Renter's Rights

NSW Left activist, Donherra Walmsley, writes about housing affordability and renter's rights.

In a plot twist absolutely no-one (read – actually everyone) saw coming, the most recently released Household, Income and Labour Dynamics (HILDA) Report revealed that in the next few years the proportion of Australians who own their own home will drop below 50%. For Australians between 25 and 34, levels of home ownership are already well below that, sitting at 29.2% in 2014, according to the report.

Despite being the recipients of such sage pieces of advice as “get a good job with good money” (thanks Joe Hockey, any tips on how to get a sweet ambassadorial gig? I hear they pay well), have parents who will “just shell out” for you (hey Malcolm I’ll send you my parents’ numbers and you can have a chat with them yeah?) and “just save some money by cutting down on how much you spend on coffee/eating out/your phone/any other thing that even if you cut it out completely and lived your life like an ascetic monk would in no way put you anywhere near close to being able to afford a deposit on a home in Sydney even if that home was totally uninhabitable and had literally had a dead body lying in it for 8 years” (thanks, numerous boomers), there are clearly serious structural factors that are putting home ownership out of the reach of many Australians, particularly younger ones.

It has become more widely acknowledged that this is a problem, and one that needs to be addressed over the last couple of years, which is great. The policies the ALP took to the last federal election on winding back both negative gearing and capital gains tax, both of which distort the market and disproportionately benefit the wealthy, are a step in the right direction.

Realistically though, even if those changes were implemented immediately, they are most likely only going to reduce the rate at which property prices increase. For those of us for whom the median Sydney house price of a cheeky $1,021,968 is already well out of reach, negative gearing and capital gains tax reforms unfortunately probably aren’t going to magically conjure up the rungs we need to get onto the property ladder.

So we are left with a growing number of people who most likely will never be able to afford to own their own home, and for whom lifelong renting will be the reality.

Unfortunately, our rental laws are very much designed through a prism of renting as a transitory stage, most likely experienced in youth, on your way to the inevitable conclusion of home ownership, and disproportionately benefit landlords at the expense of tenants. 

In NSW, tenants can be kicked out of a property for literally no reason (called a “no grounds termination”), long term leases are rare, landlords can forbid you to have pets, and rent can be increased at any time with no caps.

The combination of tax settings and rental laws encourages people to see property as a short-term, speculative investment – buy in, hold on to it for a few years while property prices go up, and cash in on it by selling when you need an injection of liquidity. Rental laws and these tax settings are mutually reinforcing ways of driving up property prices and speculative investment, and driving down the rates of home ownership in Australia.

Lifelong renting isn’t inherently a bad thing though. It’s just bad in an Australian context because you can be kicked out of your home at any time, which is a pretty anxiety-provoking situation, especially if you have kids (incidentally the HILDA report also noted that couples who own their homes are more likely to have children than those who rent). It also means that tenants often won’t complain about things that need fixing because they’re worried about being seen as “difficult” and therefore having their lease terminated. 

Having prosecuted and won the arguments for reforms to negative gearing and capital gains tax within the ALP, it’s time to tackle the next piece of the puzzle – renter’s rights. The people affected by poor rental protections are overwhelmingly Labor people – this is a clear class and generational issue, where change has the capacity to make a very real difference to the quality of life of almost 50% of the population.

We need to put an end to “no grounds” terminations, introduce longer-term tenancies, and give people the right to have pets in rental properties, just to name a few. No doubt some will push back against these ideas, just as we’ve seen with the negative gearing and capital gains tax reforms proposed by the ALP; but as we’ve seen with those policies, the public appetite for change on housing affordability is there, and scare campaigns haven’t been resonating. Better renter’s rights are a series of reforms whose time has come, and Labor should be advocating for them.    


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  • commented 2016-07-22 21:42:59 +1000
    I’m a huge fan of this article, but we need to talk about why “longer-term tenancies” don’t and won’t really work. Drop me a line anytime.
    Cheers,
    Ned @ TUNSW
    http://tunswblog.blogspot.com.au
  • commented 2016-07-22 15:56:08 +1000
    Excellent article on a very important issue. I also note the author’s contribution to the Left’s push for a broad based progressive land tax to replace stamp duty, which is possibly the very worse tax, the most distorting we have, which prevents people buying homes. A broad based progressive land tax will also help renters significantly, by ensuring the maximum economic use of any land, property or rooms currently un-rented. That is, if a room or property is currently held by a speculator or simply by an owner, the current tax regime does nothing but encourage it being left un-rented. A land tax encourages every land owner to make the best possible use of their land, by either renting out any properties they have on it, or by building as many properties, rooms or units as the local planning laws will allow, so they can be rented out. With a broad based land tax, abolition of stamp duty and strong renters rights (State issues) plus reforms to negative gearing and capital gains tax concessions (Federal laws), Labor can make a real dent in making housing affordable, for buyers and renters. Throw in a universal basic income and you’re making major headway into the crisis of inequality that our economic system has created.