Friday, December 19, 2014

Tenancy advice over the Christmas-New Year period

That's it for another year. The TU and the TAASs are taking a break over the Christmas-New Year period, but a couple of elves will be answering our hotline.


Tenants' Union of NSW Christmas – New Year Hotline

 8117 3750

or

 1800 251 101

The hotline is open 22 December – 2 January (except Christmas Day, Boxing Day and New Years Day), from 10 am – 5 pm (except 1 pm – 2 pm, for the elves' lunch).

There's also our Tenants Rights Factsheets, and our Tenants Rights Manual, available 24/7. 

If you're spending Christmas with relatives, you might like to bone up on some topics of conversation for the dinner table – say:
Seasons greetings, thanks for reading, and see you next year.


Wednesday, December 17, 2014

Rent Tracker - Sneak peek

We've previously written about the various ways people can track rent movements in Sydney. We plan to continue this practice in our new series "Rent Tracker."

This is a brief sneak peek while we work on adding all sorts of improvements. We've two substantial changes to note.

Previously, we tracked the 'asking rents' reported by APM against the rents tenants actually pay, as presented in the Rent and Sales Report and in the CPI - Sydney Rents series.

For this and subsequent issues, we've added two new 'asking rent' trackers - CoreLogic RP Data (until very recently known as RP Data), and SQM Research.

To make it easy for you, we'll be keeping these colours for each series in all our graphs! Clicking on each graph will get you the bigger version.
First, let's introduce CoreLogic RP Data and SQM Research.

Both are independent data researchers that primarily focus on property. CoreLogic is an international group that acquired RP Data in 2011, but only recently changed the name to match.

We will primarily be looking at RP Data's Quarterly Rental Reviews, or Quarterly Property Reports where the Review is unavailable.

SQM Research publishes a Weekly Asking Rents Index on their website, which will be the source of data for them. SQM publish prices for all houses, and 3 br houses, all units and 2 bedroom units. For consistency with the other measures, we will be using their all houses and all units measures. SQM publish a methodology for their index here.

Both CoreLogic RP Data and SQM Research primarily scour property listing websites for asking rents to gather their data.

Sydney Rents

First, median rents for houses and units for the last 18 months, and the difference between asking rents and actual rents is noticeable.We've adjusted for inflation to September 2014 here, which produces a flatter image, though the slow rise is clear as well. 


SQM prices houses at a much higher level than other data houses, we'll be seeking comment from them. Interestingly, their unit prices are lower than even the Rent and Sales Report.




We're also looking at producing a couple of indexes to try and give an broader perspective on the narrative that gets played out in the media whenever rent prices are reported on. The following graphs show one of two ways of we'll use to indexing our five data series. The indices purpose is to try and represent movement, rather than merely the data points of the series.



These indices demonstrate the relative movements of rent prices together. This represents clearly that the actual rents have been rising much faster than the asking rents would suggest, particularly in houses, and particularly with APM but certainly all three asking rent series show flat periods while the actual rents catch up. This becomes an issue when the media narrative describes flat periods in prices, when we should be talking about how much more unaffordable rents are getting!

We'll begin to look at what all this means in the New Year, and look forward to bringing you more numbers, including regional reporting, in subsequent instalments!

Thursday, December 11, 2014

The shape of the private rental market: update

We've been discussing the changing shape of the private rental market, with reference to some graphs provided by Judy Yates from her research. That research is now published.

We'll discuss it in more detail in future post; for now, here's our new favourite graph on the changing shape of the market, showing how the market is both growing absolutely, and growing more expensive.

 
See how the market, pumped up on speculator-steroids such as negative gearing, is lurching up the scale of rents.

Monday, December 8, 2014

Hear no evil, see no evil

Following the release of the social housing discussion paper last month, we've spent a little bit of time talking about the private rental market. We've felt a real need to, because the many issues we encounter in the private sector are apparently not within the scope of the discussion - even while it blithely assumes this market will pick up any shortfall caused by making social housing harder to get into and even harder to keep...

The department of Family and Community Services has decided to focus its attention very narrowly on the social housing system itself, rather than exploring just how it operates within - and is constrained by - the broader housing system.


But the paper does provide some opportunities to take the discussion down that more useful path. For instance, it says at one point that "while costs have increased, revenues under the income-based rent model have not kept pace with market rent and have declined relative to growing operating costs". Another way of looking at this is that, by their very definition, social housing rents have kept pace with incomes, but the private rental market has left low incomes behind.

We've talked about this on the Brown Couch, ad nauseam, but it seems it's time to go over it all again... We struggle to maintain a functional social housing system because of the way private housing works.

Here’s why:

1. Australian houses are a tax haven
Home owners don’t pay tax on any increase in the value of their homes, and landlords are allowed to offset rental losses against their taxable incomes. But everyone pays tax on savings and other capital gains, so anyone with the capacity to borrow is encouraged to pile into the housing market instead. Squirreling those excess dollars into savings, or investing in a new venture of some kind, is no way to make money – speculating on house price gains is. And the more who do it, the higher values can go. This is great news for anyone who can afford it... but not so great for those who can't.

2. Low taxed housing leads to fewer properties and higher rents
Landlords are encouraged to spend more borrowed money on holding property than they receive in rent. By doing this, they can reduce their taxable income, making day-to-day losses easier to wear. But the real incentive is the prospect of capital gains, or the idea that the value of property increases faster than the value of money. Landlords who follow this logic tend to buy properties that will quickly rise in value – usually established homes in well-served areas, and very rarely new built homes. They pass over low value/low gain properties when they come up for sale, so they drop out of the rental market. For tenants, such properties becomes harder to find, and more expensive to rent.

3. High cost housing leads to more people renting for longer
As property values rise many people are priced out of home-ownership, and remain in the rental market for longer – even though they may be on good incomes. Higher-income households compete with those on low-incomes for fewer properties to rent at low cost. They usually win. There are not enough affordable properties left over for low-income households, putting pressure on our social housing system.

4. High cost housing means social housing is expensive, too
With affordable housing disappearing from the private rental market, and demand for social housing on the rise, government investment is urgently needed. But with property values so high that's more easily said than done. Social housing has been in decline in New South Wales for the last two decades. We have a system that is difficult to expand and expensive to run, but easy to cash-in because of its value. We need investment and improvement, but we’re seeing sell-offs instead…

5. So social housing is monitored and rationed…
Social housing landlords are left to do more with less. Assistance is targeted to those with the greatest need for housing, which just restricts its availability while demand continues to grow. In this declining system social housing landlords become obsessed with monitoring performance and reviewing tenants’ needs, looking for every opportunity to put their resources to maximum use. In the result, tenants must be vigilant to promote their own needs as the most acute and chronic, or they might just lose their home.

***

Unfortunately, the Social Housing in NSW discussion paper really just enforces our final point. It's yet another plea for our social housing system to do more with less, but it's difficult to see how tenant independence, and a fair and sustainable housing system, can be encouraged by turning the screws ever more tightly.

For more information on the changing shape of the private rental market - as referenced in our second point above - see this post from earlier in the year.

Friday, December 5, 2014

Sydney’s Concrete Poetry

Today's guest appearance is from Mary Sutton, a resident of Millers' Point. We are very pleased to be able to share her presentation made to the Getting Serious about Sirius event at NSW Parliament House in November. It is a long read, but well worth it- so settle in and enjoy!


Sirius is prominently located right in the middle of The Rocks, a Sydney conservation precinct. I'm pleased to speak today about the historical importance of the Sirius apartment complex and its site. I'm Mary Sutton and I've always loved the Sirius building for its;-impressive sandstone hill site,
-bold architecture,
-innovative adaptation of art, and
-collaborative design

All elements that have seamlessly combined to provide treasured homes for the residents since Sirius was constructed in 1979. 


    Sirius was built following a lengthy period of discussions and negotiations. Sirius arose out of The Rocks 1970’s Green bans, a movement prominently associated with Jack Mundey, a later patron of the Friends of the Historic Houses Trust. 

    Richard Roddewig, in his book ‘Green Bans: The Birth of Australian Environmental Politics - A Study in Public Opinion and Participation’, writes
    ‘In 1975, a major compromise was reached. Green Bans were lifted on three specific sites. The Sydney Cove Redevelopment Cove Authority, in conjunction with The Housing Commission of New South Wales, proposed to develop on one of the sites as eighty housing units, in a medium-rise, nine-story building, for affordable income persons’.

    A welcoming brochure was produced in 1979 for the newly housed residents by The Housing Commission of New South Wales. The brochure proudly noted that:
    ‘The stepped roofline and face of the building were planned to blend and harmonise in good neighbourly fashion with the general roofscape of The Rocks. Shading precast concrete sills surround bronze anti-sun glass resiliently mounted to reduced noise and glare.
    The new building has been named “Sirius” in honour of the First Fleet, HMS “Sirius” and her commander, Captain Arthur Phillip. Off the main entrance foyer is a large community room,the “Phillip Room” with generous outdoor plaza, tasteful furnishings, kitchen facilities & toilets.
    The Housing Commission’s apartment building makes a spectacular addition to the transformation and restoration of The Rocks, Sydney’s most historic neighbourhood, near where in the early days the Tank Stream, flowing into the bay, provided drinking water for the tiny new colony. Cave shelters, humpies, stone cottages~all were stuff of the Colony’s history.’

    As my fellow speaker Charles Pickett, a curator and noted architecture author has just commented
    ‘A small number of public housing towers were ground-breaking architecturally and widely influential. Some public housing complexes were so successful architecturally that they eventually became sought-after and expensive addresses. Le Corbusier’s Unite d’Habitation at Marseille, Lafayette Park, Detroit by Mies van der Rohe and London’s Barbican Estate are perhaps the best known. For much of the twentieth century the Australian housing authorities also worked at the cutting edge of housing theory and practice. Sirius is a success story of public housing design.
    Sirius is a special building – not generic in format like much public housing, Sirius shows the potential of architecture geared to its site and its residents. It deserves to continue to be a part of The Rocks. ’

    Most mornings I stroll along Gloucester Walk in The Rocks with Sirius sitting high on the prominent land of Bunkers Hill. The Sirius building always looks imposing. I think of the Sirius building as ‘concrete poetry’. 


        Photographs taken from the 1979 residents ‘welcoming brochure’ (above and below) depict the simple, but innovative, off-form concrete walls, combined with acid-etched picture windows, to produce Sirius’ distinct stabled building block appearance, reminiscent ‘of a Native American pueblo’.

          Sirius shares ‘the magnificent panorama of the harbour in all its moods, the exciting city skyline, and nestling against the Harbour Bridge approaches…..just across the water from the famed Opera House.’

          Earlier this year, I had the opportunity to showcase what some may call an ‘unpolished diamond’ to the seven members of the NSW Government's Legislative Council Housing Select Committee.
          Thank you to The Hon Paul Green [Chair] and the members of the Upper House Committee for taking the time to see first hand why the Sirius building is an architectural, heritage and mixed tenure, social housing success - a cost effective asset for Sydney - the best example I know of 'Concrete Poetry'. 

          The Sirius apartment building is named after Governor Phillip's First Fleet vessel, HMS Sirius - a vessel scarcely larger than a Manly ferry - an adventurous little vessel that traversed the world's seas with its unwilling passengers to arrive in Sydney in January 1788. 

          Sadly, this crucial supply vessel was sunk at Norfolk Island whilst landing vital food supplies and lost forever to the fledging Sydney Cove community on 19 March, 1790. George Raper, a naval officer and illustrator, recorded this melancholy event in his wonderful drawing held by the National Library of Australia and depicted in the drawing (below courtesy of National Library of Australia) you have today. 

            We are now gathered because of a second equally significant 19 March Sirius event – an announcement by the NSW Government earlier this year on that date that is writing another chapter in the history of the Sirius building. 

            What I'd like you to consider today is what makes Sirius and its site so notable. I must start by noting that the Sirius building sits prominently on land owned by the Sydney Harbour Foreshore Authority (SHFA) and part of the answer to the question, I think, lies with the vision of SHFA "to make unique places in Sydney that the world talks about". 

            ‘Does the Sirius building and its location satisfy this SHFA vision?’ you might ask. ‘Is the Sirius building and its location a ‘unique place in Sydney that the world talks about’? It seems ‘yes’.
            We have heard much today of the uniqueness of the Sirius building, particularly its architecture and concrete construction and its international recognition as such.

             There is also much historical evidence of the uniqueness of Sirius’ Bunkers Hill location, as depicted in:
            * the earliest colonial drawings of
            -John Eyre,
            -Jacob Janssen,
            -Thomas Watling,
            -Richard Read,
            -Joseph Lycett,
            -Conrad Martens, and
            -Frederick Garling,
            * Governors' Phillip, Hunter and King's official Colony papers, and
            * all the way through to the sights and sounds as you stroll along Gloucester Walk today, as many Sydney and international visitors do. 

              Richard Read ‘View from Bunkers Hill Including Dawes Battery, Fort Lachlan & South Head Lighthouse’ c.1820 Mitchell Library (above)
              Conrad Martens ‘View Sydney Cove from Bunkers Hill July 2, 1836’ Mitchell Library of NSW (above)
              From what we've just heard from some of the other speakers, there is no doubt in my mind that the Sirius building and its location are unique places in Sydney that the world talks about – something that SHFA and the residents of Sydney and Australia can quite rightly be proud of.
              The Sirius building and its location are social, tourism, educational, cultural, commercial and conservation assets for NSW.

              The world has talked of Sirius' and it location in many ways, including:
              1. The opportunistic sailor who foundered the colonial whaling industry and sometime Liverpool, Hawkesbury River and Hunter Valley farmer, Ebenezer (Eber) Bunker, is said by Governor Hunter to have ‘cultivated in a style one would expect from a sailor’, (SMH 2/3/29). Captain Bunker was granted the site on which the majority of the Sirius complex now stands, for some services to Governor King, a site that was known until at least the 1830's as Bunkers Hill. 

              Eber Bunker was a master mariner and landholder credited with being the "father of Australian whaling".  The Sydney Morning Herald of 2 March 1929 records, ‘On his vessel being moored in Port Jackson in 1791 he had an interview with Governor Phillip and astounded that gentleman by his calculations of the possible great profits for a whaling industry for the new settlement…..Within six months he had secured 600 barrels of oil to enhance the interests of the Colony ( and no doubt himself).’ 

              Bunker’s arrival in New South Wales in 1791 was as master of the ship “William and Ann" (with 185 involuntary passengers aboard), one of the whalers chartered to bring early prisoners to ‘Botany Bay’. He then went whaling in the South Seas and he later accompanied the "Lady Nelson" in the vessel "Albion" to establish the Derwent settlement in Tasmania in 1803. 

              Bunker brought his family to the Colony in the "Elizabeth" in August 1806. He became a landholder at Bunkers Hill, Liverpool, Bankstown on the Hawkesbury and the Hunter Valley. Bunker had built a stone house and stores atop Bunkers Hill (replacing his earlier wattle and daub c. early 1800’s structure) and from this high ground in The Rocks with views to the Heads, Kirribilli and the Parramatta River, Eber ran his global whaling empire.

                Watercolour Eber Bunker, c.1810. Courtesy State Library of New South Wales

                Eber Bunker’s achievements in having the world talk about him also included presenting the first West Australian black swan to the King of England and some cumbersome limited use weaponry to Hawaii's king to support a request ‘to be kind to the missionaries’, (SMH 2/3/29), together with naming Bunkers Islands in Queensland and various New Zealand islands. 

                Eber Bunker’s house stood on Gloucester Street at Bunkers Hill from 1806, later hemmed in by taller, more elegant terraces, with his house being demolished around 1912 as part of the Rocks reconstruction works (Sirius was built on the central part of this land in 1977-1979).

                2. The HMS “Sirius” association represents a tangible link to the most significant vessel associated with early migration of European people to Australia and to the “Sirius” midshipman, Captain Henry Waterhouse, a godson of Prince Henry, the younger brother of King George lll. Some short time after his arrival in the Colony, Captain Waterhouse was granted land on which the northern apartments of the present Sirius complex now sit. HMS “Sirius” was guardian of the first fleet during its epic voyage to Australia between 1787 and 1788, which brought the convicts, soldiers and sailors who became Australia’s first permanent European settlers.

                HMS “Sirius” was also the mainstay of early colonial defence in New South Wales and the primary supply and communication link with Great Britain during the first two years of the settlement (Source: Heritage Council of Australia).

                The careers of the first three governors’ of the colony of New South Wales, Arthur Phillip (1788-1792), John Hunter (1795-1800) and Philip Gidley King (1800-1806) are closely associated with the history of HMS “Sirius” as all three sailed as senior officers on board HMS Sirius during the voyage of the first fleet to New South Wales. Hunter was also Captain of HMS “Sirius” during its last ill-fated voyage in 1790, when it was totally wrecked at Norfolk Island. The loss of HMS “Sirius” at Norfolk Island on 19 March 1790 was a disaster for the fledgling colony during a period of crisis, when the settlement at Port Jackson was in danger of collapse and abandonment.

                It has been argued by some that the adaptability, ingenuity and grim determination to survive, demonstrated by the colonists at Port Jackson and Norfolk Island following this disaster, became an enduring trait of the Australian people.

                3. Wharf Owner Robert Campbell, Cumberland Place, Bunkers Hill and Waterhouse Land.

                  F Garling’s c.1840 “Sydney Cove” a view towards Bunkers Hill (center), Lower Fort St and Dawes Battery Mitchell Library
                  Captain Waterhouse left Australia permanently in 1800 and leased his grant covering part of the Sirius site to Campbell Cove's famous wharf owner Robert Campbell. In the 1830’s the town leases, grants and permissive occupancies of the past were formalized and Robert Russell produced section plans showing the owners of the land (SHFA Heritage and Conservation Register). This part of the site remained unoccupied land until the 1840’s, as did much of Bunkers Hill land surrounding Bunker’s house in current Gloucester Walk. In the 1820's Robert Campbell developed the prestigious landholding of Cumberland Place, designed by Francis Greenway, on his Bunkers Hill land, adjacent to his Waterhouse grant and nearby wealthy Dawes Point wharf and landowners. Garling captures Bunker’s Hill c.1840 above.

                  4. The Mitchell Library's benefactor, David Mitchell, was born in 1836 in Campbell’s Bunkers Hill’s elegant ‘cottage ornee’ at Cumberland Place (since demolished) and Mitchell spent his childhood there before moving with his large library to modern digs in Darlinghurst. Mitchell famously collected colonial documents associated with Bunkers Hill, (Sirius' site) and all aspects of Colonial Sydney maps, art and memorabilia to found the Mitchell Library Collection.

                  5. Australia’s first Prime Minister Edward Barton lived as a child in the 1850’s in one of the Young’s townhouses. This four storied townhouse (three stories with a basement kitchen) was one of a terrace of three houses built by Adolphus Young on land developed adjacent to Bunker's land on Gloucester Walk in the early 1840’s and may have been designed by John Verge’s protégé, John Bibb, (who also built the nearby Mariners Church). The imposing terrace of three homes survived until the early 1900's Rocks reconstruction project. This land forms part of the Sirius site today.

                  6. Innovative concrete technology and an early example of Australian public town planning can still be readily viewed as the Federal Electrical Company (Ajax Building) on the corner of Gloucester Walk and George Street – also a part of the “Sirius” Captain Waterhouse's land grant. This concrete technology and the Arts and Craft movement design of the building, was developed by the recently formed New South Wales Housing Board’s architect, William Henry Foggitt, in association with the Public Works Department, for The Rocks reconstruction works during the period 1912-15. Occupiers included Young and Stewart cordial manufacturers.

                  In January 1915, the Sydney Morning Herald reported this was the first building in Sydney to be constructed entirely of reinforced concrete. The building was a warehouse, with an office building on the top of the southern end of the building. Several bays of the building’s southern end and the office building were demolished when the Sirius complex was built. This inspirational concrete technology was later used on Millers Point’s High Street flats. Concrete's innovating impact was a feature of the inspirational Sirius building constructed by Anderson & Lloyd, described as a ‘bold and exceptional experiment’ in ‘Concrete’s Rearview’.


                    7. Sirius now sits on the location of a major employer in the Rocks, Rowans Bond and The Federal Electrical Company, (Ajax Building) that utilised modern loading and storage technology. 

                    8. Sirius was the 1986 setting for the movie of Ruth Park's popular novel ‘Playing Beatie Bow’.

                    Sirius in 2014- the continuing conversation
                    The most recent example of the world talking of the Sirius building, and its rare and important position in Sydney, was in response to the NSW Government's 19 March 2014 announcement of the sale of the Sirius building, which was reported in local and international press. 

                    People have also commented recently about the Select Committee's hard won recommendation, I think directed at the Sirius building, that the NSW Government, when selling multi-unit properties in the Sydney area, include in the contract for sale, a requirement that at least 10 per cent of all dwellings on that site be allocated as social, public and affordable housing.

                    Each unique aspect I've cited has stamped its mark on the Sirius building and its location as a rare and important place talked about in the world's press and by visitors. For me, I'm attracted to the description of the Sirius building as simply "concrete poetry".

                    I imagine that SHFA and all of Sydney must regard the interest in the Sirius building and its site, and modern day Bunkers Hill including Gloucester Walk, as an inspired and visionary success.
                    In concluding, you have heard much today about the Sirius building and its location and I invite you to walk around the Rocks and take time to ponder all that's been said.

                    Consider the "concrete poetry" of the Sirius building, its location and its history. Its connection to Sydney's past and the value of its contribution to the present and what may be its future. 

                    If you would like to continue the conversation, the Minister for Heritage, the Hon. Rob Stokes address is 52 Martin Place, Sydney 2000 and I'm sure he'd be interested in hearing your view.
                    Thank you for your time.

                      Photograph of Sirius Level 8 Balcony by Mary Sutton ~ March 12 2014 Site Visit with the Legislative Council Housing Select Committee

                      Thursday, December 4, 2014

                      Happy 20th birthday, TAASs


                      Twenty years ago this week the first generalist Tenants Advice and Advocacy Services commenced operations. This was the start of the State-wide network of local TAASs that continues to inform, advise and advocate for tenants throughout New South Wales today. We estimate that more than half a million tenants have gotten phone advice and other assistance from TAASs over that time.



                      NSW Fair Trading Minister Matthew Mason-Cox has kindly sent a warm note of congratulations on the anniversary:

                      NSW Fair Trading is proud of its association with the Tenancy Advice and Advocacy Service and the work it is doing to empower tenants. To provide a continuous community service for 20 years is a significant milestone and I congratulate the services and their staff for their continued dedication to ensuring all tenants are able to exercise their rights.

                      Now it's over to legendary tenants advocate and TU Older Tenants Project Officer, Dr Robert Mowbray, to tell the story of how the TAASs came to be.

                       *

                      Let’s jump back in time and see the circumstances around our birth. The earliest reference to a tenant organisation in New South Wales is the Rent Payers Association. They campaigned for fair rent legislation in the period 1910 to 1916 and also gave advice to tenants: ‘If you are in trouble about rent, ring up Telephone No. Paddington 752’.

                      In 1975 the Australian Government Commission of Inquiry into Poverty identified seven main areas in which tenants required assistance. The first was ‘access to informed advice on their legal position and on the rental market generally, both before and after entering into a residential lease’. The Poverty Inquiry was a fillip to the emergence of Tenants’ Unions in a number of states. So, in 1976 the Tenants’ Union of NSW was established.  In its early years it relied heavily on active members, social work students on placement, resources provided by South Sydney Community Aid (a neighbourhood centre in Redfern), and was assisted by a few young lawyers. It built up a network of volunteer tenancy advisors across a number of locations to provide information to tenants. At the same time it campaigned for fully funded services. 

                      In the 1980s, the Tenants’ Union was successful in lobbying the NSW State Labor Government's Housing Minister, Frank Walker, for the funding of the Housing Information and Tenancy Services (HITS) Program. This commenced 1 January 1986, and provided a network of nineteen Tenants’ Advice and Housing Referral Services (TAHRS) across New South Wales. The program, however, was short lived. In December 1988, following a change in government, the Coalition’s Minister for Housing, Joe Schipp, terminated the program – against the recommendations of his senior management.

                      Following cancellation of the HITS Program there was a constant pressure on the State Government for its reintroduction from a broad range of community groups across the State. The Uniting Church became actively involved in the campaign through its Board for Social Responsibility and it funded a tenants’ service in Western Sydney. Redfern Legal Centre also provided a tenants’ service. Part-time services were maintained by the local councils of North Sydney, Randwick and Waverley. Community groups maintained pressure over a period of years. Consultations about a State Plan for the Department of Housing in 1990, 1991 and 1992 were held at venues in all Department regions across New South Wales, and these consultations unanimously called for the reintroduction of funding for independent tenants’ services. Community groups made submissions to John Mant’s ‘Inquiry into Certain Customer Service Bodies under the Responsibility of the Minister for Housing’. His 1993 report was supportive.

                      By the end of November 1993, the NSW State Coalition Government had a new Minister for Housing, Robert Webster. The Minister called a meeting with representatives of the community organisations that had been lobbying for refunding of tenants’ services. At this meeting he stated that the Government would again fund community-based tenants’ services. He advised that he would set up a working party to examine how a Tenants Advice and Advocacy Program (TAAP) might be funded. Subsequently, the Department of Housing contracted the Tenants’ Union to resource a network of generalist services ... and the first generalist TAAS were funded from 1 December 1994. Specialist services for residents of residential parks and for Aboriginal tenants were funded in late 1995.

                      So, happy 20th birthday to all those TAASs out there!


                      For a glimpse at the enormous amount of help provided and lives changed by the TAASs, see our posts under the label ‘my3cents’. For the case for greater funding for the TAASs and more advice and advocacy for tenants, see the TU's policy and law reform page

                      Tuesday, December 2, 2014

                      The private rental market: awful numbers

                      Some numbers, from the 2011 Census.


                      • Households privately renting in New South Wales: 574 183
                      • Low-income households (ie bottom 40 per cent of incomes) privately renting in New South Wales: 219 202
                      • Low-income households paying more than 30 per cent of their incomes in rent (ie in 'housing stress'): 171 563
                      • Low-income households paying more than 50 per cent of their incomes in rent (ie in 'housing crisis'): 94 959

                       In other words:
                      • 78 per cent of low-income private renters are in housing stress; 43 per cent are in housing crisis
                      • of all households renting privately, 30 per cent are low-income households in housing stress; one in six are low-income households in housing crisis.

                      We presented these numbers in our recent discussion of the social housing discussion paper, but they deserve a post of their own.

                      Also noteworthy is the fact that these numbers are significantly higher than the National Housing Supply Council's figures for affordability problems in private rental housing (66 per cent in stress, 25 per cent in crisis) – figures we've referred to in previous posts and submissions. The new figures come from the ABS on special request by the TU, and we prefer them to the NHSC figures. We've counted as 'private renters' only households who are renting through a real estate agent or a person not in the same household; we understand the NHSC included in its count of 'private renters' households in community housing, which will bring down the rates of stress and crisis.

                      Looking at the numbers for the private rental market properly defined, we see a private rental market that fails appallingly to serve the needs of low-income households for affordable housing.

                      And, we might add, it fails expensively. For 15 years, private landlords have been running large and increasing losses ($1.2 billion in New South Wales in 20111-12, the most recent figures), primarily because of their debts. These losses are subsidised by the Australian Government through its generous tax treatment of negative gearing (we estimate about $360 million for New South Wales landlords in 2011-12, going by Grattan Institute's numbers).


                      Sunday, November 30, 2014

                      Happy 140th birthday, Winston Churchill

                      Three cheers for the Rt Hon Sir Winston Leonard Spencer-Churchill, KG, OM, CH, TD, DL, FRS, RA, on his 140th birthday.


                      Regardless of anything else he did, Churchill's on our birthday card list because of his advocacy for land tax.

                      Here's an excerpt from his cracking 1909 speech on the subject:

                      Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains -- and all the while the landlord sits still. Every one of those improvements is effected by the labor and cost of other people and the taxpayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is enhanced. He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived.

                      Those who love enterprise, take note!

                      Thursday, November 27, 2014

                      'No Land Tax' does not know land tax: part 2

                      We discussed the other day the merits of a broad-based land tax, and how the 'No Land Tax' (NLT) campaign gets things wrong. Today we'll consider a few more claims made by NLT, specifically in relation to the effect of land tax on housing – both rental and owner-occupied – and how these claims too are wrong: completely, upside-down-and-back-to-front, wrong.


                      Rental housing 

                      NLT claims that 'Land Tax raises rents – making it harder for families and small businesses to make ends meet'. 
                      Wrong. Land tax does not increase the rents tenants pay; assuming normal market forces are at work, landlords cannot pass land tax on to tenants in the form of higher rents. In fact, if there was no land tax, rents would probably be higher .
                       
                      Here's why. Think of landlords as vendors of a service (shelter). The ability of a vendor to pass on the cost of a tax liability to a consumer depends on the vendor being able to withhold the service from the market, and hold out for a higher price that covers the cost. Their ability to hold out depends on how that tax liability applies. 
                       
                      If the vendor is liable to pay the tax only if and when they've made a sale to the consumer, this tends to allow the vendor to hold out for the higher price. This is how a sales tax, or the GST, applies, so a vendor can generally pass on these taxes. 
                       
                      But with land tax, it's different. 
                       
                      The liability to pay land tax cannot be put off until the vendor has found a consumer willing to pay the vendor's price. Instead, land tax is due every year, regardless of whether the property is let or what price it is let for. This tends to restrain the vendor from holding out for the higher price, and instead encourage them to come to meet the market.
                       
                      (An aside: this assumes, as we said, that normal market forces are at work. We know that during a tenancy, the operation of market forces is inhibited by the high cost to tenants of moving, so landlords may be able to extract a higher rent than they would achieve on the market. This problem should be dealt with by the Residential Tenancies Act's provisions about excessive rent increases. We encourage tenants to use these provisions, especially where the landlord claims that the increase is the result of land tax. These provisions are underused, and should be reformed to make them fairer and more useable by tenants.)  

                      To reinforce the point about land tax and rents, let's look at the issue the other way. Say NLT had their way and there was no land tax. Would landlords pass on this saving to tenants? No – they've gotten the rent that the market will bear and there's no force operating on them to reduce it. On the contrary, if there was no land tax, we might expect more landlords to do the lazy thing and have their properties sit empty. The result would be a withdrawal of supply from the rental market and hence an increase in tenants' rents.   
                       
                      Owner-occupied housing 
                      NLT claims that 'Land Tax hurts first homebuyers by making new housing more expensive to build'.
                      Wrong again. In fact, land tax, properly applied, reduces the price of land and makes new housing more affordable.

                      That's because land tax discourages land owners from holding land in idle speculation, and instead encourages them to put land to its most valuable use, or sell it. Land tax, therefore, helps bring land to the market.

                      The problem is that our present system of land tax exempts land used for owner-occupied housing and primary production, so speculative holding still takes place under these uses.

                      For example, a land owner might own a big block of land that would do nicely for some new houses. If the owner has their own house on the big block, or puts a few cows on it (or bees!), there's no land tax payable, and the owner can sit back and watch the value of the block go up as the demand for housing rises. If, on the other hand, land tax did apply, the owner would be spurred to get on with doing the subdivision and selling the lots to would-be home builders.

                      As we say, NLT's claims about land tax and housing are completely wrong. Properly applied, land tax helps make housing – rental and owner-occupied – more affordable. The thing to do is to reform our present system of land tax to fully realise its beneficial potential, particularly by broadening the base. 

                      Tuesday, November 25, 2014

                      'No Land Tax' do not know land tax

                      The Tenants' Union is for land tax. The great problem is that New South Wales (like other Australian States and Territories) doesn't do it right. In particular, more than 60 per cent of the tax base (that is, land used for owner-occupied housing, and land under primary production) is exempt from the tax! The key thing to do is broaden the base, so that all the benefits of this sound manner of taxation can be enjoyed by the State and citizens alike.

                      We've just come across another outfit, 'No Land Tax' (hereafter NLT), who are aggrieved that there is any land tax at all.

                      NLT claims to represent 'mum and dad investors saving for their retirement – and working to improve the lives of their families'. In fact, 'mums and dads' would do better with a broad-based land tax that taxed the unearned gains of landowners, and reduced the tax burden on earnings from work and savings.

                      We're going to try to talk them around. NLT presents some its members* – presumably the most personable and endearing of the bunch – with their own personal messages about land tax. We'll try to set them straight.

                      Here's Gordon Brown, of Balmain:


                      Gordon says: 'Some of us are paying more in Land Tax than we are receiving in rent'.

                      Gordon, land tax is giving you a hint: you are not using that land of yours as productively as you could. Maybe you've let the building on it get run down; maybe it's ripe for multi-unit redevelopment, or a change to some other more valuable use. Think about doing something more with your land, Gordon – or sell it to someone who will.

                      Here's Stephen Perri, of Randwick:


                      Stephen says: 'Property investors are being forced out of NSW into lower Land Tax States like Queensland and Victoria. Less investment means fewer jobs, and that's bad for NSW'.

                      Stephen, c'mon. Over the last year or two, property 'investment' – more accurately, speculation – in New South Wales has boomed. In particular, residential landlords have been borrowing more than ever, and their share of all borrowing for housing has never been higher. This has inflated house prices and priced out many would-be purchasers – including some would-be speculators, who have gone to other States for lower-priced gambling opportunities. 

                      Land tax generally discourages speculation, but our system exempts too much land for this discouragement to work as well as it should.

                      As for jobs – land tax encourages job creation.




                       
                      Simply owning land does not create jobs – not a single one. A person who owns a block of land and does nothing with it creates nothing: no jobs, no valuable goods and services. 
                       
                      It is when land is put to use that things get created; that is, when the owner puts a house on the block, and creates the service of shelter; or puts up a factory or office, and creates valuable widgets or widget-servicing. Land tax encourages owners to put land to use, because the landowner needs to get some money to pay the tax. So, land tax fosters jobs.  
                       
                      Now let's turn it around. Say land tax is removed. The owner might still put their land to use in the creation valuable goods and services from which they might profit... but there's always a risk that an enterprise won't succeed. So why not just do the easy thing and withhold the land from use, and just leave it sitting idle? As long as other people keep working and need land for shelter, business etc, the value of the idle land will rise... and if the owner owns heaps of land, they can withhold heaps from use, and push its value even higher – at the expense of workers and enterprise. So no land tax would kill jobs. 
                       

                      Here's Thomas Lee, of Eastwood:


                      Thomas says: 'It's inevitable that the GST will be increased. And when that happens, Land Tax must be abolished.'

                      So Thomas wants everyone to pay more GST, so that he doesn't have to pay tax on unearned increases in the value of his land. Enough said.

                      Finally, here's Rebecca Schembri, of Mosman:


                      Rebecca says: 'The NSW state election will be held on 28 March 2015 – and the outcome will be close. The votes of 150 000 Land Tax payers and our families could decide the outcome'.

                      Rebecca, you'd do better by campaigning for broadening the tax base, rather than eliminating it. With a broad-based land tax, we could get rid other taxes that really do hurt people: payroll tax, which really is a tax on jobs, and stamp duty, which for most families is effectively a fine for moving house. We could also start to think about shifting some of the tax burden on the earned rewards of labour and enterprise onto the unearned rewards of increasing land values.

                      It's not too late, NLT: get to really know land tax, ditch your present misconceived campaign, and support reforms to broaden the base!

                      * UPDATE – 23 January 2015: for more about NLT's 'Gordon', 'Stephen, 'Thomas' and 'Rebecca', see this blog post.

                      Friday, November 21, 2014

                      Getting Serious about Sirius

                      A guest appearance today from our Executive Officer, Julie Foreman on the importance of the Sirius apartments in Sydney's heritage.

                      “A landmark building”

                      “Housing is more than real estate”

                      “Cities should not be enclaves of the rich”

                      These are just a few comments from the speakers of a forum I attended last week. Held at the NSW Parliament, the forum shone a light on the social and historical importance of the Sirius building. Speakers reflected on important themes – many of which have been left out of the Government’s analysis and policy development regarding the Millers Point sell off.

                      Sirius apartments, watercolour and ink on board. Powerhouse Museum collection 2013/36/1

                      Panel members at the forum were the architect of the Sirius building, Tao Gofers, the Chair of Urban Planning and Policy at University of Sydney Professor Peter Phibbs, the Director of City Futures at University of NSW Professor Bill Randolph, curator and architecture writer Charlie Pickett, and Millers Point resident Mary Sutton.

                      They led an insightful discussion about the importance, and the history of social and affordable housing in NSW. I learnt much, including the fact that the compact kitchen we enjoy in apartments today was the result of the design and development of public housing in Holland in the 1920’s!

                      We heard about the iconic importance of Sirius - purpose built by the then Housing Commission. Tao Gofers, the architect talked with enthusiasm of breaking new ground with the design, which had input from the Resident Action Group and the Government.

                      The design is practical and beautiful; with murals in the entrance inspired by Spanish cave paintings, a photographic mural of the city skyline captured in 1978 hangs in the community room and pictures of the Harbour Bridge in various stages of completion adorn the walls of each of the floors. The roof visible to many via the Harbour Bridge became an important part of the design with roof top gardens.

                      Professor Peter Phibbs was the peer reviewer for the social impact assessment for the Millers Point sales. He expressed his astonishment that the Sirius building which was not included in the social impact study was then included in the sale proposal! No subsequent social impact of the sale of Sirius has been undertaken.

                      Peter noted that Sirius did not raise the same repair and maintenance issues as other homes in Millers Point. In fact it was a shining example of a number of Government policy directions – aging in place, need for smaller social housing stock and social mix.

                      He described the sales as a ‘clumsy and cruel’ policy particularly because of its impact on elderly tenants and because there are other financially viable alternatives. Options such as:
                      · building new purpose built homes for Millers Point residents or
                      · relocating residents from Millers Point to Sirius to maintain their social connections or
                      · slowing the sale process to allow residents to age in place or conducting a partial sale and using the funds to facilitate the sustainable upkeep of the remaining dwellings. [At least two independent, expert reports have identified financial viable alternatives]

                      Professor Bill Randolph broadened the debate to discuss the impact of the sale on all of Sydney and put it in an international context. His research demonstrates that Sydney is polarising, both socially and economically. Moving away from the more egalitarian city that existed 30 years ago, inner Sydney is set to become an enclave for the rich. Bill acknowledged that the real estate boom has only assisted a few and that Treasury today views public housing as a financial asset to be exploited rather than a social asset. You would have to agree with him that that seeing a city as “purely as real estate shows no imagination or maturity”. Sirius is a social asset paid for by all of us and belonging to all of us.

                      This is certainly how my father thought. As a child he would bring the family in by train from Wiley Park to enjoy the Rocks and Millers Point and proudly say to his children that this belonged to all of us. He didn’t feel jealous and he didn’t mind contributing taxes from his meagre wages to create a better city for all.

                      Bill also highlighted how the Treasury approach contrasted with trends in European and American cities. New York has inclusionary zoning, for example. European countries are expanding access to affordable housing in their cities.

                      Bill stated that the Millers Point and Sirius policy was another brick in the wall of social divide, noting that a disparate group - President Obama, Pope Frances and the head of the IMF cautioned against such policies, that encouraged social exclusion and led to further social and economic costs.

                      Charles Pickett confirmed the importance of Sirius in Australian architecture history and hailed its success as a public housing building. In the early 1900s the government built model workers public housing in the area - low rise and terraces. Critics at the time said it would become slums! Charles concluded that Sirius is the last major piece of architecture built in this tradition and must be retained.

                      Mary Sutton gave a detailed history of the building which we hope to soon bring to you on the blog.

                      If like me you value our social history and want to live in a socially inclusive city let the Minister for Heritage know and ask him to save our sirius.

                      The Hon. Rob Stokes, MP
                      Minister for Heritage
                      52 Martin Place
                      SYDNEY 2000
                      office@stokes.minister.nsw.gov.au

                      To become a friend and show your support for the community of Millers Point email john@piperpress.com.au with your name and contact details with 'FRIENDS" in the subject line.

                      Thursday, November 20, 2014

                      'Social Housing in NSW' discussion paper... and what's not up for discussion

                      The NSW State Government has produced a discussion paper on the future of social housing in New South Wales. Its major theme is 'providing opportunity and pathways for client independence', by which it means 'more actively supporting clients' – particularly working age tenants, and young people – to 'transition out of social housing'.

                      As for what they would transition into... that would be private rental housing, though the paper has hardly a word to say about it.


                      This is the biggest gap in the discussion paper, and in current discussions about social housing generally. Much gets said about the failings of the social housing system; not nearly enough about the failings of the private housing system, and private rental in particular.

                      But you really cannot have a proper conversation about social housing – much less actually do any of the things the State Government says it wants to do to social housing – without also saying and doing something about private rental. 

                      Private rental fails low-income households (ie those in the bottom 40 per cent of the population by income). The 2011 Census counted 219 202 low-income households privately renting in New South Wales. Of these households:
                      • 78 per cent – 171 563 households – were paying more than 30 per cent of their income in rent; that is, they were in 'housing stress';
                      • 43 per cent – 94 959 households – were paying more than 50 per cent of their income in rent; that is, they were in 'housing crisis'.

                      Research by Terry Burke and Simon Pinnegar tells us a bit more about experience of low-income households in private rental. Their survey found:
                      • 86 per cent 'worry constantly about [their] financial situation'
                      • 84 per cent 'don't have enough money set aside to meet unexpected expenses'
                      • 75 per cent experience a 'constant struggle to pay regular bills'
                      • 61 per cent say 'costs put stress on household relationships'
                      • 42 per cent say that their 'children have missed out on school activities such as excursions'
                      • 26 per cent say that their 'family has sometimes gone without meals'.
                      Focusing on those in housing stress, they report these additional effects:
                      • 35 per cent say that their 'children have had to go without adequate health and/or dental care'
                      • 32 per cent 'sold or pawned personal possessions'
                      • 28 per cent 'approached a welfare/community/counselling agency for assistance'
                      These rates are between 50 per cent and 100 per cent higher than the rates for households not in housing stress.

                      That's just how private rental fails on cost; it also fails on security (about one in six tenancies end at the instigation of the landlord, and everyone is subject to termination without grounds at the end of their fixed term, or on three months notice otherwise); and it fails on consumer protection (according to our own survey, 79 per cent of private renters have put up with a problem, rather than assert their rights, because they feared adverse consequences).

                      It is simply unreal to expect appreciable numbers of households in social housing to happily 'transition' into this. And we know this because Housing NSW already operates such a policy (it reviews tenancies for continuing eligibility at two, five or ten year periods), and has done for seven years, and over this time the rate of exits from public housing has declined. This policy has made matters worse for public housing tenants (who stay poor to stay housed) and for those on the waiting list (who are stuck longer in private rental, or homelessness).

                      If the NSW State Government really wants to help those on the waiting list, and make 'transitioning' out of social housing a realistic prospect, it must discuss reforming the private rental market too. It should also be open to discussing increased funding for social housing, so that there's more of it. Unfortunately, this too is not up for discussion in the paper, which is predicated on funding 'within the existing envelope'.

                      At a briefing on the discussion paper, FACS Minister Gabrielle Upton was asked about the lack of reference to the private rental market and its problems, and she replied that the policy levers for reform were not within her grasp, but instead with others in the State Government and, even more so, the Federal Government, and that rather than wait for any action from them, she just had to get on with it. Fair point. But if the social housing policy that follows from the present discussion does not consider the reality of the private rental market, and how it fails low-income households, and how other government policies have shaped it that way, any initiatives for 'opportunities and pathways' out of social housing will only raise false hopes, or real fears.
                       

                      Tuesday, November 11, 2014

                      Long fixed terms are not the solution

                      Domain ran an article the other day about 'long leases' – or to be precise, residential tenancy agreements with long fixed terms. People often suggest long fixed terms as a way of addressing the insecurity of renting, but we don't think they're the solution.


                      First, let's get clear on what fixed terms do.

                      Fixed terms are a hangover from the common law, which said every lease had to be for a term – and if it wasn't for a term, it wasn't a lease (resulting in lots of fun case law about what is a term... is 'until the end of the peanut crop' definite enough to be a term?). But never mind about that – it's a hangover, and the Residential Tenancies Act 2010 says a fixed term is not essential: you can have a residential tenancy agreement with a fixed term, or without.

                      Under the Act, a fixed term protects you (the tenant) from termination without grounds and termination on the ground of sale requiring vacant possession. It also protects from rent increases, but that protection is not absolute: you can get hit with a rent increase during a fixed term if the agreement has an additional term providing for it.

                      These protections are why people think long fixed terms are a good idea. But there's another side to a fixed term: during one, you cannot terminate without grounds either.

                      With those things in mind, let's consider the structure of our rental market. It is dominated by small-holding landlords: most (73 per cent) own a single property only. Most are in it as speculators, in pursuit of capital gains (for 66 per cent of them, their rental income doesn't cover the cost of owning). Their best chance for capital gains lies in being able to sell the property not just to other landlords, but to owner-occupiers too (because owner-occupiers also speculate in housing). And to do that, they have to be in a position to deliver the property to its new owner with vacant possession – that is, without you.

                      For those reasons, Australia's small-holding speculator landlords don't – and won't – voluntarily tie up their properties in long fixed terms.

                      And there's another implication of the structure of the market. These small-holding speculator landlords are amateurs (they prefer the term 'mums and dads'). Most would try to conduct themselves reasonably, but they don't trade on their reputations and there's not a lot of market discipline operating on them. When you apply for a tenancy, you will most likely have no idea who the landlord is, or how good or bad they may be. They could be a nightmare... and for that reason, tying yourself up in a long fixed term isn't a good idea for you, either.

                      Long fixed terms are an attempt at a legal fix that doesn't really fit with the structure of our rental market. To really make renting more secure, we need to address both the legal and structural causes of insecurity.

                      In terms of structure, we need a different type of landlord. Instead of small-holding amateur speculators, looking for the best chance to realise capital gains, we need the sort of landlord who is instead more in interested in receiving an ongoing trickle of cash, in the form of rents... from a multitude of properties, so that a problem in a single tenancy doesn't upset the whole enterprise. In other words, an institutional landlord. This sort of landlord would be a lot better disposed towards long-term tenancies... and because of their scale, they might trade on their reputations and be concerned about their customer relations, and you might be more disposed to consider a long-term tenancy with them too.

                      That sort of structural reform is going to take some time. Meanwhile, we can improve security in terms of the law, with reforms that are doable considering the present structure. Here's what we should do:
                      • Legislate a list of reasonable grounds for termination by landlords. The RT Act already has some (for example, 'failure to pay rent' and 'sale requiring vacant possession'), to we'd add:
                        • 'landlord or family member requires premises for own residence', 
                        • 'employment-related tenancy and employment is terminated',
                        • 'premises to undergo renovation requiring vacant possession, demolition or change of use'.
                      • Abolish termination by landlords without grounds (including termination at the end of a fixed term). This wouldn't cramp the style of landlords who operate reasonably (they'd use termination notices with grounds, as above), but it would give all tenants more peace of mind and assurance.
                      • Limit rent increases to not more than once in 12 months.

                      Monday, November 10, 2014

                      Proposed Redfern public housing criminal record ban won't work

                      The Daily Telegraph reports today that police have proposed to the NSW State Government that applicants for social housing should be banned from being allocated tenancies in Redfern and Waterloo if they've been previously convicted of drug offences.

                      Redfern Local Area Command Superintendent Luke Freudenstein is quoted:

                      'I know everyone's got to have a place to live... but they're going back into an environment where they fall back into bad habits and it's not doing justice for their rehabilitation.'

                      For that very reason, we think the proposal should be rejected, because it won't work.

                      As the Superintendent says, everyone's got to have a place to live. If you make a person ineligible for a sizeable part of the social housing system in Sydney, they will have wait longer for another offer of social housing... and while they wait, they'll still got to live somewhere. Most likely, they'll be transient, moving between family, friends and associates. There's every prospect that they'll be back in same environment, at risk of the same 'bad habits', but they'll be there as a transient homeless person.


                      Research by Eileen Baldry and her colleagues at UNSW shows that for people leaving prison, having only transient accommodation is one of the strongest risk factors for their being imprisoned again. They conclude:


                      Chaotic living arrangements made doing anything about drug rehabilitation, employment or social connections virtually impossible for the study participants [ie ex-prisoners]. A majority of these transient participants was re-incarcerated by nine months post-release.

                      To do justice for rehabilitation of ex-drug offenders, the State Government should focus on providing secure housing and helpful support, not denying both.  

                      Friday, November 7, 2014

                      Some thoughts on mutual obligation

                      In an interesting follow-on from our recent discussion on underemployment and housing insecurity, The Monthly magazine has published an excellent article about Australia's contradictory approach to mutual obligation for welfare recipients. It's recommended reading on the Brown Couch - you can find the online version of the article at this link here. It's a long read, but it really is worth giving it some time over the weekend.

                      Much obliged

                      In a nutshell, the article explores our expectations of those who receive government assistance at each extreme of the welfare spectrum - individuals receiving some level of income support at one end, and multinational corporations structured for maximum (sanctioned) tax avoidance at the other.

                      Somewhere along that spectrum - towards the end where tax avoidance happens - we might also add landlords. Landlords who lost nearly $1.2billion in a single year, as part of their tax avoidance strategies. Landlords who have been wearing these losses in exchange for eye-watering capital gains. Landlords who will tell you that they'll stop investing in housing if you even hint at making life a little bit better for tenants...

                      The social responsibility that comes with being a landlord is something we've occasionally talked about here on the Brown Couch. We think it's far too easily overlooked. It's worth keeping that in mind, as you're scrolling through The Monthly's article this weekend.

                      Go on - give it a read.


                      Tuesday, November 4, 2014

                      Underemployment and housing insecurity

                      We were recently discussing unemployment and underemployment, and the awful waste it represents. Not having adequate work also represents a threat to a person's housing, and some new AHURI research puts some numbers on this.



                      The research focuses on underemployment (that is, where a person is employed less than full-time, and would prefer to work more hours) and notable findings include:
                      • Of households comprising a single earner who is underemployed, almost half (48.2 per cent) are in private rental (by contrast, 25.6 per cent of all households are in private rental). Of these households:
                        • 28 per cent fell into rent arrears sometime in the previous year (by contrast, 16.8 per cent of adequately employed single earners had been in arrears);
                        • 37.1 per cent were 'at risk' of arrears (by contrast, 13.9 per cent of adequately employed single earners were at risk)*;
                        • 48.9 per cent had difficulty paying other bills in the previous year (by contrast, 31 per cent of adequately employed single earners had difficulty);
                        • and the median rent paid by these households increased in real terms by 14 per cent over the period 2001-2009 (contrast the real increase of 17.5 per cent paid by adequately employed single earners). 
                      • Of households comprising multiple earners, at least one of whom is underemployed, 28.3 per cent are in private rental. Of these households:
                        •  22.6 per cent fell into rent arrears sometime in the previous year (by contrast, 11.6 per cent of adequately employed multiple earner households had been in arrears);
                        • 16.2 per cent were 'at risk' of arrears (by contrast, eight per cent of adequately employed multiple earner households were at risk);
                        • 37.9 per cent had difficulty paying other bills in the previous year (by contrast, 22.3 per cent of adequately employed multiple earner households had difficulty);
                        • and the median rent paid by these households increased in real terms by an awful 54.7 per cent over the period 2001-2009 (contrast the real increase of 26.48 per cent paid by adequately employed multiple earner households)
                      The researchers also find that underemployment is 'scarring': the odds of an adequately employed person being 'at risk' of arrears are 1.4 times higher if they were underemployed the previous year.

                      Turning the numbers around, we also find that of private renter households with members in the labour force (counting together multiple earners and single earners):
                      • 76.35 per cent have all members adequately employed;
                      • 13.95 per cent have at least one member underemployed;
                      • 8.7 per cent have at least one member unemployed.
                        

                      * Assessed 'at risk' because they reported they were paying more than 30 per cent of income in rent, would have 'extreme difficulty in raising $2000-$3000 at a time of need, and described themselves as 'just getting by', 'poor' or 'very poor'. 

                      Thursday, October 30, 2014

                      Tenancy Culture Studies: I'm interested in apathy

                      The Institute of Tenancy Culture Studies returns with a quick look at TISM's song "I'm interested in apathy". There's a clever irony in the title (perhaps you spotted it?) which really gives us something to think about.


                      In a couple of recent-ish articles about Australia's housing system, and the way it leaves first home buyers (aka tenants) behind, economist Saul Eslake has said:
                      "I'm surprised there isn't more anger among young people about the way in which the housing system has been rigged against them by their parents" (SMH 5/4/14)
                      and
                      "In some ways I'm surprised there isn't more anger among young people about how the housing market has advantaged older people" (AFR 27/9/14)
                      It's something that occurs to us as well. But are we really as relaxed and comfortable as all that?

                      Does Australia's housing system make you angry? Does it make you burn with resentment for those wealthy enough to buy, or at least canny enough to buy before it became impossible? Are you merely resigned to a new reality, where owning a home is little more than an aspirational flight-of-fancy for people on extravagant incomes?

                      Or are you simply not concerned?

                      In a survey we conducted earlier in the year, we asked tenants in New South Wales to tell us why they rent. 57% of our respondents said it was because they couldn't afford to buy. By comparison, 15% said they were happy to rent because it was cheaper than buying where they wanted to live.

                      We also asked tenants if they were satisfied with their current housing, and 68% said they were. In the same survey, 92% said they'd worry about finding another place to rent if the landlord asked them to move.

                      ... and worry they should. Because in New South Wales your landlord can ask you to move without giving you any reason at all.

                      And if that doesn't make you just a little bit angry, then we don't know what will.