Page 3717 - Week 09 - Wednesday, 24 August 2011
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Secondly, it will help to raise the standard of rental housing stock across Canberra, such that energy and water use is reduced providing cheaper properties to run as well as contributing to the community’s savings in these areas. It will reduce long-term cost of living pressures on those who are renting homes.
Thirdly, we know that the nature of renting means we have a split incentive problem. The landlords are the ones who need to make the investment but it is the tenants who often reap the immediate benefits in most cases. This leads to some properties never having investments made to keep the properties liveable, especially if the landlord is more focused on the capital gains rewards than the wellbeing of the tenant.
Finally, in the face of that split incentive problem we know that when financial incentives are made available to landlords, landlords do not often take advantage of them. We saw practical evidence of this in the federal government’s energy efficiency homes package in 2009. In spite of being offered up to $1,000 to help with the costs of ceiling insulation, landlords were reticent to take up the opportunity, and the stats tell the story. The federal government was aiming to insulate 500,000 rented properties, but in the six months to 30 June 2009, only 3,526 rental properties had been insulated, and the rental scheme was soon rolled into the home owner scheme.
Demand was only 16 per cent of what was anticipated. This phenomenon has been supported by survey research undertaken by the Tenants Union of Victoria, where only 12 per cent of people who received insulation rebates in Victoria in 2008 were in tenanted households. On their own, incentives are clearly not the kind of policy measure that you would use to actually fix the problem if you wanted to do so.
This is a really important point: the carrots alone do not work. The time has come to think about gently applying a small stick; not too hard, not too fast, but that is the beauty of minimum standards. They are really just about getting the basics in place—the measures that mean renters are safe, warm and healthy in their homes.
We set such standards for cars and for children’s toys. We set them for service delivery. We demand them of government. So why on earth are we not asking those who lease out their properties to other people to meet just the most basic of standards—standards that would help prevent people from getting sick, that would reduce their electricity bills and that would improve their quality of life?
I think the answer to that question is that we must do it. The community groups who work with vulnerable Canberrans who are living in poor quality rentals are asking us to do it. Renters who currently live in cold rentals are keen. Canberrans who have in the past lived in damp rentals understand why we should do it. The majority of landlords in this town would be horrified if their own properties were not meeting these standards. We are not mandating luxury here. We are mandating that Canberra’s rental properties should be warm, safe, secure, ventilated, have functioning heating and should not cost a bomb to run.
The criticism I most roundly received when I put this bill forward was the criticism that, of course, landlords will pass on the costs. Of course, I did not actually say that
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