What if I can’t pay my rent? These are the options for rent relief in Australia


Mark Giancaspro, University of Adelaide and David Brown, University of Adelaide

You’ve lost income because of the coronavirus crisis and finding it hard to pay the bills. What if you can’t pay your rent?

The short answer, if you live in Australia, is that rules changes give you more time – at least six months – before you face eviction.

But that’s all. Nothing else has changed. As Prime Minister Scott Morrison has said, the moratorium on evictions “doesn’t mean there’s a moratorium on rents”.




Read more:
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Whatever rent you don’t pay you will still owe, with consequences eventually.

There’s unlikely to be any other national assistance for residential tenants along the lines the commercial tenancy market might get.

But there may be other assistance on offer according to your state and territory. In Queensland, for example, you may be eligible for a one-off rental payment.

So this is how your options stand.

Eviction moratorium

The National Cabinet – incorporating the federal cabinet and state and territory leaders – announced the eviction moratorium on March 29. Rental law is a state and territory matter, so legal enforcement depends on these governments enacting legislation.

Tasmania was the first to do so, pre-empting the National Cabinet decision with a four-month ban on evictions. It’s likely a good indication of what other states and territories will do.

The Tasmanian legislation prohibits commercial and residential landlords from serving notice to vacate for rent arrears for the duration of the “emergency period”, unless:

  • the lease is non-fixed term and property is being sold (with notice being served before April 3)
  • the Residential Tenancy Commissioner orders termination because of “severe hardship” to either party.

Severe hardship is an established part of tenancy law. It allows parties to apply for a fixed-term lease to be terminated without penalty. It is possible a landlord could argue financial hardship based on needing rent to cover their own debts, but commissioners (or tribunals in other jurisdictions) are likely to scrutinise such applications closely.

(Severe hardship is discussed further below, under “What if I want to break the lease?”).

What if I don’t pay my rent?

If you don’t pay your rent, your debt will keep accruing. Once the moratorium ends, you face eviction.

Your landlord will have the right to keep your bond to cover the rent. If you owe more, they can chase it up through debt collectors or file court proceedings. If this happens, your personal credit rating could take a hit, and costs may be added to any judgment against you.

So take the Prime Minister’s advice: negotiate with your landlord or agent.

Try to work out an arrangement both sides can live with. Remember, many private landlords rely on rent to pay the mortgage. Even with the major banks offering mortgage relief during coronavirus crisis, the interest on that debt will keep accruing.




Read more:
Lessons from the Great Depression: how to prevent evictions in an economic crisis


Can I get any rent assistance?

There are generally no special provisions for rent assistance during the coronavirus crisis.

So far only Queensland is offering any form of special rental assistance – a one-off payment of up to $2,000, paid directly to your lessor. To be eligible, you must have lost your job due to the pandemic and have applied to Centrelink for income support.

In other states the usual rules for rent assistance apply. You need to first qualify for Centrelink income support, such as the JobSeeker payment, Youth Allowance or the Parenting Payment. Centrelink provides up to A$139 a fortnight if you’re single, and A$164 for a couple with two children.

What about a rent reduction?

As mentioned, there’s no sign there’ll be direct subsidies for residential tenants, though there may be a national package to reduce commercial rents.




Read more:
The case for a rent holiday for businesses on the coronavirus economic frontline


The closest thing so far announced is the Australian Capital Territory’s encouragement to residential landlords to lower rents by at least 25% through direct tax relief equal to half the discount (up about $100 a week). The scheme is voluntary, so it remains to be seen how effective it will be.

What if I want to break the lease?

If you’re not on a fixed-term lease, but a monthly or weekly tenancy, you simply have to give the required notice to the landlord (usually 21 days).

If you’re on fixed-term lease, state and territory laws allow both tenants and owners to apply to break the lease without penalty if its continuation causes “severe hardship”.

But this option “should be seen as a last resort,” advises the Tasmanian government. “It is best to maintain a positive relationship between owners and tenants. The best way to do this is for owners and tenants to discuss their concerns.”

It is possible your lease may contain a force majeure clause providing for suspension or termination when unforeseeable events (for which neither party is responsible) occur. Unfortunately, such clauses are extremely rare in leases, and unlikely to cover pandemics.

Is there anything else to consider?

If you consistently miss rent payments you risk going on a “black list” – a privately owned tenancy database that real estate agents use to screen tenants. A track record of missing payments can mean a black mark on a future rental application.

So the bottom line: talk with your landlord.


Correction: this article has been amended to clarify that consistent non-payment of rent is required to be listed on a residential tenancy database. The article originally suggested any non-payment was a risk. For more advice contact the tenants advice service in your state or territory.The Conversation

Mark Giancaspro, Lecturer in Law, University of Adelaide and David Brown, Co-Director, Bankruptcy and Insolvency Scholarship Unit, University of Adelaide

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Rushed coronavirus tenancy laws raise as many questions as they answer



Shutterstock

Dilan Thampapillai, Australian National University

The coronavirus and its attendant emergency measures are set to deliver a profound shock to the residential tenancy market.

How it will work out is anybody’s guess, but it is looking like a crisis.

Banks and governments have acted quickly.

The major banks are deferring mortgage payments for up to six months for customers whose income is hit by the coronavirus.

NSW and Tasmania have introduced bills that will make it difficult for landlords to evict tenants or terminate leases during the crisis.

The rushed laws are designed to prevent a raft of evictions and a spike in homelessness, but they raise almost as many questions as they answer.

Rent postponed rather than forgiven

Both laws put power in the hands of the minister, giving that person the power to make regulations during the coronavirus pandemic. Tasmania’s more closely prescribes what the minister can do.

And both are temporary. The NSW act has effect for six months and the Tasmanian bill for 120 days, although it can be extended by 90 days.

Neither law excuses tenants from their liability to pay rent. They merely prevent evictions during the emergency period.




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Why housing evictions must be suspended to defend us against coronavirus


In effect they say that although tenants can stay, their landlords can later sue them for arrears.

While on paper, this suggests landlords will get their money, in practice they might not, and some will be tempted to issue notices of termination ahead of the minister taking action.

The minister’s regulations would most likely be prospective, meaning landlords would seem to be able to get away with it. But whether a tribunal would enforce the notices is another question.

The Tasmanian bill only permits landlords to apply for terminations where the landlord is in hardship. The NSW law has less detail, but would probably do the same.




Read more:
Lessons from the Great Depression: how to prevent evictions in an economic crisis


In any event, most landlords who evicted would want to re-let, and that will prove difficult with inspections prohibited.

Sick tenants are unlikely to be evicted whatever the law. That is in nobody’s interests.

Cooperation in a crisis is desirable, but it is fraught in practice.

The law discourages communication

Representations made by landlords with the best of intentions can become binding under the equitable law of estoppel.

In essence, once landlords make representations they can be estopped (stopped) from going back on those representations.

In an environment where fortunes change quickly, this might become problematic.

Contract law is replete with cases of agreements varied or entered into with the best of intentions that ultimately turn sour.




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Given there are tough and uncertain times ahead, a better approach than rushed laws might be a pragmatic one of exhorting both landlords and tenants to take the legitimate interests of each other into account.

If laws are to be made, there ought to be extensive consultation.

Even in the coronavirus pandemic this is doable and a good idea.The Conversation

Dilan Thampapillai, Senior Lecturer, ANU College of Law, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Why housing evictions must be suspended to defend us against coronavirus



Antonio Guillem/Shutterstock

Sophia Maalsen, University of Sydney; Chris Martin, UNSW; Dallas Rogers, University of Sydney, and Emma Power, Western Sydney University

The COVID-19 pandemic is a double crisis affecting public health and the economy. And both aspects are playing out in our housing system – in our homes.

More and more of us are being directed to stay home, to work from home, or to socially isolate at home. Our homes are the “first line of defence against the COVID-19 outbreak”, as the UN’s Special Rapporteur on Housing puts it. But, depending on how our housing system responds, it could make the double crisis worse.

More and more workers are losing shifts, or losing jobs altogether, as well as the incomes they use to pay for their homes – whether it’s the rent or the mortgage. On Friday, the prime minister announced that states would work on model rules to provide relief to tenants in “hardship conditions”. On Sunday, the federal government moved to replace some of the income households have lost, temporarily doubling some social security payments and making cash grants to businesses.

The risk of people becoming homeless during the pandemic is still high. Some more specific actions are needed to shore up our first line of defence. Governments must implement a moratorium on evictions as long as the crisis lasts. Similar changes have already been made overseas.

Evictions can happen quickly

A sudden loss of wages puts renters at risk of arrears and owner-occupiers at risk of mortgage default. This may result in legal proceedings to terminate the tenancy or give possession to the bank or other lender, and ultimately eviction. Tenants are vulnerable to termination and eviction for a host of other reasons, too.

Renters are at particular risk because rent arrears termination proceedings are quick. You can go from a missed payment to termination orders in about eight weeks in New South Wales. Other states and territories are similar.

Many renters’ finances are already precarious. About one-third of private renters are low-income households in housing stress (in the bottom 40% of household incomes paying more than 30% of income in rent). And 30% don’t have $500 saved for an emergency.

Homeowners with a mortgage are also at risk of default due to loss of income. About 20% of mortgagees are already in mortgage stress. This rate has grown over the last year despite rate cuts.

Now workers are facing sudden income and job losses. We see widespread evidence of an economic downturn across many sectors, including tourism, hospitality and the arts. Casual workers are at particular risk of reduced income if required to self-isolate for long periods or care for unwell family members.

A breach of our defences

An eviction is a breach in the first line of defence that housing provides against COVID-19. In fact, the risk of arrears and eviction might drive an infected person to keep working and transmitting the virus.

An evicted household might pile in with family or friends, disrupting social isolation and contributing to unsanitary overcrowding. It’s a challenge people already living in share housing will have to manage. Across Australia, 81,000 dwellings are already overcrowded, 51,000 of these “severely overcrowded”.

People who have been evicted might move through temporary accommodation, and through real estate offices, social services and doctors’ rooms making urgent applications. Or they may be shut out of assistance, and sleeping rough. With limited space and facilities to wash hands and personal effects, the risk of transmission will grow.

How would a moratorium work?

These risks justify a government-imposed moratorium on evictions for the duration of the crisis. This could be done through legislation, or through an emergency executive direction to authorised officers to stop evictions. Other countries have already taken such steps.

In the United States, many states and cities have suspended eviction proceedings against tenants. Federal housing finance agencies have implemented a 60-day moratorium to protect some families from mortgage default.

Ireland has also suspended evictions and temporarily frozen rent increases. In the United Kingdom, renters in the private or social sector are to be protected from eviction.

A moratorium on evictions is an obvious triage measure. That’s why in Australia a community coalition has come together to advocate for no evictions during this crisis. You can show your support by signing the petition.

The federal opposition is urging the government and financial institutions to consider similar measures.

What about the mounting debts?

By itself, an eviction moratorium doesn’t affect the legal liability to pay rent or mortgage instalments. Without anything more, those liabilities would continue.

The federal government’s increased social security payments and business grants will go some way to replacing the income households are losing. But even as the government tips money into households, money is drained away by rents and mortgage payments.

About A$40 billion is due to flow out of Australia’s 2.5 million private renter households and into 1.3 million landlord households. Landlord households have, on average, much higher incomes and wealth than other households.

Billions more are due to flow, as principal and interest payments, from 3.4 million owner-occupier mortgagees to the banks. Australia’s big four banks last week announced borrowers could “pause” their payments as a pandemic hardship measure. But mortgagees should be aware interest not paid is capitalised into the debt, so they will have more to pay off after the “pause” ends.

Both to prevent the accumulation of arrears, and to make the government’s income-replacement measures more effective, governments should consider implementing reductions or waivers of rent and interest liabilities for as long as the crisis lasts.

The double crisis of the COVID-19 pandemic needs a dual response that aims to keep households in their homes and to keep income in households.The Conversation

Sophia Maalsen, ARC DECRA Fellow and Lecturer in Urbanism, School of Architecture, Design and Planning, University of Sydney; Chris Martin, Senior Research Fellow, City Futures Research Centre, UNSW; Dallas Rogers, Program Director, Master of Urbanism, School of Architecture, Design and Planning, University of Sydney, and Emma Power, Senior Research Fellow, Geography and Urban Studies, Western Sydney University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Growing numbers of renters are trapped for years in homes they can’t afford



Rental stress leaves hundreds of thousands of Australians struggling for years to cover all the other costs of living.
Tero Vesalainen/Shutterstock

Hal Pawson, UNSW

Low-income tenants in Australia are increasingly likely to be trapped in rental stress for years. New evidence from the Productivity Commission shows almost half of such “rent-burdened” private tenants are likely to remain stuck in this situation for at least half a decade.

Rental stress is where a low-income tenant faces housing costs that leave them without enough income for food, clothing and other essentials. The scale of the problem – commonly defined as when rent eats up more than 30% of income – is usually presented as a “point in time” or snapshot statistic.




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As the Productivity Commission report reveals, the snapshot number in this situation has increased from 48% of low-income renters in 1995 to 54% in 2018. That’s around 1.5 million people pushed into poverty by high housing costs.

For some, of course, this will be only a temporary problem. On this basis, it is sometimes argued that concerns over Australia’s high rate of rental stress are overstated.

However, the Productivity Commission report, Vulnerable Private Renters: Evidence and Options, highlights longitudinal survey evidence showing that a low-income tenant’s experience of rental stress is increasingly likely to be long-term – not a passing problem. As the commission notes:

[…] a growing number of households find themselves stuck in rental stress.

What is the evidence for this?

This conclusion stems from a comparison of two different tenant cohorts experiencing rental stress as revealed by survey data for 2001 and 2013. Less than a third (31%) of the 2001 cohort remained in stress five years later. But almost half (46%) of the 2013 cohort were.

While many people exit rental stress quickly, the proportion of private.
low-income renters in long-term rental stress has increased significantly.

Vulnerable Private Renters: Evidence and Options, Productivity Commission, CC BY

So, it’s not just that more low-income earners are paying unaffordable rents at a particular point in time. This is increasingly a situation that affected private tenants cannot escape.

Beyond the obvious welfare impacts, recent work argues that excessive rent burdens may also damage human capital and, as a result, reduce economic productivity.

The commission’s findings seem to suggest the ongoing restructuring of Australia’s labour market and housing system is eroding socioeconomic and/or housing mobility. The report notes the significant fall in the numbers who manage to move from renting to owning – from 13.6% of renters in the period 2001-04 to 10.0% from 2013-16.

Perhaps slightly more surprising is the commission’s explanation for the rising rate of (point in time) rental stress for all low-income tenants. According to the report, this results not from increasing unaffordability for the private renter cohort specifically, but from the growing dominance of private rental housing as the tenure in which low-income households live.

The number of private renters has grown as the proportions of owner occupiers and public housing tenants have fallen.
Vulnerable Private Renters: Evidence and Options, Productivity Commission, CC BY



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This, of course, results from the post-1990s failure of Australian governments to expand the supply of social housing to match population growth. By 2018, well over two-thirds (71%) of low-income tenants were renting in the (relatively expensive) private market – rather than from a (rent-limiting) social landlord. Back in 1996, barely half (52%) of them were renting privately.

What does this mean for policy?

The report presents some useful discussion of possible policy directions.

For example, while dismissing rent control as liable to advantage existing tenants at the expense of potential tenants, the report is implicitly critical of residential tenancy laws in most states and territories.

The report advances the broad case that tenancy law reforms, “if well designed”, can enhance tenant welfare “without substantially increasing the cost of renting”. Longer notice periods are particularly favoured because these will “provid[e] vulnerable families more time to find new accommodation and prepare for the move”.

Slightly more controversially, the commission strongly hints at support for outlawing no grounds evictions. The landlord power to end a tenancy without any need to justify the move persists across most states and territories. Discussing this power the report states:

It increases the bargaining power of landlords […] and decreases that of tenants. Landlords’ incentives to carry out obligations, such as repairs and maintenance, decrease when no grounds evictions are available, since this provides them with an avenue to terminate leases in the event of a dispute.




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Life as an older renter, and what it tells us about the urgent need for tenancy reform


However, having highlighted a private rental affordability problem that is both growing in scale and becoming demonstrably more entrenched, the report is timid on solutions beyond modestly improving tenancy conditions.

It argues in general terms for an increase in Commonwealth Rent Assistance but – beyond tentatively floating a 10% rise in maximum payments – advances no specific proposal.

Expanding the social housing stock as part of the broad-ranging housing strategy Australia badly needs is scorned as “an expensive option”. This is a reference to the narrowly scoped analysis in the commission’s 2017 Human Services report. It favoured market solutions to provide low-income housing – on efficiency grounds.

The “expensive option” assertion is out of line with the more broadly framed analysis of the Productivity Commission’s predecessor, the Industry Commission. The latter concluded:

Public housing and headleasing [when social housing providers sublease private rental properties] are assessed to be more cost-effective than cash payments and housing allowances.

While the Industry Commission report admittedly dates from 1993, the subsequent failure of overwhelmingly private provision for low-income renters surely presents compelling reasons to revisit the investment case for social housing.




Read more:
Australia’s social housing policy needs stronger leadership and an investment overhaul


The Conversation


Hal Pawson, Associate Director – City Futures – Urban Policy and Strategy, City Futures Research Centre, Housing Policy and Practice, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

‘I really have thought this can’t go on’: loneliness looms for rising numbers of older private renters



People living in private rental housing were much more likely than social housing residents to say they felt lonely.
Dundanim/Shutterstock

Alan Morris, University of Technology Sydney and Andrea Verdasco, University of Technology Sydney

Loneliness is increasingly recognised worldwide as a critical social issue and one of the major health hazards of our time. Our research shows older private renters are at high risk of loneliness and anxiety. This is a growing concern as more Australians are renting housing later in life. By contrast, only a small proportion of the social housing tenants we interviewed said they were lonely.

The links between housing arrangements and loneliness could have profound implications for our health. As former US surgeon general Vivek H. Murthy said:

The reduction in life span [for people experiencing loneliness] is similar to that caused by smoking 15 cigarettes a day, and it’s greater than the impact on life span of obesity … Look even deeper, and you’ll find loneliness is associated with a greater risk of heart disease, depression, anxiety and dementia.




Read more:
Why secure and affordable housing is an increasing worry for age pensioners


What causes loneliness?

The causes of loneliness are multifaceted and complex. The number of people living alone in Australia is clearly a factor. In 2016, just under one in four households (24.4%) were single-person households. That’s up from one in five in 1991.




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One in four Australians are lonely, which affects their physical and mental health


Research suggests low-income individuals are more likely to experience loneliness. So, too, are people who have a serious mental or physical health condition or have had a serious disruptive event (financial or job loss, illness or injury, or relationship breakdown) in the last couple of years.

The impact of housing tenure on loneliness has received little attention. While recognising that there are no definite associations, we interviewed about 80 older (65-plus) private renters and social housing tenants who depended on the Age Pension for their income. These in-depth interviews indicated that their housing tenure was a critical factor in their risk of experiencing loneliness.




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Many older private renters are lonely

Many older private renters have little disposal income, because the cost of housing uses up much of their income. They also live with the constant possibility that they may be asked to vacate their accommodation. Their limited budgets mean they often end up living in a poorly located property. These features, individually or in combination, create fertile ground for anxiety and loneliness.

Their dire financial situation was often an obstacle to social activities. One interviewee told of how she had to choose between food or breaking her isolation by using public transport.

Well, you sort of think what you can do with $2.50. That’s a loaf of bread type of thing. – Beverley *

A 72-year-old woman living by herself said she could not afford the outings organised by her church.

There’s quite an active social club at the church for over-55s but I can’t go to any of those … Sometimes I think it would be nice to go on something that appeals to me, yes. And they might have an afternoon at somebody’s home and you’re asked to bring a plate [of food]. You see, I couldn’t afford to do that.

Peter, 67 and divorced, had left the workforce prematurely due to ill-health.

I’ve become very isolated. I used to, before I had the hip operation, I used to play tennis and I loved to play tennis … but I really can’t afford it. I’ve found a few clubs that I could go and play in. I’d like to get back to it, but they say, ‘Ah, the fees are this and you pay it annually,’ and I can’t come up with $150 or $200 or whatever.

Lack of money and insecure tenure were sources of enormous distress and anxiety, which further discouraged social contact. Brigette (67) was brutally honest:

You do get depressed and I believe that’s why people suicide … And there have been times when I’ve thought, what is the point to life? I really have thought this can’t go on, you know … I feel sorry for people because it is hard, and once you stay in it’s like crawling out of a slime pit … I have to say, ‘Get up and go out, go up the shops … Pretend you need potatoes or something.’

Not all of the private renters interviewed experienced loneliness. These interviewees usually had strong family ties or had managed to find affordable and secure accommodation.




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Social housing tenants feel less isolated

In sharp contrast, only a small proportion of the social housing tenants interviewed said they were lonely. Almost all were adamant they did not experience loneliness and felt they had strong social ties. Their affordable rent, security of tenure, long-term residence and having neighbours in a similar position meant they could socialise and were not beset by anxiety.

An 85-year-old long-established social housing tenant’s response to the question about loneliness and isolation was typical:

I do like it around here. I know where everything is and I know all the people, especially around these units you know. I know everyone and they know me. I like it around here. This is my home, you know. This is a community, I think. Like I know all the people and we’ve become really good friends. I couldn’t think of being anywhere else. – Kay

Pam, who had been a private renter before being allocated social housing, reflected on how her life had changed:

Well, it is changed because I’m happier and I think I’m healthier and I have a lot of new friends. I also have a lot more people around me for support if anything does happen. If I get sick and if they don’t see me for a few days someone will come and say, ‘Pam, are you OK?’ In private housing there was nobody.

The residualisation of social housing meant some tenants were living in what they perceived to be unbearable conditions. However, they generally were able to deal with their situation. Patricia coped with her very challenging neighbours by going to the local community centre.

No, I hate it [public housing]. I live here [at the community centre] every day. Yes, I’m on the committee here and I do things every day. This is my home, my family. Everybody is friendly with everybody. We have outings and things.

What the interviews indicate is that the housing tenure of age pensioners often plays a fundamental role in whether they are able to escape the experience of loneliness. Older private renters are far more likely to experience loneliness than their counterparts in social housing and that loneliness can be acute.

* All the names used are pseudonyms.




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The Conversation


Alan Morris, Research Professor, University of Technology Sydney and Andrea Verdasco, Research Associate, University of Technology Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Chilly house? Mouldy rooms? Here’s how to improve low-income renters’ access to decent housing



Too many Australians struggle to get their housing maintained and problems fixed.
Trevor Charles Graham/Shutterstock

Edgar Liu, UNSW; Chris Martin, UNSW, and Hazel Easthope, UNSW

People’s quality of life, their health and their comfort can suffer when living in poor-quality housing. It can also impose high ongoing costs of maintenance, repairs, heating and cooling. And these problems are more likely to affect low-income households, as our report for Shelter NSW shows. In it, we review the evidence on housing quality problems and consider ways to resolve these, especially for low-income households.

There is extensive evidence of the impacts of poor-quality housing on physical health, mental wellbeing and comfort. For example, poor design and maintenance can lead to the build-up of mould.




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These negative impacts vary by income groups and tenure. From the recently completed Australian Housing Conditions Dataset we know, for example, that renters on very low incomes (the bottom fifth of households for gross income, about $20,000 a year) are most likely to have unmet repair needs. They also have a harder time staying comfortable during winter and summer, as the table below shows.


Source: Australian Housing Conditions Dataset, Author provided

What are the reasons for poor-quality housing?

There are several underlying reasons for substandard housing.

Properties may enter the rental market after years in owner-occupation with no formal checks on their state of repair.

Another problem is some private renters do not assert – or feel unable to assert – their legal right to habitable premises in a reasonable state of repair and upkeep. This is often because of the insecurity of their leases and lack of affordable alternative housing.




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Life as an older renter, and what it tells us about the urgent need for tenancy reform


Another issue is “split incentives” – landlords decline to upgrade properties because they would not receive any benefit themselves.

There are also problems in public housing. Disinvestment by governments has both reduced the supply of housing and caused a backlog of maintenance for much of the remaining stock of dwellings.




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Housing quality is covered by myriad regulatory regimes. Lately, governments have been focused on questions of how best to regulate construction of new buildings. Less attention is given to the ongoing use of existing buildings.

Recent state and national reviews have highlighted problems in the certification of building design and construction, and in the public agencies that oversee the certifiers. Some state governments have begun to respond. The New South Wales government, for instance, is moving to consolidate the regulation of construction practitioners under a new building commissioner.

We spoke to a range of housing sector stakeholders and the theme from the recent reviews that most struck a chord was inadequate policy governance. There was no comprehensive overview or oversight of the issues of housing quality. As a result, some important issues escape policymakers’ attention.

Many stakeholders indicated that the current focus on problems in new buildings is an example of this. Although that’s plainly an issue in need of attention, other problems in existing buildings and more fundamental solutions are being overlooked – such as increasing social and affordable housing supply.




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So what are the solutions?

Empowering tenants and regulators

One way in which the quality of existing housing is regulated is through tenancy laws. This will become more important as rental housing becomes an increasingly common option, particularly for the long term.

Recently, some state governments have amended tenancy laws to specify “minimum standards” for rental housing. Our research participants supported these moves, but said security of tenure also had to be improved to protect renters when they assert their rights. The onus of legal enforcement could also be shifted from tenants to regulators.

Mandating improvements to overcome the split incentive problem

The split incentive problem for housing quality means some landlords are reluctant to pay for upgrades – such as insulation or other energy-efficient features – where tenants are the beneficiaries. As a result, renters, especially those on low incomes, are likely to be living in housing of lower standards or quality.

A potential solution is for governments to take the minimum standards approach and legislate energy efficiency and other improvements as mandatory. This is already commonplace overseas.

One of our workshop participants observed that “energy poverty” was another way of framing the policy issue that had proved compelling in overseas jurisdictions. While this framing had not had the same impact in Australia, this may be changing.

Improving transparency of housing standards

Social housing providers have a role in leading by example. Increased investment in social housing could contribute to improved quality across the housing system.

To this end, social housing landlords – particularly state and territory public housing authorities – need to be more accountable to tenants and the general public. Transparent reporting on property conditions, maintenance and tenant satisfaction, led by the social housing sector, can and should be rolled out as standard practice across the sector.

To do this, however, enough funding must be provided to reverse decades-long underfunding in the sector.

Collectively, these options can deliver more equitable housing outcomes, not only to low-income households but to all. The challenge lies in having the political and industry will to act on them.




Read more:
Australia needs to reboot affordable housing funding, not scrap it


The Conversation


Edgar Liu, Senior Research Fellow at City Futures Research Centre, UNSW; Chris Martin, Research Fellow, City Futures Research Centre, UNSW, and Hazel Easthope, Associate Professor, City Futures Research Centre, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Ideas of home and ownership in Australia might explain the neglect of renters’ rights



File 20181024 169804 rsn6h3.jpg?ixlib=rb 1.1
People should be able to feel at home regardless of whether they own the place they live in.
Halfpoint/Shutterstock

Bronwyn Bate, Western Sydney University

In Australia, when we think of home, we think of ownership. This normalisation of home ownership is reflected in the “Great Australian Dream”, the belief that it’s the best way to achieve financial security. This “dream” is based on the premise that if you work hard you will one day be able to buy a home. Home ownership is an important goal for many Australians. Home ownership implies success.

Linked to the importance of home ownership are our conceptions of home – what home means and the ways home can and should be made. Popular understandings of home suggest that feelings of home are most easily created between a house and the person who owns it.




Read more:
‘Just like home’. New survey finds most renters enjoy renting, although for many it’s expensive


What is home?

So ingrained is this relationship between home and ownership that in my recently published paper I argue that research rarely considers the ways non-owners make and think about home. This is problematic, given recent housing trends.

Recent changes in housing, particularly the increased cost of home ownership and curbing of public housing, have created a greater demand for rental housing. As a result, there is an undersupply of privately rented housing in Australia.

Australian tenancy laws add to the insecurity of the private rental sector. Tenancy laws and policy reflect cultural norms in Australia, where private renting is seen as a form of short-term, transitional housing.

Recently, significant media and public attention has been directed at the impact of state-based tenancy legislation. It is argued that tenancy laws need to be changed to reflect current housing trends and the needs of many tenants to have long-term, secure housing.




Read more:
When falling home ownership and ageing baby boomers collide


Rental insecurity is a persistent source of stress for many tenants. It’s a key reason that many tenants struggle to feel at home in their rental property. A person’s ability to identify feelings of home with their dwelling has been shown to impact psychological health and overall well-being.

My research findings suggest that while tenancy law affects the ways we understand and make home, likewise, our meanings of home affect how we shape and understand tenure and policy. Australian tenancy law reflects broader cultural values that associate the meaning and making of home with home ownership.

While researchers and policymakers focus on how tenancy law can negatively affect or restrict renters within their homes, the actual practices of home-making by renters are often overlooked. Current understandings of home typically reference what home means to home owners. My research points to the importance of understanding the ways private renters make home – and make home meaningful – so that any changes to tenancy law reflect the needs of tenants.




Read more:
Life as an older renter, and what it tells us about the urgent need for tenancy reform


Is having a home a right or a privilege?

While there is no doubt that small changes are being made, perhaps the lack of consideration for tenants in tenancy laws and policy is indicative of our larger beliefs about what it is to “feel” at home and make a home. The “Great Australian Dream” is based on the belief that hard work will eventually lead to home ownership. Yet owning a home is becoming impossible for many people, irrespective of how hard they work.

If we understand home to be a basic right, then we will have policies that reflect this. If we understand home to be a privilege, reserved only for those who manage to achieve home ownership, then we will forever live in a country where tenure security and a feeling of being “home” are reserved for those who are able to buy a house. Consequently, our policies will continue to support the idea that, ultimately, a rental property cannot be “home” to a tenant.

The question then remains: do we consider home a right or a privilege? This issue is at the very heart of Australia’s housing crisis. Until we change our meaning of home by separating it from ownership, we will never be able to “fix” Australia’s housing crisis.




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The Conversation


Bronwyn Bate, PhD Candidate, Urban Research Program, Western Sydney University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Renters Beware: how the pension and super could leave you behind



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Super and the pension treat most retirees well, but not renters.
Shutterstock

Rafal Chomik, UNSW

How we fund retirement in an ageing century ought to worry all of us.

But one group of us should be much more worried than the rest.

In a new set of research briefs published by the Centre of Excellence of Population Ageing Research, we report that most people do well out of our retirement income system and that the living standard of retirees has improved over the past decade.

In international comparisons, our system ranks highly, for good reason.

Most retirees do well

About 60% of older Australians can afford a lifestyle better than that deemed to be “modest” by widely used standards.

Households headed by baby boomers reaching retirement age between 2006 and 2016 did so with incomes 45% higher than those who retired a decade earlier.

Typical boomer households aged in their late 60s earn almost as much as they did when they were still working – only 20% less, that is, with about 80% of their working income maintained.

And their needs are lower. Lower spending in retirement is common because older households need to pay less for transport, less for working clothes, and have more time to cook.

Many continue to save while in retirement.




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And they tend to spend less over time, rather than more over time as benchmarks publicised by the superannuation industry assume.

When we included the value of living rent-free for the 80% or more of retirees who own their own home (about A$10,000 per year on average), we found older Australians live in no more poverty than working age Australians.

But not renters

The living standards of those who rent in retirement are very different. Only about 15% of older renters can afford a lifestyle better than “modest”.

Single renters are particularly badly off.

Among all older people only about 10% fall below the poverty line set at half the median income.

Among older Australians who rent, 40% fall below.

Among older Australians who rent alone, it’s more than 60%.


https://datawrapper.dwcdn.net/Oyddt/1/


If that relative poverty measure seems too abstract, an absolute dollar figure might help.

Alarming research aired on the ABC in September found that, on average, aged care homes were spending $6.08 per day on food per resident.



Our research finds that among pensioners who rent alone, one quarter spend even less than that per day.

And it’s getting worse

The pension has always favoured home owners.

On the one hand it is insufficient for renters and on the other it doesn’t cut pension payments to the owners of very valuable homes, because the value of any home – no matter how big – is excluded from the pension means test.




Read more:
Let’s talk about the family home … and its exemption from the pension means test


Rental assistance, introduced to complement the pension in the 1980s, was meant to alleviate this, and to some extent it does.

But it climbs only in line with the consumer price index every six months, which usually fails to keep pace with rents.




Read more:
Life as an older renter, and what it tells us about the urgent need for tenancy reform


Sydney rents have doubled over the past two decades. The consumer price index has climbed 68%.

As a result, rental assistance is less effective in reducing financial stress than it was when it was introduced, and is set to become even less effective if rents continue to climb more quickly than the price index.

And more of us look set to rent

Households headed by Australians aged 35 to 44 are now 10 percentage points less likely to own their own home than were households headed by people of the same age a generation earlier.

They might be merely postponing buying homes until they are older as more of what would have been their income is sequestered into super and they enter the workforce and retire later.




Read more:
Explainer: what’s really keeping young and first home buyers out of the housing market


If so, they might end up owning and paying off homes by retirement at the same rate as boomer households did before them.

If not, more and more of them could end up in poverty in retirement.The Conversation

Rafal Chomik, Senior Research Fellow, ARC Centre of Excellence in Population Ageing Research (CEPAR), UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

‘Just like home’. New survey finds most renters enjoy renting, although for many it’s expensive



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Fewer than than 5% of renters are unhappy with their landlord, but rent can be expensive.
Shutterstock

Steven Rowley, Curtin University and Amity James, Curtin University

One in every four Australian households rents, and it’s not just those on low incomes.

A new nationally representative survey of 3,182 renters, funded by the Bankwest Curtin Economics Centre, finds that while 60% of renting households have a household incomes below A$78,000, 30% are on incomes of more than A$100,000.

Although many households on low incomes and those headed by single parents are undoubtedly struggling to meet rental costs, those on moderate or higher incomes are generally positive about the experience.

Many of us rent

Despite its reputation as a nation of homeowners, Australia has the 10th largest private rental sector in the 37 nations that make up the Organisation for Economic Cooperation and Development.


Comparison of international private rental sectors.
OECD Housing tenure distribution 2014 or later. ABS Census data 2016

Six in ten renters do it because they can’t afford to do anything else. The rest rent by choice.

Most are happy with what they rent

Perceptions of dwelling quality are positive with only 6% reporting that their dwelling is in a poor or terrible condition. 81% report a good or excellent relationship with their landlord.

Add a property manager into the mix and this falls to a still respectable 69%. Fewer than than 5% of respondents reported a poor or terrible relationship.

Around half of respondents claim to have a good to full understanding of their rights as tenants.


Relationship with property manager or landlord.
Bankwest Curtin Economics Centre 2018 Private Rental Sector Survey., Author provided

Overall, when asked whether their rental property felt like home, just over 60% reported it did, with less than 20% being negative about their experience.

The longer a tenant lives in a rental dwelling, the more it feels like home, highlighting the importance of security of tenure.

Generally, levels of satisfaction with the sector are high given the proportion of tenants who would rather be owners.


Satisfaction with the private rental sector by age group.
Bankwest Curtin Economics Centre Private Rental Sector Survey

Security of tenure matters

Security of tenure is a major concern of private renters.

Two thirds of renters have been in their current property for less than three years. Almost 40% have rented four or more properties during their time as renters.

While two thirds of moves are by choice, around one third are forced with the primary reason being the owner selling the property.




Read more:
Home ownership foundations are being shaken, and the impacts will be felt far and wide


Moves are stressful, expensive and disruptive, particularly for households with children. Around half of all renters say they would gladly choose to sign a lease longer than 12 months if given the option because it would offer greater security and a stronger sense of home.

As does discrimination

One in five renters report some form of discrimination when applying for rental properties.

Those households most likely to suffer from discrimination are single parents with children.

In September Victoria passed landmark leglislation intended to improve the rights of renters.




Read more:
Life as an older renter, and what it tells us about the urgent need for tenancy reform


Some important issues addressed in the legislation are highlighted in the BankWest Curtin Economics Centre report which found the vast majority of respondents are on short-term leases (12 months or less).

NSW is following suit, although, disappointingly, it does not plan to outlaw no-grounds evictions.

And rent can be expensive

The typical proportion of gross income spent on rent is 28%, with almost half of all renters paying more than 30%, a figure that rises to 63% for renters over 55.

One in seven renters are paying more than 60% of their income in rent.

When asked the reasons for such high rental payments, almost six in ten report being forced to pay that much through a lack of available alternatives.

Commonwealth rent assistance was regarded as important or very important by nine out of ten of those receiving it.

What we could do to help

One of the best ways to make rent more affordable would be to reintroduce a subsidised rental scheme that offered a financial incentive for developers to invest in housing that would be leased to low-income households at below-market rents along the lines of the National Rental Affordability Scheme by Prime Minister Kevin Rudd in 2008.

It was wound up by his successor tony Abbott in 2014.

Workable build to rent schemes could also help boost supply and security of tenure, and the negative gearing and capital gains tax concessions tax available to mum and dad investors could be tied to the delivery of long–term, below market rental dwellings.

Our survey finds the private rental market is performing quite well for those on moderate to high incomes. But not for those on low incomes who will never access home ownership and need secure long term tenure.The Conversation

Steven Rowley, Director, Australian Housing and Urban Research Institute, Curtin Research Centre, Curtin University and Amity James, Lecturer, School of Economic, Finance and Property, Curtin University

This article is republished from The Conversation under a Creative Commons license. Read the original article.