frequently asked question
Do you support stronger renter protections?
As a member of the Abundant Housing Network Australia, we at YIMBY Melbourne help draft the following as a part of a submission to the federal rental crisis inquiry:
While we are focused on facilitating greater housing abundance and believe that—in the long term—greater supply will have significant impacts on renters’ bargaining position in housing markets, we acknowledge that supply-side solutions to the rental affordability crisis will take years to have significant downward pressure on prices.
We also recognise that merely improving rental affordability does not address the multitude of other disadvantages while renting.
This is why regulatory changes need to happen to improve the position of renters in the short term and cushion them from retaliatory or knock-on effects that these other much-needed reforms might create.
There will be people—typically on very low incomes—who fall through the cracks. People who are on the social housing waiting list or don’t even try to get on in the first place.
Stronger regulation is both a sword and a shield for these people, whose low market power makes them vulnerable to exploitation but whose economic position means they are unable to access other services.
Many of our members are young renters and many of those have been homeless at some point in their life, so our membership brings broad insights as consumers of rental housing—particularly in the rapidly changing context we face now driven by rapidly growing rents, low vacancy rates and a preponderance of digital intermediaries that sit between renters and their landlord, many of which bring their own hidden fees and extra costs with very little benefit to the renter.
Any reform of renters’ rights—whether these are better lease conditions, price controls, building standards or anything else—should recognise the fundamental power imbalance between a renter and a landlord and improve renters’ bargaining position in the housing market.
Overly bureaucratic systems that expect renters to know and act to enforce their rights fundamentally do not work. This is particularly the case when vacancy rates are so low and landlords have few incentives to keep around “problem” tenants.
National leadership to improve rental regulation is important at this juncture, not least to make renting more easily tractable as people move around our country—but any measures should be assessed for their impact over the short and long term against more than just short-term relief and in particular minimises adversely affect overall housing supply.
A national renters rights accord
By international standards, Australia’s rental regulation overwhelmingly privileges landlords and affords poor protections to renters.
National Cabinet has the opportunity to raise the floor of rental regulation in Australia by setting minimum national standards for renting with a national renters rights accord.
The United States is currently investigating a similar agreement which seeks to set both minimum standards and best practice across access to safe, quality, accessible and affordable housing, clear and fair leases, the education, enforcement, and enhancement of renters rights, renters’ right to organise and on eviction prevention, diversion, and relief.
This, like in Australia, is in the context of rental regulation being seen primarily as within states’ jurisdiction.
In particular, we believe a national renters rights accord should aim to improve renters’ security of tenure, access to information, and lease conditions. It should also aim to reduce the administrative burden borne by renters in enforcing their rights.
Such an accord needs independent oversight and National Cabinet should investigate including a national renters’ voice—whether that is a new agency, a rental commissioner like NSW and Victoria have introduced, or formalising the role of the National Association of Tenants Organisations.
We do not have a strong position on what needs to be in such an accord—but it is important to make sure that any measures introduced are evidence-driven, are best practice, and learn from international experiences.
Likewise we believe it is important that any changes improve renters’ bargaining position in the rental market and have appropriate enforcement mechanisms that do not necessarily rely on the renter initiating a complaints process—whether they rent from a private landlord, a large commercial landlord, a community housing provider or a government agency.
The costs of renting
Even regulatory changes will take some time to make major impacts which will come as small comfort for the third of renters at a conservative estimate currently facing rental stress—especially since that rate is likely to grow precipitously for the first time in decades if current trends in advertised rents growth continues much longer.
And like we have stated before, housing affordability must be measured in real and absolute terms, which means prices need to come down or incomes need to go up—and ideally both.
As a short term solution, the Commonwealth should review Commonwealth Rent Assistance payments—and other income support payments like JobSeeker and Youth Allowance— to make sure they are fit for purpose in addressing the cost of living for low income people, and in particular keep up with rental increases. Anglicare has outlined a number of reforms of cut-in rates, rate calculations, documentary evidence and indexation that would improve Commonwealth Rent Assistance.
We do not—in general—support price controls for private rentals except where they create more certainty for renters. In particular, we do not believe blanket “rent caps” and “rent freezes” would improve certainty or affordability and will largely function to encourage retaliation or regulatory avoidance.
However, controls that restrict how often rents can be increased, restrict the reasons for increasing rents, require greater transparency, or constrain rent increases within a lease by requiring fixed amounts or formulae for increases to be included in leases when signed or even advertised would, in our view, help without causing significant negative disruption to the housing market.
To paraphrase ACT Chief Minister Andrew Barr, any price controls should be constructed as flexible safeguards that improve the bargaining position of renters and must be combined with a dramatic increase in both public and private housing supply and robust minimum standards for rental properties and lease conditions.
It is important to remember that there are more costs to renting than just rent prices.
The role rents play in reducing people’s capacity to save money—particularly a home deposit—is well litigated.
Less well-understood are the cost peaks created every time a renter has to move.
These moving costs are a shock, having to pay upfront deposits, bonds, removalists, cleaners and often crossover rent weeks—and increasingly extra fees for applying for rentals, request maintenance or pay rent through “renttech” platforms imposed on renters.
A recent report found that, in NSW at least, the cost of moving house is at minimum $2,000 per person, with the average closer to $3,500 per person.
Renters move far more often than owner-occupiers and in a regulatory context that incentivises high rental turnover and assumes any rental is temporary rather than a long-term home by default, these moving costs are borne by renters over and over again.
In fact, that report found that in the last five years, four in five private renters have moved, one in three have moved multiple times, and one in ten have moved at least once every year—and over a third of those moves are involuntary, a proportion that is likely to grow as rent increases accelerate.
Reforms that aim to improve rental affordability need to also address the causes of involuntary moving—whether that is uncertainty, poor housing conditions or evictions—and also need to smooth out the price peaks associated with moving.
However, as we have repeatedly said, over the long term the only thing that will keep rents down is high rental vacancy rates which we can only achieve through much greater supply of public, community, commons and private housing.