Chair's View & Recommendations

Introduction

1.1As Chair, I would like to thank everyone who participated in this inquiry. I have been deeply moved by the thousands of people who have shared their experiences renting whether through appearing at a hearing, making a written submission or via the simplified submission form.

1.2The enormous number of submissions to this inquiry—both written and through the simplified submission process—has revealed the depth and breadth of the housing and rental crisis. Renters across Australia are clearly hurting and they are desperate to have their stories heard.

1.3The evidence presented in this report demonstrates a housing system in disrepair and a patchwork of largely insufficient and weak regulations. To meaningfully address the housing and rental crisis, urgent reforms are needed beyond what is currently being undertaken by the government.

1.4These reforms are reflected in the suite of recommendations I have put forward as Chair of the Committee. These include a significant boost in our public and affordable housing stock, rent caps and freezes and other housing measures to provide immediate relief to renters and strengthen renter’s rights, and a range of other actions to address issues with Australia’s tax system, short-term rentals and planning system.

1.5It is staggering and incredibly disappointing that despite listening to the devastating testimonies of renters across the country, both Labor and Liberal have not committed to stronger recommendations. By putting forward recommendations that fail to address the impact of unregulated rent hikes, the inadequacy of income support and the magnitude of the gap in our affordable housing stock, both parties are revealing their indifference to renters and the housing crisis more broadly.

Boosting the supply of public and genuinely affordable housing

1.6This inquiry has shone a light on the extreme neglect of our public and affordable housing system. The committee heard overwhelming evidence about how decades of underfunding and privatisation of public housing have left Australia with a massive shortfall in our affordable housing stock and driven low-income renters into the private rental market.[1]

1.7While the recently legislated HAFF is an important step towards increasing our stock of affordable housing, evidence from this inquiry revealed that this investment falls completely short. It is estimated that the unmet national demand for social housing will be around 550,000 dwellings by 2037[2]—revealing the total inadequacy of the HAFF’s promise of 20,000 homes in five years.

1.8The Chair is of the firm view that further significant investment in public and genuinely affordable housing is fundamental to fixing the housing crisis.

1.9The Chair recommends the Australian Government commit to substantial further investment in public, social and genuinely affordable housing in the 2024-25 Federal budget, including specific funding for youth and First Nations housing.

1.10The Chair recommends the Australian Government quantify the yearly investment that will be required from the federal government to meet the shortfall in public and community housing.

1.11Tax incentives are a powerful mechanism to encourage policy outcomes in the housing market.

1.12Whilst Australia’s negative gearing policy and capital gains tax discount may have encouraged small investors to enter the private rental market, the inquiry heard how these policies have also had a perverse impact on our housing system. Including, the significant cost to government of an estimated $24.4 billion per year in forgone revenue for negative gearing alone;[3] the disproportionate benefit to households on the highest incomes; the rapid inflation of property prices; and, critically, the entrenched view of housing as a speculative asset rather than a human right for all Australians.

1.13Australia’s tax system is antagonistic to the fundamental right to housing. If the government is serious about fixing this crisis, urgent reform of tax measures like negative gearing and capital gains tax discount must be undertaken.

1.14The Chair recommends the Australian Government redirect foregone revenue from negative gearing and capital gains tax discounts to increase supply of public and community housing.

1.15There was strong support from inquiry participants for mandatory inclusionary zoning. The Chair agrees that mandatory inclusionary zoning is a promising avenue to increase the supply of public and community rental housing.

1.16The Chair recommends the Australian Government coordinate with state and territory governments to implement mandatory inclusionary zoning for all new developments.

1.17Evidence from this inquiry has exposed the gaps in Australia’s regulation of short-term rentals.

1.18The committee heard evidence about the negative impacts of short-term rentals on the housing supply in the past few years, particularly in areas of high tourism. While the issue of short-term rentals is complex, the Chair believes that the federal government should play a coordinating role in the regulation and data collection of short-term rentals.

1.19The Chair recommends the Australian Government coordinate with state, territory and local governments to improve its data collection regarding short-term rental accommodation, including advancing the development of registers for monitoring and compliance purposes.

1.20The Chair recommends the Australian Government coordinate with state, territory and local governments to make it easier for local governments to implement policies and compliance mechanisms regarding short-term rental accommodation, including applying local caps on the number of days a short-term rental property can be rented.

Relief for renters

1.21There is unequivocal evidence that income support payments, including Commonwealth Rent Assistance (CRA), as currently designed, fail to keep pace with the rising costs of rent. Income support recipients are increasingly either shut out of the private rental market or experiencing severe rental stress, unable to pay for other essentials.

1.22Charities and other community organisations have been left to fill the gap created by inadequate government assistance, as evidenced by the record numbers of renters accessing emergency relief from these organisations. Additionally, we heard that the homelessness sector is significantly under-resourced to respond to the growing numbers of people experiencing homelessness or at risk of homelessness.[4]

1.23While witnesses and submitters broadly welcomed the recent modest increase in CRA and income support, there was consensus that these payments are still inadequate to keep people out of rental stress. CRA payments, for example, are not linked to market rents and do not reflect the variation in rental prices across different locations.

1.24Adequate income support can be an effective mechanism to help people secure and maintain a rental property. This is supported by the accounts of income support recipients whose rental stress was reduced as a result of the coronavirus supplements to income support payments.

1.25The Chair supports the calls for a significant increase to CRA and all income support payments. Additionally, the Chair acknowledges and recognises that CRA may not be the most effective mechanism to address rental stress, and is of the view that the payment should be reviewed for its appropriateness.

1.26The Chair recommends the Australian Government immediately review the adequacy of all income support payments, including whether eligibility rules for these payments effectively target those most in need.

1.27The Chair recommends the Australian Government undertake a review of the Commonwealth Rent Assistance program, including eligibility criteria to determine whether it is the most effective mechanism to improve rental affordability or whether across-the-board increases in income support may be more appropriate.

1.28The Chair recommends the Australian Government immediately increase all income support to ensure no income support recipient lives in poverty.

1.29Unregulated rent hikes are wreaking havoc on the lives of renters. In the past years, we have seen asking rent increase by up to thirty five percent and it is estimated rents will increase by another ten percent this year.[5]

1.30The committee heard many testimonies from renters about the devastating impact of unregulated rent rises. We heard how a family has been forced to live in a caravan,[6] a single mother to live in a share house with her baby[7] and people having to make choices between skipping meals and medical appointments in order to pay increasingly unaffordable rent.[8]

1.31To relieve renters from skyrocketing rents, many submitters and witnesses proposed intervention measures such as rental caps and/or freezes. While there was a diversity of opinions on rent controls, on balance evidence demonstrates that carefully designed rent controls would have a meaningful and positive impact on the lives of renters, without negatively affecting the supply or quality of rental housing.

1.32The Chair is of the view that rent controls are an important part of the holistic and multi-pronged approach to addressing the rental crisis, particularly in the current crisis with the severe shortfall of public and community housing.

1.33Given the urgency of the situation that renters are currently facing, an immediate temporary rent freeze, followed by an ongoing cap on rent increases, is required to curtail the exponential rise in rents across the country.

1.34The Chair recommends the Australian Government coordinate with the states and territories to freeze rental increases for two years, followed by a limit on rental increases of two per cent every two years. Both freeze and the ongoing limits should be attached to the property, not the specific tenancy or lease. The reference date for the freeze on rental increases should be backdated to avoid rents being increased in anticipation of the restrictions. The freeze and ongoing cap should apply to new properties where starting rents are set at the median rent for the area and property type.

Increasing renters’ rights

1.35Evidence in this inquiry has laid bare the inadequacy of tenant protections across the country. The committee heard story after story of renters living in squalid conditions due to a system that fundamentally favours landlords.

1.36While the recent commitment in ‘A Better Deal for Renters’ attempts to bring the current patchwork of ineffective and inadequate tenancy laws between jurisdictions in line with one another, evidence in this report reveals that it does not go far enough to protect renters. More can and should be done by the Australian government to take a role in guaranteeing stronger rental protections.

1.37It is the Chair’s view, that the following recommendations address the various gaps in renter's rights raised in the inquiry and crucially, support the right to safe and secure housing.

1.38The Chair recommends the Australian Government work with state and territory governments to amend tenancy laws to strengthen the prohibition on rent bidding, including ensuring that the advertised rent for a property matches the actual rent agreed in the lease.

1.39The Chair recommends the Australian Government work with state and territory governments to develop standardised rental application forms that contain clear and specific limits on the types of information that can be requested of renters.

1.40The Chair recommends the Australian Government expand the application of the Privacy Act to all real estate agencies and RentTech businesses as part of the Government’s ongoing Privacy Act reforms.

1.41The Chair recommends the Australian Government coordinate with state and territory governments to strengthen regulation of RentTech to ensure that renters’ rights are adequately protected.

1.42The Chair recommends the Australian Government coordinate with state and territory governments to remove no-grounds evictions, including at the end of a fixed term agreement. Grounds should be limited to:

sale of the property;

landlord or immediate family member moving into the property;

demolition of the property; or

reconstruction, renovation or repair of the property only where the work cannot be carried out unless the property is vacated, and only after relevant permits have been obtained.

1.43The Chair recommends the Australian Government work with state and territory governments to develop and legislate a set of minimum standards for energy efficiency, thermal comfort, and accessibility in all rental homes, including social housing.

1.44The Chair recommends the Australian Government work with state and territory governments to increase substantially investment in repairing and maintaining existing social housing stock.

1.45The Chair recommends the Australian Government coordinate with state and territory governments to require the disclosure of properties’ compliance with minimum standards in rental advertisements.

1.46The Chair recommends the Australian Government coordinate with state and territory governments to implement measures to make it easier for renters to make minor modifications that would improve the safety, liveability and energy efficiency of the property.

1.47The Chair recommends the Australian Government coordinate with state and territory governments to develop clear and nationally consistent definitions and timeframes for urgent and non-urgent repairs to rental properties.

1.48The Chair recommends the Australian Government coordinate with state and territory governments to ensure appropriate funding allocation for crisis support services and crisis accommodation.

1.49The Chair recommends the Australian Government coordinate with state and territory governments to improve temporary visa holders’ access to domestic violence provisions, services and accommodation.

1.50The Chair recommends the Australian Government coordinate with state and territory governments to establish rental commissioners in every jurisdiction and facilitate their national cooperation on rental matters.

1.51The Chair recommends the Australian Government coordinate with state and territory governments to ensure that tenancy support services are fully funded, including to help tenants navigate the appeals system.

1.52The Chair recommends the Australian Government coordinate with state and territory governments to review legislation governing the rights and protections for occupants of marginal and less common housing types, including but not limited to:

caravan and manufactured home parks;

boarding houses; and

student accommodation

to ensure residents are adequately protected from exploitation and have sufficient recourse to dispute resolution.

1.53The Chair recommends the Australian Government coordinate with state and territory governments to consider implementing legislation to protect co-renters and landlords in situations where there is a dispute between co-renters, as is currently in place in the ACT.

Senator Janet Rice

Chair

Footnotes

[1]See, for example, Community Housing Industry Association, Submission 41, p. 12.; Everybody’s Home, Submission 52, p. 3.; Homelessness Australia, Submission 54, p. 5; Housing for the Aged Action Group, Submission 130, p. 7.

[2]Professor Libby Porter, Urban Planning, RMIT University, Committee Hansard, 27 September 2023, p. 35.

[3]Commonwealth of Australia, Tax Expenditures and Insights Statement, February 2023, p. 41.

[4]Homelessness Australia, Submission 54, p. 4.

[5]Ms Maiy Azize, Campaign Spokesperson, Everybody's Home, Committee Hansard, 30 August 2023, p. 25.

[6]Witness A, private capacity, Committee Hansard, 30 August 2023, p. 36.

[7]Ada, private capacity, Committee Hansard, 30 August 2023, p. 28.

[8]Amity, private capacity, Committee Hansard, 24 August 2023, p. 22.