The ACT Greens have joined their Federal colleagues in calling for a two-year rent freeze and a 2 per cent cap on rent increases in the Territory in response to the ongoing rental squeeze and the soaring cost of living.
The cap would apply to rent increases between new tenancies and remove the mechanism allowing it to be overridden by tenancy agreements.
ACT Greens Leader Shane Rattenbury has written to the Chief Minister Andrew Barr imploring him to consider this urgent action at the Territory level, and the Greens have also written to Federal and State Housing Ministers.
But it was Homelessness and Housing Services Minister Rebecca Vassarotti and MLA Johnathan Davis who fronted the media to argue the case for such market intervention, dismissing concerns that the measures would make the situation worse by driving away landlords and reducing supply.
Ms Vassarotti said there must be a coordinated response to the rental crisis across Australia.
She said that the ACT had the highest rents in the country, increasing more than seven times the rate of wages and that almost half of renters were in financial stress.
Mr Davis, a former real estate agent whose push for a tax on vacant properties received short shrift from Mr Barr, said that despite the handwringing from landlords, the ACT continued to be one of the best places in the country to invest in property, with the number of rental properties in the ACT increasing by 4 per cent over the past decade.
“Government does not exist to ensure that private investment in any market, let alone the property market, remains profitable and lucrative,” Mr Davis said.
“Government’s job is to eliminate homelessness. Government’s job is to make sure everyone in the richest city in the country in one of the richest countries in the world has a roof over their head and has a home.”
Ms Vassarotti said landlords had nothing to fear from these measures.
“We’re talking about having increases of rents to an element that is affordable for people,” she said.
“Landlords who are providing tenants with a good safe home will actually see benefits from these proposals as we regulate the market and ensure that people are able to maintain their tenancies.”
Both the ACT Council of Social Services and Better Renting back the Greens’ call.
But Acting Opposition Leader Jeremy Hanson said a rent freeze was madness and would just end up hurting renters more, echoing concerns from the property industry.
“It’s dangerous and reckless and will lead to more homelessness,” he said.
“What we’re going to see is more pressure on rental properties, so people will sell their properties and there’ll be less supply.”
Mr Hanson said prices would increase and it would be even harder to find rental properties.
Deputy Chief Minister and Housing Minister Yvette Berry did not dismiss the Greens’ proposal out of hand, saying the government, a landlord itself, would study the implications of any further market regulation beyond that already introduced in the ACT.
“We have previously discussed the application of rental price controls in the Territory, particularly in the context of no-cause evictions,” she said.
“The government will put in place a process to ensure we can thoroughly investigate the impacts of any further market interventions and have a fully informed government and stakeholder consideration of the issues.
“This will include particular consideration of the supply of rental properties in Canberra (eg Build to Rent) and the financial impact on Housing ACT.”
Ms Berry met with other Housing Ministers on Wednesday after National Cabinet tasked them to develop a proposal to strengthen renters’ rights across the country.
She said the ACT already had some of the strongest tenancy protections in the nation, and the government was focused on constructing more rental properties.
“ACT Labor knows that we need to increase housing supply – that is why we continue to pursue planning reforms and large-scale build-to-rent projects to deliver that supply for the fastest growing city in the country,” Ms Berry said.
“Importantly, we are starting to see our policy response working, with the vacancy rate rising and data released indicating that while median rents across the combined capital cities increased 11.7 per cent for the 12 months to the end of April, in Canberra, dwelling rents fell 0.7 per cent.”
The vacancy rate has also eased to 2 per cent which, while still tight, is much better than a year ago when it was just 0.7 per cent.