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The forgotten people, Victoria's 1 million renters

Renter Sharon Moore, 59, is on a disability pension: 'You can't really get settled.'

Renter Sharon Moore, 59, is on a disability pension: 'You can't really get settled.' Photo: Angela Wylie

Sharon Moore has moved house at least a dozen times in the past 25 years, mostly against her wishes. Sometimes the landlord has sold, other times the rent has gone up "to a ridiculous price". It has left her with little sense of security.

"You can't really get settled. You've always got that hanging in the back of your head, something is going to happen," she says.

Moore, 59, is on a disability pension. Half of it goes on a $250 a week flat in Wyndham Vale, in Melbourne's south-west. It makes it hard to get by.

Matthew Cheyne has also had to move against his wishes. Suffering from fibromyalgia, a chronic condition causing pain and fatigue, he had to give up his job. When the rent for his apartment in Spotswood was increased from $190 to $230 a week he moved out of town to Morwell. He now lives in a small flat at the back of a house, paying $90 a week.

Cheyne says it's not great, but "it's a place over my head".  Now 37, he has been on a pension since 2008. He still has to commute regularly to the city for medical care and dreams of moving back.

"I'd like to return to Melbourne one day, but it'd have to be public housing - the private housing market is unaffordable," he says.

Moore and Cheyne are two examples of the rising pressures being faced by renters increasingly being squeezed out of Victoria's private market.

There are about 1 million Victorians who rent in a system that is heavily weighted towards the interests of landlords and has become steadily less affordable, even for those on middle incomes.

The Victorian Residential Tenancies Act gives extensive powers for landlords to remove tenants. This applies particularly once a lease has expired, but tenants can also be given 120 days notice for "no specified reason" or 60 days if the landlord wants to do something else with the house or flat.

It often means renters move far more often than they would like. Ninety per cent have moved in the past five years. It can cause problems for the growing number of families in rentals, with children having to change schools and social networks and parents facing challenges with work arrangements.

The interests of renters are unlikely to attract much attention in this state election campaign. When housing has received a mention in recent state and federal campaigns it has tended to focus on the woes of first home buyers - not renters.

This is despite renting having become far more mainstream in Victoria, which is now a long way from the stereotype of students in share-houses. Families with children make up more than a third of renters and growing numbers have rented for more than a decade.

So why the lack of political interest?

Swinburne University professor of housing Kath Hulsesays it is part of a broader change in the political climate.

"Two key issues for elections used to be around housing and jobs, which are two essentials of a good life," she says. "Jobs are still there to a degree, maybe not so much anymore, but housing has almost completely dropped off the political agenda."

Hulse says this is despite housing being of "immense" concern to many people. Back in 2007, then opposition leader Kevin Ruddcalled it a "barbecue stopper", but after he was elected it faded as a priority for federal Labor and no subsequent leader has picked it up. 

"With the advent of neo-liberalism it's [seen as] your responsibility, not governments'. The consequence is that it's very hard. A significant number of people can't get good housing," Hulse says.

Compared with comparable countries in the OECD, the level of public and social housing in Australia is tiny - barely one in 20 houses. As government has retreated, private rentals provide shelter for many more people on lower incomes than in the past.

Much of the responsibility falls to state governments, which have important role to play, whether through planning rules that could mandate low-cost housing, direct development or tenant protections. But in recent decades Victorian governments have mostly taken a hands-off approach.

Part of the problem is cultural. Home ownership has long been seen as the Australian dream, and is now close to being an obsession in Australia if the popularity of TV shows such as The Block are a guide. Renting is rated as very much a second-best option and few state MPs directly experience it. On average, they own nearly two properties each.

It has not always been that way. After World War II, 44 per cent of Australians households rented. Today it is 23 per cent - up from 19 per cent three decades ago. In that time rent as a percentage of income has risen sharply, from 17.9 per cent to 25.6 per cent, with most rentals are clustered around the $300 to $500 a week mark - too expensive for many, particularly those on welfare.

Hulse says the situation in Australian compares poorly to that in Germany, where most households rent and "there's no stigma attached to it". Germany and other European nations also regulate rent by tying increases to inflation or similar measures.

"One of the things in the German system is you can sign up for a lease where there isn't a time period specified on the lease," Hulse says. "Both tenants and landlords expect that to be a longer-term arrangement."

Tenants Union of Victoria policy and liaison worker James Bennett says the system needs an overhaul. As a start, he says the rule that allows renters to be kicked out without a reason to be done away with. "That's a very good example of the power imbalance that exists between landlords and renters," he says.

Consumer Affairs Victoria lists 24 reasons landlords can give to remove tenants, including 11 during a lease. They range from causing malicious damage to having a child living at the rental when the agreement does not allow it.

Rather than just setting up a system that allows longer leases, Bennett says the aspiration should be to make indefinite leases the norm. Given the gap between the Australian model and that in Europe he admits the proposed change is "fairly utopian".

"A lot of [the current system] is linked to the notion that renting is seen as a stepping stone to home ownership. Therefore, you don't need a lot of full on protections around security of tenure because people aren't going to be there that long," Bennett says.

"What we'd advocate, as a default position, is the tenant stays on unless there is a very specific reason."

22 comments

  • Just over 1 million negative-gearers in the entire country, and yet they're considered a political force; 1 million renters in Victoria alone, and they're considered expedient, and with none of the protections other countries provide.

    Maybe stop rewarding these parties your vote...

    Commenter
    cjs
    Location
    Melbourne
    Date and time
    November 02, 2014, 11:49AM
    • Hear, hear! You make more sense than the next commenter.

      Commenter
      Alfred
      Location
      Melbourne
      Date and time
      November 02, 2014, 2:12PM
    • I can't say renting has ever been any better under any political party, and I've been renting for 25 years.

      Commenter
      Calypso
      Date and time
      November 02, 2014, 2:27PM
    • Why can't everybody have rights in your world? Aren't property owners entitled to protection from dead beats who don't pay their rent and damage their property just as much as tenants should be protected from landlords spying on them and not affording them quiet enjoyment? Renting isn't all about negative gearing either - there are many many rental properties that are positively geared - where do you think all those rental properties come from??

      Commenter
      Huh
      Location
      Sensibletown
      Date and time
      November 02, 2014, 4:02PM
  • It's simple economics, so what's this article really about ? Housing prices are very high so how do you expect rents to be low ? The owner has to get a return on their investment. If you want government to control rents thatn at the same time you need to have government controlling house prcing as well. Lets see how that minefield works....... next non-issue.

    Commenter
    Enlightened1
    Date and time
    November 02, 2014, 12:40PM
    • "Enlightened1", perhaps it's the negative gearing and investors snapping up properties which drives up housing prices. The landlord chooses to invest in this market rather than say, the stock market.

      And please don't dismiss it as a "non-issue". It very well is a serious issue which is getting worse.

      Commenter
      Martin
      Location
      Gippsland
      Date and time
      November 02, 2014, 1:07PM
    • Negative gearing that allows losses to be offset against all income pushes up house prices that then put up rents. Our house prices astonish Canadian and American visitors. This merry-go-round just makes money for banks, property spivs and real estate agents.

      It's all a Ponzi scheme. Just ask the Gold Coast 'investor's and recent off the plan apartment buyers

      Commenter
      John
      Date and time
      November 02, 2014, 1:20PM
    • "The owner has to get a return on their investment." Actually, it doesn't quite work that way. The owner signs a legally binding lease agreement which they are supposed to honour. That means if repairs and maintenance are needed, they theoretically have to pay for them whether they like it or not. Despite that many owners choose to spend only what they wish to, completely disregarding the contract they have entered into.

      It's not supposed to be a case of the owner being guaranteed a return on their investment at the tenant's expense. There are tenancy laws which most landlords and agents simply do not obey.

      Commenter
      Calypso
      Date and time
      November 02, 2014, 1:21PM
    • What matters is wages. If the rent for a place is $250/wk and the landlord cannot find a tenant at a higher rent, then the rent is $250/wk. The the price of the house, and any rises is irrelevant.

      Commenter
      Lee eel
      Date and time
      November 02, 2014, 3:04PM
    • @Calypso. Learn how to read my comments. I didn't say anything about landlords being entitled to disregard the lease contract obligations and maintenace, nor did I say anything about a guaranteed return on investment.

      The simple fact is if a person buys a house at a very high price, then it would naturally be reflected in the price they need to charge in rent to get a return on investment (nothing about guaranteed return). That's the simple economics part i refer to. If you think its so great to be landlord there's a solution, be one!! Join the great negative gearing club, you don't need to be well off ;-) (please note the winking icon before spamming)

      Commenter
      Enlightened1
      Date and time
      November 02, 2014, 3:09PM

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