Daniel Andrews was the last Victorian leader to openly consider a rent freeze – but the idea is coming back to parliament. Photo: Asanka Ratnayake/Getty Images.
A day after Victorian tenants were given a new chance to fight rising rents, the state’s Greens have called for a freeze on hiring because of the growing cost of living crisis.
The demand was issued 24 hours after new tenancy laws came into effect allowing tenants to fight rent hikes, as Consumer Affairs Victoria and the Victorian Civil and Administrative Tribunal are now able to take into account factors such as rent increases over the past two years, as well as tenants’ circumstances when assessing whether a taxi is appropriate.
The last Victorian leader to seriously consider a rent freeze was Daniel Andrews, who said “everything is on the table” when he discussed plans to tackle the housing crisis in 2023 – but dismissed it shortly before he resigned.
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Mr Andrews has also implemented a year-long rent freeze in Victoria and an eviction freeze that has stopped landlords from evicting tenants during the Covid-19 crisis, with the freeze ending on March 28, 2021.
The list of rent reforms that have been introduced since they were first implemented by the state government expanded again yesterday, including wider options for tenants to challenge rent increases – and requiring a standard form to be used for all applications, as well as a ban on charging tenants to use rental applications and platforms.
After this extension, Tenants Victoria yesterday urged every tenant in the state who receives rent above the Consumer Price Index, about 3.3 per cent in Melbourne, to submit it for a free review with Consumer Affairs to ensure that the rules apply.
Today, the Greens will introduce a bill in state parliament calling for a two-year rent freeze – followed by a reduction in increases that would see them rise faster than wages.
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Victoria’s rental market has seen a significant increase in rental costs in recent years, although it remains one of the country’s most affordable cities for renters.
They will argue that rents have risen 2.5 times faster than wages over the past five years and that a two-year cooling-off and long-term cap will help provide security at a time when many are struggling with rising food and fuel costs due to ongoing conflicts in the Middle East.
While the CPI component of the latest changes would address this in theory, the Greens say it puts the onus on landlords to fight rising rents – rather than stopping landlords.
Victorian Greens rental spokeswoman Gabrielle de Vietri said for many tenants, one increase in their rent was enough to “send them into rental hell or homelessness”.
“The rental crisis is a political choice. The government can pass this bill today and renters can get relief as soon as next week,” said Ms. de Vietri.
“It’s time we legalized unlimited rent so renters can afford their homes, and save for the future.”
Greens spokeswoman for leasing Gabrielle de Vietri is calling for the hiring to be stopped. Image: NCA NewsWire / Ian Currie.
The managing director of the Australian Housing and Urban Research Institute, Dr Michael Fotheringham, said that all rent changes have an impact on tenants and landlords.
“If you use long-term snow in a wide area, the result is that you cause evictions as the owners of the houses will have to sell if they cannot meet the costs,” said Dr Fotheringham.
He also underestimated the rise in rents from income, as homeownership costs were more in line with interest rates – making the Consumer Price Index a better measure to guide employment.
Property Investment Council of Australia board member, Ben Kingsley, agreed that the freeze would end up hurting renters in the long run, as it would encourage landlords to sell.
“Although I understand the purpose of the request, the truth is that it is nonsense,” said Mr Kingsley.
“Daniel Andrews has been absolutely vocal about the possibility of rent caps or rent caps, and he said in several press conferences, and it was the beginning of the lack of trust in this government that we (investors) have now.
“What landlords want is trust in rules and regulations, and otherwise they won’t invest here – there are other cities and other markets to go to.”
Research and industry experts have all warned against leasing to stop the risk of eviction as it will encourage landlords to sell.
The CEO of the Real Estate Institute of Victoria, Toby Balazs, said the rent freeze could cost tenants long-term housing.
“There have been failed attempts to introduce rent caps in Stockholm, New York, Berlin and San Francisco,” said Mr Balazs.
“We suggest that the best way would be to create a policy that will encourage more housing.
“Rent hikes are a symptom of the problem, not the problem itself. The problem is the supply shortage. Adding another short-term, ill-conceived condition like a rent cap is reckless.”
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