How do we make the private rental market work better? There's been a lot of talk about the problems – now is the time to focus on the specific ways to make change.
I want to start with a story, a familiar one for many people who rent and know about the power imbalance they face when trying to get things fixed. Here’s an experience of a parent who's renting:
"I have been asking to baby-proof our house for two months. Despite several follow-ups and lots of communication when THEY want something (like four valuers to visit since November), they still haven't answered."
The renter who wrote this had the same Ikea drawers that had fallen on and killed multiple toddlers worldwide when they weren't secured to the wall. She had the drawers. She had the kit to secure the drawers safely to the wall. But she didn't have permission from her landlord or real estate agent to keep her child safe.
We need to change the power balance between people who rent and service providers
To me, this story points to one of the most important reforms we need to see in the private rental market. We need to change the power balance between people who rent and service providers.
That means strengthening rights across the nation and getting landlords and associated services to lift their game.
A complex and unfair market
CHOICE became interested in renting issues about four years ago. We were considering which markets across Australia were the most complex or the most unfair. The private rental market stood out.
Since then we've completed two research projects into the experience of people in the private rental market in partnership with housing experts and advocates, National Shelter and the National Association of Tenants Organisations (NATO).
We've learned that, while there are state-by-state variations to the rental experience, some renting experiences are consistent across Australia – poor-quality homes, poor service from landlords or agents, and an overwhelming feeling of fear and insecurity which means people aren’t able to effectively complain or exercise the rights they have.
Poor quality of service
While some people who rent have told us that they have a strong and trusting relationship with a landlord or agent, poor experiences are far too common.
Our research from February 2017 found that over one-fifth of people who rent had to wait more than a week just to get a response from their landlord or agent about an urgent repair.
We've heard story after story of renters fighting just to get basic fixes, with landlords who drag their feet, flat out refuse repairs or, worst of all, kick people out of their homes for asking for these fixes.
We cannot accept poor treatment of customers in the provision of the most essential service, a home
We wouldn't accept such low service standards from any other industry. Can you imagine if half of all people with a mobile phone in Australia had no access to SMS services? Or if calls dropped out half the time? Or, more than that, if these customers knew they could have their service cut off if they made a complaint to get the problem fixed? The telco sector has its problems, but it's not this bad.
We don't accept such low standards of quality or service in energy, telecommunications or even banking. We cannot accept poor treatment of customers in the provision of the most essential service, a home.
Time to focus on landlords and real estate agents
We need a shift in the conversation. Our attention has, rightly, been on the experience of people who rent. But I believe there's now an opportunity to ask, "What should real estate agents and landlords be doing to lift their game?"
Understanding the motivations and experiences of landlords may be one of the best opportunities we have to get much needed change. Because until landlords change their behaviour, we cannot expect a radical change in experience for people who rent.
For example, I'd like to know how many people are encouraged to buy and then rent out a property as a "passive investment", but aren't coached through the upkeep and maintenance costs? How many of these investors accurately budget for repairs? Can they afford to replace the oven when it breaks?
I also think that there are opportunities to better understand the service providers in the renting sector – for example, how do conditions in landlord insurance affect the renting experience? Does landlord insurance require an unreasonable volume of inspections or photos taken of private living areas? How does the experience and workload of a rental agent affect the service a renter receives?
A need for national standards
Combined with this focus on lifting standards for service providers, I believe the biggest opportunity for change is around a national debate about rental standards.
We've seen some states, like Victoria, lift rental rights. But we need every Australian to have the strongest protections for their home.
Compare the rights for no-grounds evictions in different jurisdictions. If the no-grounds eviction notice is issued at the end of a fixed-tenancy, then in Victoria that person currently has 60–90 days to find a new property. In NSW, they have just 30 days. In the Northern Territory, they only have 14 days to find somewhere new and leave their current place.
At minimum, what we need is a national, coordinated conversation to lift the bar. However, if we're bold, we could look to coordinated legal reform. This is ambitious, but we've seen it work in other areas, like the Australian Consumer Law.
Coordinating a national conversation is the only way to ensure that renting will be a safe and fair experience for everyone, whether you live in Melbourne or Alice Springs.
DISCLAIMER: This article was originally presented as a speech at the Consumer Policy Research Centre (CPRC) Policy Connect Series forum.
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