With an election in NSW next weekend (March 23), and another for the whole country just a couple of months away, apartment owners and residents who aren’t rusted on to a party may well be looking at which policies will make their lives better or worse.
As far as the state goes, your views on commercial holiday letting in apartment blocks, as well as residential rent regulations, could colour your voting choices from blue to red, or even Green, with Labor promising a crackdown on Airbnb-style holiday lets (a real crackdown, not like the Liberals’ definition of the word which was to remove all restrictions) and more renter-friendly leasing laws.
The most we’ve heard from the Liberal-Coalition is a promise to tighten up on building regs – which is great for future apartment blocks – and an Airbnb rules by-pass for Byron Bay.
The Greens have posted a massive manifesto online, also promising a better deal for renters, but you have to dig deep to find anything apartment specific. Of the 23 panels on their NSW Election page and the specific section on homelessness, holiday letting doesn’t even get a mention depite proven statistics that it takes tens of thousands of rental properties out of the residential market.
Federally, apartment living isn’t even a blip on the political radar. It’s a state issue, with no clearer proof required than the kaleidoscope of strata laws that differ widely and often bizarrely between states and territories.
One federal party policy that may make a difference, however, is Labor’s plan to end negative gearing tax breaks on residential property investments. More than half the apartments in Australia are investor properties, so this is significant.
You will hear a lot in the coming weeks about the potential for downward pressure on house prices and a possible shift from renting to home owning, but the general consensus is that it’s swings and roundabouts.
Economists and politicians disagree (when do they not?) but the feeling is that things will balance out, eventually, with more renters moving into ownership, easing any upward pressure on rents when they are no longer subsidised by tax breaks.
However, one unintended effect could see owners of non-geared apartments taking increased interest in the costs of maintaining their properties. If Labor gets in, expect to hear more complaints about “excessive” levies (fees) and reduced enthusiasm for the maintenance and upkeep of unit blocks.
In the NSW election, the choices are starker for apartment residents. The government hasn’t made any major policy announcements regarding existing strata communities or laws, although its plans to beef up building regulations can only help future developments.
Labor, by way of contrast, plans to apply the brakes on Airbnb and their ilk with its proposal for a register of all holiday lets, which will significantly affect short-term holiday letting in apartment blocks.
If the experiences elsewhere in the world were replicated here, that could flush out illegal lets and tax dodgers, reducing commercial lets by as much as 30 to 50 per cent.
They are also planning to introduce an “opt-in” by-law regime for apartment blocks which will require 75 percent of votes at a general meeting to pass a by-law before residents can let whole homes on holiday rental sites.
The Greens have a chequered record when it comes to holiday lets in apartment buildings but the party’s pro-resident policies exist, if you dig deeply enough.
In other areas Labor is planning a more radical approach. They are considering taking strata out of Fair Trading and making it part of a larger housing and building ministry. Their proposed strata commissioner would be a major step in that direction.
They also plan to remove no-fault lease terminations and limit rent increases to once a year, which would bring more certainty into renters’ lives while limiting the churn when landlords see a six-month turnover of tenants as the easiest way to maximise their profits (apart from listing their properties on a holiday letting website).
So who should apartment owners and residents vote for? If you are purely an investor in apartments, sticking with the Coalition both nationally and in NSW makes some sense.
If you are a resident-owner, you might weigh a potential dent in property values from Federal Labor’s plans, against a renewed focus on community values and consumer protections – including that Airbnb register – that Labor and, to a lesser extent, the Greens are promising at State level.
And if you are a tenant, the end of no-fault lease terminations, a lock on rent increases to one per year and the freeing up of some of the estimated 24,000 Sydney properties taken out of the residential rental market, temporarily or permanently, by holiday letting (according to InsideAirbnb.com), make NSW Labor an all-round attractive package.
A version of this column first appeared in the Australian Financial Review.