Rabu, 27 April 2011

Kids Still Can't Fly

We posted recently about children falling from windows. It's happened again – this time, fortunately, the four-year old girl who fell is recovering in hospital.

The Daily Telegraph reports that the State Government is considering what actions it might take to address this problem. It need look no further than the report of the Children's Hospital at Westmead.

Now, if you follow the link to the Tele's article (here it is again) you'll see some reader comments at the bottom – many of them from landlords who don't at all mind giving their industry a very bad look. Tidied up a bit, they disclose two main objections – both readily answered.

Objection 1: how about parents exercising some personal responsibility?

Parental care and responsibility will always be the best assurance of a child's safety. Surely the goal is making parents' exercise of responsibility work to best effect. What the Children's Hospital's proposed reforms would do is put window-limiting devices into the hands of parents and tell them 'now, exercise your responsibility and use them – make them work to keep your children safe.'

Objection 2: but what if there's a fire?

The Children's Hospital anticipated this one in their report, and asked Fire and Rescue NSW (formerly NSW Fire Brigades) for its view. It had no conclusive data as to how many people escape fires by exiting through a window – whereas the Hospital's data shows that kids falling from windows is a clear and present hazard. Fire and Rescue NSW's own recommendation is that people should plan to have multiple escape routes in the event of fire, and that window-limiting devices should be able to be unlatched, unlocked or removed by adults.

The Tele editorialises on the issue:

Shut legal window

IT isn't the biggest state project of all time, but it is deeply urgent. A simple change in state housing laws will possibly save many children from serious injury or death resulting from second-floor (and above) window falls.

As things stand, there are relatively few regulations mandating safety for windows in NSW houses. As we've lately seen, these sort of conditions can easily result in terrifying falls for young children.

A basic legal requirement to limit the amount that a window can open, therefore preventing any falls, is all that is needed.

In the meantime, there are extremely simple steps that parents of little children can take in order to make their houses secure.

Any person who is competent with basic tools should be able to stop windows being opened dangerously.

Why wait for the Government to act?

Well said.

Rabu, 20 April 2011

Negative gearing - turning off the third rail?

An eyebrow-raising report in the Herald today:

THE Gillard government has sounded out unions over steps to cool Australia's housing market, with measures that range from a new sales tax for investors sitting on large property portfolios, to curbing the popular strategy of using negative gearing for multiple properties.

The proposals to do something about negative gearing, in particular, catch the eye. Is the Labor Government finally daring to touch what has long been regarded as the third rail of Australian politics, in order to slow the debt-laden housing loco as it barrels down the line?

(Labor ministers and union representatives gingerly prod the third rail.)

The report is short on details, but gives an outline of the strategy:

[T]o reduce political risk, the changes have been designed to target only the wealthiest property owners, leaving those with one investment property untouched.
[The negative gearing] proposal is to scale back the negative gearing tax benefit from its 100 per cent benefit as the number of investment properties rise.
About 1.7 million property owners used negative gearing in the 2009 financial year, claiming rental losses as a tax offset. This generated a net rental loss of $6.5 billion for the financial year, Tax Office figures show.
They show about 1.19 million Australians own one investment property. About 294,000 have two investment properties, while those with three number 88,300.
Meanwhile, about 14,100 Australians have six or more investment properties, the figures show.

Our housing system sorely needs negative gearing to be reformed, but does it need this sort of reform?

Do we need further preference given to small-holding amateur landlords, who all-too-often get into the market without a second thought to tenancy, instead of multiple-property holders who might take a more professional approach to their business?

Do we need to further encourage the dedicated negative-gearists out there to borrow up big and spend up big on a single property ('aw yeah, it's a premium property!'), instead of building a portfolio of lower price - and hence lower rent - properties, which is what we really need?

There's other ways of reforming negative gearing. There's the short-lived 1985 reforms – recently reprised by Saul Eslake – which allowed landlords to set their losses (ie the amount their rental income fell short of their interest payments) only against future rental income or capital gains, rather than against all their income from work and other sources.

Or there's restricting negative gearing to newly constructed properties only, and for a certain number of years post construction.

Or there's the Henry Review's proposal to reduce the tax preferencing of capital gains by discounting tax on rental income... more on that as our review of the Henry Review continues.

Rabu, 13 April 2011

Kids Can't Fly

A couple of years ago Dr Danny Cass, head of Emergency and Trauma at the Children's Hospital, Westmead, noticed something: an increasing number of his tiny patients had sustained their injuries from falls from residential windows and balconies.

Looking over his records, Dr Cass found that over the ten years to 2008, 169 children had been admitted for this reason – and that's just at the Children's Hospital at Westmead.

Last month the Children's Hospital at Westmead released the report of its Working Party for the Prevention of Children Falling from Residential Buildings. Its recommendations include making amendments to residential tenancies and strata legislation to require landlords and owners corporations to provide safety devices (window guards, durable and sturdy mesh screens, locks, winow opening limiters) or other permanently affixed devices on openable windows more than three metres above an external surface, such that occupants could limit the window opening to 100 millimetres.

The same month yet another child, a boy two years old, fell from a window at home and died.

The issue of window safety was not specifically considered in the review of residential tenancies law that led to the recently commenced Residential Tenancies Act 2010. The relevant provisions of the Act – that premises must be provided and mainatained in a state of reasonable repair, and must comply with health and safety legislation – do not go so far as to specifically require the window safety devices described by the Children's Hosital's report. This means that tenants who ask their landlords to install such devices might be told 'no, the windows in reasonable repair/safe enough as is'. And of course there are many more tenants and landlords who, in the absence of a specific requirement for window safety devices, may not turn their minds to the issue at all – until it's too late.

The Tenants' Union strongly supports the Children's Hospital's proposals. They can and should be implemented now – and there could be no more worthwhile first item of business for a new Fair Trading Minister.

Selasa, 12 April 2011

New Ministers

We referred yesterday to the new State Coalition Government's Minister for Citizenship and Communities, Victor Dominello. It would be remiss of us if we didn't properly congratulate him and his colleagues newly appointed to ministerial portfolios relating to renting.

Congratulations to the new Minister for Fair Trading, Anthony Roberts –

(Minister for Fair Trading, Anthony Roberts MLA)

and the Minister for Housing...


... actually, there is no Minister for Housing. For the first time in 70 years, there is no Minister for Housing in the NSW State Government. Congratulations instead to Minister for Finance and Services, Greg Pearce –

(Minister for Finance and Services, Greg Pearce MLC)

and Minister for Family and Community Services, Pru Goward.

(Minister for Family and Community Services, Pru Goward MLA)

Ministers Pearce and Goward share responsibilities previously allocated to Housing Ministers, including administration of the Housing Act 2001.

This new division of ministerial responsibilities is an interesting development, and we'll have to see how it works in practice. As noted by the Brown Couch after the federal election, the Commonwealth Government has also lost its Housing Minister. We were disappointed with that decision, because the Commonwealth had only just restored the portfolio after years of abeyance under the Howard Government, and a wide-ranging federal housing portfolio had the potential to direct policy to outcomes like improved affordability and security, rather keeping the great housing Ponzi scheme going.

The situation is a little different at the level of State Government, because unlike the Commonwealth Government it is directly involved in housing provision through the public housing bureaucracy. Despite successive Housing Ministers taking office with a commitment to being 'a minister for housing, not just public housing', each has been fatally attracted to the administration of public housing, including individual allocation and tenancy management decisions.

Maybe the new arrangement will break the curse. Still, its a curious thing for the Commonwealth Government, which does not directly administer a social housing system, to have a Minister for Social Housing, and for the NSW State Government, which does have a social housing system, not to have a Housing Minister at all.


It would be remiss of us too if we did not acknowledge at least a few of those on the opposite side of politics who exited the parliament at the recent election.

In particular, the former Fair Trading Minister, Virginia Judge, who lost her seat in the Legislative Assembly, deserves credit for her role in producing the new Residential Tenancies Act 2010. After an over-long review of our renting laws (under three previous Ministers), it was Ms Judge who finally got out of it a new – and significantly improved – Act.

Secondly, we also acknowledge the efforts of Paul Pearce, previously MLA for Coogee. Mr Pearce was never a Minister for Fair Trading or Housing – more's the pity, because he was always a voice in the parliament for tenants and marginal renters. He leaves with our thanks and best wishes.

Senin, 11 April 2011

Sex exploitation in marginal rental

Today's Herald reports on the experience of international students living in illegal boarding houses in university-side suburbs throughout Sydney. These marginal renters often live in difficult conditions – the 'boarding houses' are often just ordinary houses and flats with partitions thrown up to create additional rooms, in each of which several students might sleep – and sometimes have to deal with some of the very worst landlords in our housing system, whose demands start at exploitative rents and go on to exploitative sex.

The Herald reports that the new State Minister for Citizenship and Communities, Victor Dominello – also MP for Ryde, where many of these boarding houses have sprung up – is proposing legislation to better regulate this sort of marginal rental accommodation.

In fact, the Minister has already got some legislation ready – a private member's Bill drafted last year, when he was in Opposition. This Bill would have created a boarding houses register, to help sort the legitimate operators from the rogues.

As the Tenants' Union said at the time, a boarding houses register would be a welcome and useful consumer protection measure and should be part of a wider ranging program of reform of the marginal rental sector. In particular, let's build on the register so that it also becomes an accreditation or even a licensing system to check that operators have appropriate skills and knowledge of their business (Mr Dominello's party proposed something similar for residential park operators ahead of the election).

And let's also get the lamentable state of legal relations between marginal renters and landlords sorted out with legislation for modern occupancy agreements that have to comply with a few basic occupancy principles.

It's not only the marginal renters themselves who stand to benefit form better regulation. The universities and the legitimate operators should get behind marginal rental reform too, for the benefit of their reputations and businesses.

Good on Mr Dominello for maintaining his interest in this neglected part of our housing system as his party makes its transition to government. And here's hoping that from his new position of power, the Minister builds on his efforts in opposition and pushes for a more ambitious program of reform for marginal renters.