Jenny Leong introduces the Greens' bill in Parliament to freeze rents

Jenny Leong introduces the Greens' bill in Parliament to freeze rents, on 29 June 2023:

HANSARD EXTRACT:

Ms JENNY LEONG (Newtown) (10:18): I move:

On behalf of The Greens, I introduce the Residential Tenancies Amendment (Rent Freeze) Bill 2023 to freeze rents for two years and to put a stop to out-of-control rent increases. New South Wales is in a rental crisis the likes of which we have not seen in generations. Rents are increasing four times faster than wages, evictions are on the rise, and too many renters are just one rent hike away from homelessness. The NSW Council of Social Service this week estimated, based on census data analysis, that one in five renters in New South Wales are living in poverty. The Greens are introducing this bill because renters are in crisis right now. There is a need for immediate action to address skyrocketing rents.

Before the Government claims that it is making renting fairer by appointing a Rental Commissioner and planning a broader suite of reforms, I make it very clear that none of those actions will provide any relief for the crisis that renters face right now. This crisis requires an urgent response. I urge all members to think about the stories they have heard from people in their communities who have been subjected to massive rent hikes. People are in housing stress, living below the poverty line and paying well over 30 per cent of their incomes on rent. Members should consider whether they could face those people and look them in the eye if they do not support this rent freeze bill, which will give renters desperately needed relief from the ongoing stress of worrying about rent hikes or evictions. The Parliament has the power to act right now to make this change. We can give urgent relief to the renters in our community who are experiencing enormous financial stress; all we have to do is vote for it.

The Residential Tenancies Amendment (Rent Freeze) Bill 2023 will prohibit rent increases on all residential tenancy agreements in New South Wales for two years. Under new section 40A (3), all New South Wales residential tenancy rents will be frozen at their rate as of 30 June 2023. If a new tenant starts a lease at a property after that date, the property can only be rented at or below the June 2023 rate. If a property was not rented out as of 30 June 2023, then during the rent freeze period of two years it can only be rented out under a new tenancy agreement at or below the median rent for that postcode. These provisions—freezing rents as of tomorrow, 30 June 2023, and linking rental rates to the property rather than to the tenant—ensure that we will not see a massive rent hike before the bill is enacted, nor an increase in unfair, no-grounds evictions as a way for dodgy landlords to avoid the freeze. The rent freeze is linked to the property, and not to an individual tenant or lease agreement.

New section 40A (4) (a) also provides a maximum penalty for breaching the rent freeze at 50 penalty units for an individual or 100 penalty units for others. These penalties are in line with the Government's recently passed Residential Tenancies Amendment (Rental Fairness) Bill 2023 and are appropriately balanced against the significant profits that are to be made in the private rental market. New section 229 sets out the requirement for the Minister to ensure that a review of new section 40A is conducted within one year of the legislation commencing. A report on the outcome of the review must be tabled in each House of Parliament no later than six months after the review is carried out. It is envisaged that the soon-to-be-appointed Rental Commissioner will be best placed to conduct this review.

The legislation sets out that the review must consider three elements: first, whether the policy objectives of the new section remain valid—that is, the two-year rent freeze—secondly, whether the terms remain appropriate for securing the objectives of the bill; and, thirdly, and most significantly, whether ongoing limits on rent increases are required to ensure that rents are and remain affordable. This will give Parliament the time to consider the impact of this temporary two-year rent freeze as well as any longer-term or ongoing actions required to ensure that rents are affordable. These actions might include the introduction of limits on rent increases and making it illegal for unlimited rent increases to be imposed on renters in New South Wales. To be clear, the bill does not do this. At this point, the intention of the bill is to introduce an interim two-year rent freeze to offer time to reform rental laws in the State and to deal with the immediate rental crisis.

I take time to respond directly to comments by the Premier and others expressing their concerns and opposition to a rent freeze. I believe in drafting this legislation The Greens have responded to those concerns and that they are all now addressed. We have heard concerns that freezing rent increases will somehow actually increase rent prices, suggesting that landlords and real estate agents will jack up rents in anticipation of or at the end of the rent freeze period. While this is a clear admission of what The Greens know to be true—that dodgy landlords and real estate agents are price gouging and profiting off the housing crisis—we share the concern that those who wish to profit off the housing crisis will stop at nothing to boost their bottom line. That is why the bill includes a number of safeguards to ensure that this does not happen.

New section 40A (3) (b) ensures that the rent freeze is not just linked to the individual tenant or tenancy agreement, and is set in place regardless of whether a tenancy ends at that property, to act as a safeguard against eviction for the purpose of a landlord wishing to avoid the freeze. The 30 June 2023 commencement date also ensures that landlords cannot pre-emptively increase rents ahead of the freeze period. New section 40A (2) clearly stipulates that rent increases after this date will have no effect. The review required by the bill also ensures that consideration will be given as to whether the ongoing limits on rent increases are required to ensure that rents are affordable. On behalf of The Greens, I will be clear: This bill is intended as an interim, emergency measure to get rents under control. Much bigger and longer-term reforms are still needed. But we also know that renters are struggling now, and a two-year rent freeze gives the new Government the time and space to implement the reforms that it believes will actually address the crisis.

During the 24-month rent freeze period, The Greens members expect to be working hard in Parliament and campaigning hard on the streets to ensure that the Government is taking the necessary action to put an end to no‑grounds evictions and to implement long-term solutions that will get the cost of rents under control. That is the job of the Government. The Greens are committed to working with the Government on solutions to address the housing affordability crisis and to make renting affordable, secure and fair. We recognise that fairness is not enough. We need to ensure that renting is also secure and genuinely affordable. Sadly, we have repeatedly heard outdated and irrelevant studies rolled out to justify inaction and oppose a rent freeze—studies that do not take into account the scale of the crisis we face or reflect the temporary nature of The Greens' proposed rent freeze. They also misrepresent arguments about supply in a way that shamefully, but unsurprisingly, works to benefit big investors and those profiting from the current crisis.

One of the clearest examples I can point to is that of Berlin, where in 2019 residential rents were frozen on apartments built before 2014. The sky did not fall in, and neither did supply. Instead, as economist Dr Cameron Murray wrote inThe Guardian last week, Berlin saw considerably faster new housing development than the 13 next-largest German cities in the two years following the introduction of the policy. We have also heard claims that in a rent-controlled market, investors will simply pull their investment properties off the market. Not only is there no evidence to back this claim, but also the reality of the housing crisis means that many renters would love to buy their first home but have instead been locked out by ever-increasing house prices, in no small part because big investors with access to more borrowing power are hoarding properties. If landlords have no interest in participating in a rental market that does not fleece renters, they can sell their investment properties and create an opportunity for first home buyers, while also reducing the demand in the private rental market.

Before we hear cries about the loss of rental supply, The Greens offer a simple solution. We can tackle the problem by building more public housing—and not demolishing existing stock—and by putting in place an immediate requirement for at least 30 per cent genuinely affordable housing in all new private developments. Too often we hear blame and excuses for why intervention is not possible. Whether it is the nimbys, migrants, wealthy overseas investors, international students or local councils, every week the Government seems to find someone else to blame for the housing crisis. Instead of playing the blame game when it comes to the rental crisis, the New South Wales Government could act right now. When we come back from the winter break, we could pass legislation in this Chamber to freeze rents for the people of this State. Everything is possible until it is not; all we need is the political will in this Chamber to provide financial relief for the more than two million renters in New South Wales.

We are facing an unprecedented crisis right now. Governments need to take the necessary actions and intervene to address this and make a material difference in people's lives. During the pandemic the Federal Government doubled the rate of JobSeeker and lifted more than one million people out of poverty. I do not think any of us would have predicted that would happen under a Liberal-Nationals Government. In this very Parliament, at the peak of the COVID pandemic, we froze rents on commercial tenancies for six months and introduced a moratorium on evictions for residential tenants under the Retail and Other Commercial Leases (COVID-19) Regulation 2022. It was an emergency, and the Parliament acted accordingly. In Victoria, all residential and commercial rents were frozen for six months during that pandemic period, alongside a ban on evictions under the COVID-19 Omnibus (Emergency Measures) Act 2020. Just last December, after adjourning for the year, the New South Wales Parliament was urgently recalled in this Chamber—in fact, bizarrely, in a side room—to pass laws to cap coal and gas prices and reduce electricity bills in the face of escalating cost‑of-living pressures.

That showed the Government has a responsibility to urgently intervene in unprecedented crises, and the rental crisis and financial stress that people are facing in this State are unprecedented. With no limit on rental increases, rents over the past 12 months have surged by 20 per cent in Sydney and by 6.7 per cent in regional areas of New South Wales, according to the Tenants' Union of NSW's rent tracker data. Rentals in New South Wales are at unprecedented levels of unaffordability. More and more people are experiencing severe rental stress, and there is a dire shortage of affordable rentals for people on lower incomes. Just this week the Tenants' Union of NSW, Shelter NSW, the NSW Council of Social Service and the Housing for the Aged Action Group jointly demanded government action on out-of-control rents. They said:

Too many are spending too much of their income on rent, leaving too little for other necessary expenses. The escalating cost of housing has placed a tremendous burden on individuals and families. Together, we draw attention to the urgency of addressing the problem of increasing rents. The NSW Government needs to provide clear plans to address the pricing of this essential service to bring it in line with community needs and expectations.

I have good news today, because this bill would do just that. It is not the only solution, but it is the start of a solution. The bill would give renters immediate relief and would cost nothing for the Government's budget bottom line. As a cost-of-living measure, it would have a much more significant impact on the weekly budget than the Active Kids vouchers, toll rebates or energy caps. It would not cost the Treasury a single cent. Every day that the Government refuses to act is another day that a renter will face eviction because of an unfair rent hike they cannot afford.

The Greens know that a rent freeze alone is not going to solve the housing crisis. It is the start, not the end, of ongoing, desperately needed reform to put a stop to the massive profits that big investors and developers are reaping from the housing crisis and to make renting more affordable and secure. The Greens look forward to the commitments that the Government has made to end unfair no-grounds evictions, appoint a Rental Commissioner and provide much greater transparency and oversight of the rental market. We believe that unlimited rent increases can and should be illegal. Whether it is through rent caps similar to those in the Australian Capital Territory—the only State or Territory in the country that has seen the cost of rent go down—through capping rent increases to 2 per cent per year, or through establishing an independent body to regulate and set rents, The Greens want long‑term measures to get the cost of rent under control.

We also need to address the short-term and holiday renting issues in our communities. In regional holiday hotspot areas, families and local workers are finding it nearly impossible to find affordable rentals where they live. That is why The Greens are committed to cracking down on the profit motive underpinning the housing crisis, making those profiting from short-term rentals pay tax just like any other business, empowering local councils to set short-term rental caps as they see fit and imposing a 5 per cent tax—at least—on empty homes. But there also need to be viable alternatives to the broken private housing system. We need a massive investment in public housing. Australia has one of the most privatised housing markets anywhere in the world. By stepping up and making this a government responsibility, we can improve conditions, incentivise lower rents and ensure better living standards for private renters. If public housing is good, cheap and plentiful, private landlords have to offer something better to remain competitive. The State has a role to play.

Today The Greens are clear: We are here to work with the Government to make renting more secure and more affordable. There are many mechanisms, levers, policy reforms and new initiatives that can solve this crisis. We know the solutions are all there; this is just one small part. But we also know that renters cannot handle the financial stress any longer and that they need urgent relief while the rest is being worked out. The New South Wales Government and, indeed, every member of this Parliament, with this minority government, has a choice: They can stand on the side of big investors and developers or they can relieve renters from soaring rents by supporting The Greens' rent freeze bill and working with us to implement longer-term solutions to the rental and housing crisis. It is time to listen to the 60 per cent of people who, as a recent Guardian Essential poll found, support a freeze on rental increases and to back this bill. A freeze on rents is not only possible but urgently necessary, and this Parliament has the power to do it. The time for blame is over; the time for action is here. I commend the bill to the House.