Public housing ‘renewal’ likely to drive shift to private renters, not owners, in Sydney


Dallas Rogers, University of Sydney and Michael Darcy, Western Sydney University

A target of 70% private and 30% public dwellings is an accepted standard for public housing renewal projects in several Australian states. This level of private ownership is said to be necessary to counter stigma and the supposed demotivating impacts of concentrated disadvantage. When we looked at the impact of applying this model to the planned Waterloo redevelopment in inner Sydney, the demographic projections were revealing.




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Our analysis shows the project would reduce the suburb’s proportion of social housing dwellings from 30% to about 17%. About 30% of households in the suburb would be owner-occupiers. Private renters might rise to more than 50% of households.

Why set social mix targets?

Social mix is often proposed as an antidote to a range of presumed problems associated with public housing estates. With the need for a social housing stimulus package receiving attention, and the Victorian government announcing a A$500 million program, it’s timely to revisit the mix of tenancies in estate redevelopments.




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State housing authorities favour a mix of public and private residential tenures when they redevelop large public housing estates. Authorities can then sell the majority of new dwellings to private owners and investors.

As Kate Shaw, Janet McCalman and Deborah Warr have explained in The Conversation, the strategy doesn’t always work as promised. Drawing on extensive empirical research into mixed-tenure renewal neighbourhoods, the evidence shows simple mathematical “one size fits all” targets do not work. Decisions on the residential mix need to be sensitive to local settings and needs.

Nonetheless, an orthodoxy has emerged among some housing authorities that social housing tenants should make up 30% of households while 70% should be sold to owner-occupiers and investors.




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The case of Waterloo

In Waterloo, limitations of the fixed-ratio approach relate to the likely composition of the post-renewal resident population.

The Waterloo estate site now contains about 1,900 public housing units. The renewal plan proposes retaining this number in the context of a three-fold increase in dwellings with a 70:30 private-public tenure mix. This will result in a total of about 6,500 dwellings.

At the suburb or neighbourhood level, Waterloo had 6,151 dwellings in 2016. As the table below shows, almost exactly 30% of these were let to social housing tenants.


Data: ABS Census 2016, Author provided

The table also shows the large variation in tenure mix across five Sydney suburbs and the Greater Sydney area. Some 44% of all dwelling stock in Waterloo was already rented privately. That’s almost 50% more than the Sydney-wide average of just under 30%.

Importantly, 63% of private dwellings in Waterloo are privately rented – double the Greater Sydney proportion.

Located close to three universities and the CBD, Waterloo is dominated by investor-owned rental housing. Future occupation is likely to follow this pattern.




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More like 17% social housing

State housing authorities measure tenure mix within public housing estates. But the Australian Housing and Urban Research Institute recommends measuring tenure mix at the neighbourhood scale.

Adding 4,500 new private households, while maintaining current social housing numbers, will reduce the proportion of social housing in the suburb of Waterloo to about 17%.

Projecting the current rate of renters in private dwellings onto the proposed 70:30 renewal mix might be expected to result in 63% of new private dwellings being privately rented.

The suburb would then comprise 52% private renters. Less than one-third of residents would be owner-occupiers.

The chart below shows how applying the 70:30 target to redeveloping the public housing estate could actually reduce tenure diversity for Waterloo.


Data: ABS Census 2016, Author provided



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Many private renters struggle too

The need for more social and affordable housing in well-serviced, inner-urban areas is well recognised. Getting the residential tenure mix right through renewal is key.

In the only full-length book on social mix in Australia, Kathy Arthurson notes social disadvantage occurs in both public and private rental housing. She writes:

The omission of private rental from the social mix literature is problematic, as in Australia and elsewhere most poor renters are in private rental and not in public housing.




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A key element of the case for limiting social housing to 30% in redevelopment projects is the belief that any more would scare off potential private buyers and reduce developer returns.

However, an RMIT evaluation of the Victorian Public Housing Renewal Program showed the presence of social housing had little effect on sales of private apartments in renewed inner-city public housing estates.

Another evaluation of the Kensington renewal project in Carlton, Victoria, found strong investor sales but fewer owner-occupiers than anticipated.

Key takeaways

Recent research in Melbourne and Sydney suggests the supposed benefits of social mix are based on owner-occupiers, not more transient private renters.

It also shows social mix renewals that apply a simplistic 70:30 target within a narrowly defined boundary around an “estate” risk seriously undervaluing large public housing assets.The Conversation

Dallas Rogers, Associate Dean, School of Architecture, Design and Planning, University of Sydney and Michael Darcy, Adjunct Professor, School of Social Sciences, Western Sydney University

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

As coronavirus widens the renter-owner divide, housing policies will have to change


Rachel Ong ViforJ, Curtin University

What began as a global health crisis in the form of COVID-19 is now also an economic crisis of historic proportions. Much of the housing policy focus during the pandemic has rightly centred on the plight of people who are insecurely housed or homeless. Another strand of commentary has focused on a likely fall in property values.

But what does the pandemic mean for housing market inequalities in Australia? And what are the policy implications?




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The renter-owner gap will widen

Despite concerns about house prices plummeting, the spread of COVID-19 is exposing a widening gap in housing markets between those who own zero housing wealth (renters) and those with substantial housing wealth (owners).

Australians with little to no housing wealth were already experiencing at least three key types of vulnerabilities before the pandemic in the form of work insecurity, financial stress and ill-health.

The charts below show the comparisons between renters and home owners in these three categories of vulnerability, using data from the HILDA Survey. Owners are ranked in quintiles by housing equity, from the bottom 20% (Q1) to the top 20% (Q5).

Renters were much more likely to be unemployed or in casual jobs than people with high housing wealth.

Note: Sample includes all persons aged 25+ no longer living in their parents’ homes. Housing equity is defined as family home value minus mortgage debt. Population weights have been applied.
Author’s calculations from 2017 Household, Income and Labour Dynamics Survey data, Author provided

Both renters and owners with low housing equity were more likely to have difficulty paying their rent, mortgage and utility bills on time. They were less likely to be able to raise emergency funds when needed.

Note: Sample includes all persons aged 25+ who are no longer living in their parents’ homes. Housing equity is defined as family home value minus mortgage debt. Population weights have been applied.
Author’s calculations from 2017 Household, Income and Labour Dynamics Survey data, Author provided



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Renters were also more likely to report poorer physical and mental health.

Note: Sample includes all persons aged 25+ who are no longer living in their parents’ homes. Housing equity is defined as family home value minus mortgage debt. Population weights have been applied.
Author’s calculations from 2017 Household, Income and Labour Dynamics Survey data, Author provided

The spread of coronavirus has added to these existing vulnerabilities. Casual workers have been particularly vulnerable to job loss.




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The social gradient in health is well-known. People on the bottom rungs of the socioeconomic ladder tend to be in poorer health. They are then more likely to develop serious health problems from the coronavirus.

Post-pandemic markets will add to inequalities

COVID-19 is making existing economic inequalities worse. And even in a post-pandemic world it can be expected to slow down wealth accumulation among renters.

Hysteresis is a term used to describe an economic event that persists into the future, after the factors that led to the event have disappeared. In labour markets, the long-term unemployed also suffer long-term damage to their job prospects as their skills deteriorate and they are regarded as less employable.

This hysteresis effect will likely spill over into housing markets. Any crisis-driven falls in house prices may be short-term as housing values remain relatively insulated by record low interest rates. People who are exposed to job loss, insecure work or ill-health during the crisis will face a greater struggle to regain their economic footing after the pandemic than those from more affluent backgrounds.

This means the wealth-accumulating capacity of people with little to no housing equity is further compromised during and after the pandemic. In short, renters could fall further behind in their ability to buy a home. The gap between the haves and have-nots will grow.




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3 principles for post-pandemic policy

An even more unequal housing future for Australia is undesirable. The post-crisis housing debate will need to be conducted with three key elements in mind: equity, solidarity and security.

Equity in access to housing opportunities must not slide off policymakers’ radar. It is not a debatable fact that governments have long provided generous concessions for property buyers. These measures include capital gains tax discounts, family home exemptions from land tax and income support means tests, and negative gearing for investors.

These preferential tax treatments have far exceeded government spending on renters. Notwithstanding the benefits commonly associated with home ownership, restoring some balance in the distribution of subsidies between owners and renters is essential to narrow the widening chasm between them.

Solidarity between generations will be more crucial than ever before to preserve Australia’s social and economic fabric. The surge in national debt created in response to the crisis will likely be a multi-generational burden.




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Some might be tempted to return to pitting the young against the old in housing debates. Policy thinking that encourages solidarity, rather than stoking tensions between generations, will be increasingly important. For instance, abolishing stamp duty together with levying land tax on all land will remove a key financial barrier to home purchases for both young first-time buyers and older downsizers.

The formation of the national cabinet to oversee the response to COVID-19 also provides a post-pandemic forum to forge federal-state cooperation on the required reforms. Federal support will be needed to help cover state revenue shortfalls in a gradual transition to land tax. On the other hand, the release of housing equity by older downsizers should ease pressures on the federal retirement incomes system.

Finally, it is time to reprioritise housing security as a foundation for fostering good health and economic participation. Critical public health measures to avoid the spread of disease, such as social distancing and staying at home, are inherently shelter-related. These measures are rarely achievable for people who are homeless or in overcrowded housing.The Conversation

Rachel Ong ViforJ, Professor of Economics, School of Economics, Finance and Property, Curtin University

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

4 ways to be a good landlord in a time of coronavirus



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Emma Baker, University of Adelaide and Rebecca Bentley, University of Melbourne

The COVID-19 pandemic is creating major challenges for our residential rental system. The lockdown of businesses has meant an almost overnight loss of jobs or reduced hours for many Australian workers. Many tenants are struggling to pay their rent.

While the release of a government package to help residential renters has been mooted for weeks, the only concrete outcome so far has been a halt on evictions and some progress in individual states and territories. The rapid sequence of events has left renters – that’s about one in three Australian households – and landlords in uncharted territory; they must renegotiate their terms.

We asked stakeholders from across the rental market – landlords, tenants, advocacy groups, housing researchers – for ideas on what ethical landlords might do in these highly uncertain circumstances. We discuss some of these ideas later in this article.




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Landlords are taking a hit too

But, first, it’s important to remember it isn’t just renters who are struggling. Some landlords are too. For many of Australia’s more than 1 million “mum and dad” landlords, COVID-19 has dealt a blow to their relatively safe bricks-and-mortar investment.

On the other hand, landlords may have access to mortgage holidays and low interest rates. Some are also calling for relief on rates and other costs associated with their investment properties so they can better support their tenants.

At the coalface, responses from landlords, letting agents and property managers have reportedly varied widely. The official position of the Real Estate Institute of Australia is that a “a moratorium on evictions during these challenging times is the correct thing to be doing”. However, there have been widespread reports of threatened evictions, suggestions renters draw on super or use savings to pay rent, or that rent reductions will only come in the form of deferred loans.

Pulling together in a crisis

Australians have rallied together in this crisis – checking up on older neighbors, for instance, or delivering groceries or home-baked bread to isolated friends and relatives. This is grassroots stuff, which has largely happened separately from, and in advance of, formal government responses. People see COVID-19 as a shared challenge, and there is a lot of goodwill.

In this environment, while landlords are rightly concerned to protect their investment and keep paying their mortgages, many also have a competing concern to help out their tenants.




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The problem is, in such a dispersed system of ownership, there is no template for how they might help, and no library of what other landlords are doing, so each mum and dad investor is responding in different ways. Anecdotal evidence suggests some letting agents have been contacting landlords for direction on how to respond to requests for rent reductions and gauging attitudes to eviction.

An added complication is that many of the responses that aim to help out tenants may be counter to the best interests of letting agents, who receive a percentage of rental income.

4 ways landlords can help

Here are some ideas in response to our questions of rental stakeholders:

  1. Talk directly with tenants if you can, or at least ask to be included in the conversation.

  2. Everyone will have different pressures. Work out what position you are in. Find out what concessions your bank may be offering, what inflexible costs (such as council rates) you have, what landlord insurance covers you for, and how much of the pain you are prepared to share – and for how long. Ask your tenants to do the same. This will form a good, and hopefully fair, basis on which to compromise.

  3. Use letting agents who reflect your values as a landlord. You may wish to have a chat to your agent and ask that they notify you if tenants are having trouble. Some landlords have gone further and requested that all communication between agent and renter is cleared by them first.

  4. Share success stories. One of the motivations for this article was the lack of information for mum and dad investors who are trying to be good landlords. Options to offer tenants as part of negotiations might include rent reductions, or deferred rent, but there aren’t many examples of what other landlords have done out there.

It would be helpful if landlords shared the solutions they have developed, what worked and what didn’t. Even though every case will be different, having positive case studies available for other landlords to emulate will be valuable.

The full extent of COVID-19 and its effect on employment, housing and the economy just isn’t known. And neither is the full detail of what government assistance may be provided – or the implications for landlords, tenants and agents.




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Impacts are affecting everyone

It’s worth remembering that we’re all in this together. Everyone in the rental system – tenants, landlords and agents – will feel the effects of the pandemic.

Many households have already been tipped into post-COVID unemployment, many landlords will also have lost their jobs, many agents are overwhelmed by trying to keep businesses afloat while quickly mediating temporary solutions. And many want to do the right thing – tenants and landlords alike.

Everyone is waiting to know the shape and impact of any government response. Although it is difficult to adequately plan long-term responses to hardship, individual landlords can do a lot in advance of government help, and in addition to it.The Conversation

Emma Baker, Professor of Housing Research, School of Architecture and Built Environment, University of Adelaide and Rebecca Bentley, Professor of Social Epidemiology, Centre for Health Equity, Melbourne School of Population and Global Health, University of Melbourne

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

Australia had rent control in wartime. War on coronavirus demands the same response


Liam Davies, RMIT University

The COVID-19 pandemic is likened to a “war on two fronts” by senior government figures, including Prime Minister Scott Morrison and Treasurer Josh Frydenberg. On one front is the pandemic, which threatens to put unprecedented strain on the health system; on the other front, the lockdown is devastating the economy and employment.

These impacts have prompted debate about protection of renters. During the second world war Australia implemented rent control, protecting tenancies for decades afterwards. In this coronavirus “war”, governments should take inspiration from the past and again implement rent control.




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We have already seen governments adopt other “wartime” measures. Commonwealth and state governments have joined forces in a national cabinet, likened to the wartime cabinet Australia had during the second world war.

Images of thousands of Australians queuing for welfare evoke memories of hardship not seen since the Great Depression and then the war. The scale of stimulus is unlike anything seen in Australia before, eclipsing the Global Financial Crisis stimulus package.

Renters already have it tough

Renters are a sizeable and vulnerable cohort. Almost one in three Australians live in rental properties. In Australia, renting has increased from a low of 25% of households in 1986 to 31% in 2016.

Not only are more Australians in rentals, but they are renting for longer. However, as tenancy is less secure than ownership, housing insecurity is a growing problem.

Renters are typically financially worse off than home owners. Based on my analysis of 2016 Census data, the unemployment rate among renters was 10.9% compared to 5.2% for owners.

Renters also generally have lower incomes. My census analysis has found almost half of renters earned less than A$649 a week, compared with only 31% of owners with a mortgage. (Comparisons of renters with outright owners can be misleading, as outright owners have much lower housing costs.)

Lower incomes mean a higher proportion of income is spent on housing. Households with a mortgage spend an average of 15.9% of household income on housing compared to 20.2% for private renters. Further, 43% of low-income renters experience housing affordability stress (defined as a household in the bottom 40% for income spending over 30% of income on housing).

These renters are highly vulnerable to the impacts of the pandemic.




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COVID-19 is making it way tougher

The economic crisis gripping Australia will affect an estimated 6 million jobs. But almost 1 million casuals are ineligible for the federal government’s $A130 billion wage subsidy paid to businesses to retain workers.

Disproportionate numbers of renters work in these casual jobs. Their already high rates of financial stress are likely to increase as they lose the income they rely on to pay the rent.




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As business revenues plunge, there are also calls for commercial landlords to provide rent holidays. At least one major retailer has refused to pay rent. To save businesses, the national cabinet last week announced a mandatory code of conduct for commercial tenancies, reducing rents proportionate to reduced turnover.

Home owners are able to seek relief from banks, who are offering to freeze housing mortgages. Banks are still capitalising interest, meaning owners face extended loan periods or increased payments following the freeze.

To date, the national cabinet has only agreed on an eviction moratorium for residential tenancies. It’s welcome but could simply shift payment or eviction into the future for households unable to pay rent – the moratorium does not waive the requirement to pay rent. Some landlords are rushing to evict before state and territory governments follow early mover Tasmania in putting the moratorium into effect.

A warlike crisis calls for a wartime responses

During the Great Depression, calls for greater protection for renters resulted in policies like rent control at state level. Australia’s entry into the second world war ushered in a national approach.

The Menzies government introduced rent control in 1939. Curtin’s wartime cabinet strengthened rent control in 1941, fixing rents at 1940 levels. Independent tribunals administered rent variations.




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Rent control left a lasting legacy. States took responsibility for rent control in 1948, implementing their own schemes.

In Victoria, rent control sat alongside public housing, offering two strong forms of protection to renters from 1938 to the mid-1950s, when both were wound back, in favour of home ownership. Despite this, rent control remained in force in Victoria, protecting thousands of tenancies until the 1980s.

The situation today is remarkably similar to that of the 1940s. In recent years growing numbers of Australians have found themselves in precarious rentals. While home ownership soared from the 1950s, in recent decades ownership rates have fallen as housing unaffordability has risen.




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In 2016 rental rates in Victoria reached highs not seen since the late 1950s, when virtually all rents were controlled. Low-income households have been spending unsustainable amounts on rent even before the pandemic hit.

This “war on two fronts” will push many to the brink. A moratorium on evictions will delay the pain, but not avoid it. The national cabinet should take inspiration from Australia’s wartime cabinet and regulate rents nation-wide.

The lowering of commercial rents under the new code of conduct will prevent many business bankruptcies. Setting residential rents at affordable levels would also protect millions of vulnerable Australians. Such a policy would be consistent with Finance Minister Mathias Cormann’s concept of “spread[ing] the pain as fairly and equitably as possible” by sharing the losses with landlords.

Regulating rents would leave a lasting positive impact on Australia. We would come out of this crisis with a fairer rental system than we started with. And hundreds of thousands, if not millions, would be spared the stress of facing the threat of eviction.The Conversation

Liam Davies, PhD Candidate, Centre for Urban Research, RMIT University

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

Rents can and should be reduced or suspended for the coronavirus pandemic



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Chris Martin, UNSW

The National Cabinet announced a moratorium on evictions just over a week ago in response to the COVID-19 pandemic. As government ministers and commentators have tried to make clear, it’s intended only to stop evictions – not rent payments. But the sudden losses of jobs and incomes mean many households cannot continue to pay pre-crisis rents.

Tenants are seeking rent reductions or waivers from their landlords, with disturbingly mixed results. It is time for governments to step in and resolve the issue, by legally mandating rent reductions across the board.




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Recent analysis of renter and landlord household finances clearly shows the latter group are much better placed to take a financial hit from this pandemic.

Up to now the prime minister has encouraged tenants and landlords to make individual arrangements. In the absence of any government guidance, agents’ and tenants’ representatives agree on this much: the situation is a mess.

Some landlords and agents are responding sympathetically. Others are hesitant, apparently wary voluntary reductions may void their insurance. Some are insisting on full payment, or even increasing rents. And some were advising tenants to draw on their superannuation to pay rent – until ASIC warned them off.

Why should government step in?

Yesterday the National Cabinet addressed commercial tenancies, but again left aside residential tenancies. It is within the power of state and territory governments to sort this mess out. They could legislate to reduce rents to some fraction of current rents or to zero – a complete suspension of rent liabilities for the declared duration of the pandemic.

With federal government co-operation, mortgage interest could receive the same treatment: mandatorily reduced or suspended for the pandemic, with principal repayments deferred.

This is the appropriate response to the peculiar nature of this crisis. The key point here is that government is deliberately suppressing economic activity to prevent transmission of the virus. With household incomes much reduced – and governments trying to top them up with new payments – it makes sense also to reduce household outflows.

A look at renter and landlord finances

The biggest household expenses to reduce are rent and interest. Here’s a quick sketch of incomes and outflows in the Australian private rental sector, using the latest available figures from the ABS, the ATO, the Productivity Commission and detailed analysis of previous rounds of data last year by Kath Hulse, Margaret Reynolds and me.

About 2.5 million Australian households rent privately. Just over half are in the bottom 40% of households by income. About one-third are low-income households paying more than 30% of their income in rent – and that’s before the COVID-19 income losses.




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Private renters pay about A$43 billion a year in rent to another, smaller group of households: Australia’s 1.3 million landlord households.

A little more than half of that rental income, A$22 billion, flows right out again to banks, as interest payments on investment loans. For 60% of landlords the interest outflow, plus other property-related expenses, is greater than their rental income: they are negatively geared. For them, rental income is not about putting food on the table; it is part-funding their investment or speculation in property.

This negatively geared group receives high incomes from work and other sources. Leaving aside their net rental losses, they have an average annual taxable income of about A$94,000, versus A$54,000 for non-landlords. Landlords’ other incomes may have taken a COVID-19 hit, but the most common occupations for this group – general managers, registered nurses and accountants – have probably fared better than the casual and gig workers.




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Landlords who derive a net positive rental income mostly receive other income too. Their average annual taxable income is A$66,000 before net rent is added.

A relative few landlords, 16%, are post-retirement age. They may well rely on rental income for consumption, but, on average, they are rich, with almost A$3 million in net wealth.

A final point about landlords: they are more likely to have a partner than non-landlords. Presumably, then, they have access to shared resources when times are tough. The average disposable household income for landlords is A$135,000 a year, versus A$82,000 for non-landlords.

So, were tenants’ rental outflows reduced, landlord households are relatively well-positioned to bear a reduction in their rental incomes.

How to ease the burden on landlords

Landlords would, of course, also want to reduce their own outflows. They have probably already done so, because the pandemic has closed so many discretionary spending opportunities.

Another outflow – the A$3 billion a year they spend on real estate agents – would also be reduced, because agent fees are mostly calculated as a proportion of rent. This would cause pain for agents, but many of their activities – inspecting properties, handling eviction proceedings, conducting marketing campaigns – are not needed in a pandemic. JobKeeper payments could support their businesses.




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The biggest pain would be the interest outflow. But let’s reduce or suspend interest too, for both owner-occupiers and landlords. This would reduce income for banks, which would have a problem when their own liabilities to whole funders come due.

And at that point a really useful negotiation could take place between banks and the Australian government. They could “sit down, talk to each other and work this out” – as the PM has suggested to millions of individuals – to keep finance operating, in return for reformed service and a public equity stake.

In ordinary times, rents and interest have a controversial role in the economy. They extract value from productive actors in the economy for the benefit of owners of property and financial assets, and are the object of speculation. But, as the political economist David Harvey observes, they also have a co-ordinating role that drives competition and future production.

But these are not ordinary times. For the moment, at least, we don’t need rent to co-ordinate what the economy must do. We need to produce the essentials and whatever else can be safely done at home, with the rest of production in hibernation. And we need to ensure households retain enough income for the essentials, with reductions in income equitably shared.The Conversation

Chris Martin, Senior Research Fellow, City Futures Research Centre, UNSW

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

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”.




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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.




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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.




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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



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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.




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


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



Read more:
Private renters are doing it tough in outer suburbs of Sydney and Melbourne


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.




Read more:
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.