What the Federal Government can learn from Victoria’s rental reforms

by Damien Patterson, Council to Homeless Persons Policy and Advocacy Officer

This article was originally published in Parity magazine. Learn more about Parity magazine including how to access full editions.

As National Cabinet looks at means for strengthening the rights of renters, it is useful to consider what has been achieved in my home state of Victoria. Rental reforms have had in impact on homelessness and make a compelling argument in favour of limiting evictions further across the nation. It’s also instructive to look at what remains to be done both locally and nationally.

In 2015, when the Victorian Government kicked off what became a string of residential tenancy law reviews across the country seeking to improve renters’ rights, renters in Australia, across every jurisdiction, had far weaker rights than global comparator countries. Despite our Federal division of powers meaning that eight residential tenancy regimes existed independently of each other across the eight jurisdictions, something in the history and culture of the nation saw a dominant belief that the rights of landlords come before those of renters.

In 2017, Council to Homeless Persons (CHP), along with the many partner organisations with whom we worked so hard for improved tenancy rights, celebrated the new Victorian Residential Tenancies Act. At the time we said that measures like removing the no-reason notice to vacate (for ongoing tenancies), the ‘reasonable and proportionate’ test for evictions, and stronger protections against eviction for late payment would see a permanent decrease in homelessness in Victoria.

While attribution is tricky, today, we have good reason to believe that those hopes have borne out. Figure 1 below shows the number of people attending Victorian homelessness services each year whose main reason for presenting is ‘housing crisis’, a term that describes evictions.

Victorians have had increased protections against eviction since financial year 2019–20, first in the form of pandemic-related protections, and now through the permanent Residential Tenancies Act. Since this time, the number of people seeking homelessness assistance due to eviction has decreased. So, to have evictions as a proportion of all reasons for presenting to homelessness services.

Changes like these, and others that we hope to see in the future, such as the removal of ‘no reason’ notices to vacate at the end of the first periodic tenancy, can reduce evictions, stemming the flow of people into homelessness.

Other changes to residential tenancy laws have sought to improve the situation of renters. Even before the current disastrously low vacancy rates, Australian rental markets were enormously competitive.

Recent rental market trends see an acceleration of a long-standing trend, in which our rental markets are becoming less affordable, especially for people on very low incomes. Once, rents clustered towards the affordable end of the market, reflecting the role of the private rental market in providing somewhat affordable housing options for people on low incomes and those seeking to save a home deposit. Today, rents are clustered towards the middle. (1)

This results in increased competition between low-and middle-income earners, and an almost complete absence of affordably priced housing options for low-income renters.

There are a variety of reasons for this change in where costs cluster, but Commonwealth tax settings are a key factor.

The resultant rental market competition has a disproportionate effect on those experiencing or having previously experienced homelessness. These cohorts have perhaps the least market power of anybody in the private rental system and are therefore far more likely to receive offers of only the worst maintained properties. In some instances, these properties would be considered by most of the community to be uninhabitable, typifying both homelessness and rent stress.

But changes like the introduction and strengthening of minimum standards for rental properties can have an impact. The establishment of minimum standards for rental properties likely saw many well-meaning landlords actively comply. In many other instances, less disempowered renters can request or compel landlords to meet the standards. They’re also an important tool for legal advocates and support workers. In total, it can be said that more rental properties meet the basic standards that you would expect of a home.

Despite this, this edition of Parity is full of examples of the structural reasons that mean that renters don’t always feel safe to assert these rights. When somebody controls your access to a home, and when homelessness is a real and evident threat, a power dynamic is at play. Dodd and Marzohl’s interesting article later in this edition of Parity calls for a redefinition tenant-landlord dynamics, based on the idea of stewardship.

These power relations are important, and they’re maintained by landlords’ easy access to evictions. It should be an expectation of all advocates for people without homes that the nationwide strengthening of renter’s rights that was recently announced by National Cabinet should remove ‘no reason’ notices to vacate, and limit ‘for cause’ evictions. As CHP has long argued, there is no such thing as an eviction for ‘no reason’, there are only evictions for reasons not allowed for in the law. Wherever the law (whether tenancy or otherwise) allows such wide discretion, it will always be used most against marginalised people, often in ways the Parliament doesn’t intend.

At the current moment in time, the implicit threat of eviction is especially powerful, as across the country rental vacancy rates are devastatingly low, and the price of newly advertised rentals is skyrocketing. For our clients there has long been too few affordably priced homes. Now, there are too few affordable homes for most renters. Interesting reforms in the Australian Capital Territory, outlined by Pippen later in this Parity, explore admirable legislative approaches to preventing excessive rent hikes.
But legislative reform can’t be the only aim of advocates for housing security. As noted above, until recently Australian jurisdictions have had universally weak protections for renters. Stronger renters’ rights are part of the solution, but the prevailing culture which preferences landlords means that it is likely that millions of Australian renters assume that their rights are less than they actually are, and that landlords assume the same. These assumptions make it difficult to uphold a right that you don’t know that you have.

Anecdote isn’t evidence, but I’ve had to leave all of my neighbourhood’s social media groups in frustration. People regularly turn to these groups for advice on the unfair circumstances they’re facing in their rented home. These groups do provide advice, but rarely based on the Residential Tenancies Act. This advice is almost always based on what individual commenters think would be a fair outcome. It’s almost always far less than what the law provides. What many people feel is fair is often pretty degrading to the renter, who just wants a peaceful home.

I don’t anticipate any time soon a level of service provision in Australia whereby every renter has reliable access to legal support. So, for Australian rental systems to operate as intended, we need to achieve a culture change piece. Only when renters, and the community more broadly, expect more for renters, will we see the system start to self-regulate — when people understand their rights, and enforcing them is not only risk‑free, but expected, we’ll know that the rights contained in residential tenancy laws are being upheld.

National Cabinet’s move to improve renters’ rights is both a positive step, and hopefully, a reflection that the culture of supporting landlords over renters is shifting. But it’s also an opportunity to further the culture change piece of work that we need to do. A national conversation will soon be underway on the rights of renters in Australia. There will be many who argue for continued priority on landlords’ property rights. But it’s also an important opportunity to shift the dial on the public narrative and encourage people to challenge their perceptions of what the rights of renters might be.

Because while improved rental laws can do a lot to help renters, many of these improvements will only really be applied when Australians understand that renters deserve better than they currently get.

This article was originally published in Parity magazine. Learn more about Parity magazine including how to access full editions.