Greens plan to make rental more expensive back on the table

johnboy 14 February 2012 67

The Greens’ Shane Rattenbury is letting us know that his plans to make renting more expensive, but more environmentally friendly, are back on the table:

This week, the Greens will bring back their Rental Standards Bill. A failure to implement the bill’s minimum energy efficiency standards for rental properties is effectively leaving 1/3 of Canberrans out of the Government’s plans to improve energy efficiency.

The bill, which was introduced last year, sets basic minimum energy, water and security standards for rental properties in the ACT, including public housing.

“30% of the ACT’s housing stock is tenanted and the Greens bill will deliver significant benefits for Canberra renters,” Greens climate change spokesperson, Shane Rattenbury MLA, said today.

As a renter I can’t say I relish getting kicked out of my current place so the landlord can undertake remedial standards work, and then having to rent a new place recently refurbished with a landlord trying to recoup the costs.


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67 Responses to Greens plan to make rental more expensive back on the table
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Diggety Diggety 2:18 am 03 Mar 12

Watson said :

What an exaggeration. Sounds a bit conspiracy nutter even.

I would hate having my rent put up for any reason, but it’s going to keep going up anyway disproportionally to the CPI as a result of skewed market forces and without any improvements to the property.

Conspiracy? Don’t shy away from argument, my dear Watson.

it’s going to keep going up anyway disproportionally to the CPI as a result of skewed market forces and without any improvements to the property.

Of couse rental prices will rise as a function of CPI. That was never disputed.

But you’ve never noticed higher prices as a function of Government?:

– Locked land release
– High average salaries of public servents.

There are plenty of struggling people in Canberra paying silly amounts of money on rent. There is one (not a good example as he options) floating on the lake right now.

devils_advocate devils_advocate 8:37 am 01 Mar 12

Deref said :

The single biggest issue with energy efficiency has to be orientation. As far as I know, no party is talking about mandating north-south orientation for all new buildings, yet the cost would be negligible to zero for new developments.

No. This may have been the case with the older, larger residential blocks but certainly not the case with new developments. This is because the block sizes are so small it severely limits options as far as locating the house on the block, and the living areas. For example, the driveway has to be at the front of the property, obviously, but there is no option to run it out the back past the house into the garage – the garage has to be located at the front of the block. And of course people want the sleeping areas away from the street as much as possible, so at teh back o fthe block. This explains why, when you go through the newer suburbs, so many of the houses look the same.

Now of course within the constraints above you can play around to try and optimise, but having done a fair few new builds, it truly is an exercise in constrained optimisation.

Watson Watson 8:21 am 01 Mar 12

Diggety said :

jezman said :

To all those who are accusing the Greens of short-sightedness : This decision would cause rent to rise on some properties which is a short term problem. The issue being tackled here is a long-term problem that has also been around for a long time, that is, too many houses in Canberra have unacceptably poor thermal performance, resulting in high heating/cooling costs and environmental problems.

This kind of policy was needed so long ago that it will be problematic to dump a long list of requirements on landlords all at once. Policies like this need to be introduced gradually, as successful ones often do. For example this year it could be required of landlords to install ceiling insulation in any houses where insulation is inadequate, but only if a tenancy finishes. After 2-3 years that could extend to wall insulation (very possible to retrofit insulation in most Canberra houses).

And clearly no political party has been good at keeping rent low in Canberra. This is another long term problem that requires forward thinking and has to do with much more than the cost of renovating.

Jezman, let me get this straight, you want the Government to:

1. Intervene and undermine an agreement between two willing parties
2. Use violence as a means to implement that intervention
3. Financially burden the capital and ongoing costs of two parties
4. You (and the political party proposing the idea) submit no detailed reasons on why this use of Governmental force is warrented.

Yep, you fit right in with the Greens jezman.

What an exaggeration. Sounds a bit conspiracy nutter even.

I agree with Jezman. I would hate having my rent put up for any reason, but it’s going to keep going up anyway disproportionally to the CPI as a result of skewed market forces and without any improvements to the property. At least the energy rating improvements would keep my heating costs down. I cringe every time I hear my heater come on because it’s like I can almost see the $50 notes float out of the ludicrously badly insulated house.

If I had a choice between a more expensive high EER property and a cheap dump with 0 EER, I might feel forced to choose for the latter. I would actually rather that that choice be taken away from me than to spend another winter in a freezing cold house while paying through the nose for heating.

Deref Deref 7:47 am 01 Mar 12

The single biggest issue with energy efficiency has to be orientation. As far as I know, no party is talking about mandating north-south orientation for all new buildings, yet the cost would be negligible to zero for new developments.

Diggety Diggety 11:43 pm 29 Feb 12

jezman said :

To all those who are accusing the Greens of short-sightedness : This decision would cause rent to rise on some properties which is a short term problem. The issue being tackled here is a long-term problem that has also been around for a long time, that is, too many houses in Canberra have unacceptably poor thermal performance, resulting in high heating/cooling costs and environmental problems.

This kind of policy was needed so long ago that it will be problematic to dump a long list of requirements on landlords all at once. Policies like this need to be introduced gradually, as successful ones often do. For example this year it could be required of landlords to install ceiling insulation in any houses where insulation is inadequate, but only if a tenancy finishes. After 2-3 years that could extend to wall insulation (very possible to retrofit insulation in most Canberra houses).

And clearly no political party has been good at keeping rent low in Canberra. This is another long term problem that requires forward thinking and has to do with much more than the cost of renovating.

Jezman, let me get this straight, you want the Government to:

1. Intervene and undermine an agreement between two willing parties
2. Use violence as a means to implement that intervention
3. Financially burden the capital and ongoing costs of two parties
4. You (and the political party proposing the idea) submit no detailed reasons on why this use of Governmental force is warrented.

Yep, you fit right in with the Greens jezman.

jezman jezman 9:43 pm 29 Feb 12

To all those who are accusing the Greens of short-sightedness : This decision would cause rent to rise on some properties which is a short term problem. The issue being tackled here is a long-term problem that has also been around for a long time, that is, too many houses in Canberra have unacceptably poor thermal performance, resulting in high heating/cooling costs and environmental problems.

This kind of policy was needed so long ago that it will be problematic to dump a long list of requirements on landlords all at once. Policies like this need to be introduced gradually, as successful ones often do. For example this year it could be required of landlords to install ceiling insulation in any houses where insulation is inadequate, but only if a tenancy finishes. After 2-3 years that could extend to wall insulation (very possible to retrofit insulation in most Canberra houses).

And clearly no political party has been good at keeping rent low in Canberra. This is another long term problem that requires forward thinking and has to do with much more than the cost of renovating.

I-filed I-filed 8:10 pm 15 Feb 12

miz said :

The last major ‘green’ improvement to my govvie that I did not do myself was a hopeless ‘green’ airoheat hot water tank totally unsuitable for Canberra’s climate. It was ‘re-replaced’ with an off peak within six months.

Totally agree – instant hot water is unsuitable for Canberra in winter – the water going in needs to be at around 20 degrees for it to heat up enough hot water flow for a goodly shower.

Holden Caulfield Holden Caulfield 5:50 pm 15 Feb 12

Futureproof said :

Correct me if I’m wrong, but isn’t there an ACT Greens Senator who was voted in at the last election, who lived in a housing commission residence? I remember there was a bit of a stink about it. Don’t know whether she had to move out

Kerrie Tucker ran for the Senate, but the usual pairing of Lundy (ALP) and Humphries (DICK) got in.

    johnboy johnboy 5:55 pm 15 Feb 12

    Deb Foskey was the MLA in government housing. Other MLA’s still view it as a great travesty that she was forced to give it up.

Futureproof Futureproof 5:16 pm 15 Feb 12

Correct me if I’m wrong, but isn’t there an ACT Greens Senator who was voted in at the last election, who lived in a housing commission residence? I remember there was a bit of a stink about it. Don’t know whether she had to move out

VYBerlinaV8_is_back VYBerlinaV8_is_back 4:47 pm 15 Feb 12

johnboy said :

Word reaches me that Labor and Liberals have teamed up to kill this one off, for fear of raising rents.

Good to see some common sense in play, then.

devils_advocate devils_advocate 4:47 pm 15 Feb 12

pajs said :

Trouble is, there is a demonstrated market failure (with years of national studies and evidence) here. It’s a classic split incentives case, with the people who pay the utility bills (who will reap the savings from efficiencies) not the people who own and control the building. And the costs for the changes apply to the owners, who don’t receive direct benefit for the investment.

Yep, the split incentives problem has also contributed to me not fitting solar panels on my rentals. It’s not the sole cause, though – I’m waiting for the technology to get a bit better before investing even in a home I’ll live in for the medium-term.

pajs pajs 4:23 pm 15 Feb 12

devils_advocate said :

VYBerlinaV8_is_back said :

pajs said :

Personally, I’d prefer a policy that said if your rental property doesn’t meet minimum standards for habitability (including security, safety. insulation, energy efficiency & water-efficiency) then no negative gearing for you, dear landlord.

Wouldn’t bother landlords like me who are positively geared.

Personally I’d prefer a policy that said governments at all levels should stay the hell out of markets except where a) there’s a demonstrated market failure AND (note the AND) b) they can actually improve market outcomes by interfering.

Trouble is, there is a demonstrated market failure (with years of national studies and evidence) here. It’s a classic split incentives case, with the people who pay the utility bills (who will reap the savings from efficiencies) not the people who own and control the building. And the costs for the changes apply to the owners, who don’t receive direct benefit for the investment.

There is also reasonable evidence (though I don’t know what new studies specific to Canberra the ACT Government/Greens may have done) about the payback periods from household energy & water retrofits. To my mind, assuming the rental property market is much of a market at all, you would expect, even want, owners to pass the costs of retrofits along to renters as higher rental charges. Given the renters have reduced utility bills, post-retrofits, economics would argue they can afford the cost of the increased rent.

But I’d be stunned to see a Green pollie come out directly and say that this is how the plan is meant to work out. Easier to pretend market magic will happen and costs will be absorbed by owners and not passed on to renters.

devils_advocate devils_advocate 3:25 pm 15 Feb 12

VYBerlinaV8_is_back said :

pajs said :

Personally, I’d prefer a policy that said if your rental property doesn’t meet minimum standards for habitability (including security, safety. insulation, energy efficiency & water-efficiency) then no negative gearing for you, dear landlord.

Wouldn’t bother landlords like me who are positively geared.

Personally I’d prefer a policy that said governments at all levels should stay the hell out of markets except where a) there’s a demonstrated market failure AND (note the AND) b) they can actually improve market outcomes by interfering.

miz miz 3:13 pm 15 Feb 12

The last major ‘green’ improvement to my govvie that I did not do myself was a hopeless ‘green’ airoheat hot water tank totally unsuitable for Canberra’s climate. It was ‘re-replaced’ with an off peak within six months.

The greens do not have a very good record on energy efficiency initiatives as they don’t do their homework – eg, the ‘more efficient’ extra long buses that can’t go down half of Canberra’s streets.

VYBerlinaV8_is_back VYBerlinaV8_is_back 2:17 pm 15 Feb 12

pajs said :

Personally, I’d prefer a policy that said if your rental property doesn’t meet minimum standards for habitability (including security, safety. insulation, energy efficiency & water-efficiency) then no negative gearing for you, dear landlord.

Wouldn’t bother landlords like me who are positively geared.

johnboy johnboy 12:51 pm 15 Feb 12

Word reaches me that Labor and Liberals have teamed up to kill this one off, for fear of raising rents.

pajs pajs 12:33 pm 15 Feb 12

Personally, I’d prefer a policy that said if your rental property doesn’t meet minimum standards for habitability (including security, safety. insulation, energy efficiency & water-efficiency) then no negative gearing for you, dear landlord.

VYBerlinaV8_is_back VYBerlinaV8_is_back 12:01 pm 15 Feb 12

Grail said :

VYBerlinaV8_is_back said :

I did a renovation a couple of years ago that resulted in the rent being increased 30% in 4 weeks.

Wow … I increase the rent every year to keep slightly behind market. If I re-let the place today, I would get about 5-10% more rent. Good long term tenants are not worth 30% of my income.

How much did those renovations cost in relation to the value of the property?

I have good tenants, but the issue is not keeping rent down to retain them. For my ACT properties, I have several times increased rent by the maximum allowable level, but in order to get a one off 30% increase it was renovation that did it (combined with having new tenants and thus not being caught by the maximum rental increase rules).

When I did the renovation I spent about 7% of the value of the property (it was old and run down, and some careful cosmetic work and improvment of the bathroom yielded a very nice result).

JC JC 11:56 am 15 Feb 12

NoImRight said :

In all fairness Ive seen some Public Housing houses recently and they are well below what Id call a reasonable standard on these issues. No wall insulation and virtually none in the roof (just that cheap token crap) and tenants expected to heat an older design segregated house from one inefficient gas heater that even predates the wall unit types.It does seem a little wrong that we put people on low incomes into houses that will cost a fortune just to maintain a basic liveability condition.

And no Im not seeking any “they should just be grateful our taxes pay for them” responses. Thanks anyway.

That’s interesting as ACT Housing have been undertaking a program of insulating their properties and to a very hight standard. Though yes the standard of heaters they have installed leaves a lot to be desired. My old mum had her place in Macgregor insulated about 4 years ago, but had a pissy electric heater heating a 4 bedroom places. She has since moved on to a new place, which is much better insulated, has double glazing but still poor heating, consisting of a case wall furnace and two electric raditors in the bedrooms.

chewy14 chewy14 11:18 am 15 Feb 12

Grail said :

chewy14 said :

Yes, you’re not in the game to throw money away which is why if you were smart you could use this to complete multiple renovations as well as those required by this law.

Then re-let the house at a much higher rent.

Ah but maybe i’m being too cynical, Landlords are usually such altruistic chaps and the Greens always think their schemes through completely, don’t they?

It would be nice if you could think your absurd story through completely before vomiting it over the RiotACT.

I am a landlord. I have long term tenants. I am happy. New law arrives that says I have to renovate my property before I can lease to new tenants.

Explain to me why I would kick these tenants out in order to incur expenses and be losing income, so I can re-let the place at higher rentals later? That would mean I have lost rent to make up for, advertising fees to make up for, and the cost of the renovation has impeded my goal of acquiring another property.

I don’t know, perhaps you would do your sums and work out which one would be more profitable for you depending on the increase in rent you could get as VY_Berlina explained?

I’m not saying it will be the case for all landlords but I can think of a couple of houses i’ve lived in previously (probably the majority of them) where it would be more profitable for the landlord to do exactly what I said.

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