Wednesday, 4 October 2023

Residential Tenancies Amendment (Rent Freeze and Caps) Bill 2023

Statement of compatibility

Aiv PUGLIELLI (North-Eastern Metropolitan) (10:00): I lay on the table a statement of compatibility with the Charter of Human Rights and Responsibilities Act 2006.

In accordance with section 28 of the Charter of Human Rights and Responsibilities Act 2006 (the Charter), I make this statement of compatibility with respect to the Residential Tenancies Amendment (Rent Freeze and Caps) Bill 2023.

In my opinion, the Bill as introduced to the Legislative Council, is compatible with human rights as set out in the Charter. I base my opinion on the reasons outlined in this statement.

Overview of the Bill:

The purpose of the Residential Tenancies Amendment (Rent Freeze and Caps) Bill 2023 is to amend the Residential Tenancies Act 1997 to:

a. to prohibit increases in rent and limit rent payable for a period of 2 years; and

b. to limit the rate of increases in rent after that 2-year period; and

c. to prohibit excessive rent for premises not previously let; and

d. to repeal provisions allowing residential rental providers to give a notice to vacate because a fixed term residential rental agreement has ended; and

e. to make consequential and related amendments.

Human Rights Issues:

The Rent Freeze Bill does not limit any human right, therefore it is not necessary to consider section 7(2) of the Charter. I consider that the Bill is compatible with the Charter.

Second reading

Aiv PUGLIELLI (North-Eastern Metropolitan) (10:00): I move:

That the bill be now read a second time.

Victorian renters cannot continue to face unlimited rent rises. Our housing system is in crisis and renters are under extreme pressure to keep up with rising costs and to keep a roof over their head.

Too many people are one rent rise away from homelessness. Too many people are cutting back on food and other essential items just to make sure that their rent is paid and they have a place to call home.

Every day we hear from people about just how dire it is to rent in Victoria. One in three Victorians rent their homes and so many of them have had awful experiences.

The price of rent continues to rise and the power imbalance between landlords and renters means that people are living in substandard homes because they are too scared to report crucial maintenance for fear of another rent rise or eviction for causing too much bother.

Rents in Melbourne have gone up 18.2 per cent in the last year – the biggest annual increase that we’ve had since the year 2000. These rises are unsustainable; renters cannot continue to weather higher and higher rents each year. Something has to be done and this bill is the circuit breaker.

This housing crisis has been created by the choices of successive governments that prioritise a landlord’s ever-increasing return on their investment over everyone’s basic human right to a secure, affordable home. Today, this Parliament has another choice: to lift some of the stress and uncertainty for people who are facing unbearable housing stress by limiting rent increases.

And this isn’t some fringe Greens thought bubble to bring forward socialism. Sixty per cent of Australians support a freeze on rents. And 78 per cent of Australians support rent control by way of either rent caps or a freeze.

This is a reasonable and effective intervention that has been used before in our state and is currently being used elsewhere in Australia and around the world. During the pandemic Victoria froze rents, which was a lifesaver for so many. In countries around the world rent increases are limited and people have certainty. Sixteen European countries, including Scotland, Germany and Denmark, currently have some form of rent control, whether a fixed rate, tied to another index or based on a region-to-region formula. And right here in the ACT, a territory with a Greens–Labor government, rent increases have been capped since 2019.

This urgent situation here in Victoria needs urgent action. We cannot wait for more homes to be built to alleviate supply issues or to magically bring down rents. In fact, we currently have more dwellings per adult than at any other time in our history, and we are building at a faster rate than most other OECD countries, and yet affordability is at an all-time low. People need relief from unlimited rent increases now. That’s why this bill will freeze rents at the rate that they were on 1 January 2023 and will put an end to out-of-control rent rises. This means that for a period of two years the going rent for a property cannot be increased. The rate is retrospective to prevent landlords from increasing prices in response to the legislation.

For properties that weren’t being leased at the start of this year there are provisions to set the rent at the most recent rate since 2021. For a property that has not previously been let, the rental rate will be based on similar homes in the same area at no more than 10 per cent above the median rate. Tenants will still be able to challenge a rate if they believe it to be excessive.

After the two-year freeze, rent increases will be capped to 2 per cent every two years to ensure that renting remains affordable and secure into the future. With 82 per cent of renters experiencing housing stress, this is a rate that allows wages the chance to catch up with the cost of rent, which has spiralled out of control and beyond the rate of inflation for too long.

Too many people are staring down the barrel of eviction or financial stress. People are going without medication or can’t afford to turn their heater on this winter, because their rent is too damn high. These limits on rent increases will offer some relief from unlimited surges in rents.

Under this bill, rent will be linked to the property, not the tenant or tenancy, to avoid people being evicted to allow for rent increases.

Beyond freezing and capping rent increases this bill seeks to end no-grounds evictions at the end of a fixed-term lease. This will strengthen a tenant’s right to remain in a secure, affordable home. Rental properties are people’s homes. Renters set up a life and community around their home, their children attend nearby schools, work is within a reasonable distance, local friends and networks are formed. Many people rent for decades, some for their entire life. And with home ownership becoming increasingly unattainable it’s important that rental homes are stable places to live and an opportunity to put down roots. That’s why this bill ensures that rental providers will no longer be able to issue a notice to vacate just because a fixed-term residential rental agreement has ended. This is common practice elsewhere in the world where tenants can rely on continuing tenancy unless they stop paying rent or otherwise breach the terms of their tenancy.

Housing has been commodified. It is seen by many as an investment rather than a human right. We need these urgent actions to ensure that everyone has a safe, secure and affordable home. Addressing unlimited rent increases is just one part of this puzzle. There are still many other reforms needed to address the state’s housing crisis. We need to regulate the short-stays industry to prevent greedy landlords from switching their rental investment property into an Airbnb so they can continue to cash in on the unregulated market while others are living in tents. We need a massive investment in public housing built by a public builder. We need property developers to pay their fair share by requiring them to include 30 per cent public and affordable homes in new developments and 50 per cent in special development zones. We need a legislated goal to end homelessness in Victoria by 2030 and more long-term funding for homelessness services. Our planning system should work to mandate better developments without stripping powers from local government. And our taxation system should be reformed to strengthen and properly enforce the vacancy tax, overhaul stamp duty and make some big changes federally to negative gearing and capital gains tax. And very importantly political donations from property developers should be banned at all levels of government.

And while freezing and capping rents will put an end to unlimited rent rises and ending no-grounds evictions will allow for more stable tenancies, there’s still much more that needs to be done to make renting fairer. Renters are too often treated like second-class citizens. Rental standards are still lacking and poorly enforced. Cooling in homes should be mandatory. Renters cannot be expected to swelter through long, hot summers. We need to ensure that homes meet minimum energy efficiency standards, with insulation and draft prevention. Renters shouldn’t have to put up with substandard homes that are damp or mouldy, have mushrooms growing in the bathroom or are infested with insects. Living in these conditions affects the health and wellbeing of Victorians and the Victorian Labor government has turned a blind eye for too long. A rental property is a home, and people have a right to expect a safe and comfortable place to live in.

It’s time to take action. There’s much to be done to make renting fair in Victoria, but the first and most important step is to stop unlimited rent increases. People cannot continue to wear hefty rent increases. The rising cost of living is impacting so many in the community. People are cutting back on all sorts of essential items and doing what they can to make sure that rent is paid and they have a home. How long are renters expected to keep copping the endless rises in rents? It’s not like they ever decrease.

Freezing rents for two years will provide immediate relief for renters in increasingly uncertain times and buy the government some time to address the broader issues faced by renters.

I commend this bill to the house.

Lee TARLAMIS (South-Eastern Metropolitan) (10:10): I move:

That debate on this bill be adjourned for two weeks.

Motion agreed to and debate adjourned for two weeks.