laws for public housing residents, and we also haven't yet seen any policies from community housing providers.

We'll keep you updated as these laws are implemented in the new year.

In the meantime some holiday reading for us all from the Queensland Mental Health Commissioner who commissioned a report on the impact of the three strikes policy implemented in that state in 2013.
The summary of its key recommendations are:

• Better planning to meet social housing needs, provision of alternative housing solutions and monitoring outcomes for tenants with complex needs
• Improved communication with tenants about the anti-social behaviour policy and consideration of additional steps to reduce confusion between “strike” and “breach” processes
• Combining enforcement with prevention, early intervention and rehabilitation support
• Adopting a more systemic approach to supporting tenants with complex needs and integrating with other support services.

Homelessness and Renting in Sydney

This week two reports regarding homelessness, from opposite sides of the world - Sydney and England - were released. We explore today what lessons we can learn and use to inform the Residential Tenancies Act 2010 review.
The most striking aspect of the Sydney survey was that of the 516 homeless people surveyed in the inner city, 65% only needed some short term support and housing they could afford. This means that for many people, the solutions for their homelessness lie in resolving our housing affordability issues.

Meanwhile in the UK government figures were released showing that the biggest single trigger for homelessness across England was insecure private rental. Of the 15 000 households (including single people) across England that identified as homeless in Jul-Sept 2015, 31% had become homeless because an "assured shorthold tenancy" (the equivalent of a fixed-term agreement in NSW) had come to an end and the landlord evicted the tenant.

Whilst the Sydney study didn't ask those kinds of questions, it is not a stretch to consider that a significant number of people experiencing homelessness in NSW are in that position merely because they were not able to access stable, liveable and affordable housing.

One easy way to address the stability of our renting system is a change to the Residential Tenancies Act 2010 to remove the option to end tenancies without grounds, and instead provide an expanded list of grounds. This could include circumstances where the landlord requires the property for another legitimate purpose, or where the property is to be renovated such that vacant possession is required. The question should be: does the landlord’s purpose require the recovery of vacant possession, or could it be achieved without displacing a sitting tenant? Given the potential impact of eviction on tenants - as indicated in these surveys - this question should be taken seriously.
Another way of promoting stability in housing is to ensuring that rent increases take into account affordability concerns, as well as ensuring the increase is justifiable when considering the general cost of living and comparative value of dwellings. Our proposal to require the landlord to bear the obligation to prove an increase is reasonable if it is above the CPI increase will make sure these decisions are fair and reasonable.
To read more about the review and our proposals, check out our quick guide to the review!

Public housing repairs - an inquiry

It's been awhile since we talked about repairs and maintenance in public housing. The last time we brought it up was way back in 2013, when the Land and Housing Corporation was in the midst of reviewing arrangements with its contractors.

Back then, signs were ominous that change might come - at least in the way the Government procures the work it deems necessary, if not in getting better outcomes from the work itself. We've even heard that their new repair and maintenance contracts were trialled in a couple of different areas, and are set to be rolled out more broadly. But as yet, nothing seems to have come of that. We're hoping to hear from the Land and Housing Corporation soon, with an update on where the process has gotten to.

Of course, in the meantime we've had the NSW Auditor-General's report into making the best use of public housing and we've seen more of a focus on the need to renew the public housing portfolio than to repair it. But thankfully not everyone seems to singing from that particular sheet.

Recently the Legislative Assembly's Public Accounts Committee has called an inquiry into the management of public housing repairs and maintenance contracts. Its terms of reference look useful:

That the Committee inquire into and report on the management of public housing maintenance contracts in NSW, with particular reference to:
a) The current repair status and physical condition of the public housing stock managed by Housing NSW;
b) The costs of maintenance of the current public housing stock, variations in expenditure trends over the previous five years and projected expenditure for the next five years;
c) The nature and administration of maintenance contracts, including private sector arrangements;
d) Methodologies and processes for ensuring consistent public housing maintenance standards across NSW, including quality assurance, effectiveness, efficiency and contract supervision;
e) Statutory obligations on tenants to take care of properties and report maintenance needs in a timely fashion;
f) Measures to meet the special maintenance requirements of aged and disabled tenants;
g) Any other related matters. 

If you're living in a poorly maintained public housing dwelling, now is a good time to put pen to paper to make something of it. Submissions are due on February 5th 2016.

See the inquiry website for details.

Renting laws in review - the case for change

In case you've missed it, our renting laws are under review.

The last time this happened was way back in about 2007. We made a number of recommendations that would improve stability, liveability and affordability for tenants and other renters in New South Wales.

Some of these were ultimately taken up and are working relatively well, or just need a tweak to get them working a little bit better. Others were rejected outright - such as our suggestion to introduce 'just cause evictions', and do away with landlords' ability to end tenancies without a reason.

At the time, Fair Trading said:

The review does not find sufficient justification for NSW to become the first State to introduce "just cause" only evictions. To do so would have serious implications on the rental housing market. In any event, trying to list all valid reasons would be a difficult or impossible task. Landlords should retain the ability to issue notice without stating a reason. However, there needs to be a greater deterrent against the issuing of notices without grounds, when the landlord really wants to end the tenancy because the tenant has allegedly breached the agreement. This is a matter of natural justice, and tenants should have the right to defend themselves against any claim being made.

(... you can read more about that here).

In the aftermath of that review, the law was eventually changed. Not only did landlords retain the ability to issue notices of termination without needing to state their reason, tenants lost the right to prevent eviction by drawing the Tribunal's attention to the circumstances of the case. We made quite a fuss about it at the time - you can read more here.

As was alluded to in Fair Trading's earlier review, the idea that strengthening tenants' rights would have 'serious implications on the rental housing market' is an oft-drawn bow. Even when getting down to the minutiae of rights and obligations, any suggestion that landlords can't simply do what they like with their property - or worse, that they'll have to spend a bit of money in order to manage their investment - leads to cries of foul. This, too, is something we've talked about before - you can read more here.

But the changes that were, and the changes that weren't made to renting laws in the wake of the last review need to be considered in a new light: the residential housing market is no longer what it was.

The proportion of renter households in New South Wales is growing at a faster rate than the population generally. It was 27.5% in 2001, up to 30.1% in 2011. Various data suggests this will have increased again - perhaps quite substantially - when the next Census occurs.

• Tax data shows that between 2009-10 and 2013-14, almost 85,000 properties were added to the New South Wales rental market.
• Lending and finance data from the ABS shows that NSW's landlords borrowed almost $70 billion in the 2014-15 financial year - up from around $51 billion the previous year and $35 billion the year before that - to fund their investment in property.
• Only a small percentage of this borrowed money is used to fund new housing supply - almost all of it goes towards purchasing established homes.
• Vacancy rates have been hovering at around 1.6% for Sydney.
• By comparison, the number of renter households in New South Wales grew by 43,000 between 2006 and 2011 according to Census data.

And at the 2011 Census, almost 40% of renter households were families with children.

The housing market continues to be dominated by investor landlords, and an absence of new owner-occupiers entering the market means more people are renting for longer. The need for stability, liveability and affordability for renters only ever grows in importance.