The five big ways to fix Victoria’s housing system
ANALYSIS
The Victorian Government is promising the “greatest shakeup” of housing policy in decades.
The need for bold reform is self evident. Our state doesn’t have enough social housing, renters are being asked to pay too much, and many property managers and landlords (no, not all landlords) are taking advantage of the immense power they wield over tenants.
This means an increasing number of Victorians are teetering on the edge of homelessness or making heartbreaking sacrifices just to pay the rent — and pay off somebody else’s investment property.
The Victorian Government’s promised Housing Statement is being developed just as a cross-parliamentary committee is investigating the same issue.
So what should be done?
There are five key things housing advocates and anti-homelessness bodies are hoping for:
1. Build more social housing.
Victoria is currently engaged in a massive $5.3 billion ‘Big Build’ of social housing over four years. This is a landmark investment – nation-leading, in fact. But it’s still not enough to meet demand. Decades of under-investment by previous governments means that Victoria has fewer social housing properties per head of population than the other states and our wait list has blown out to more than 100,000 people. Victoria needs to build at least 6,000 new properties annually over the next ten years. Doing so will not only give people a home directly, but take pressure of the private rental market.
2. Mandate a formula for fair rent increases.
Victorians are paying too much rent. By some estimates, rents have increased by double the rate of homeowners’ mortgage repayments. Things are now hitting crisis point. Victoria needs to create a formula for fair rent increases in the private market. This formula would determine how much rents can increase by. A successful formula will give certainty to both tenants and landlords.
3. Phase out stamp duty.
Stamp duty is a barrier to first home buyers and a disincentive to existing homeowners wishing to downsize. It generates a lot of money for the government but is corrosive for the housing market. Stamp duty should be gradually replaced with a broad-based land tax.
4. A tax on Airbnbs and other homestays.
Too many Victoria homes are being converted into holiday properties and advertised online. We can no longer put our head in the sand and blithely accept this. A tax on homestay properties will do two things: If investors wish to keep their property on the homestay market, they can pay the tax and contribute to the construction of more social housing. Or, they could return the property to the traditional rental market.
5. Help renters assert their legal rights.
Renters — despite suffering from a fundamental power imbalance — do actually have a stack of rights. For example, they can request necessary home upgrades and challenge excessive rent increases. But laws alone are not enough. Enforcement is critical. Right now, the onus is on individual renters to identify issues and chase their landlord or property manager to make things right. This can be time consuming and expensive. There needs to be more training and support for renters, housing advocates, community lawyers and property managers to know the law, and easy, cheap and streamlined avenues of dispute resolution. More funding will also be needed for government monitoring and enforcement.
At the moment, renters are struggling. And the tenancy support services and other community sector organisations that assist renters are also over-stretched and will need more resources to keep up with demand.
The housing crisis is so complex and entrenched that there’s no single (or quick) solution.
The best response will be a suite of coordinated and complimentary measures introduced in tandem.
Read the full VCOSS submission to the Victorian Parliament’s Inquiry into the rental and housing affordability crisis in Victoria.
VCOSS is the peak body for Victoria’s social and community sector, and the state’s premier social advocacy body.
We work towards a Victoria free from poverty and disadvantage, where every person and community experiences genuine wellbeing. Read more.
VCOSS acknowledges the Traditional Owners of Country, and we pay respect to Elders and Ancestors. Our business is conducted on sovereign, unceded Aboriginal land. The VCOSS offices are located on Wurundjeri Woiwurrung land in central Naarm.