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Tackling the Rental Crisis in SA

6 July 2022

The Hon. R.A. SIMMS:


I rise to speak on the Residential Tenancies (Rent Control) Amendment Bill. This bill seeks to limit rent in line with CPI to protect renters from unreasonable rent hikes. For far too long, high rental prices have put pressure on our most vulnerable South Australians, and it is time for us as a parliament to step in. As we know, the cost of living across our state, and indeed our nation, is skyrocketing. People are struggling with increased fuel costs, increased grocery costs and high housing costs.


Nearly 30 per cent of South Australians rent their home. According to a SACOSS report, data shows that, on average, renter households had lower incomes than homeowner households and spent proportionately more of their income on housing. Furthermore, that report showed that 39,556 renters in December 2021 were experiencing housing stress. With rising costs across the board, too many people are struggling to pay the rent and make ends meet.


According to the SA Housing Authority, the cost of renting has increased by 20 per cent over the last two years, far outstripping the rate of CPI, which currently sits at 5.1 per cent. In some locations, such as Murray Bridge, we have seen an increase in rent prices of almost 70 per cent—70 per cent. This is simply unsustainable and untenable.


Just this morning it was reported in multiple news outlets that Adelaide has overtaken Melbourne in average rental rates, with Adelaide seeing a 4.3 per cent increase in rates over the last quarter. On average, rent has increased from $350 per week to $490 per week over the last two years. So it is now cheaper to live in Melbourne than it is to live in Adelaide. Something must be done.


Data from CoreLogic has shown that rental rates are rising at a faster rate than housing values. The rapid increase of rent added to existing cost-of-living pressures is forcing people into poverty and homelessness. My office regularly hears stories about the increase of rent and the impact that this is having. The Anti-Poverty Network, which does really important work in this space, has shared stories from tenants who have been adversely impacted by rent increases, and I want to share some of those with you, for the benefit of Hansard. One has said:


Our rent went up a few months back to $250 from $190. We can't afford anywhere else and given we are two pensioners, we would never be accepted for another property. I know because we've been trying to move since before the pandemic.


Another says:


My rent just increased by $500 a month yesterday. Fortunately, it was from a low baseline and I do have a part time job, but it's still a lot of money. It's going to be rough for many of us.


Another says:


Mine is just about to go up...from $360 a week to now $500 a week for a very standard, nothing special, small three bedroom home. The stress is absolutely overwhelming…


Another:


My entire JobSeeker Payment is spent on my rent. This is the cheapest rent anywhere I could find.


Another says:


Even having a job where I work 20-30 hours per week, which is the most I can manage with my disability, I struggle to cover all expenses.


And here is a story from one renter:


I've moved house about 2 months ago to a new rental. This rental had an asking price of $410 per fortnight. We offered $420 after months of rejections without even having our application opened taught us that we have to play the price fixing game. Agent calls a few days later stating that another applicant had offered $450 and asking if we would match it. What option did we have? Stay at my parents' house for another 3 months waiting for a golden goose? What was wrong with the other applicant? Did they ever exist? So here we are paying $40 above asking price for a rental with rats living in the walls due to a huge hole in the exterior wall. Raised this with the agent and was told to buy bait.


The story is dire for people who are trying to live on the minimum wage. Anglicare's Rental Affordability Snapshot of 2022 highlighted that a single person working full time on the minimum wage could afford only two rentals in greater Adelaide or no properties in regional and rural South Australia. Nothing at all was affordable in regional South Australia. Compare this with ten years ago. In 2012, 30 per cent of properties were affordable to people on the minimum wage.


People living with a disability or on the aged pension are being left behind. As we know, the National Rental Affordability Scheme, which gave private owners and community housing organisations a subsidy to provide affordable housing, is being wound up in 2026. This is outrageous. There are fears that those owners and organisations will simply increase rents back up to the market value when the scheme ends. We are already seeing right now that the market is simply not addressing the housing crisis. We need to do something. We need to find alternative measures.


Rent control has been used to protect renters in jurisdictions right around the world but also in Australia. It really is not that radical a concept. During the Great Depression, rent control was used by the Menzies government to ease pressure on families and to keep a roof over their head. Menzies was hardly considered a Marxist, but he embraced rent control as a need to respond to this crisis. It was then continued by the states, with rent control used in New South Wales, Victoria and Western Australia.


In Victoria, rent control continued alongside public housing until the mid-1950s when policy decisions were made to instead favour home ownership. The COVID-19 pandemic is reminiscent of the postwar world. It has been the biggest global shift since the Second World War, and it has resulted in similar difficulties—people being forced into homelessness, rising costs of living and people struggling to stay afloat.


This bill limits rent increases to stay in line with inflation—the CPI. Currently in South Australia, landlords can increase their rent once every twelve months without any legislated control. That has created an uneven balance of power between landlords and tenants. This bill seeks to restore the balance. It ensures there is protection for renters. By increasing rent only in line with CPI once every 24 months, renters can be sure that they will not be pushed into housing stress through an unexpected price hike.


Ireland uses general rent control to match general inflation. Introduced back in 2017, it was used as a lever to stabilise rent in areas that were identified as being under housing pressure. In that jurisdiction, rent increases are now moderate in designated rent pressure zones. New York implemented rent control in 1994. While this has been successful in terms of regulating rent, there were some flaws with their particular rent control program and my bill addresses some of those.


The bill addresses some of those shortfalls in terms of looking at what has happened overseas in places like New York and Ireland. Ensuring that rent control is in place regardless of the tenant or the landlord means that landlords are unable to use such a mechanism as an excuse to raise the rent or to evict tenants. In the ACT and in Victoria, limits have been put on the ability to increase rents. In those places, they are also banning no-cause evictions. These are reforms that the Greens have been advocating for for some time and that we hope to see in South Australia.


We have heard from landlords that they want to be able to increase the rent when improvements are made to the property. This bill ensures that they can do just that. They can increase the rent beyond CPI if the amenity or standard of the property is improved or if they are offering additional services, facilities or goods. It also allows the landlord to apply to the tribunal to increase the rent beyond CPI in certain circumstances.


Housing is a fundamental human right. It should be the right of each and every South Australian to have a roof over their head and a place to call home. We need to think of rental properties not as commodities but as homes for our citizens. Having a secure roof over your head is one of our most basic needs. As members of parliament, it is our duty to ensure that people's housing needs are met. The Greens believe that tenants in private rental, public and community housing must be supported by legislative safeguards, and this bill would ensure that renters are not forced into homelessness or housing stress as a result of soaring rental prices.


As stated by Liam Davies of the Centre for Urban Research at RMIT, regulating rents would have a lasting positive impact on Australia. It certainly would here in South Australia. In considering this bill, I would urge members of this place to consider the plight of the people we seek to represent, those South Australians who, through no fault of their own, have found themselves during this housing crisis forced out onto the street. We see them when we spend time in our city, people literally living on the street in the middle of this cold winter, people who are forced to live in their cars, people who are being forced to live in tents, people who are being forced to live for prolonged periods in caravan parks.


Surely we can do better than that in a country like Australia? Surely we can do better than that in a state like South Australia? If members of parliament are not supportive of this bill, then I ask them to consider what they are going to do to help these people who desperately need our help, because we cannot simply say, 'Let the market decide.' We have seen what happens. This has not happened by accident.


We have seen both the Labor Party and the Liberal Party fail to do anything to deal with social housing over the last 10, 20, 30 years. As a result, the chickens have come home to roost and we are seeing the impacts being felt by vulnerable South Australians. I urge members of this parliament to act, to step up and to do something to help these desperate people, because we cannot continue to do nothing. We cannot continue collectively to sit on our hands whilst so many South Australians are in trouble. We have to help them.