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Making rental ownership even more unattractive is a no win situation

If not the end of January, then at some point, the moratorium on rent evictions due to rent arrears will end and the clean up and planning for next time must begin. Further extensions of the no evictions for rent arrears intervention are not only unjustifiable but will delay the inevitable and worsen the situation as tenants accrue more debt and more landlords turn their backs on rental property ownership.

The Tasmanian Residential Rental Property Owners Association has formally requested the State Government take urgent action to remedy the current situation by clearing all rent debt owed to landlords – which we estimate to be around $500,000 – and, finally after months of pleading, amend their faulty legislation so that tenants are only protected from eviction when they have demonstrated they are in financial difficulty due to COVID-19. In every other jurisdiction, only tenants who are financially worse off due to the pandemic are protected from eviction due to their genuine inability to pay rent, as it should be.

When our government granted every tenant the unconditional ability to stop paying rent it opened the door for a disgustingly unfair situation. In Tasmania, we have Tenant A who is truly struggling but still scraping together their rent, while Tenant B has not had their financial situation worsen but has seized the opportunity Tasmania’s faulty legislation provides and is benefiting from a hefty $4,000 windfall as taxpayers gift money to reduce their rent debt under the misleadingly named Landlords Support Scheme. For example, we have State Government employees who have continued to work having their rent paid by taxpayers. The Government knew of this foreseeable risk and the Tenants Union of Tasmania also know this legislation is legally being taken advantage of by "bad eggs" with no repercussions, but a simple amendment has not come.

In addition to the extensive clean up, we need to look ahead. Our Association has urged the Government to bring all parties together and take the lead on future planning for private rentals in the context of this new world and the precedents that have, mostly erroneously, been set.

It has never been a scarier time to own rental property and dramatic changes in rental investment behaviour and attitudes cannot be without consequence. On top of the inherent risks that come with rental property ownership, landlords must now also consider that, according to the Government and Tenants Union’s, the requirement for a buyer (tenant) to pay a seller (owner) for the product they use is now linked to the status of the Tasmanian economy. For many owners, that risk will be unpalatable, as it would be to many other sellers.

Nervousness around the feasibility of being a rental owner is amplified further by talk of rents being frozen and controlled, restrictions being placed on what information a landlord can request and landlords losing the right to decide whether animals occupy their property or not. Our Association believes that it must be an owner’s right to set the price for their product, to be able to request information that gives relevant insight to a potential tenant’s situation and history, and to decide who and what occupies an expensive asset. While stating the obvious but being a fact too many are scared to say, we need to remember that renting is not the same as ownership – it does not bring the same freedoms, expenses, or risks.

Hobart’s house prices shot up 6.1 per cent in 2020, despite a pandemic continue to wreak havoc. This increase will further hinder the ability for many to purchase, especially when plagued by unstable incomes and big competition from tree changers bringing forward their decisions to leave city compounds behind. Our Association absolutely believes everyone should have a safe and secure home. And it is widely known that private rental properties are needed to keep thousands of Tasmanians warm and dry. We, therefore, must find a middle ground which provides both tenants and owners with a fair and sustainable solution.

Our message is simple – the more unattractive it is to be a landlord, the fewer rental properties that will exist. The fewer rental properties we have, the more it will cost tenants and the longer the housing wait lists will be. The State Government and tenant advocates need to tread carefully as disincentivising rental ownership will only worsen our housing woes.



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