Almost one in three Australians are renters and hand over a significant share of their income to landlords. Low-income earners pay a particularly high price, with more than half of those renting spending more than 30 per of their incomes on housing costs. What consumer protections do renters receive in return for all this money? Until now, very few at all, but things are changing.
In 2018 the Victorian Parliament decided to make things fairer for renters. Over 2019 and 2020, renters will gradually receive more rights, including minimum housing standards, greater modification rights, an end to ‘no reason’ evictions, quicker bond repayments, limits on upfront rent payments, and a right to keep pets.
These are sensible, long overdue reforms. The need for change is highlighted in CPRC’s report, The Renter’s Journey, which explores the lived experience of renting among four major groups: young renters aged under 30, newly arrived migrants, low-income families, and women aged 55 and over – one of the fastest growing groups of renters in Australia.
Our report showed renters are neglected as consumers, despite making substantial financial outlays. Renters across each group reported they either did not know about their rights and avenues for complaint or avoid using them. Fear of retaliatory eviction holds people back, especially when trying to get repairs and maintenance done.
The rental market has been failing consumers, when it comes to both affordability and quality. Landlords face little market pressure to provide decent housing that meets basic standards. CPRC’s research found all renter groups faced tight timeframes to find housing, and that securing ‘something’ – regardless of whether it was fit-for-purpose – was better than the alternative, including homelessness. For many people, rental housing is a take-it-or-leave-it proposition, and consumers have little capacity to influence the range of products available.
Renters have also been receiving very little information prior to entering a tenancy; most disclosures are minimal and only occur once the agreement is signed. Until moving in, renters are in the dark about the quality of the home, whether it will be expensive to heat and cool, and whether the landlord plans to sell anytime soon. This stands in contrast to many other essential consumer markets where significant improvements are being made to improve disclosure, to enable consumers to make an informed choice.
So, what needs to be done? Meaningful minimum standards are vital given the market is failing to meet consumer needs, including standards for efficient heating and hot water systems, ceiling insulation and window coverings. Cold homes can kill people or cause serious health conditions. In a recent study of Victorians suffering from hypothermia, nearly 80 per cent were found indoors and were most likely to be elderly—a staggering indictment of home quality and energy affordability. To better protect people’s health and wellbeing, the Victorian Government can map out a trajectory for rental energy efficiency standards. This would send a clear signal to landlords about the timeframe for compliance, and ensure there is sufficient industry capacity to meet the demand for work.
We also strongly support landlords having to provide information about any proposal to sell the property or mortgagee action, the presence of an embedded power network, any asbestos or flammable cladding, and any previous unlawful use of the home that puts future occupants at risk. Renters also need to know about housing features that affect running costs, such as whether the home is insulated or not.
We also welcome restrictions on the type of information that can be sought from rental applicants, which should preclude landlords asking about a person’s rental payment history, whether a person has previously exercised their legal rights as a tenant, and intrusive and excessive personal details such as car registration numbers. The rental market needs to grapple with fair data practices in the digital age, just as other sectors are introducing reforms to better protect consumer privacy.
These reforms will help to achieve some balance in the rental market and provide much-needed protection to young people, families and the increasing number of older people renting. The reforms, if implemented well, will build accountability and reposition landlords as providers of an essential service, rather than as mere investors with cashflows to maintain. The message is clear: being a housing provider is a significant responsibility, and renters deserve consumer protections that shield them from harm and enhance their wellbeing.