Daniel Andrews was the last Victorian leader to openly consider a rent freeze — but the concept is headed back to parliament. Picture: Asanka Ratnayake/Getty Images.
A day after Victorian tenants were given extraordinary new scope to combat rent rises the state’s Greens have called for a rent freeze in response to a growing cost-of-living crisis.
The demand has been issued 24 hours after new rules for rentals came into play that allow tenants to fight back against excessive rent rises, with Consumer Affairs Victoria and the Victorian Civil and Administrative Tribunal now able to consider factors such as rent increases in the past two years, as well as the tenants’ circumstances when assessing if a hike is fair.
The last Victorian leader to seriously consider a rent freeze was Daniel Andrews, who said “everything is on the table” when discussing plans to combat the states housing crisis in 2023 — but ruled it out not long before resigning.
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Mr Andrews also implemented a year-long rent freeze in Victoria as well as an eviction moratorium that stopped landlords kicking tenants out during the Covid-19 pandemic, with the freeze ending on March 28, 2021.
The list of rental reforms that have since been implemented by the state government grew again yesterday, including broader options for tenants to challenge rent rises — as well as requiring a standard form be used for all applications, and banning charging tenants to use rental apps and platforms.
Following the expansion, Tenants Victoria yesterday urged every tenant in the state who receives a rent rise of more than the Consumer Price Index, about 3.3 per cent in Melbourne, to submit it for a free review via Consumer Affairs to ensure the laws are working.
Today, the Greens will put a bill to the state parliament seeking a two-year freeze on rents — followed by a cap on increases that would stop them being raised faster than wages.
Victoria’s rental market has had significant increases in rental costs in recent years, though remains one of the nation’s more affordable cities for tenants.
They will argue that rents rose 2.5 times faster than wages over the past five years and that a two-year freeze and longer-term cap will help provide security at a time when many are struggling with the rising cost of food and fuel as a result of ongoing conflict in the Middle East.
While the CPI element of the latest reforms could in theory address this, the Greens argue it puts the onus on the tenant to fight a rent rise — rather than stopping landlords.
Victorian Greens spokesperson for renting Gabrielle de Vietri said for many tenants, one more increase in their rent was enough to “push them into rental hell or even homelessness”.
“The rental crisis is a political choice. The government could pass this bill today and renters could have relief as soon as next week,” Ms de Vietri said.
“It’s time we made unlimited rent rises illegal so renters can actually afford their home, and even save for the future.”
Greens spokesperson for renting Gabrielle de Vietri is calling for a rent freeze. Picture: NCA NewsWire / Ian Currie.
Australian Housing and Urban Research Institute managing director Dr Michael Fotheringham said every rental reform came with impacts for both tenants and landlords.
“If you implement a long-term freeze on a wide area, the effect is you trigger evictions as landlords will have to sell if they can’t meet the costs,” Dr Fotheringham said.
He also downplayed tying rent rises to income, as landlords costs were more closely aligned with interest rates — making the Consumer Price Index a better measure to guide rents.
Property Investment Council of Australia board member Ben Kingsley concurred that a freeze would wind up hurting tenants more in the long run, as it would drive landlords to sell up.
“While I get the well meaning nature of the intent of the request, the reality is that’s just stupid,” Mr Kingsley said.
“Daniel Andrews absolutely talked about the potential for a rent freeze or rent caps, and he said that at a couple of press conferences, and that was the start of the lack of confidence in this government that we (investors) now have.
“What landlords want is confidence in the rules and regulations, and without that they won’t invest here — there are other cities and other markets to go to.”
Research and industry experts have all warned rental freezes risk leading to tenant evictions as it would drive landlords to sell.
Real Estate Institute of Victoria chief executive Toby Balazs said a rent freeze might cost tenants a place to live long term.
“There have been failed attempts of introducing rent caps in Stockholm, New York, Berlin and San Francisco,” Mr Balazs said.
“We suggest a better approach would be to create policy that incentivises increased housing supply.
“Rising rents are a symptom of a problem, not the problem itself. The problem is lack of supply. To add another shortsighted, ill-considered condition such as a rent cap is reckless.”
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