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Residential Tenancy (Rent Control) Amendment Bill 2021


Cassy O'Connor MP

Cassy O'Connor MP  -  Wednesday, 24 March 2021

Tags: Housing, Tenant Rights, Housing Crisis

Ms O'CONNOR (Clark - Leader of the Greens) - Madam Speaker, I move -

That the bill now be read for a second time.

I note with a heavy heart that most of the Labor members have left the Chamber already.

The Residential Tenancy (Rent Control) Amendment Bill 2021 replaces the current unworkable rent control provisions in the Residential Tenancy Act of 1997, the principal act, with rent control provisions substantially similar to the model used in the Australian Capital Territory.

Tasmania is currently, and has been for some years, in the grip of a housing and rental crisis. Data compiled by the Tenants' Union of Tasmania by the MyBond system run by the Rental Deposit Authority shows that between September 2016 and September 2020, the weighted medium rent per week in Tasmania has increased from $266 to $357 - a 34 per cent increase over four years.

And as we know, many of our constituents among the 54 000 residential tenants in Tasmania have received notice of a rent increase since the coronavirus protections expired on 1 February.

We have, for example, a case put forward by the Tenants' Union of a Huon Valley household where the rent went from $378 a week to $450 a week. A mum on the eastern shore whose rent jumped by 60 per cent, from $220 to $350 a week. The 63-year-old woman in West Hobart who had lived in her home for 15 years and received a 70 per cent rent increase notice.

As we know, the Residential Tenancy Commissioner has limited capacity, if any, to rein in those rents.

This is an urgent issue. In six days' time, the JobSeeker and JobKeeper COVID-19 supplements will come to an end, and we know that will have a devastating impact on household budgets for Tasmanians who live in rental homes. Data from SQM Research shows that between March 2017 and March 2021, the weekly rents for houses have increased by 42 per cent in Launceston, 41 per cent in Hobart and 29 per cent in Burnie. The SQM Research data also shows an increase in rental costs for units of 43 per cent in Launceston, 32 per cent in Hobart and 20 per cent in Burnie over the same period.

The 2020 Rental Affordability Index, produced by SGS Economics and Planning, Bendigo Bank, National Shelter and the Brotherhood of St Laurence, found that the average rental household in greater Hobart would pay 31 per cent of its total income for a median-rate dwelling. Thirty per cent is the commonly used threshold for housing stress.

Before I outline the effect of this bill, I will address some of the issues raised by opponents. Opponents to this reform have broadly relied on two arguments: that this bill will not resolve supply issues in the rental market, and the bill will have unintended negative consequences on rental availability and affordability. This bill is not intended as the silver bullet to the housing and rental crisis. The supply issues in the housing market need to be resolved with further government investment in social housing - investment that was neglected for the first three years of the Hodgman Liberal Government.

We need to address the tapped-out construction workforce, and of course, as a priority, we need to regulate short-stay accommodation. These are actions the Greens support, but they cannot be addressed by an amendment to the Residential Tenancy Act 1997.

In terms of speculation over unintended consequences, this is exactly the reason why we have drafted this bill in the way that we have. The provisions in this amendment bill are modelled on the provisions in the ACT Residential Tenancy Act 1997 - provisions that were supported by Labor in the ACT because they are good policies. The only salient distinction between the ACT model and the proposed model here is that in the ACT, their Administrative Appeals Tribunal is the first point of assessment. Our bill retains the current process in the principal act of an initial assessment by the commissioner, with an appeal process to the Magistrates Court's civil division.

Tasmania's Civil and Administrative Tribunal (TasCAT) is currently in the process of being established. In addition to a second-tranche amendment bill being prepared this year, a consequential amendments bill to, quote -

confer jurisdiction onto TasCAT within both its original and review jurisdictions is being prepared.

If the bill passes, we expect the TasCAT reform process, including the consequential amendments bill, to consider amendments that may be necessary or desirable to the amended Residential Tenancy Act.

The ACT model has operated in some form since 1997. SQM Research data shows that between April 2009 and March 2021, rental prices in the ACT have increased from $501 to $660 - a 32 per cent increase over eleven and a half years. Rental prices for units have increased from $372 a week to $494 a week - a 33 per cent increase over eleven and a half years.

In Tasmania rents have increased more over three years than rents in the ACT went up over 11 and a half years. The claim that this model would perversely result in increased rents is not substantiated. The evidence strongly suggests the opposite.

I will now outline the changes that the bill will introduce. Under the current provisions in the principal act, rents can be increased if a written residential tenancy agreement allows for an increase or there is no residential tenancy agreement. This bill will allow for rent increases in the case of a fixed-term lease if the lease allows for it or in any other case if the increase is not above CPI plus 10 per cent of CPI, or the increase is above CPI plus 10 per cent but the agreement allows for the increase, or the tenant agrees to the increase in writing, or if the landlord applies to the commissioner and an order allowing the increase is issued.

These provisions notwithstanding, under both the current and proposed arrangements rent increases can be challenged as unreasonable by a tenant, but as we know, under the current arrangements, all that the commissioner looks at is the current state of the market and what the market can bear.

As it currently stands, under section 23 of the principal act, a tenant may apply to the commissioner for an order that a rent increase is unreasonable. Proposed new section 24F has similar provisions. However, current arrangements allow for an application at any stage during the 60-day notification period. The proposed amendments require the request to take place at least 14 days before the rent increase would come into effect.

The bill also provides under proposed new section 24H for rents to be frozen while an assessment takes place and contains provisions in clause 24K to retrospectively allow for payments to take place based on the decision of the commissioner.

The recent Muddyman vs Nest Property decision of the Magistrates Court of Tasmania makes it clear that under the current system the burden is on a tenant to establish that an increase is unreasonable. The court noted:

While neither the act nor the minor civil regulations expressly allocate any burden of proof, legal or evidential, to the tenant, it was common ground that it is for the tenant to establish that the increase in rent is excessive.

The model proposed by this bill provides a fairer and more considered allocation of the burden of proof. Proposed section 24(1) stipulates that if the rent increases below the rent increase limit, that is CPI plus 10 per cent of CPI, the burden of proof is on the tenant to prove the increase is unreasonable. If the rent increase is above this limit, then the burden of proof is on the owner.

One of the current issues with the principal act is outlined in the Muddyman vs Nest Property decision, which notes:

Section 23(1) makes it clear that the issue is whether the increase in rent is unreasonable. The issue is not whether the resulting rent is unreasonable.

Proposed new section 24(4A), consistent with provisions in the Australian Capital Territory act, allows for consideration of the amount of rent payable before the proposed rent increase. This will in effect allow the question of the reasonableness of the rent after the proposed rent increase to be considered.

The current provisions also only require the Residential Tenancy Commissioner to have regard to the general level of rents for comparable residential premises in the locality or a similar locality and any other relevant matter. While the provisions of the catch-all of 'any other relevant matter' in the Muddyman vs Nest Property decision make it clear that it is up to the commissioner or the court to determine what is relevant, the absence of a prescribed list also fails to provide a guide to tenants, owners, the commissioner and the court on what matters may be relevant.

Under proposed new section 24(1), the commissioner is required to consider a range of matters, including current rent and past rent increases, costs, services, goods and repairs provided by the owner or the landlord, works carried out by the tenant, the general state of the property, rental rates for comparable premises and any other matter the commissioner considers relevant. Proposed new section 24O allows for the commissioner, on application from a tenant, to issue or refuse to issue a rent reduction order. A rent reduction order must be issued if the tenant's use or enjoyment of the premises has diminished significantly as a result of:

(1) the loss or diminished utility of a feature of the property service supplied by the owner;

(2) the loss of the use of all or part of the premises; or

(3) interference with the tenant's quiet enjoyment of the premises or the tenant's ability to use the premises which is caused by the owner.

This order can also be appealed to the civil division of the Magistrates Court for a fresh decision.

The Council of Homeless Persons says nationally they expect the end of the coronavirus support payments will lead to a 24 per cent increase in housing stress and a 9 per cent increase in homelessness nationally. In Tasmania, the most unaffordable rental market in the country, the impact is likely to be even worse. As we know, in Tasmania around a third of the population are dependent in some way or another on a Commonwealth income supplement or support. Adrienne Picone from TasCOSS says:

We are gravely concerned. We feel like last year what we talked about a lot was this potential cliff and what we are seeing right now is people poised on the end of that cliff.

Members of this House have two options today. They can vote in favour of this bill, this modest reform proposal, that would provide immediate relief to thousands of tenants to whom we are responsible and answerable. If they vote in favour of this bill they are giving thousands of vulnerable people a basic level of protection. Or they can vote against it, thereby endorsing every massive rent increase we will hear about in the coming months and years and condemning everyday Tasmanians to extreme financial hardship and potentially homelessness. It really is that simple.

This bill, while not providing a panacea or silver bullet for housing and rental stress, will contribute to downward pressure on rents and, importantly, provide individual tenants with workable rights to challenge unreasonable rent increases.

On Twitter the other day there was an interesting exchange between a Mr Adam Burling and Louise Elliott, who is the spokesperson for landlords. Mr Burling tweeted:

Do you support a 59 per cent increase in rent for a tenant who is renewing a lease?

Ms Elliott replied:

Yes, I support an owner's right to set the price for their product, the same way private healthcare professionals, pharmaceutical companies, supermarkets, private schools and clothing stores do. And what's the back story? Rent before, after condition, bad egg tenant, et cetera.

With the greatest respect to Ms Elliott, a home is not a product. It is someone's home. It is a family's home, like that woman in West Hobart who has lived in her home for 15 years whose landlord served notice of a 70 per cent increase in rent. We have another approach from a landlord who wrote into the Mercury newspaper's comment section and said:

We own a rental property for investment reasons. That investment is looking very good due to the increase in the value of the property that we are seeing. For this reason we are not increasing the rent. We are coming out of a pandemic, and we all have a part to play. Our tenants play their part by paying the rent, although we gave relief in the depths of the closure, and looking after the property.

Being decent is an option for owners; not trying to maximise is also okay.

On the weekend, I had the great pleasure of going to the Hobart Mosque to see the beautiful exhibition of the history of Muslims in Australia which was sponsored by the Tasmanian Muslim Association. Towards the end of the event, I spoke to the President of the Tasmanian Muslim Association, Mr Karsi Sarbeer . He was very supportive of this rent reform. He said that within his wider community, there is an enormous level of financial stress and fear of rising rents. To paraphrase, he said that many people who are renting within his community are worried about the decisions they will have to make about where they prioritise their spending. He was encouraged to contact members in this House, to help our colleagues understand the extent of the distress in this community. Here, in this House today, we could do something about that.

I will finish with a quote from Montana Bradshaw, who is facing a rent increase of 59 per cent, from $220 a week to $350 a week. When asked by the ABC if she thinks that members of the Tasmanian Parliament should support the bill we have before us today, Ms Bradshaw said, '100 per cent, I think that is the best thing they could do'. I plead with all members to listen to Miss Bradshaw, and to vote to protect her and her family and so many like her.

Madam Speaker I commend the bill to the House.