Sydney squeeze: Is rent control the answer to the housing affordability crisis?
Published by: www.abc.net.au. 21 March 2017.
Karen Ward has been renting in Sydney for 25 years. Until a year ago she was leasing a rundown house in Mascot with her son Charlie for about $450 per week.
"I found having a private landlord, he seemed to be able to put the rent up whenever he felt like it," Ms Ward said.
"There was no monitoring of repairs. Once when the toilet broke down, he said he didn't have time to fix it and said to me, 'use a bucket'.
"For myself and my son I needed something more stable, more secure, where rental prices were monitored."
Ms Ward and Charlie now live in a modern two-bedroom apartment in Zetland which was built last year exclusively as an affordable housing block by not-for-profit developer City West Housing. Since its creation in 1994, City West Housing has built more than 730 homes and is expecting to provide 1,045 affordable apartments by the end of next year. The complexes are managed like a private rental property and City West Housing expects the project cost of each development should be paid back within 30 years from the rent received from tenants.
So how does rent control work?
While the rent Ms Ward is paying now is similar to that of her previous home, it is capped to be no more than 30 per cent of her gross annual income, which includes any family tax benefits. She works as a planner with the National Disability Insurance Agency and has a salary of $85,000. A quick search for two-bedroom apartments in Zetland shows weekly rental prices ranging between $700 and $900.
"I most definitely have been able to save more," she said.
"I know exactly what I have to pay, whereas with private rental there is no benchmark on that."
But Ms Ward is on the higher income band of affordable housing residents. Most applications come from those earning between $33,000 and $55,000, like 27-year-old Alice Anderson (pictured above) who pays $250 a week for a studio apartment in Eveleigh.
"I have definitely been able to save a good chunk which is just such a peace of mind," she said.
"It's definitely motivated me to stay in jobs I haven't necessarily felt like they were right jobs for me.
"Obviously you can't quit jobs or you're risking losing your accommodation."
The human resources employee said that while a room in a sharehouse might be slightly cheaper, she valued the certainty of having an ongoing lease. Eligible residents are reviewed every six months and must be earning less that $94,274, work in the City of Sydney Local Government Area, have no other assets or savings and be living in inadequate or unaffordable housing at the time of applying. If a tenant's income is found to have increased and exceeds the maximum income band, they are given 90 days to find alternative accommodation. If they lose their job, City West Housing gives them a grace period of three months to find another job.
Council's commitment to affordable housing
City West Housing is the main community housing provider for the City of Sydney and also has properties in Eveleigh, Glebe and Alexandria. The council's Affordable Housing Policy requires developers in Green Square, Ultimo, Pyrmont and the southern employment lands including Rosebery to pay either a monetary levy or allocate a portion of finished homes to affordable housing. On Monday, a proposal to expand the policy to other suburbs including Potts Point, Darlinghurst, Camperdown and Erskineville was submitted to council.
The Federal Government is also working towards establishing a government bank to fund community housing. The City of Sydney has a target that by 2030, 7.5 per cent of all housing in the local area will be affordable housing. It says it is "committed to working with other governments to address the chronic shortage of affordable housing in the local area".
It's not just about first-time buyers
Rene McKenzie-Low, community engagement manager for City West Housing, said that without rent control in Sydney, low to mid-income families, nurses, teachers, shift workers and public servants would find it "impossible" to live close to work and maintain employment. She cited one story she heard of police officers forced to sleep in their cars overnight between shifts because they lived too far from work to make the commute worthwhile.
Ms McKenzie-Low said supporting long-term renters was just as important as the current conversations about schemes to help first-time home buyers get into the market.
"If focus is always on affordable purchasing, you're missing a gap in the housing continuum if you ignore affordable renting," she said.
"We're capturing the mid market. Our niche is to make sure that people who keep our city running have quality of life."