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Private renting just a dream for many

By October 10, 2022No Comments

The front page revelations in The Mercury from property data firm PropTrack, that it is cheaper to rent a home in Melbourne than Hobart, is staggering.

Who would have ever believed that could happen, that we pay more for rent here, in little old Tassie, than those who live in Melbourne’s metropolis?

Adrienne Picone, chief executive of the Tasmanian Council of Social Services, has described Tasmania’s housing market as “failed”, while noted urban researcher Professor Peter Phibbs has labelled it “dysfunctional”. He recently observed, “You can’t run a society where people can’t move to a place to be a teacher or a doctor because they can’t get a house”.

That is where we are at now. A failed and dysfunctional housing market. When the private rental market falls over, the knock-on effect reverberates around all aspects of our life.

Without affordable and accessible private rentals there cannot be a functional housing sector or a functioning society.

We need the government to give us some clear pathways out of this mess. That is what the people of Tasmania expect, but we’re seeing precious little effective action.

How did it get to this? We live in a prosperous country and it is hard not to get the feeling that our generation has blown it, that we are handing to our children and grandchildren a society in worse condition than when we received it.

The electoral offices of all Tasmanian politicians have, no doubt like mine, been inundated with the most heart-wrenching tales from ordinary Tasmanians falling foul of our out-of-control private rental market. Spiralling rents are forcing families on to social housing waiting lists where they are likely to languish for years. More and more people stranded on the public housing list – around 4,500 households – waiting close to two years before they are offered a home.

Make no mistake, it is not just a dilemma for those on welfare or low incomes. This is also a problem for many tenants who would normally be thought of as quite comfortably off but now find themselves priced out of the private market.

While the government has made some investments in social housing it has no plan to get private rentals under some sort of control. Why not adopt common sense measures like limiting short stay accommodation, such as Airbnb, to rooms in the owner’s principal place of residence? Or an empty house tax to incentivise owners to either sell or rent their empty homes? This latter initiative has been adopted in cities as diverse as Vancouver and Melbourne where homes left empty for more than six months without a reasonable excuse are taxed at one per cent of the value of the property.

The Tenants’ Union recently released data that estimate there are over 500 houses across Hobart, Glenorchy and Launceston that sit empty. By extrapolating the survey methodology across all municipalities, there would be around 2000 Tasmanian homes empty right now.

The Housing Minister, Guy Barnett, must do what his predecessors have failed to do and find ways to release these vacant homes, and those tied up in the short-stay market, back into the private rental pool.

So within our grasp we have the opportunity to put roofs over Tasmanians’ heads. The government does not see it; instead we have housing initiatives that are doomed to failure.

Chief of these is the first home owners grant, which simply economic stupidity, piling mistake on mistake by extending the $30 000 grant for another year. Any economist would tell you that these types of incentives do little more than inflate property prices by the amount of the grant.

As respected Tasmanian economist Saul Eslake said recently, “… first home buyer incentives do nothing to increase the home ownership rate but inflate the price of existing houses and end up in the pocket of either vendors or the profit margins of builders and land developers.”

People live in fear of rent increases that are coming in the hundreds of dollars. I have been overwhelmed by desperate people being forced in to homelessness or close to it.

Someone who is homeless is more likely to have poor health. Someone who is homelessness is less likely to engage in education and training. Someone who is homeless is more likely to be caught in the criminal justice system. This all costs the taxpayer money.

The Government’s main housing policy focus is to build 10,000 new homes over the next ten years. But houses won’t be built quickly enough so much more needs to be done to make sure we get people housed, and real action on the private rental market is a necessary first step.

This should be our government’s priority. And health. And education. Not obsessed with a football stadium we can’t afford and no one wants.

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