Rabu, 31 Oktober 2012

Help save your EDO

The EDO NSW (Environmental Defenders Office) is, like the Tenants' Union, a community legal centre.


They're the experts in environmental law, and in the course of their work giving legal information and advice to interested members of the community, they've ruffled the feathers of some powerful interests. Their funding is under pressure – funds and funding timeframes have already been cut – and if things don't change, the EDO will have to lay off most staff and cut most of their services in the New Year.

The EDO needs a commitment from the NSW State Government to its ongoing funding. You can help – the EDO's call for help, with further details of the current crisis and how best to solve it, is reproduced below.

Will you help us to save your EDO?
After nearly 30 years of helping the people of NSW to protect their environment and heritage under the law, EDO NSW faces an unprecedented threat to its survival and we need your help to ensure we can continue to assist you in public interest environmental matters. Please read on to better understand the problem and what you can do to help.

POLITICAL PRESSURE
In recent days, the NSW Energy Minister attacked EDO NSW’s involvement in last weekend’s community conference in Gloucester. The conference provided an opportunity for community members to obtain information on developments across NSW and was attended by farmers, elected representatives and the broader community. This latest comment follows months of repeated attacks in The Australian newspaper, the National Civic Council and in NSW Parliament, mainly by Shooters and Fishers Party MPs. These are unjustified attacks on our work as lawyers for the environment.  Click here to see our letter of October 19th 2012 to NSW Government Ministers and MPs responding to these attacks.

FUNDING CRISIS
The NSW Government is now being urged to stop EDO NSW funding under a review of legal assistance services. At the same time, the major source of our annual funding - which comes from the Public Purpose Fund of the Law Society of NSW (PPF) - has been cut. We have been receiving PPF funding since 1996, normally under three-year grant agreements, and our work has been actively supported by the Trustees. The first cut was to 6 months (July-December 2012); and as of this month has been reduced to only 3 months (January-March 2013), with the dollar value cut by a quarter.  As a result, both our PPF funding, and NSW Government funding, must now be considered at risk.

THE PROBLEM
This damaging uncertainty makes it extremely difficult, if not impossible, to maintain a strong, independent EDO, that can offer ongoing help to clients, and serve the wider community, while operating free of the politics of the day. If our PPF funding is not restored and public funding affirmed then EDO NSW as you know it will be decimated if not destroyed in the New Year. This is occurring at the same time as the Government is pursuing its signature reform of the planning laws, with the avowed intention of restoring community participation and public confidence after the dark days of fast-tracking major projects under Part 3A.

THE SOLUTION
The uncertainty can be solved by the NSW Government making clear its strong and unambiguous support for ongoing PPF and public funding of EDO NSW, ideally with cross-party agreement in the Parliament. In this way, community participation and public confidence in the planning and environment system can be maintained.

WHAT YOU CAN DO
We need our many supporters to speak up long and loud. Please do any or all of the following:  Contact your local Member of Parliament to call for their support to save EDO NSW, and to express your support. You can find contacts for your local MP at http://www.parliament.nsw.gov.au/prod/parlment/members.nsf/V3Home
  • Contact the Premier office@premier.nsw.gov.au or ph: (02) 9487 8588), the Attorney General the Hon. Greg Smith office@smith.minister.nsw.gov.au or ph: (02) 9228 5246) and the Minister for Planning & Infrastructure the Hon. Brad Hazzard MP office@hazzard.minister.nsw.gov.au or ph: (02) 9228 5258)
  • Speak to your local media and look for opportunities to support us such as calling in to radio talkback
  • Share this email with anyone you think might care about EDO NSW.
  • We also welcome your donations to EDO NSW  
OUR FUTURE
If the current situation goes unchanged, it means we will have to lay off most of our valuable, highly professional and tireless staff early in the New Year, and begin dramatically scaling back or shutting down our popular key community services including: 
  • Free legal advice telephone line – we took nearly 1500 calls last year
  •  Community workshops – 95 across NSW in the past three years, with about 95% in rural and regional areas
  •  Rural and regional work – a major focus for the past 10 years, with a regional office in Lismore, and support to communities on key issues like native vegetation, water plans, coal seam gas, mining, private conservation and local planning
  •  Indigenous program – unique support to the Aboriginal community on culture and heritage
  •  Education and publishing – major guides/handbooks, and 40 much-used Fact Sheets, and a major new guide on mining set to be published
  •  Policy and law reform – including extensive input to the current major reform of the NSW planning laws, with 2400 hits on our online guide to the Green Paper during the submission period
  •  Court cases and mediation – ensuring high quality cases get heard and those with poor prospects are filtered out, which has led to many important environment cases on behalf of communities from the cities to the bush  
  • If NSW loses its EDO, the community’s only source of accessible, independent, expert, public interest legal advice on planning and environment matters since 1985 will disappear.

If that alarms you, then please take a stand. Help us to save your EDO.

Minggu, 28 Oktober 2012

The housing recovery that wasn't...

With all the talk of the new Boarding Houses Bill throughout last week, you could be forgiven for missing all the discussion about the Mid-Year Economic and Fiscal Outlook (MYEFO). Then again, perhaps you've followed all the rantings and ramblings about company tax and cash-flow, changes to the Baby Bonus scheme, and the removal of research funds from the tertiary education sector - all in the name of a budget surplus - far more closely than we did... which is, to say, not really very closely at all.

But because we're tenancy nerds, and because tenancy is all about housing, we couldn't help but notice when Michael Pascoe declared "Swan bets big on a housing recovery"... before explaining, with more than a hint of skepticism, that Treasury is expecting an upturn in the housing market to be one of the few positive drivers of our economy over the coming years. He says:
More important for the credibility of the government's outlook is the belief that the housing industry will finally turn the corner.
Says Treasury: “Dwelling investment is forecast to be flat in 2012-13, before growing 4 per cent in 2013-14. Dwelling investment declined 3.3 per cent in 2011-12 on the back of continued weakness in the detached housing market. Conditions across the sector are expected to improve gradually over the remainder of 2012, consistent with the solid growth in dwelling approvals and commencements seen in the June quarter.
“The recovery is expected to gather momentum into 2013-14, driven by a pick-up in home buyer demand, improved affordability following declines in house prices over the past two years and the assumption that interest rates will remain below average across the forecast period.”
Low interest rates, 'affordable' house prices, and an increase in the construction of new homes means more and more money will be changing hands, forever into the future. We'll all be back in silk ties and handkerchiefs before you can say "put on a happy face"!


If Treasury's predictions are correct then tenants should be happy, as the construction of any new dwelling should create a potential vacancy in the rental market. That vacancy would come from either a tenant of means opting to buy and occupy a new dwelling; or a new-home-buyer seeking to rent their dwelling to a tenant. Each scenario adds a property to the pool of available rental stock.

Of course, this 'one-for-one' formula would be skewed a little each time a first-home-occupier turned out to be a home-leaver, rather than a tenant... or whenever a new household of home-buyers was created by the partial dismantling of two or more existing households of tenants. But, in simple terms, the injection of new housing into the marketplace should be good for tenants. It would create new vacancies, and the reduced competition amongst tenants would put downward pressure on rents.

It should also slow the rate at which the price of property increases (read: capital gains), as supply starts to kick back against demand. This would see the trifecta that should help keep our economy ticking along (low interest rates, 'affordable' prices and increased construction of housing) on some kind of sustainable footing...

But wouldn't both of these things also reduce the incentive for 'Mum & Dad Landlords' (read: amateurs) to speculate on rising property prices? Indeed, if yields from both rental incomes and capital gains were to stabilise at a relatively modest level, speculators might look to other ways to make their rapid gains. Those in the game might take their money out of property, while potential new-comers could avoid it altogether - putting their savings into, well... into savings, instead.

The effect of this would be to put further downward pressure on the price of property, which might see more people realising their aspirations of property-ownership, creating more demand for the construction of affordable homes. The nature of that aspiration might undergo some form of transformation, as the incentive to speculate is diminished. But the increase in transactions tied to the production of new housing would surely outweigh the loss of quick speculative gains associated with the buying and selling of second hand dwellings. We might have to cut back on silk ties and handkerchiefs, but we could probably manage to hang onto one or two, to bring out on special occasions.

... and tenants, on the whole, would be much better off. They'd have landlords who wanted to be landlords, rather than amateur property magnates.


But there's a problem with this scenario, and it's illuminated quite starkly in today's Sydney Morning Herald. Matthew Kidman writes:
There are three fundamental ways of increasing housing affordability. First, house prices could drop significantly. This is a disastrous result because it creates financial pressures on the entire financial community. Second, wages could skyrocket, producing unacceptable increases in inflation. Finally, interest rates could fall, reducing the cost of borrowing. This is the most acceptable path, and the only one the RBA has control over. One year into a rate-cutting cycle, housing in Australia is the most affordable in eight years, but there are only tentative signs that this tactic to raise housing from its slumber is working. The broader community is now conditioned to the process of our banks passing on only about 75 per cent of the RBA cuts to customers. This may mean the RBA just has to keep cutting until there are signs housing is affordable.
The problem lies not with any profound truths contained in the words Kidman has written - his basic premise should be routinely questioned. The problem is that our entire economic framework is based on an acceptance of such words as truth.

Apparently, if house prices fail to increase at rates to which we are largely accustomed, the banks will go broke. If this happens, we'll all go broke, because we wont be able to borrow the money required to fund our most basic consumption needs. The banks will have to charge us a fortune for it, and they'll steer clear of most of us as too high a lending risk...

Without debt-fueled consumption, production would start to falter, the economy would grind to a halt, and we'd all lose our jobs. Without jobs, we'd end up losing our homes, too... and because our landlords borrowed too much to pay for them in the first place, we'd all be jobless, homeless and indebted for life.

This, at least, is the conventional wisdom.

Notwithstanding the fact that Australia's love affair with debt seems to be wavering, it seems that nobody is prepared to take this kind of a hit - not even in the name of a productive economy. We'll all just have to accept that the pathway to prosperity is not affordable housing, but affordable debt.

Pascoe, for his part, doesn't seem to buying it. Neither does Leith van Onselen who writes in the MacroBusiness blog that 'housing wont fill the void'. Accordingly:
Housing construction is unlikely to pick-up considerably until land prices deflate back to levels that are affordable and represent value to the home buying public. Tinkering around the edges by cutting interest rates and increasing subsidies does not resolve the fundamental problem that Australian vacant land prices are far too high.
 ... and all of this brings us right back to the speculators. It's the highly leveraged speculators who stand to lose the most if land prices go down. And as we've said before on the Brown Couch, it's negative gearing that entices speculators to take on more and more debt. At the same time it drives up the cost of housing, pushes up rents and restricts the availability of affordable rental housing.

As we've also said before on the Brown Couch, negative gearing costs our economy a whole lot of money. Which makes us wonder - if you were the Treasurer and you were looking for savings in order to produce a surplus amidst a revenue downturn, why wouldn't you have a look at negative gearing?

As it happens, we're not the only ones to ponder such potential savings. Saul Eslake appeared on the ABC's The Business last week and suggested that its abolition:
...would reduce the loss of revenue arising from negative gearing that, according to my own estimates, runs in excess of $5 billion per annum...
It might hurt a few speculators in the short term, and it would create a period of financial uncertainty for those property owners who are borrowing outrageous sums of money in order to 'get onto the ladder'.  But if you were looking to come up with a budget surplus, with a wink and a nod to the future, then taking a good long look at negative gearing might just have been the way to go.

International human rights and public housing terminations

Last month Justice Kevin Bell, of the Victorian Supreme Court, delivered the Costello Lecture at Monash University. His topic: 'Protecting public housing tenants in Australia from forced eviction: the fundamental importance of the human right to housing and home.'

 (Justice Kevin Bell)

There's a quick report of it here, but it is really worth reading the lecture in full – download it here.

Please read and reflect.

Selasa, 23 Oktober 2012

Boarding Houses Act 2012

The NSW State Government's Boarding Houses Bill has passed through both Houses of the Parliament. It just needs the Governor's signature and we'll have a Boarding Houses Act 2012.


(Charles Blackman, Self-portrait in front of a boarding house)

The Act has not commenced operation yet. We understand that the Government intends for it to commence 1 January 2013.

This is a landmark reform. Under the Act, residents of registrable boarding houses will have, for the first time, an enforceable entitlement to written agreements and written receipts.

They'll also have, for the first time, agreements that must comply with certain basic occupancy principles. These include entitlements to premises that are in a reasonable state of repair, to know the house rules before moving in, to quiet enjoyment, to know why and how the occupancy may be ended, including how much notice is to be given, and to be given reasonable notice of termination. They also include safeguards against penalty terms and unfair utility charges, and a limit on bonds to two weeks' rent. 

Residents will also have, for the first time, straight-forward access to dispute resolution in the Consumer, Trader and Tenancy Tribunal.

If these things seem basic and modest, they are – which says a lot about the very rough deal that boarding house residents have gotten from proprietors, and from the law, for too long.

The Act also establishes a Boarding Houses Register – so you will be able to check if the premises are registered, and find out the name of the proprietor – and directs councils to inspect premises for compliance with building and fire safety requirements. Finally, the Act revamps the regulatory regime for LRCs – now called 'assisted boarding houses'.

As we say, it is a landmark... but not the final destination of reform. Beyond this piece of legislation, there's still more to do. 

We still need to develop standard forms of occupancy agreement for the different types of boarding house accommodation (as provided for by the Act). 

We still need further law reform to extend the occupancy principles to marginal renters who don't live in registrable boarding houses (such as lodgers in private homes, share houses, student accommodation, and refuges and crisis accommodation) and who are excluded from residential tenancies legislation.

And finally, we need the deliberate and orderly winding up of the assisted boarding house sector, with residents assured of appropriate accommodation in social housing, groups homes or nursing homes, and properly funded professional support.

But as we reach the present landmark, we pause and congratulate the NSW State Government, and in particular the Disability Services Minister, Andrew Constance, who had carriage of the reforms. And we congratulate all those community workers, advocates and, especially, boarding house residents, who, over so many years, have spoken out against the injustices of marginal renting and who have kept pressing the case for reform.

Kamis, 18 Oktober 2012

Bonds for social housing tenancies?

A couple of days ago Greg Pearce, the NSW Minister for Finance and Services (he's in charge of government assets, including the bulk of housing that is managed by Housing NSW), made an announcement - he would like to start charging bonds to social housing tenants, among other strategies, to curb deliberate vandalism of social housing properties.



You can find a link to the Minister's press release from the Finance & Services website… or you can download the .pdf version from here.

Mr Pearce says that it will cost up to $12 million to repair vandalised public housing properties this year, and that's up from $5 million last year and $8 million the year before. He says that "there are hundreds of social housing properties across the state waiting to be refitted because previous tenants caused so much damage that they are not fit to live in".

Now, regular visitors to the Brown Couch may recall our recent discussion about the Parliamentary Q&A session between the Treasurer, acting on behalf of the Finance and Services Minister, and Mr Jamie Parker, the Member for Balmain. In this session it was revealed that the 2012-13 budget for repairs across NSW is $210.2 million for planned and responsive repairs, and $194.5 million to upgrade social housing properties. That's a total of $404.7 million being pumped into the repair, maintenance and upkeep of the government's mostly ageing housing portfolio in the current financial year. Clearly, this is an expensive business. $12 million, in the grand scheme of things, is not big bikkies.

That said, $12 million is still a whole lot of money. As the Minister suggests, it would be better if it could all be spent on building new homes. But we wonder how much of that $12 million can be directly attributed to the liabilities of tenants, taking into account their obligations under the Residential Tenancies Act 2010? How much of it is a result of other factors?

Let's have another look at that Q&A session

As we've already mentioned, in 2012-13 there is $210.2 million to be spent on planned and responsive repairs, and $194.5 million to be spent on upgrades of ageing stock - so there is clearly a lot of work to be done. But it was also revealed that in the 24 months before June 30th 2012 the government's contractors were called back to 39,142 jobs where further work was required. The majority of these recalls were at the contractors' own expense, which might indicate that the job was in fact not properly seen to the first time around.

We wonder how many incomplete repairs are not properly picked up on by HNSW or its contractors, with tenants incorrectly being charged for these repairs at the end of their tenancy? Our discussions with the Tenants Advice & Advocacy Services would suggest that this is not uncommon. On top of this, it is often reported to us that attempts are made by HNSW and its contractors to charge outgoing tenants for routine repairs and maintenance that they are not liable for, but that any good landlord should tend to between lettings of a property.

We can also note from the Q&A session that at the time it occurred - late July, early August 2012 - there were no properties that were unoccupied because they were not considered fit for habitation. Now, just a few short months later, there are apparently "hundreds across the state". We're just not sure what to make of this.

Regardless, it's pretty clear that there are some issues with the way the government's housing portfolio is being looked after. We're not convinced that fingers of blame should always be pointed at tenants, to whom only a fraction of the problem might actually be attributed even before we start to test any specific allegations of liability.

But back to the issue at hand: bonds for social housing tenants.

Interestingly, a large number of tenants who are housed by social housing landlords in New South Wales have already paid a bond. Many Community Housing providers already make use of the practice, although it is true that Housing NSW does not. We'd be prepared to bet that almost every one of those tenants has obtained their bond money through either a grant or a loan from Housing NSW. This is because, as the Minister himself has alluded to in this recent announcement, "in most cases, tenants are on such low incomes they can't afford it…"

Perhaps even more interestingly, the Minister suggests that bonds "would only be considered for high risk tenants who may have a history of damaging properties and who ask for a second chance". Currently, such tenants would be subject to the policy of 'categorising a former tenancy', that might see them subject to specific conditions in order to meet the social housing eligibility criteria a second time around. At a minimum, a 'less than satisfactory former tenant' (that is, someone who owes Housing NSW more than $500 from a previous tenancy) is eligible to go onto the waiting list, but their application will be suspended for a period of six months… which makes the application effectively useless if the need for housing is critical. So while we're not ready to sing the praises of social housing tenancy bonds in general, if they were to replace this system of 'categorising a former tenancy' (and applicants could borrow the money on interest free terms, and Housing NSW would take more care in assessing damage for which a tenant is liable at the end of a tenancy) we might start to be persuaded.

But in the meantime, we'll continue to remind Housing NSW and the Land & Housing Corporation of their own obligations when it comes to the repair and maintenance of the properties in which their tenants live.

Rabu, 17 Oktober 2012

Boarding Houses Bill 2012: TU comment

This afternoon the NSW State Government introduced its Boarding Houses Bill 2012 for debate in State Parliament. This is the Tenants' Union's comment on the Bill.



The Tenants' Union strongly supports the Boarding Houses Bill (the Bill). The Bill is a much-needed and long-overdue measure of law reform for the State's boarding house sector and the people who live in it.

In particular, the TU strongly supports the Bill's provisions relating to occupancy principles and occupancy agreements for boarding house proprietors and residents. These provisions give proprietors an appropriate degree of flexibility in drafting agreements that suit the services they provide, and give residents some basic rights and access to justice.

We also strongly support the Bill's establishment of a new Boarding Houses Register. This will give prospective residents and other members of the public access to relevant information about boarding houses; help ensure that councils identify and inspect boarding houses and enforce building and fire safety requirements; and provide a point for information exchange between government and the boarding house sector.

The Bill makes a number of improvements on the Government's earlier draft Bill, circulated for consultation in June this year. In particular:
  • the loophole about premises that are subject to a tenancy agreement is closed;
  • the names of boarding house proprietors will be included on the Register;
  • proprietors will be required to provide a written occupancy agreement at the commencement of an occupancy;
  • standard forms of occupancy agreements for different classes of agreements, persons or premises may be prescribed by regulation;
  • the occupancy principles are effective – it is a term of every occupancy agreement that the occupancy principles apply;
  • a new occupancy principle prohibits penalty clauses for breach of house rules;
  • a new occupancy principle allows utility charges to be levied on a reasonable basis only;
  • a new occupancy principle limits bonds to two weeks' occupation fee; and
  • a wider range of remedies is available in the Tribunal, including compensation.
The TU commends the Bill to all Members of Parliament. Beyond the present Bill, we encourage the Government to continue reform of the boarding house sector and marginal renting more generally, particularly by:
  • working with stakeholders to develop standard forms of occupancy agreements, to be prescribed by regulation;
  • legislating to provide that all persons who rent their housing and who are not otherwise covered by residential tenancies legislation are covered by the occupancy principles and occupancy agreements;
  • boosting the Boarding Houses Financial Assistance Program, in anticipation of increased applications for fire safety grants, and to allow grants for other purposes;
  • expanding the Boarding House Outreach Program, to connect boarding house residents to support services in locations throughout the State; and
  • adopting as government policy the orderly winding up of the assisted boarding house sector, and ensuring that residents have access to appropriate housing and funded support services, provided on a not-for-proft basis.

Selasa, 16 Oktober 2012

Bankstown fire flat: a 'mini-boarding house'?

Like many people, we've been disturbed and saddened by the reports of the recent fire at the Euro Terrace apartment block in Bankstown, where a young woman died after she and a friend leapt from a fifth floor flat to escape the flames.

Our thoughts go to the family and friends of the young woman who died, and the other young woman who survived with serious injuries. We feel too for all those residents made temporarily homeless while awaiting repairs.


According to early reports, there were defects in the way the whole block was built: in particular, it had allegedly had an unauthorised roofed atrium added, which trapped heat and smoke in building.

Lately it has been reported that there were problems within the flat itself: in particular, that part of the dining room had been walled off to create an additional (fourth) bedroom, and locks had been installed on the bedroom doors. The implication is that the flat was being operated as a 'mini-boarding house'.

We make no comment here as to the liability of the builders or certifiers of the block, or of the owner or managing agents of the flat. We will also not go here into the question of the adequacy of current laws about building certification or fire safety.

What we will we consider here is how the NSW State Government's proposed boarding house law reform might operate in relation to a flat operating as a 'mini-boarding house', on the facts as reported by the Herald. We stress: this is conjecture – the Government's draft Boarding Houses Bill is not law, and if and when it becomes law, there may be differences between its terms and those of the current draft Bill.

First there is the question of whether a flat, operating as a 'mini-boarding house', would be covered by the legislation. The physical form of the premises isn't the issue here: the draft Bill provides that even a 'vehicle, vessel or aircraft' could be boarding premises, so a flat certainly could be. The key question is whether the premises provides beds for five or more persons (not counting the proprietor, if they reside there too). If it does (and a four-bedroom flat could do, because sharing a room in these situations is common), the flat would be covered as a tier 1 registrable boarding house. But if it's for four persons or fewer: no, it would not be covered. (And we leave aside the question of tier 2 boarding houses; these are residential centres for vulnerable persons, and the sort of flats we're discussing are not these.)

Before we leave the question of coverage: under the current terms of the draft Bill, the flat would not be covered – even if five or more persons lived there – if the flat is subject to a residential tenancy agreement (ie between the owner and one of the residents, or between the owner and an absent head-tenant who rents out the rooms). We've previously called this a fatal loophole in the draft Bill, and we understand that the Government sees the problem and will fix it in the final version of the Bill.

Secondly, there is the issue of registration. If a flat is a tier 1 boarding house, the draft Bill says the proprietor (either the owner or the head-tenant, whoever is letting the rooms) must register the flat on the Boarding Houses Register (which would be established by the legislation).

Registration has nothing to do whether the premises are approved for use as a boarding house by the local council – that's a separate process. For the purposes of the Boarding Houses Bill, if the premises  fit the definition of a registrable boarding house under the Bill, they've got to be registered (whether approved for use as a boarding house or not); if they're not registered, the proprietor is guilty of an offence.

If the flat is registered as a boarding house, the draft Bill states that the local council must inspect it within 12 months. The purpose of the inspection is to determine whether the flat complies with requirements relating to building and fire safety, and with standards for shared accommodation. (More on this in a moment.)

Of course, if the proprietor knows that the flat is not approved by the council for use as a boarding house, or that it does not comply with building and fire safety requirements, they'll probably not register. If that's the case, the Boarding Houses Register might still help the local council catch up with them. Say a neighbour is suspicious about the fact that what looks form the outside to be a three-bedroom flat is home to several adults. The neighbour would be able to search the Register (it will be online) for the premises and, finding no match, then report their suspicions to the local council. They might also report their suspicions to NSW Fair Trading, as the keeper of the Register, which might then prosecute the proprietor's breach of the registration requirement.

Thirdly, there is the issue of building and fire safety requirements and standards. This is what the council will consider when it inspects or investigates the premises. For the council, there's also the question of whether the use of the premises as a boarding house is approved and what to do about it in the very likely event that it is not approved.

In considering these questions, the council will be looking at what the Environmental Planning and Assessment Act and Regulation, its own Development Control Plans, and the Building Code of Australia say about boarding houses. What these things say generally proceeds from the BCA's classification of boarding houses into two classes: Class 1b buildings and Class 3 buildings.

Class 1b boarding houses are typical small-medium sized boarding houses (not more than 300 square meters in area, and accommodating not more than 12 persons), but because they are defined as being 'not located about or below another dwelling or another Class of building', a flat in a strata scheme won't fit the definition.

Class 3 applies to boarding houses other than Class 1b boarding houses... but the assumption in the BCA and elsewhere is that these will be large boarding houses (not 'mini' ones, like a single flat), capable of complying with relatively onerous requirements in relation to shared facilities, such as kitchens and bathrooms, and fire safety (for example, sprinkler systems). It's difficult to see how a typical flat could comply with the requirements of a Class 3 building, but that's for the council to determine.

There's also the issue of the number of persons residing in the flat – and the question of overcrowding. This is addressed in the standards for 'places of shared accommodation' in Part 2 of Schedule 2 of the Local Government (General) Regulation, which provides (at clause 1) that councils can determine a maximum number of boarders or lodgers for each bedroom or dormitory, and for the whole of the premises, for premises that are 'places of shared accommodation'. Under the draft Boarding Houses Bill, these standards would apply to all registrable boarding houses. The council might consider any limits on numbers of occupants it may have provided for in its own development approval for the strata scheme.

A further note on the standards for places of shared accommodation under the Reg – it is hard to see a flat complying with some these: for example, the requirement at clause 2(2) that 'a schedule showing the numeral designating each bedroom and dormitory and the number of persons permitted to be accommodated in each must be conspicuously displayed on the premises'.

So, there are many ways in which a flat operating as a 'mini-boarding house' might contravene the requirements and standards applied by councils.

As for what the council might do – depending on the circumstances, it can order that:
  • the proprietor stop using the flat for a purpose that has not been approved; 
  • the proprietor reverse any unlawful work done to the premises;
  • the proprietor stop carrying on an activity that constitutes a life-threatening hazard or threat to public health;
  • the proprietor do things to ensure adequate fire safety;
  • everyone leave the premises, because the proprietor has failed to comply with a public health or fire safety order; and
  • that the proprietor take action to bring the premises into compliance with the standards for places of shared accommodation.

The power to make these orders already exists (the first five are from section 121B of the Environmental Planning and Assessment Act 1979; the last is from section 124 of the Local Government Act 1993) – but it seems to us that the reforms in the Boarding Houses Bill would help in the identification of premises that councils should be looking at, including 'mini-boarding houses' operating from blocks of flats, and usefully direct councils get in and make orders where necessary.

When it comes to learning from and responding to the terrible event at the Euro Terrace, it may be that changes to the law about building design and certification will be the key to safer flats and buildings, but the changes to the law already pending in the Boarding Houses Bill can also be seen as contributing to the same end.

Senin, 15 Oktober 2012

Tenants' Rights Manual Launch

The beautiful Mitchell building of the State Library played host to the launch of the Tenants' Rights Manual 4th Edition yesterday morning. The event went brilliantly!

The author with the fruits of his labour

Guests from a range of places including: tenants from Newcastle to Surry Hills; tenant advocates from all over the place; the author of the original Tenants' Rights Manual, Dr. Robert Mowbray; community organisations, legal centres and law firms; government departments Fair Trading NSW and Legal Aid NSW; and politicans from all sides of politics, including the Hon. Minister for Fair Trading, Anthony Roberts who launched the Manual.
The Hon. Anthony Roberts during his launch speech

The event was part of Anti-Poverty Week and we took the opportunity to reflect that 65% of low income renters in NSW are in housing stress, paying an unsustainable amount of rent. We also heard that it is estimated that by 2020 the number of renters aged over 65 will have increased by 115%. The importance of access to knowledge of the rights and responsibilites in tenancy agreements will only become more important over time.


The speechgivers and the author: from l-r, Dr Chris Martin, Senior Policy Officer of the Tenants' Union of NSW; Julie Foreman, Executive Officer of the Tenants' Union of NSW; the Hon. Anthony Roberts MP, NSW Minister of Fair Trading; Geoff Mulherin, Director of the NSW Law & Justice Foundation; Dr Alex Byrne, Chief Executive of the NSW State Library.



Thanks to all our guests, speakers, contributors and supporters!



Finally, you can now purchase the Tenants' Rights Manual from Federation Press. Very soon, you will also be able to find a physical copy of the Manual in every public library in NSW through the Legal Information Access Centre's (LIAC) Legal Toolkit. You'll also be able to access the Manual through LIAC's page on the State Library website here. That page will contain the most up to date version of the Manual as occasional updates are published.

Kamis, 11 Oktober 2012

My 3 Cents Tenancy Trivia

You may remember we mentioned the good value TAAS's represent- a cost of just 3 cents a day to renters in NSW, paid by renters in NSW.
We'll be talking more about your 3 cents in coming weeks but to celebrate the imminent launch of the Tenants' Rights Manual (4th Ed.) on Monday we're having a trivia competition. The winner will receive their very own copy of the Tenants' Rights Manual to take pride of place on their bookshelf, their bedside table, or under a wobbly piece of furniture.
 
Not just any copy- THIS copy
The Tenants' Rights Manual is one of the many results of the more than 30 years of experience and insight from dedicated tenants advice workers which has culminated in the TAAS network today.
At noon we're going to send out the question on Twitter and Facebook, first person to answer correctly on either site will win. (A clue, the answer will be found somewhere on the TAAS website at www.tenants.org.au)
If you're the winner, we'll direct message you to get postal/delivery details.

The Rules
1. Winning answers must come from personal accounts (sorry NGOs, we still love you!)
2. Delivery will be to NSW addresses only (because this only covers NSW tenancy law)
3. Current workers in the TAAP network are excluded

Good luck, and if you miss out this time don't worry, we'll be doing more trivia competitions in the future!

Update: The question was "What is the maximum flow rate your shower can have before you don't have to pay for water usage?"
Congratulations to Troy Walker from the Hunter region who was the first correct answer on our Facebook page with "9 litres per minute"
Well played Troy!

Rabu, 10 Oktober 2012

Reporting rent reports

It's been ages since we've discussed reports of rent increases in the private market. For a time – particularly in the couple of years leading up to the GFC – this was a hot topic in the media, and every quarter the TU would take inquiries from journalists with the latest rents data from APM or Housing NSW's Rent and Sales Report in hand (opened at the table of median rents by local government area, with the highest figures circled for attention).
 

Since then, things have been quieter, and in a way we've enjoyed the break. Not because unaffordable rental housing isn't a problem – we say it's our most critical housing problem – but because of the way alarming reportage of rent increases may encourage the very thing it professes to be alarmed about. As I indicated, the reporting usually leads with the highest figures at hand, and the more nuanced details tend to get buried, with the result that at least a few landlords get a rush of blood to the head and send out notices of large and unrealistic rent increases.

Today, rent increases are being reported again, under the headlines

Sydney house rents hit record high

and

Record in high house rents could force families into flats

so it's important to try to keep some of the details in mind.

First, rents data being reported is from APM, and as such it refers to 'asking rents' – that is, the rents that are being touted for in the on-line advertisements that APM uses as the source of its data. What a landlord asks for in an ad may be quite different from what they actually end up getting when the property is let. (When we crunched the numbers – a few years ago now – we found that what they were getting was $45-50 per week less).

So what's reported today is that the median asking rent for Sydney houses in the quarter ending September was $520 per week. Whether landlords actually got this amount is another matter.

Looking at the data for what landlords actually got for new tenancies, you'll find that the way it is presented doesn't exactly match up (the Rent and Sales Report is a quarter behind, and doesn't give a median for all Sydney houses), but you can see that the median rent for two-bedroom Sydney houses was $375 per week, and for three-bedroom Sydney houses it was $420 per week.

Secondly, when looking at the Rent and Sales data keep in mind that these relate to new tenancies, and there's good reason for supposing that these rent will be higher than those paid by tenants in existing tenancies (ie the property is more likely to be newly repaired or renovated, and an existing tenant who is a known good payer will usually get a bit of a discount over a new tenant of unknown quality).

Thirdly, critically consider the analysis. For example:

First home buyers were putting off buying and instead turning to the rental market, the Australian Property Monitors economist Andrew Wilson said. ''That means there's more demand … and that's one of the factors that has driven up house rents,'' he said.

Turning to the rental market? Most of them would already be in it. There's a bit more to the changing shape of the rental market than that.

None of these qualifications changes the fact that for lower-income households in particular, the rent is just too damn high. When almost two-thirds of lower-income renter households are in housing stress – about a quarter of the whole rental market – we've got a problem. The thing is to engage the problem-solving capacities of policy makers, rather than the greed-impulse of so many landlords.
  

Kamis, 04 Oktober 2012

Bad piggies? Underoccupancy in public housing

We discussed recently the issue of public housing 'underoccupancy' or 'underutilisation': that is, where a public housing tenant happens to have a spare room.


In Queensland, the State Government considered that this was a 'crisis' and made the ludicrous suggestion that public housing tenants there should share their spare rooms with strangers from the waiting list, or move somewhere smaller.

Concern about underoccupancy has also registered with the NSW State Government, though its response to date has been more sober: the Audit Office is investigating the issue.

As we noted last time, public housing tenants are the least likely persons to be underoccupying their housing. Owner-occupiers – especially those without a mortgage – and even private renters are more likely to have a spare room than public housing tenants. In other words, public housing allocates housing much more frugally or, in this sense, 'efficiently', than the private market.


(Source: ABS (2011) 'Housing Occupancy and Costs 2009/10', Table 14. Click on the image for a better view.)
But, even where underoccupancy does happen, is it such a bad thing?
A spare room in public housing is not necessarily a waste of space. It might be used for visits by grandchildren and other family members – which is not just a nice thing, but a material way of maintaining family connections and the support they afford. It might also be used to house friends or relatives in need, and who might otherwise be without housing and without support.

This figure below gives a bit of an indication of this function of public housing underoccupancy. It comes from Census data, over a 30-year period, in relation to a particular public housing estate in the suburbs of Sydney (I've no data from the most recent Census, or from the 1986 Census). Construction on the estate finished in the mid-70s, so the amount of housing on the estate was pretty well constant over the period. The number of people, however, was not.


Long-term, the population has declined. You can imagine the process: the first households on the estate (many of them being two parents with kids) have lost members as kids have grown up and moved out, and as partners have died; many of these households will have moved out altogether, to be replaced (as public housing eligibility has tightened) by smaller households of single-parent families and single persons. 
But the population movement is not all one-way: in the early 1990s the spare rooms filled up. Again, you can imagine what may have happened here too: as the economy faltered, some households on the estate took in friends and family members who were doing it tough.

This is conjecture, but is accords with the experience of tenant advocates whose clients occasionally take in a grandchild when the parents aren't coping, or who have a room ready for a relative who is getting out of gaol, or who is in and out of treatment for illness.

In other types of housing, and for other types of households, this might be called 'flexibility' or 'capacity'. Instead of governments slinging angry letters at public housing tenants, maybe the relatively small degree of 'underoccupancy' in public housing should be considered in those terms too.

Selasa, 02 Oktober 2012

Federal government rescues Queensland tenants services

The Federal Housing Minister, Brendan O'Connor, has announced today that the Australian Government will provide emergency funding to Queensland's Tenants Advice and Advocacy Services, which were due to close after their funding was cut by the Queensland State Government.


(Minister O'Connor)

The emergency funding will keep the services operating pending changes to that 'ensure that Tenancy Advice and Advocacy Services funding is a condition of any future Commonwealth/State agreements.'

The Tenants' Union of NSW applauds the Federal Government on its decision: it's recognised the essential services provided by TAASs and acted to ensure that they remain available to tenants.

And it's recognised that TAAS funding from the interest earned on tenants' bonds is tenants' money – not State Government revenue.

Congratulations to the Minister and the Federal Government – and to our colleagues at the Tenants' Union of Queensland and the Queensland TAASs.


Senin, 01 Oktober 2012

The real housing supply problem (part 3)

A little while ago we were discussing Australia's real housing supply problem: that is, the problem of getting affordable rental dwellings to the low-income households who really need them.

We observed that across Australia, 60 per cent of lower-income households renting privately are in 'housing stress' (paying more than 30 per cent of their income in rent); and 25 per cent are in 'housing crisis' (paying more than 50 per cent). In New South Wales, the figures are, respectively, 65 per cent and 28 per cent of low-income private renters.

We also observed that for all but the very poorest (ie lowest 10 per cent) these lower-income households (and, throughout Australia, there's estimated 857 000 of them), there are actually dwellings out there that are going for affordable rents (an estimated 1 256 000 of them) – the problem is that lots of higher income households (an estimated 937 000 of them) live in these dwellings instead.

So, who or what is to blame for this?


First, let's say who is not to blame: the higher-income renter households. We're a liberal-minded lot at the Brown Couch, and if a higher-income tenant prefers to spend less of their hard-earned and live in a less flash house, it is not for us to challenge the sovereignty of their consumer preferences. In fact, we'd say that the developers and buyers of flash 'investment' rental properties should reflect upon the evident preferences of higher income renters: the majority of them don't want the expensive, flash, 'premium' properties that these interests are pushing.

No, we point the finger at the Australian tax system – in particular, at its treatment of negatively geared rental property speculation.

Almost uniquely amongst nation-states, Australia allows losses generated by an asset (specifically, interest and other costs paid on a rental property) to be set against its owner's other sources of income, thus reducing the owner's tax liability and enhancing the prospect of a speculative profit when the dwelling is sold.

For years, negatively geared rental property speculation has been wildly popular, which has pushed property prices up – which has made it more popular. Which means, on the other hand, that it has worked to the disadvantage of priced-out, would-be owner-occupiers – that's who so many of those higher-income private renters are.

And it has worked to the disadvantage of low-income private renters too, by distorting the rental market. As a tax-avoidance strategy, negative gearing works best for landlords with high incomes, and high levels of gearing. And to work at all, the landlord needs a property with a high prospect of capital gain. This means that over the years of negative gearing's growing popularity, more and more 'investments' in rental property were in established properties in very desirable locations, going for high prices and hence high rents.

And as lower value properties, going for lower rents and with less prospect of capital growth, have come onto the market for sale, fewer and fewer of them have been bought by landlords. So, those remaining in the rental market have become more scarce, and have more expensive.

It should be said: there are other factors involved in our affordable housing supply problem. Some will say the planning system is too restrictive of new development and housing supply. Others might say the problem lies on the other side of the concept of 'housing affordability': that is, that low-income households incomes are just too low, and should be increased. There's fair points made in support of each of those cases.

But as we've presented this picture of our real housing supply problem, we see that negative gearing has got its fingerprints all over it.

[UPDATE: everyone's getting stuck into negative gearing today – see Philip Soos and Macrobusiness's Leith van Onselen for further critiques, with excellent graphs.]