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Renters v landlords: have-nots and have-lots

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The recent revelations that rentersvare too scared to complain about problems in their units should come as no surprise to anyone who has ever rented a house or flat in this country.

What are they scared of?  Mainly that the rental agents will ignore their pleas or simply not renew their leases when they run out, meaning another frantic search for a home and maybe even schools if they have to move their family somewhere new.

Alternatively, their landlords will fix the things that need fixing, then push their rents up to cover their costs.  If they object to the rent rise, the next letter they get will be a notice to quit.

All of this was exposed in the report Unsettled: Life in Australia’s private rental market, issued by Choice, National Shelter and the National Association of Tenants’ Organisations last week.

The survey found that 42 per cent of tenants held off making a complaint because they feared a rent increase and 23 per cent because they were worried they would be evicted.

The report also revealed that 83 per cent of renters had no fixed-term lease or were on a lease less than 12 months long.

Why is that a problem?  Because, if the easiest way for your landlord to make more money is to get another tenant – or, even worse, put your home online as a holiday rental – you are going to be moving every year at least.

The pressure to change tenants every year is built into the legislation.  Landlords need to give 30 days notice before the lease is up but 90 days after it expires.  What else are they going to do in a hot market?

Despite the fact that almost one third of Australian residents are tenants – up from a quarter 20 years ago – our national obsession with home ownership has created a culture in which renters are considered losers.

When market-skewing ideas like negative gearing are well past their use-by date, but remain locked in, nailed down and welded onto our housing market, you know that tenants are trapped in a perfect storm of private greed and political gutlessness.

Throw in ‘no grounds’ tenancy terminations and the self-interested, fast buck clusterfunk of online holiday rentals, and the incentive for tenants to become owners is almost irresistible.

Almost.  Because, as we know, in this particular carrot and stick relationship, the root veg is kept tantalisingly out of reach of first-time buyers while negatively geared multi-investors keep pushing house and apartment prices beyond their reach.

In short, we are dividing into the have-nots and the have-lots.

“We need a system in which rental housing is seen not just as a tax shelter, but shelter for human beings,” says Ned Cutcher, a spokesman for National Association of Tenants’ Organisations.

Murray Cox of InsideAirbnb.com agrees, saying the problem is that we have come to regard residential property as a means of making money that happens to house people, rather than a means of housing people that happens to make money.

What’s the solution?  Culture change can’t be legislated but the seeds can be sown.

How about we make it mandatory for rental agents to report problems to the landlords? And compulsory for the landlords to pay for them to be fixed – or forfeit a chunk of rent?

And can we trade the ‘no grounds’ rental termination for a no-quibble rent increase based on the retail price index rather than the intermittent craziness and potential for rampant opportunism of the property market?

Meanwhile, let’s get rid of negative gearing.  Can we agree that it should only be available to new purchases – to stimulate apartment and house building – and one existing investment per owner?

Yes, that will hit housing prices as ungeared homes come on the market, but aren’t we always complaining that house prices are out of control?

And doesn’t the state government have a whole bunch of braniacs putting their heads together right now to solve the problem of housing affordability?

Housing affordability is like climate change – it’s a huge and complex problem but talking about it isn’t enough.

Meanwhile, to get back to the initial issue, landlords need renters and renters need security of tenure.  There’s enough middle ground there to build a city.

There’s more about tenants and landlords on the Flat Chat Forum.

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