REPORT ON HOUSING ASSISTANCE

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CHAPTER 4 - PRIVATE RENTAL

4.1 As mentioned in Chapter 2 of this report, about 21 per cent of Australians rent privately. This percentage has remained the same for the past three decades. The Australian Bureau of Statistics (ABS), Australian Housing Survey 1994, found that the level of private renting was evenly spread across all States and Territories (between 18 per cent and 21 per cent) with the exception of South Australia, which had a smaller percentage of private renters at 15.8 per cent and Queensland the bigger percentage at 24.1 per cent. [1]

4.2 According to further ABS figures, the private rental market has grown by about 34,600 units per year in the four years to 1994. [2] The Committee could find no evidence of general supply problems in the private market. However, it received a substantial number of submissions pointing to the failure of the private rental market to provide `affordable housing' for low income earners. [3] As discussed below, this appears to be a greater problem in some regions, particularly in the two major cities where rents tend to be very high. The evidence to this inquiry also suggests that, in spite of receiving rent assistance, a substantial number of low income tenants still experience housing affordability problems in that they pay more than 30 per cent of their income in rent (see paragraph 4.9 below).

Rent Assistance

4.3 The Rent Assistance program has its origins in a supplementary payment made since 1958 to aged, invalid and widow pensioners. The program has expanded considerably in the last decade. The Commonwealth is currently spending $1.6 billion per annum on Rent Assistance (RA) payments. This represents more than a seven-fold increase on the $225 million spent on RA in 198485. The increased spending on Rent Assistance is the result of both increases in rental costs and a deliberate policy on the part of the government to broaden the eligibility criteria for RA. Key decisions which led to the increase in rent assistance expenditure include:

• the extension of rent assistance to unemployment beneficiaries in 1986;
• the extension of rent assistance to low income working families (those eligible for additional family allowance) in 1987;
• increases to the maximum rates of rent assistance in 1982, 1984 1989, 1990; and
• indexation of maximum rates of assistance in 1990. [4]

4.4 The increase in expenditure for rent assistance has led to a significant change in the balance of Commonwealth assistance for housing. While expenditure on rent assistance has increased dramatically, expenditure through the CSHA and related payments declined from $1122.5 million in 1985-86 to $1067.4 million in 1995-96 As discussed in Chapter 3 of this report, this change in emphasis has been the subject of grave concern to the majority of those making submissions to this inquiry. As a result, rent assistance has replaced the CSHA as the Commonwealth's major program of housing assistance for low income renters. Currently, the total number of recipients is about 935, 000 individuals, some 41, 500 of whom are nursing home residents.

4.5 In order to be eligible for Rent Assistance, a person must either be receiving a social security pension, benefit, payment or allowance and be paying more than a threshold amount for rent (the amount includes service and maintenance fees if they are in a nursing home or retirement village). The threshold amount is equivalent to between 20 and 30 per cent of a person's DSS entitlement. When the threshold is reached, RA is paid at a rate of 75 cents in the dollar of rent paid above the threshold up to a maximum amount. It is felt that if RA were paid at the dollar for dollar rate, landlords may be more tempted to put up rents. The maximum amount of RA payable varies according to marital status and the number of children in the family.

4.6 The aim of the rent assistance program is to ease the financial stress experienced by people on low incomes, in meeting their rent payments. The crucial issue is one of improving housing affordability. Most witnesses to this inquiry perceived the housing affordability threshold in terms of the National Housing Strategy's 30 per cent of income for rent.

4.7 At present, 39 per cent of RA recipients pay more than 30 per cent of their income in rent (43 per cent if nursing home residents in receipt of RA are included). Only 16 per cent of recipients pay less than 25 per cent of their income in rent. This shows that a proportion of RA recipients still experience considerable affordability problems. [5]

Criticisms of the Rent Assistance program

4.8 Several submissions and witnesses to the inquiry expressed reservations about the effectiveness of the Rent Assistance program. Those reservations stemmed from concerns at the Commonwealth's increasing use of the Rent Assistance payment to address the housing affordability problems experienced by low income earners while many community groups saw the provision of public housing as a more effective means of addressing the problem. [6] Some submitters quoted the Industry Commission's conclusion in its 1993 report that public housing was a more cost effective way for the Commonwealth to provide affordable housing to those in need. [7]

4.9 Community groups who put submissions and appeared before the Committee had a number of major concerns in relation to the Rent Assistance program. One was that it was not outcome related so that a large proportion of people in receipt of RA still experienced considerable housing affordability problems. Professor Judith Yates told the Committee that she shared those concerns about RA because it was neither affordability based nor does it `guarantee a supply side response'. [8]

4.10 On the same theme, Shelter WA referred in its submission to a 1996 study by National Shelter [9] which examined rental housing affordability and found that:

Although Commonwealth spending on rent assistance grew in real terms by 365 per cent (0.4 billion to 1.5 billion) from 1984-85 to 1994-95, about 60 per cent of recipients continued to live in housing stress as defined by the National Housing Strategy. [10]

4.11 Another major concern related to the possibility that increases to rent assistance, especially since they were publicly announced in advance, would result in landlords `creaming off' the increase by putting rents up as soon as RA was increased with the result that there would be no improvement in affordability for low income renters. This was raised in several submissions, including the Central Highland Regional Housing Council Incorporated who submitted to the Committee that:

There is no protection against rents in the private sector increasing to consume any increases to private rent assistance. [11]

4.12 This view was also supported by Housing for the Aged Action Group and the Tenants Union of NSW who stated that `subsidies to private renters are quickly eaten up by rent increases'. [12]

4.13 Reliable research made available to the Committee shows that, although there is a degree of fear among tenants and community groups about this, there is no evidence that landlords put up rents in response to increases in the RA payment. The NSW Federation of Housing Association confirms this in its submission, [13] as does Ecumenical Housing in its housing policy paper which refers to numerous studies of rent increases in Australia which have reached the conclusion that:

There is no evidence to suggest that the substantial increases in rent assistance to date have fuelled excessive increases in rents. [14]

4.14 The Committee notes also that Department of Social Security data from 1996 shows that over the past twenty years, rent increases have been equal to or have lagged behind the Consumer Price Index. [15]

4.15 Another concern put to the Committee about the Rent Assistance program related to its targeting to social security recipients: this was seen as creating a disincentive to employment in a similar way as targeting access to public housing:

I think there is a difficulty that we are creating poverty traps or employment traps, particularly when you have very large amounts of assistance going on things like rent assistance. If someone is going to lose those benefits. For example, if you take a single person I cannot remember the numbers who may be getting $50 a week, that is another disincentive that exists. [16]

4.16 In support of the program, the Department of Social Security submitted that:

If RA were not available, 77 per cent of income units would be paying more than 30 per cent of their income in housing costs. With RA, this figure is reduced to 39 per cent per cent (assuming the tenants remain in the same dwelling). RA also markedly reduces the proportion of income units paying over half their income in rent from 35 per cent to 8 per cent. [17]

4.17 Notwithstanding the many criticisms made of the program for not being outcome focussed, some submissions recognised that the Rent Assistance program has a role to play in housing assistance and that it has saved some low income people from severe hardship by easing their strenuous financial situation after rent has been paid:

Rental assistance has been most effective in assisting young capable people, usually single, with minimal fixed expenses over a short period of time. Rental assistance is an accessible, effective flexible form of assistance which allows a greater degree of client choice. [18]

Table 3

Ease of paying monthly housing costs, public tenants and private tenants notionally eligible for rent assistance [19]

Consumer Satisfaction

4.18 In its submission to the Committee, the Australian Institute of Family Studies (AIFS) drew on its 1996 Australian Life Course Survey (ALCS) which showed that from its sample of public tenants, 61 per cent felt that they were meeting their housing costs easily while 32 per cent were `just managing' a total of 93 per cent. For private tenants, 52 per cent met their housing costs easily and 37 per cent were `just managing' a total of 89 per cent. The Committee notes that the majority of private tenants in the survey in question were receiving Rent Assistance.

4.19 The Committee notes that the figures in the Tables reproduced from the AIFS study were the subject of criticism at its public hearing in Sydney. [20] However, the Committee has not received any empirical evidence to support the contrary view.

4.20 The ALCS survey figures were discussed in some detail at the Melbourne public hearing of the Committee in an exchange between the AIFS witness and the Chair of the Committee:

CHAIR I refer to the table on page 7 in terms of affordability. About 90 per centwhen you add the two figures for easily and just managingsuggested that they could afford their access to housing. It strikes me as a very high figure.

Dr WinterYes, I think it does. This table is comparing the objective benchmarksthose who are over the 30 per cent benchmarkwith people's own assessments of how well they are able to meet their housing costs. You are right. What we are finding here is that quite large proportions of people are saying, `We think we're doing reasonably well'. Why we are raising this as an issue is because we do not know how accurate the objective benchmarks are. [21]

4.21 The Committee has addressed the need for more research in the housing area in its first recommendation. The Committee notes that the ALCS survey figures also revealed that none of the public housing tenants surveyed felt that they were having difficulty meeting their housing costs and only one-eighth of the private tenants were having difficulty. In spite of those responses, a percentage of those who reported no affordability problems, still fell behind in their rent payments. [22]

Adequacy of Rent Assistance

4.22 There were numerous calls for rent assistance to be increased to improve affordability for low income private renters but it was stressed that this would only be acceptable if it was not achieved at the expense of public housing. The following comments from the Tenants Union of Victoria are typical:

Public housing is more likely to provide affordable, appropriate , secure and better quality housing than the private market. While we support improvements to the design and implementation of Rent Assistance, any expansion of the Scheme should not be at the expense of public housing tenants or public housing stock. [23]

4.23 A few groups objected to the government's 1997 Budget decision to reduce (from July 1997) rent assistance for people in share-households. The Tasmanian Housing Assistance Service Inc. explained why:

Many people don't choose to share, it is a question of availability and cost there is not enough suitable affordable single unit accommodation available to meet the needs of low income people.

The assumption regarding costs in share households also ignores the reality. Most share houses are notoriously unstable especially among young people. It is not uncommon to find the household has spilt up leaving one or two people bearing the full cost of the rent whilst trying to find other sharers. [24]

Recommendation 10: The Committee recommends that the Commonwealth reviews its 1997 Budget decision to reduce rent assistance for people in share households.

A regionalised rent assistance formula?

4.24 Witnesses to the Committee and some submissions called for increases in the level of Rent Assistance paid claiming that the high rents currently charged in the inner-city areas of Sydney and Melbourne meant that current levels of Rent Assistance payments were inadequate in making housing in those areas more affordable. The Committee was told that in the past year, rents have increased by 8 to 10 per cent in Melbourne. [25] While in Sydney, rents for a 2 or 3 bedroom house in the year to September 1996 increased by 5 to 6 per cent to `around $210 and $250 per week in the middle ring and $275 and $340 in the inner ring'. [26]

4.25 In evidence to the Committee, a witness from the NSW Department of Urban Affairs and Planning claimed that overall, rent levels in Sydney, `on average exceed those in other cities by between 22 per cent and 90 per cent'. [27] Her colleague, the Assistant Director General of the NSW Department of Housing explained, referring to rent assistance levels available that:

On average in New South Wales people are receiving $31 and the maximum amount they can receive is $49. These payments are going to about 330,000 people a lot of people perhaps about 40 per cent of the private rental market. But the gap for those people, if they were to achieve 25 per cent of their income in housing, is estimated in Sydney to be between $93 and $136 per week depending on the size of the dwelling required. [28]

4.26 Housing statistics gathered in the Sydney area provide some explanation for the high rents paid by social security recipients. In his presentation to the Committee, the Department of Social Security's First Assistant Secretary in the Housing Division argued that ABS surveys and information gathered about social security recipients and where they rent show that `low income renters rent across the market'. This suggested that:

People are often very keen to try and stay in a locality that they have a lot of affinity with and they are willing to sacrifice a surprising amount of their income to stay in that locality. So you find people paying very high proportions of their rent to live in...very modest accommodation in some high cost areas. [29]

4.27 The Committee recognises that there is some basis for this argument: some low income renters prefer to spend a higher proportion of their income in rent in order to live in a more desirable locality close to a range of services and save on transport and other costs. It is not for the taxpayer to compensate for the consequences of that choice.

4.28 In the early nineties, the National Housing Strategy recognised that some people choose to spend more than 30 per cent of their income on rent:

Decisions by households to spend more than 25 or 30 per cent of their income on housing should be matters of choice and preference rather than circumstance and hardship. [30]

4.29 The difficulty, in a housing market such as Sydney's where there is a range of prices across suburbs but where inner and middle-ring prices for both purchase and rent are so high, is to make the decision on behalf of social security and RA recipients (many of whom are single pensioners, sickness beneficiaries and sole parent families) as to whether it is an issue of preference, as claimed by the DSS above or an issue of circumstance.

4.30 A huge cost would have to be borne by the taxpayer if the rent of all those households were to be subsidised so that they would be paying no more than 30 per cent or ideally 25 per cent of their income in rent. Further, if recipients of Rent Assistance were to be given a subsidy equivalent to that received by people in public housing it would cost the government about $2 to 3 billion annually (in addition to current RA expenditure). [31]

4.31 While the high rents charged in inner-city Sydney and Melbourne are well documented, the Committee became aware through its inquiry, that rents varied widely between different regions throughout Australia. People living in regional areas, where private rental accommodation is scarce and those living in coastal areas, especially those popular with tourists can also be facing some very high rents. Cairns Affordable Housing Action Group called this a `worrying trend'. [32]

4.32 In its submission, ACOSS argued for an affordability benchmark that took account of the type of household and the region in which it was located. It called this an:

adequacy benchmark the cost of renting housing which is appropriate to the needs of different household types in different regions. [33]

4.33 Opponents of the system proposed by ACOSS argue that a differential RA system could have some disadvantages. It might reduce mobility for low income private tenants. At present, RA recipients carry the same RA payments with them, wherever they move. The flexibility of the current RA system is important in to-day's job market where low income renters may have to move in pursuit of employment. In addition, a reduction in tenants' mobility might have an unforeseen and negative impact on growth in some regions. It could also prove wasteful because it would be difficult to administer.

4.34 Nevertheless, there is every likelihood that the trend in regional differences in rent levels will not only continue but may well become more pronounced. Since the avowed aims of the RA program is to improve affordability, the Committee recognises that a Rent Assistance formula that treats all tenants across Australia the same does appear to be inequitable since rents differ widely across regions. The Committee considers that there is a case for the Commonwealth to reassess its options in relation to a system which would allow different RA payments based on rent levels.

4.35 The Committee recognises that affordability is a crucial issue facing private renters in many regionsurban and rural. All government spending is constantly under review as evidenced by cuts to pharmaceutical benefits, health, child care, youth allowances and other social security benefits. The Opposition's draft platform is to provide security and opportunity while fostering a spirit of community in Australian society. The Leader of the Opposition told the Sunday program after the launch that:

We've put on ourselves some pretty reasonable constraints in this document, for example, we're not going to raise taxes above the level achieved over the last decade, in terms of percentage of GDP. [34]

4.36 According to the Weekend Australian:

It is understood the total tax limit Labor has in mind is 24.7 per cent of GDP, which is the level of revenue as a share of the total economy expected for 1998-99. [35]

4.37 The Committee believes that there is a need to explore the possibilities for increasing affordability for low income renters in the private rental market and that the Commonwealth Department of Social Security should make this a priority.

Recommendation 11: The Committee recommends that the Commonwealth consider the possibility of using a region based formula for Rent Assistance payments.

Recommendation 12: The Committee recommends that the Department of Social Security investigate ways of improving affordability for low income renters in private rental.

Extending Rent Assistance to other tenants

4.38 A proportion of those making submissions to the Committee called for the current rules to be changed so that more people would become eligible for RA. Among those, the Brotherhood of St Lawrence called for low-wage people not in receipt of social security benefits to be included. Specifically, the Brotherhood's representative called for the RA payment to be outcome focussed so that rental housing becomes more affordable for those on low incomes. [36]

4.39 The Department of Veterans' Affairs (DVA) pointed to the different ways in which veterans were treated in relation to rent payable for public housing (where their disability pensions were excluded from the calculations) and Rent Assistance in the private market (where all or part of their disability pension was included before determining the level of RA for which they were eligible). [37] DVA suggested that in the name of fairness and equity, the disability pension should not be a factor taken into account in determining either the public or private housing level of payment. As discussed in Chapter 5, representations were also made by ATSIC on behalf of participants in its Community Development Employment Program who do not currently qualify for RA.

4.40 Ecumenical Housing (EU) saw merit in extending RA to low income people (described as the `working poor'), not currently in receipt of social security payments but who face high rents. However, EU recognised the high cost implications of this suggestion and the problems posed by the large numbers of self-employed people whose low taxable income would make them eligible for such a payment. [38]

Rent Control

4.41 The issue of `fair rents' and rent control was raised in evidence. [39] Rent control has been a policy used at various times in a number of countries (including Australia). It springs from the best of motives which is to keep rents down in order to make rental housing more affordable for low income renters. However, all the available evidence shows that rent control has a major impact on supply and the resulting shortages force rent prices up. Critics of rent control point to studies that show that rental prices tend to be evenly distributed above and below a median in areas without rent control while in areas under rent control, the prices cluster well above the median. [40]

4.42 The Canberra study of the effect of rent control found that the effect of rent control on the market became apparent within a fairly short time. It also led one expert to remark:

It is also obvious that the controls have not been effective in helping the low income earner and do in fact provide more benefit to the higher income earners. [41]

4.43 The reason behind the correlation between rent control and high prices is that rent control has an adverse effect on supply. Together with other regulations such as restrictions on evictions, rent control discourages investment by the private investor. [42] This in turn results in accommodation shortages. Although rent control has been in place in Great Britain for many years, that country is now moving away from rent control policies. [43]

4.44 Some critics therefore perceive rent control as a mechanism that helps to keep rental prices down for middle and high income earners and adds to problems of affordability for low income earners. This situation can be made considerably worse if, as is often the case, rent control is confined to a particular region or area. Rent control was introduced in Canberra in 1973 and by 1978, a critic commented:

In a very real sense, it can be said that part of the costs of rent control in Canberra were borne by those least able to cope the poor tenants of Queanbeyan. [44]

Tenancy Legislation

4.45 It is relatively easy to measure housing assistance in financial terms. Taking non-financial needs into account is more complicated but essential if people's needs for adequate and appropriate housing are to be met. Some submissions and witnesses to the Committee argued strongly for the inclusion of non-financial needs in the equation:

Those non-financial housing needs would include housing standards, ensuring that tenants have access to legal services where necessary in dealing with the law, security of tenure and also the Commonwealth taking an active role in ensuring that housing consumers are not discriminated against on a variety of levels. [45]

4.46 Viewed in that light, `housing assistance' should include the following:

• the quality of the house and the standard of amenities provided;
• the provision of advocacy (including legal assistance) and information services to ensure that minimum housing standards are maintained and that consumers are protected against abuse; and
• reasonable security of tenure.

4.47 Traditionally, renters in this country had been perceived as being `in transit' mostly on their way to purchasing a home. More recently, however, there has been an increasing tendency for renters to remain in rental housing on a long term basis.

4.48 A number of submissions and witnesses to the Committee referred to this trend:

Something like 40 per cent of renters now have been renting for more than 10 years. We think that that figure is building up. There are a growing proportion of households in the private rental market that are there for a long term and which are, therefore disadvantaged by the lack of security of tenure because they either have to move relatively frequently or they are subject to quite frequent reviews of rent and so on. [46]

4.49 The trend to long term renting has highlighted the absence of any measures designed to protect the needs of those who will rent throughout their lives. In particular, long term renters need security of tenure. Unfortunately, as stated by the Tenants Union of NSW, `most leases are either six or twelve months only'. [47] In most States, two months' notice is sufficient to terminate a tenancy (no ground for termination needs to be provided), resulting in a very precarious situation for many private renters.

4.50 In many European countries including Britain, leases of 10 years and even life long leases are available because there is greater recognition that people will continue to rent all their lives. The Committee is not advocating the English model of long term leasing but it believes that there should be greater recognition of the trend to longer term renting in Australia and the need for appropriate measures to be taken to cater for those who are not looking for short term renting.

4.51 Tenancy legislation is a State matter. The Commonwealth has no legislative power in this area. The Committee has canvassed the issues raised in submissions in relation to the deficiencies of State legislation. However, the Committee considers that the Commonwealth's role in this area is limited to encouraging the States to pass appropriate legislation and to facilitating negotiations so that State legislation adhere to certain core principles.

4.52 Tenancy legislation directly affects the extent to which tenants' (and landlords') rights can be upheld. One issue of particular concern is that of the protection of tenants against eviction without proper cause. Some witnesses and submissions called for the Commonwealth to set standards for tenancy legislation or to encourage the States and Territories to develop uniform tenancy legislation. [48] While it is clear that the Commonwealth cannot assume that responsibility, it still can play a positive role in this area.

4.53 ACOSS told the Committee that in its view, there should be a State-based consultative process which would develop model legislation that would address basic issues such as the lack of a just cause eviction clause in most State and Territory legislation. [49] Advocacy and tenants unions were not all supportive of the uniform tenancy legislation approach proposed by ACOSS. The National Association of Tenant Organisations (NATO) for example, told the Committee that it would prefer to see agreed standards of consumer protection which would be adopted in all State and Territory legislation.

4.54 In NATO's view, the ACT legislation provided a good model because it afforded better security of tenure to tenants but it recognised that Victoria, as well as New South Wales and Queensland had `a reasonable standards of tenancies legislation'. Tasmania was seen as not offering the same degree of protection but that State's tenancy legislation is currently being modernised. [50]

4.55 To be adequate, tenancy legislation needs to address the question of dispute resolution. It is regrettable that some States and Territories do not have Residential Tenancies Tribunals. In Queensland, a Residential Tenancy Authority mediates tenancy disputes and in the Northern Territory, the Department of Consumer Affairs handles tenancy disputes. There was strong support in submissions for Residential Tenancies Tribunals as the best means for tenants to obtain a solution to their complaints.

4.56 The Northern Territory system was strongly criticised by Northern Territory Shelter Inc. who told the Committee that:

The Northern Territory has a very mysterious complaints' process, where transparency and user friendly systems do not come into the equation. The NT has no rental bond board, there is no tenancy tribunal, there is no independent information, mediation or arbitration accessible for tenants. Darwin Community Legal Service is one of the only forms of legal rights advice to tenants. [51]

4.57 One of the problems facing public housing tenants is that in some States, State Housing Authorities are not bound by residential tenancy legislation (for example in Tasmania and South Australia). Although the crown is bound by the relevant legislation in NSW, Victoria, Queensland and Western Australia, there are some exemptions which operate in those States as well. In some cases, it is the State that fails its public housing tenants by not carrying out repairs on its properties when they are needed. However, the evidence before the Committee and the level of satisfaction expressed in surveys by public housing tenants suggest that this situation is not as common as it had been in the past.

4.58 In its submission to the Committee, National Shelter called for the reform of State residential tenancy legislation arguing that, as part of a new and expanded CSHA, the Commonwealth should negotiate with the States to ensure that they develop tenancy legislation that address:

• 'just cause' termination of tenancy;
• provision of appeal over excessive rent increases;
• equitable disputes resolution mechanisms;
• minimum structural standards; and
• administration of bonds. [52]

Advocacy Services

4.59 There is widespread recognition among both providers and consumers of low cost housing that tenant advocacy groups play an important role in promoting both consumer protection and better housing standards. The National Housing Strategy recommended that the Commonwealth and State governments ensure that information about the rights and obligations of both renters and landlords be made available to those directly affected and called on both levels of government to provide funds for tenants advocacy groups. In its 1993 report on Public Housing the Industry Commission supported those recommendations.

4.60 Although they do not always provide adequate standards to their tenants, the majority of landlords do not appear to be adverse to the development of housing standards by governments and to consumer protection. The 1993 ABS Rental Investors Survey found that only 6.4 per cent of landlords cited `tenants rights' as a factor that they took into account when considering investment in rental property. [53]

4.61 There is a direct link between low income tenants' ability to exercise their consumer rights and responsibilities and their access to tenants' advocacy groups. National Youth Coalition for Housing told the Committee:

Many young people renting in the private rental market are particularly vulnerable to exploitation by landlords and agents because they are unaware of their rights as tenants, or fin it difficult to assert these rights...It is important that these services be resourced to respond to the particular information and advocacy needs of young people who are tenants. [54]

4.62 Young people are not alone in this. Many renters feel vulnerable and will avoid complaining directly to a landlord about the condition of the property or if they feel that the landlord is not playing by the rules (for example by giving insufficient notice to vacate the rented premises). The most disadvantaged tenants are also the least likely to use complaints mechanisms. Tenants' advocacy groups may be the only `voice' available to those tenants.

4.63 Such groups often provide assistance to tenants in their dealings with landlords and in obtaining professional legal advice when necessary. They also encourage tenants to become involved in decisions that affect their housing thus enabling them to learn more about their rights and responsibilities. The Department of Social Security (DSS) provided the Committee with a summary table setting out advocacy and support services available in each State. This is reproduced at Appendix 3.

4.64 Some tenants' groups see their main role as providing legal advice to tenants. Tenants Union of New South Wales is one such group. As well as offering a tenants' hotline service, it resources a network of 17 tenants advice services across NSW and offers assistance to three Aboriginal tenancy services. [55] The network is particularly useful in view of the limited access to information and advocacy services that confronts tenants in rural and regional areas.

4.65 Both submissions and evidence to the Committee revealed widespread concern about the future of advocacy services, among those community and advocacy groups involved in assisting low income people in need of affordable housing. [56]

4.66 Witnesses also referred to the June 1997 decision by the federal Minister for Social Security to discontinue its annual grant to the peak housing body, National Shelter and ACOSS argued strongly against the perception that there was any duplication of roles between itself and National Shelter. ACOSS pointed out that it did not have the types of networks that National Shelter had and would not be in a position to give to the government, advice that is as soundly based:

National Shelter's effectiveness is based on the fact that it is a federation of state based organisations. In fact, what this will do is increasingly harm any possibility of having any rational debate on housing reform in Australia. What the government will end up with is probably poor advice, because people or organisations do not have enough time to be able to go out and do the appropriate research. It will be advice that may not be based on some fairly comprehensive consultations of key organisations. [57]

4.67 Concern about defunding was particularly pronounced in Victoria, where the Committee was told at its Melbourne hearing that:

Another issue that is of particular concern to us, and which relates to transparency and accountability, is the issue of tenant participation. As highlighted before, public tenant groups in this state have just received notice that they are going to be defunded and will no longer be able to participate in their housing in the ways that they have before. We feel that will be a great loss to both the community and to the government if that occurs. [58]

4.68 The possibility of being defunded was not the only problem faced by Victorian tenants' groups. They were also worried that they were increasingly allowed to play only a diminishing advocacy role on behalf of the tenants they seek to represent. They told the Committee that felt that their advocacy role had been `severely hampered in recent years' in that they could no longer represent tenants at residential tenancies tribunal. [59] The Committee notes that the Victorian Government has called for tenders for larger, more regionalised tenancy groups to replace the smaller units being defunded.

4.69 The Committee was particularly concerned at the limited access to tenants' advocacy and information services for people living in regional areas. This was recognised by the DSS in its submission. [60] The Committee feels that the department could use the Internet or other on-line services to better inform tenants and community groups in rural areas of their rights as tenants.

Recommendation 13: The Committee recommends:

(i) that the Department of Social Security make use of the Internet and other on-line services to ensure that tenants and community groups are better informed about tenants' rights.

(ii) that State and Territory governments provide better support for tenancy services, especially in rural areas.

Consumer rights and responsibilities

4.70 The Australian Council of Social Service (ACOSS) called for `uniform national principles defining the rights and responsibilities of tenants, property owners and managers'. [61] Tenants Union of Victoria called for all governments to support advocacy services in the housing sector. [62] Some witnesses suggested that the Commonwealth should either fund advocacy services itself or that it could require the States to set up adequate tenant advocacy services under the CSHA. [63] The Committee also notes National Shelter's call for States and Territories to be required to include a charter of consumer rights and responsibilities in their tenancy legislation. [64]

4.71 In its submission to the Committee, the Department of Social Security pointed out that the 1996 CSHA requires the Housing Authority in each State to develop a Code of Practice that addresses consumer rights and responsibilities in accordance with national guidelines. [65] The guidelines provide a clear indication of the areas which the Codes need to cover. They include the following five key principles:

• the provision of information;
• consultation;
• service guarantees;
• the availability of independent appeals mechanisms; and
• ways of measuring the effectiveness of the appeals mechanisms.

4.72 The Committee was informed by the DSS that codes of practice are now in place in Western Australia and South Australia. [66] The remaining States are in the process of developing their codes. It is important to note that public reporting of outcomes is an essential aspect of ensuring that consumer rights are respected. When all the codes are in place and reported on, it will be possible to see whether the report suggests that the codes cover the principles required by the national guidelines and that they are working effectively. If they do, they would have made a positive contribution towards ensuring that concerns about consumer rights expressed to the Committee by tenants' groups and welfare bodies are being addressed.

Adequate housing standards

4.73 The issue of adequate housing standards was of concern to a number of advocacy groups. As they now stand, various State legislation do not require landlords to provide accommodation which is of a reasonable standard for their tenants. The National Federation of Blind Citizens of Australia (NFBCA) noted for example that one home it had visited:

was sub-standard and a health safety risk. Problems included leaks in the ceiling of the bedrooms, bathroom, kitchen, laundry and hallway which were evidenced by significant water stains down the walls ... the floor boards were soft indicating rot also coming from beneath the house. There was no ventilation in the bathroom ... The floor in this room was concrete and there was no shower base to prevent water spreading over the whole bathroom floor creating a distinct risk of slippage ... The gas heater leaked gas and we were advised that both renters considered it dangerous to use. [67]

4.74 A recent High Court ruling will go some way towards improving the lot of tenants in relation to safer housing. In a decision handed down on 15 August 1997 the High Court imposed a very strict liability on landlords to provide tenants with safe premises. It was reported that in his judgement, the Chief Justice had:

declared that a landlord had a duty of care to rectify any defect in a house at the time it was let, and that the duty was owed to the tenant and anyone else the landlord knew would be living there. [68]

4.75 The Committee sees the issue of adequate standards for properties offered on the private rental market, as being part of the broader issue of consumer protection. This involves the provision of information as well as legal protection, advice and recourse to an appeals body (such as a Residential Tenancy Tribunal) in cases of unresolved conflict of interests.

Recommendation 14: The Committee recommends that, as part of the COAG process, the Commonwealth negotiate agreed standards of consumer protection for tenants with the States with the objective of having adequate legislation enacted in each State.

4.76 The lack of any regulation over rents charged is another issue that repeatedly attracted comment in submissions. There was particular concern that there was no requirement for landlords to ensure that the accommodation offered met certain minimum conditions of comfort and safety. Northern Territory Shelter gave the following example:

In Nhulunby, Gove where there is limited public housing and industry has high levels of housing, people who rely on the private market rental are in a dire situation. A three bedroom house in bad repair e.g. Broken windows, holes in the floor etc. can obtain a market rent of $250.00 per week. [69]

4.77 Shelter NSW also referred to the landlords' `unfettered ability to increase rent' and suggested that tenancy laws in New South Wales should be reviewed. [70] It further suggested that standards of rental housing will only be improved if the landlords could be told that:

This property will not attract rental assistance until it is providing a better standard for the tenants who come into it. [71]

4.78 In the Committee's view, the Commonwealth would face unsurmountable difficulties in enforcing an approach which would cause greater hardship to low income tenants than the current lack of adequate standards in private rental properties.

Boarders and Lodgers

4.79 A substantial number of RA recipients are boarders and lodgers. DSS figures show that in 1995, 21.7 per cent of recipients belonged to that category. [72] The exclusion of boarders and lodgers from the protection afforded by tenancy legislation was raised in several submissions. [73] This situation prevails in most States and Territories (except in Victoria where they have some protection under the Rooming Houses Act 1990). Major difficulties faced by rooming house residents include overcrowding, and lack of amenity which would be considered to meet general community standards. [74]

4.80 Again, in most States, long term residents of caravan parks are afforded little protection under the tenancy legislation. The Physical Disability Council of Australia claimed that 80 per cent of long term caravan park dwellers were over 60 and likely to suffer from a physical disability [75] and the poor standard of their housing endangers their personal safety.

4.81 The National Youth Coalition for Housing called for State governments to amend tenancy legislation to address the issue of sub-leasing. It pointed out that this matter is of particular importance to young people since `a substantial proportion of young people live in private rental group households where most tenants are sub-leasees' and that they have no legislative protection in most States and Territories.

4.82 However, the Committee did not receive evidence from every State and Territory in Australia. It would therefore not be appropriate for it to comment on specific measures. The Committee is gravely concerned at the lack of legislative protection for the groups of renters listed in the preceding paragraphs. A substantial percentage of boarders and lodgers are people with disabilities, many are people with mental illness. As such, they are extremely vulnerable and there is a need for governments to ensure through adequate tenancy legislation, that unscrupulous landlords are not able to take advantage of them.

Privacy

4.83 A number tenants' groups expressed concern about an increasing tendency for landlords and real estate agents to use `bad tenants databases' with little regard for possible breaches of the privacy of prospective tenants. Tenants Union (ACT) and Welfare Rights and Legal Centre submitted that:

The proliferation of private agencies operating tenancy databases has become a second source of discrimination. Clients are asked to supply information about tenants who have among other things, caused `trouble' for landlord or agent during their tenancy including disputing bond claims, rent arrears and damage to the premises. The Commonwealth Privacy Act does not provide for regulation of these types of agencies as they are neither government bodies nor credit providers. Regulation is required because abuse of individual privacy can create enormous housing difficulties for tenants. [76]

4.84 Their call for stricter privacy legislation was supported by the Tenants Union of New South Wales who explained:

Through our inquiries over time, we have discovered that many of the names of tenants listed are from unsubstantiated instances. we have some real concerns that a person may have defaulted on their rent five years ago and actually paid back the money owing and still find themselves on a list on a bad tenant database. [77]

4.85 The Committee was told by the same witness that the New South Wales Privacy Committee was looking at the possibility of regulation in this area. The Committee strongly supports this approach.

Recommendation 15: The Committee recommends that the States and Territories consider introducing regulatory measures in relation to bad tenants databases to protect the privacy rights of tenants and that any extension of the Commonwealth Privacy Act 1988 to the private sector should contemplate including the above circumstances.

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FOOTNOTES

[1] Australian Bureau of Statistics, Australian Housing Survey 1994, AGPS, Canberra, 1996, Table 1.3, p.6.

[2] Department of Social Security, Overview of the Australian private Rental Market, in AHURI Working Paper No 9, 1997, p.26.

[3] Submission No.200, p.7 (National Shelter).

[4] Supplementary information, Department of Social Security, 26 September 1997, p.10.

[5] Submission No.261, p 7 (DSS). This figure includes nursing home residents who receive RA.

[6] Submission, p.1 (Hunter Hill Tenants Group), Submission No.42, p.2 (Tenants Association of SA), Submission No.77, p.13 (Ilawarra Social Housing Forum), Submission No.243, p.2 (Mr Lafayette), Submission No.251, p.1 (Logan Area Housing Planning Group).

[7] Submission No.2, p.ii (Mr Pender),Submission No.73, p.2 (Loddon Campaspe Regional Housing Council Inc).

[8] Transcript of Evidence, p.198 (Professor Yates).

[9] Barrett, Greg, Public Housing: What the Future Holds, National Shelter Research Paper No.3, Canberra, September 1996.

[10] Submission No.177, p.5 (Shelter WA).

[11] Submission No.208, p.6 (Central Highlands Regional Housing Council Incorporated).

[12] Submission No.264, p.12 (Housing for the Aged Action Group), Submission No.219, p.5 (Tenants Union NSW).

[13] Submission No.260, p.22 (NSW Federation of Housing Association).

[14] Ecumenical Housing, National Housing Policy: Reform and Social Justice, Melbourne, 1997.

[15] DSS Housing Access Branch, Overview of the Australian Private Rental Market, October 1996, p.38.

[16] Transcript of Evidence, p.198 (Professor Yates).

[17] Submission No.261, p.16 (DSS).

[18] Transcript of Evidence, p.121 (Mr Jarque).

[19] Submission No.79, p.7 (Australian Institute of Family Studies).

[20] Transcript of Evidence, p.168 (Ms Wade).

[21] Transcript of Evidence, p.9 (Senator Mark Bishop [Chair], Dr Winter).

[22] Submission No.79, pp.6-8 (AIFS).

[23] Submission No.137, p.6 (Tenant Union of Victoria).

[24] Submission No.170, p.2 (Tasmanian Housing Assistance Service Inc).

[25] Submission No.54, p.3 (Geelong Catholic Social Justice Committee).

[26] Submission No.280, p.13 (NSW Department of Urban Affairs and Planning and Department of Housing).

[27] Transcript of Evidence, p.212 (Ms Milligan).

[28] Transcript of Evidence, p.214 (Ms Westacott).

[29] Transcript of Evidence, p.312 (Mr Whalan).

[30] National Housing Strategy, The Affordability of Australian Housing, AGPS, Canberra, 1991 p.41.

[31] Yates, Judith `Federal Housing Policy Directions' Paper prepared for Housing Directions Conference, Real Estate Institute of Australia Conference, 10 July 1996, p.6.

[32] Submission No.221, p.3 (Cairns Affordable Housing Action Group).

[33] Submission No.282 p.29 (ACOSS).

[34] Beazley, Kim (the Hon.), Federal Opposition Leader, Transcript of Sunday Program, Nine Network, 23 November 1997.

[35] George Megalogenis, The Weekend Australian, 22 November 1997.

[36] Transcript of Evidence, p.77 (Mr Siemon).

[37] Submission No.302, p.2 (Department of Veterans Affairs).

[38] Ibid, p.19 and p.66.

[39] Transcript of Evidence, p.39 (Ms Wilkins).

[40] Tucker, W. How rent control drives out affordable housing, Policy Analysis,No.274,May 1997, p.6.

[41] Ibid.

[42] Albon, Robert, `Rent Control in Microcosm' in Rent Control, Costs & Consequences, Canberra, Centre for Independent Studies, 1980, p.161.

[43] Gyourko, Joseph, `Controlling and Assisting Privately Rented Housing', Urban Studies, vol.27, No.6, 1990, p.787.

[44] Albon, Robert, `Australia: History and Overview' in Rent Control, Costs & Consequences, Canberra, Centre for Independent Studies, 1980 p.100.

[45] Transcript of Evidence, p.36 (Ms Wilkins).

[46] Transcript of Evidence, p.11 (Professor Maher).

[47] Transcript of Evidence, p.61 (Ms Macaffer).

[48] Submission No.200, p.30 (National Shelter); Submission No.172, p.6 (National Association of Tenant Organisations).

[49] Transcript of Evidence, p.199 (Mr Nicolades).

[50] Transcript of Evidence, p.39 (NATO).

[51] Submission No.272, p.10 (NT Shelter Inc).

[52] Submission No.200, p.30 (National Shelter).

[53] Australian Bureau of Statistics, Investors in Rental Dwellings, July 1993.

[54] Submission No.220, p.26 (National Youth Coalition for Housing).

[55] Transcript of Evidence, p.176 (Mr Ramsay).

[56] Submission No.194, p.11 (Sydney City Mission); Submission No.201, p.15 (ACROD).

[57] Transcript of Evidence, p.196 (ACOSS).

[58] Transcript of Evidence, p.36 (Western Region Combined Tenant Group).

[59] Transcript of Evidence, p.48 (Western Region Combined Tenant Group); Submission No.248, p.6 (Public Tenants Union of Victoria); Submission No.269, p.1 (Brunswick Public Tenants Association).

[60] Submission No.261, p.48 (DSS).

[61] Transcript of Evidence, p.194 (ACOSS).

[62] Transcript of Evidence, p.35 (Tenants Union of Victoria).

[63] Submission No.207, p.9 (Tenant's Union of Queensland Inc).

[64] Submission No.200, p.28 (National Shelter).

[65] Submission No.261, p.49 (DSS).

[66] DSS, Update on Implementation of Codes of Practice under the CSHA.

[67] Submission No.34, p.2 (National Federation of Blind Citizens of Australia).

[68] Campbell, R. `Court improves tenant's rights', Canberra Times, 15 August 1997.

[69] Submission No.272, p.11 (NT Shelter Inc).

[70] Transcript of Evidence, p.128 (Mr Ramsay).

[71] Transcript of Evidence, p.129 (Mr Plant).

[72] Department of Social Security, Housing Access Branch, Overview of the Australian Private Rental Market, October 1996, p.32.

[73] Submission No.200, p.28 (National Shelter) Submission No.207, p.3 (Tenants Union of Queensland).

[74] Submission No.179, p.1 (Sydney Inner West Local Area Housing Forum); Submission No.207, p.3 (Tenants Union of Queensland).

[75] Submission No.57, p.18 (Physical Disability Council of Australia).

[76] Submission No.214, p.9 (Tenants Union, ACT and Welfare Rights and Legal Centre).

[77] Transcript of Evidence, p.178.