19 February 2021

Rental crisis demands a bigger response from government

| Ian Bushnell
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Public housing worksite in Dickson

A public housing worksite in Dickson last year. There just isn’t enough being built to meet demand. Photo: File.

The news this week was grim for anyone caught up in Canberra’s brutal rental market, as rents continue to climb and the availability of both houses and units shrinks.

Canberra is just too popular apparently, with an influx of professionals and graduates, some looking for a safe haven, soaking up what vacant housing there is.

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If a lease is coming to an end or the landlord has decided to cash in on the ACT’s hot property prices, it can be a terrifying time for tenants embarking on a Hunger Games-type quest to secure a roof over their heads, particularly for those who don’t draw the kinds of salaries the public service and national organisations pay so they can’t compete with rents being offered in application bidding wars.

Nonetheless, they may end up in unsuitable properties or with leases that will bleed them dry, leaving them exposed to unpaid energy bills or suffering through Canberra’s winter chill or searing summer, skipped meals and a limited wardrobe.

And they’re the ones in work. God help those on fixed incomes such as the unemployed and pensioners.

Is the market capable of doing its job in Canberra?

For many, the answer has been no for a long while. The Labor-Greens government continues to tout its 10-year, $1 billion Housing Strategy but that seems to be left in the dust as rents stampede away.

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Welfare groups say the ACT needs 3,000 additional affordable dwellings, making the government’s promised 400 more public housing dwellings a paltry offering.

There needs to be a new injection of public funding and more dedicated land releases for affordable housing, they say, both of which were missing from Andrew Barr’s latest budget.

The government seems to have drawn a line about what it can do, steadfastly refusing to adjust its housing strategy for a deteriorating situation in the ACT.

With governments deploying deficits to save their economies and interest rates so low, why not take the opportunity to bolster such critical infrastructure like housing that people can actually afford?

Mr Barr delivered a better than expected bottom line, perhaps he could have thrown some of that saved money at a problem that is not going away and, in fact, is just getting worse.

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His response on Budget day was a mix of home truths and blame-shifting.

“My biggest concerns are not the financing but the supply side capability to actually build the houses, land availability and planning challenges,” he said.

“Any new public housing almost anywhere in Canberra attracts a degree of concern from sections of the community and often a media circus.”

All true but still no excuse for ignoring the situation.

But he also appeared resigned to the limits of his powers.

“There will always be a waiting list … I would rather a housing waiting list of 3,000 than a wait time between six months and two years than 60,000 and a wait time of 10 years or longer,” he said.

Mr Barr insisted that the ACT builds more public housing per capita than any other jurisdiction.

That may be so, but that self-congratulatory pat on the back does not help the growing numbers of Canberrans, who actually do a lot of the work to keep this city functioning, in over their heads or only a job or even a shift loss away from the street.

The ground is shifting, and the ACT Government needs to move with it.

And if the work of government and the businesses and associations that support it are pulling people into the national capital and putting a torch to the rental market, then governments, both ACT and Commonwealth, need to pick up more of the tab too.

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why does Canberra allow public housing for life? they don’t do this interstate. For example an elderly person in a 3 bedroom house in the inner suburbs after their kids have left home? They can stay alone in a large house until they die. Doesn’t seem fair for the families waiting for a house on the public housing waiting list.
Even the local pollies seem ‘entitled’ to stay in public housing whilst others wait…..


Mike of Canberra4:19 pm 20 Feb 21

Here we go again: an article about Canberra’s “rental crisis” that fails to apply proper analysis to the issue. Ian, there’s several factors that need to be addressed in dealing with this “crisis”. First, as another commenter has pointed out, is property affordability. If an already expensive rental property comes with a high ACT Government tax base, the rent will be higher.

Second, ACT tenancy laws increase landlord risk and thus rents. If a landlord effectively can’t evict a problem tenant causing damage to the property and/or other problems, the additional landlord risk will be reflected in higher rents. This factor also, eventually, will result in lower private investment in rental property, with lower supply inevitably putting upward pressure on rents.

The third factor, relating to public housing, is the often-chronic mismatch between property scale and tenant needs. Why have a single tenant in a 3-bedroom house? Address this to improve supply and thus put downward pressure on rents.

Fourth is how Housing ACT wastes money by maintaining old, unimproved public housing properties in expensive areas, thus adding to costs in the form of rates and land taxes. The more money Housing ACT allocates to these avoidable costs, the less it has to put into capital projects and thus new housing.

Finally, there’s the lax administration of public housing tenancy agreements. If all of these agreements were adhered to and/or enforced properly, there would be a lot less vandalism and much better management of the properties by their tenants, thus lowering the maintenance costs incurred by Housing ACT in providing housing for those eligible to receive it.

So, before we rush to build new public housing, why not ensure we’re making the most of what we already have? Never put ideology ahead of practicality.

2 reasons:
High Land tax
High Land prices

1 cause:
Labor Government making them higher

It’s the Greens who generally force Labor to do what they want

ACT Labor/Greens government loves taxing Canberra’s rents through exorbitant land tax and rates. Isn’t it a joke that a tenant of a 1-2 bedroom unit typically pays far more local ACT taxes (via rent) under Labor/Green tax reform than an owner-occupier of 4-5 br house? If Barr drops his exorbitant rent tax (land tax) when rents drop by 25%, why doesn’t he abolishes his ill-conceived land tax across the board if he is serious about fixing ACT rental crisis?

The ACT government maintains an artificial market to serve established interests. Under the current regime it would be fair to offer first home buyers a block of land at no cost. Instead we are likely to continue to see rampant inter-generational theft, and a growing underclass of serfs until their anger spills over into the streets.

They could start with reconciling the tenant to public housing match in the stock they do have. While providing stability to public tenants is of course important I fail to see how keeping them in houses that they no longer require, and some times in the really long term, serves the community. In my small inner Canberra treet we have one 3br government house that lies empty half the year while its occupant goes to Queensland for winter, another which lay empty for over six months between tenants (without being worked on), one that lies empty most of the time while the single occupant lives with his girlfriend in another government house, and still another where the 60+ year old occupant lives in a three bedroom house allocated to her 30 years ago when she had three small children. If that kind of tenancy management is happening all over the ACT – surely something can be done to improve the efficient use of public housing and cut down the wait list?

If we can just add a few more bureaucrats to the mix,, with the task of micro managing how people live, damn it, we can make this thing work ?

Government housing in the ACT is a right for life. They cannot be moved on. It’s an odd system when lots of families need the houses. I know families that have had the same house for three generations.

Step 1 for labor/green types: study the law of supply and demand.

Step 2: study the effectiveness of government ignoring step 1.

Or people who can’t afford to live here could move?

Capital Retro6:19 pm 19 Feb 21

You may be pre-empting potential mass-migration.

Canberra has more public housing stock per Capita than any other state. Why not join the queue for a near free house?

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