Coronavirus

Covid Exposed Just How Crappy Australia’s Renting System Is

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For a lot of people who live in rental properties, the pandemic’s been particularly scary.

Rent reductions and eviction moratoriums have helped to alleviate some of that renting stress but there’s still a bunch of questions about what will happen to renters going forward.

And all of that confusion and stress has really exposed some deep-seated problems with Australia’s rental system.

So, could the pandemic change the entire culture of renting?

As businesses started closing their doors and people began losing their jobs, it became pretty obvious that governments had to intervene and keep people in their homes.

Most states and territories introduced regulations to stop renters from being booted out and the Federal Government was encouraging landlords to have fair conversations with their tenants about rent reductions.

But those casual agreements between landlords and their renting tenants are a bit more of a problem than they might seem.

Dr Chris Martin: “There is a lot of confusion out there … about just what people have agreed to. It’s been quite difficult to get a clear picture on the terms of agreements, on the variations, and just how common variations are.”

That’s Dr Chris Martin. He knows a lot about housing policy and he’s been kinda shocked that most state governments didn’t just step in and help to regulate these agreements.

CM: “I suspect that a lot of people may have made an arrangement and there may be some uncertainty about the terms of it. And they might think they got a reduction. And the landlord might start saying, ‘actually no it has to be paid back later’. And that’s the ill effect of governments doing this sort of hands-off thing when they implemented the moratoriums.”

Victoria was the only state that set up a tribunal to decide what kind of reduction was appropriate for each household.

It’s been kind of a big mess and Australia could be heading towards an even bigger one.

An analysis came out recently from a renters’ advocacy group that found 5 to 15% of tenants around Australia are now in rental debt.

That’s between 320,000 and 970,000 people who could lose their current homes once the eviction moratoriums are lifted.

It’s being called a ‘rent bomb‘ and the problem is only going to be exacerbated when the coronavirus supplement for JobSeeker ends next year.

CM: “If they’d really wanted to grasp the problem, I think they would’ve across the board mandated rent reductions – particularly early in the emergency period. That would have been the appropriate response.”

But even besides the government’s response (or lack thereof) to the renter’s crisis, the way Australians think about renting might have really changed over this period.

Chris said that the behaviour of landlords in particular, has been eye-opening and he used this beautiful metaphor to explain it.

CM: “The property lobby really engaged in this hideous nude streak across the public consciousness.”

He’s talking about how Australians withdrew more than $35 billion from their super this year and landlords were happy to accept a bunch of this money to cover rent.

Some real estate agents were even caught out advising tenants to withdraw their super early to pay bills.

CM: “The idea that in order to keep paying your rent, you’re going to have to raid your super, and you’re going to have to raid your savings to pay another person who has a whole lot more in the way of assets than you … I do think people will remember that. And I think there is a more critical take out there on landlords and just what they do for people, which is take their income basically.”

 The Takeaway

About a third of Australians rent the homes they live in and the pandemic has made a lot of those living situations really precarious.

It’s been an eye-opening experience for a lot of people, about the attitude that landlords and the property lobby have towards tenants.

And that awareness could lead to a permanent cultural shift where renters will put their feet down to make sure problems like this can never happen again.