Many Canberra rentals are 'glorified tents', energy efficiency analysis shows

Rates and land tax are huge amounts of money. The ACT government only cares about making money. On my small property (it’s an older place, not big and nothing special, but in decent condition), I currently pay $120 every single week to the ACT government for rates and land tax on the property. The property is rented out for $500 per week. The way the current system works, the ACT government says landlords can only increase rents annually by Canberra CPI (which is currently 1.1%), so let’s say i can only increase my rent by about $6 week every year. It’s a restrictive law that limits the right of landlords to charge the going market rate. The ACT government will increase the land taxes again next year, but remember, every time my rates and land tax go up each year, I cannot increase the rent by more than $6 per week. Plus then add in all the other fees and expenses (insurance, property fees, water, etc). I’m lucky to get $200 each week (gross), after income tax is paid on it, I’m left with about $130 each week. Yes, I’m thinking of selling or renovating it, so I can do the property up (to stop the complaining of those who want flashy ducted heating put in) and then I will charge a very high rent to recoup my costs. Sorry to my current tenants who are quite nice, and only pay low rent, but this is the system the ACT government has created.

That’s how I felt when I used to rent. I could only afford very cheap rent. I put on extra clothing in winter and would rather have done that than pay more rent for better accommodation, which I would have struggled to pay.

Yeah, this will only lead to nobody extending a lease past 12 months, so they can get new tenants in at market rate.

You really have to laugh at the people who thought restricting rent rises was a good thing. Enjoy moving expenses every 12 months, renters.

Get your point about rental controls and increasing other costs, but this idea that properties that are awful in terms of energy efficiency is all A Ok because the investor needs to make a profit is a perfect example of why we need to get back to a world view of housing as primarily a ‘shelter’ first, and an investment ‘second’.

Minimum energy efficiency standards for rentals are perfectly reasonable, as long as a reasonable amount of time and/or support is provided to get there. You wouldn’t be able to rent out an unsafe car that doesn’t meet standards, so why should someone be able to rent out a house that doesn’t meet reasonable energy efficiency standards (not saying your property fits into that category of course).

I agree that a world view of housing should be to provide shelter first, and most houses in Australia do provide shelter. But what the ACT government wants is going beyond ‘shelter’ and moving into the category of extravagance and luxury. And those things unfortunately do cost a lot of money, and are things the average Australian does not have, and can easily live without (and has lived without for decades). The definition of ‘shelter’ should not include the latest updated electronics that the majority of people in the world do not have (e.g. ducted heating, automatic garbage disposal systems etc.). It is a wrong standard to impose. If you impose luxury standards, then people will have to pay luxury prices, and you will see a big increase in rental prices as the burden falls on the landlord to go ‘above and beyond’ providing shelter (which has been used by many families in the past) and to providing ‘the latest and greatest’ in housing. Yes, there might be some older houses out there, but some renters would rather pay low rent and have some shelter, then have the latest tech and energy in the house and be priced out of the market. Most housing is perfectly liveable and safe, even if it doesn’t have the latest mod cons and gadgets in it.

Have a requirement to meet reasonable standards of thermal efficiency is absolutely not an extravagance or a luxury. That is a misnomer to suggest that is what this is about.

As is the suggestion everyone ‘has a choice’ – the Canberra rental market doesn’t allow that and hasn’t for a long time to be honest, especially for the vulnerable cohort that don’t quite fit in the social/public housing space but need somewhere to live. For many, they don’t really get a choice bar whatever it is you can get. That isn’t to say there isn’t a cohort as you suggest that make that trade off – but its not available to many.

Just because something has ‘been that way’ for a long way doesn’t make it the right way. Policy lethargy in that regard in so many areas costs us big time as a nation – its a lazy excuse for doing nothing.

I’ve lived in both good and badly designed properties over the years, and the worst in Canberra have been truly awful. The issue here is how to deal with older properties in a fair and equitable manner, not a case of the standards being unreasonable.

Most new properties comfortably meet the standards being set, and if they aren’t then imho they shouldn’t be getting signed off.

This isn’t the 1920s…. we are a developed nation and should be moving beyond a view that ‘near enough is good enough’.

I am not sure you understand what you are asking. The standards you want imposed are set too high and are too expensive to do. Perhaps do some research on costs and then you might understand what is involved in what you are suggesting. Nor is it the landlords fault that electricity is so expensive for tenants to use. You are attacking the wrong group of people who have done nothing wrong. I suggest if the ACT government wants to bring in energy efficiency then they do it via rebates to the landlord (reimbursing the costs involved) in lieu of imposing such huge amounts of land tax (e.g. if landlord pays $5,000 in land tax to the ACT Government, this will be reimbursed to the landlord, if landlord has put in $5,000 worth of energy efficient improvements and also this can be rolled forward to other years, as the costs will be high).

Well said @Acton. The price of the property dictates what you get. If you want to rent a 6 star energy efficient modern updated house with all the latest mod cons, then you will pay a lot for it, as it cost the owner a lot of money to buy it all and install it.

I believe it is a reflection of housing stock across the territory, especially older houses, many of which are in the inner suburbs. Owners are also living in these un/under insulated houses, but I haven’t heard anything about that from those demanding rental properties be ungraded. People mostly prefer to live in the inner areas and that’s where many of the worst offending houses will be found. A solution to that from people who don’t want to rent cold houses is to rent further out, where the chances of finding a better insulated house is greater. Or rent a new unit.

Often tenants chose a house for convenience to work and cafes, rather than a house with better insulation, because they might have had to go further out in the suburbs, further away from work and cafes. It a lifestyle choice.

In the past, I have both rented and owned houses without any or almost no insulation. They were cold in winter and hot in summer. This was a lifestyle choice; I wanted to be in cycling distance to work. My choice, so I had nothing to complain about. If I didn’t want to live there I could have moved, but that would almost certainly have been further out, too far for me to easily cycle. It wasn’t the owner’s fault I chose their house (uninsulated). I chose it for other benefits.
Many of these inner city old houses are likely living on borrowed time. They will be knocked down and replaced with a new house (sadly likely a McMansion), or with units, so is it worth demanding that houses nearing the end of their life have lots of money spent on them, the results of which will in a few years mostly then end up at the tip?

Well put. My thoughts exactly but I didn’t have the time to put it the way you just have.

An owner-occupied home is just that however Maya – owner-occupied. A rented property is not – at the end of the day, while your point is reasonable, and there should be a concerted effort to bring all properties up to scratch (over a reasonable period of time), renters invariably are in a far more challenging position as they simply don’t own their own property.

And while there is some ‘lifestyle choice’ in some circumstances, there are plenty of people out there where its either ‘uninsulated’ or nothing almost – just living further out is not always an option. That goes to a broader policy issue however where the government has abjectly failed however.

Most first home buyers I would guess buy in outer suburbs. If they find they have to do this, what is the difference with someone renting? Why are renters more worthy of consideration than someone scratching together enough to buy an entry level home out on the edge of Canberra. Why do renters need to live in inner suburbs more than people buying their first home? I imagine most first home buyers would like to live in inner suburbs too, but they can’t afford it and so don’t. Not saying people shouldn’t be able to live in inner suburbs, but each area has pluses and minus and this must be weighed up and the individual must take into account what is more important for them. And then don’t complain about their choices. If they do, they should move.
People who move to outer suburbs to either buy or rent, would likely find better insulated homes. Same if they are willing to buy a newer apartment rather than a house. Buying or renting a badly insulated inner suburb house is a lifestyle choice, not a necessity. When I rented a badly insulated inner suburb house and later a flat, it was a lifestyle choice I chose. My choice. Don’t blame the person I rented them off. I am adult enough to be able to make decisions for myself. Then when I bought my first house, again it was a lifestyle choice to buy a very badly insulated house. My choice. I dismissed living in the outer suburbs because of lifestyle. My choice; fully my choice. (Within my budget.)
Then I scrimped and saved for MANY years to get a better house.

The key difference Maya is that the group that is renting also includes an overwhelming proportion of the most vulnerable element of the community – who purchasing a house is simply not even on the radar, let alone a viable option. Not talking just about the bottom end (where government policy has failed miserably) in social/public housing, -but the working poor of the 2nd income quintile – who don’t have access to much government support, but are barely making it all stack up.

This isn’t really an argument about inner city vs elsewhere, that is a fairly disingenous way to shut down a problem by trying to frame it solely through ‘people should choose to live elsewhere’. There are plenty of older properties across the city in outer suburbs with pretty diabolical energy efficiency outcomes too – noting of course the newer suburbs on the edge are much better by default because of new build standards.

The discussion in this space should be focused on at what level the bar is set at, not just trying to fob it off as ‘they should just live somewhere else’. Noting the huge challenges with older properties, that doesn’t mean that attempts shouldn’t be undertaken to help improve the situation. But such changes need to take into account reasonable lead times or alternate approaches (such as on sale) to exclude those properties nearing end of life.