Page 164 - Week 01 - Wednesday, 15 February 2012
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preferences in relation to heating and cooling and the tenant’s financial capacity to use and pay for the energy.
Even assuming that a tenant’s energy bill halves as a result of this bill, the savings accruing to tenants from reduced energy use need to be weighed against the likely rental increases. Remember, we are talking about a possible up-front increase of up to $190 per week. Are we really going to see energy savings of that order or greater to offset the increased rental costs? The government does not think so.
Another concern is that the increase in rents in relation to properties requiring improvements is likely to increase rents throughout the entire rental market. This is because the increases in rent in the affected properties will increase the rent component of the housing group of the consumer price index for Canberra. This is the index used to determine appropriate rates of rental increases by the Civil and Administrative Tribunal. This would be in addition to the usual increase for the year. The index increase for rents in the ACT in 2010 was already over seven per cent.
The other way that the entire rental market may be affected by these amendments is that some lessors may be unable or unwilling to afford the renovations necessary to bring their property up to the required standards. As we know, the rental vacancy rate in the ACT is already very low. It was 1.7 per cent in the ACT in the last December quarter. A contraction of even a small percentage of rental stock would cause rents to rise considerably, as tenants compete for the resulting further undersupply in housing. This may also cause the bargaining power of tenants to be diminished, where tenants may not be able to assert their rights for fear of not being able to secure rental accommodation in an even tighter rental market.
So let us be clear. The risk is that if landlords, if property owners, if lessors are unwilling or unable to afford the improvements required for their rental properties, they may simply withdraw that property from the rental market because it does not comply with the law. And that results in a further reduction in the amount of rental supply available in the territory. It is a serious risk. It is a risk the government is not prepared to take.
The government is committed to ensuring an adequate and diverse range of housing options to meet the changing needs of Canberrans, including affordable housing for rental. The affordable housing action plan includes 84 initiatives designed to increase the supply of affordable homes in Canberra. The action plan identifies a need to increase the supply of private rental accommodation, particularly to assist those lower income households who are not eligible for public housing but who find accessing the private rental market unaffordable. It would be contrary to the government’s priorities and would introduce a requirement that would increase costs for private renters in an already tight rental market.
The government has developed a suite of measures to buffer low income households against the cost pressures associated with the long-term impacts of climate change and rising electricity bills. Current measures include a significant increase in energy concession payments, reviewing the utilities concession regime and ensuring that low income and other vulnerable households are the recipients of targeted government
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