‘Bashing landlords’: ACT Greens pledge to freeze rents for two years as weekly average hits $660

The ACT Greens have pledged to freeze rents for two years as part of a raft of housing reforms they would implement if they lead the government after the ACT elections in October 2024.

Critics, however, claim this amounts to “landlord bashing” and would worsen the housing crisis by driving investors away from the property market.

The announcement comes after a year of relatively flat rental prices across the Territory, with an uptick the past month – average weekly rent is $777 for houses, $560 for units and $660 for all dwellings in August 2024, according to property information hub SQM Research.

Earlier this year, the Greens’ tried to make a rental freeze law in the Legislative Assembly, but the Labor and Liberal parties voted this down.

Under their latest election pledge, the party would also cap annual rent increases at 2 per cent per year after the two-year freeze and establish an independent rental commissioner, who would answer questions from tenants and resolve disputes with landlords.

“The commissioner will be empowered to enforce rental laws and issue fines,” Greens leader Shane Rattenbury said.

“This will ensure renters’ rights are protected without relying on renters to pursue matters themselves through a tribunal – a process that can be prohibitively costly, stressful and intimidating for renters.

“A rent freeze will provide a much-needed circuit-breaker for the many renters who are struggling with increasing rents alongside the increasing cost of living.”

Maria Edwards, CEO of the Real Estate Institute of the ACT, says renters are not the only ones impacted by cost-of-living pressures.

“The ACT Greens rent freeze policy is not only out of touch but harmful to the long-term supply of rental properties in the ACT. Rents have been falling in the ACT for units in the past 12 months, and houses have only increased marginally, so the need for such drastic policy is not warranted,” she said.

“The cost-of-living pressures are not isolated to tenants – landlords have had to absorb higher mortgage payments through sustained interest rate hikes, insurance, rates and land taxes, maintenance and mandated improvements such as the insulation minimum standards.

“Returns on rental properties have declined markedly since the pandemic and a rent freeze policy will make no difference to tenants currently in rentals in Canberra other than increasing the instability of their tenure as landlords increasingly consider cutting their losses and selling up. This policy has been defeated multiple times and has been rejected by all of the other states.

“It just doesn’t make sense to bring it forward again and create further anxiety for not only landlords but tenants as well.”

Canberra Liberals housing spokesman Mark Parton says the Greens’ policy will end up hurting renters.

“The Greens seem hellbent on completely trashing Canberra’s private rental market. If this suite of policies were ever implemented, it would result in a mass exodus of investors, which would dramatically shrink the private rental market,” he said.

“This will inevitably lead to an increase in rents. The removal of investors from the market will also heavily impact future housing construction.”

Belco Party candidate for Ginninderra and former Liberal Party ACT Housing Minister Bill Stefaniak called the proposal a “suicide note for rental properties”.

“Rent freezes and bashing landlords does not work,” he said.

“It’s bad enough already and real estate agents tell me landlords are selling up in droves and going interstate where the laws are fairer for all sides, or going into other areas of investment like the stock market .”

Joel Dignam, an executive director of advocacy group Better Renting and a former Greens organiser, rejects the argument that rent freezes hurt rental supply.

“Most investors don’t provide new rental supply, in that they buy an established dwelling and rent it out,” he said.

“There’s very little evidence from other jurisdictions that tenancy reform has a material impact on investment decisions.

“Even if you do see that, an investor sells a property, someone else buys a property… it probably means someone has left the rental market and become an owner occupier … the vast majority of landlords are investing for capital gains.”

ACT Greens Member for Yerrabi and renter Andrew Braddock says his personal experience suggests the balance needs to be tipped towards renters.

“A year ago, I was notified that my landlord had decided to sell my house vacant. I experienced the powerlessness of not being able to guarantee a roof over my head and a home for myself and my young children despite my immense privilege. I had to explain to my children why they needed to pack up their belongings and leave their home at short notice,” he said.

“A Rental Commissioner will help inform renters, who are often at a power and financial disadvantage, of their rights and provide accessible avenues to resolve disputes.

“Other practical help, including a portable bond scheme and rent freeze, plus permanent rent relief fund, will greatly assist renters who are struggling in an unaffordable rental market.”