Viw Magazine

Men's Weekly

.

  • Written by Liam Davies, PhD Candidate, Centre for Urban Research, RMIT University

The COVID-19 pandemic is likened to a “war on two fronts” by senior government figures, including Prime Minister Scott Morrison and Treasurer Josh Frydenberg. On one front is the pandemic, which threatens to put unprecedented strain on the health system; on the other front, the lockdown is devastating the economy and employment.

These impacts have prompted debate about protection of renters. During the second world war Australia implemented rent control, protecting tenancies for decades afterwards. In this coronavirus “war”, governments should take inspiration from the past and again implement rent control.

Read more: Rents can and should be reduced or suspended for the coronavirus pandemic

We have already seen governments adopt other “wartime” measures. Commonwealth and state governments have joined forces in a national cabinet, likened to the wartime cabinet Australia had during the second world war.

Images of thousands of Australians queuing for welfare evoke memories of hardship not seen since the Great Depression and then the war. The scale of stimulus is unlike anything seen in Australia before, eclipsing the Global Financial Crisis stimulus package.

Jobless people lining up outside Centrelink alerted Australians to the scale of the economic impacts of this crisis. Florent Rols/SOPA Images/AAP

Renters already have it tough

Renters are a sizeable and vulnerable cohort. Almost one in three Australians live in rental properties. In Australia, renting has increased from a low of 25% of households in 1986 to 31% in 2016.

Not only are more Australians in rentals, but they are renting for longer. However, as tenancy is less secure than ownership, housing insecurity is a growing problem.

Renters are typically financially worse off than home owners. Based on my analysis of 2016 Census data, the unemployment rate among renters was 10.9% compared to 5.2% for owners.

Renters also generally have lower incomes. My census analysis has found almost half of renters earned less than A$649 a week, compared with only 31% of owners with a mortgage. (Comparisons of renters with outright owners can be misleading, as outright owners have much lower housing costs.)

Lower incomes mean a higher proportion of income is spent on housing. Households with a mortgage spend an average of 15.9% of household income on housing compared to 20.2% for private renters. Further, 43% of low-income renters experience housing affordability stress (defined as a household in the bottom 40% for income spending over 30% of income on housing).

These renters are highly vulnerable to the impacts of the pandemic.

Read more: Private renters are doing it tough in outer suburbs of Sydney and Melbourne

COVID-19 is making it way tougher

The economic crisis gripping Australia will affect an estimated 6 million jobs. But almost 1 million casuals are ineligible for the federal government’s $A130 billion wage subsidy paid to businesses to retain workers.

Disproportionate numbers of renters work in these casual jobs. Their already high rates of financial stress are likely to increase as they lose the income they rely on to pay the rent.

Read more: Coronavirus puts casual workers at risk of homelessness unless they get more support

As business revenues plunge, there are also calls for commercial landlords to provide rent holidays. At least one major retailer has refused to pay rent. To save businesses, the national cabinet last week announced a mandatory code of conduct for commercial tenancies, reducing rents proportionate to reduced turnover.

Home owners are able to seek relief from banks, who are offering to freeze housing mortgages. Banks are still capitalising interest, meaning owners face extended loan periods or increased payments following the freeze.

To date, the national cabinet has only agreed on an eviction moratorium for residential tenancies. It’s welcome but could simply shift payment or eviction into the future for households unable to pay rent – the moratorium does not waive the requirement to pay rent. Some landlords are rushing to evict before state and territory governments follow early mover Tasmania in putting the moratorium into effect.

A warlike crisis calls for a wartime responses

During the Great Depression, calls for greater protection for renters resulted in policies like rent control at state level. Australia’s entry into the second world war ushered in a national approach.

The Menzies government introduced rent control in 1939. Curtin’s wartime cabinet strengthened rent control in 1941, fixing rents at 1940 levels. Independent tribunals administered rent variations.

Read more: Explainer: what are rent controls – and who benefits from them?

Rent control left a lasting legacy. States took responsibility for rent control in 1948, implementing their own schemes.

In Victoria, rent control sat alongside public housing, offering two strong forms of protection to renters from 1938 to the mid-1950s, when both were wound back, in favour of home ownership. Despite this, rent control remained in force in Victoria, protecting thousands of tenancies until the 1980s.

The situation today is remarkably similar to that of the 1940s. In recent years growing numbers of Australians have found themselves in precarious rentals. While home ownership soared from the 1950s, in recent decades ownership rates have fallen as housing unaffordability has risen.

Read more: Fall in ageing Australians' home-ownership rates looms as seismic shock for housing policy

In 2016 rental rates in Victoria reached highs not seen since the late 1950s, when virtually all rents were controlled. Low-income households have been spending unsustainable amounts on rent even before the pandemic hit.

This “war on two fronts” will push many to the brink. A moratorium on evictions will delay the pain, but not avoid it. The national cabinet should take inspiration from Australia’s wartime cabinet and regulate rents nation-wide.

The lowering of commercial rents under the new code of conduct will prevent many business bankruptcies. Setting residential rents at affordable levels would also protect millions of vulnerable Australians. Such a policy would be consistent with Finance Minister Mathias Cormann’s concept of “spread[ing] the pain as fairly and equitably as possible” by sharing the losses with landlords.

Regulating rents would leave a lasting positive impact on Australia. We would come out of this crisis with a fairer rental system than we started with. And hundreds of thousands, if not millions, would be spared the stress of facing the threat of eviction.

Authors: Liam Davies, PhD Candidate, Centre for Urban Research, RMIT University

Read more https://theconversation.com/australia-had-rent-control-in-wartime-war-on-coronavirus-demands-the-same-response-135694

The 24-Hour Home Facelift: Why an Automated Entry Is the Ultimate Statement Piece for Your Home

You can repaint the walls, landscape the garden or renovate the kitchen, but when it comes to first impressions, nothing beats the visual im...

The 48-Hour Exterior Makeover: 2 Upgrades That Instantly Boost Your Sydney Home’s Value

When it comes to improving your home’s value, most Sydney homeowners think of big renovations like kitchen remodels or adding a deck. But ...

Human Hair Toppers for Women: Subtle Volume With Natural Confidence

Hair thinning can be a quiet concern for many women, affecting confidence long before it becomes visible to others. Human hair toppers for...

Vehicle Wraps: Turning Everyday Vehicles Into Powerful Brand Assets

In a competitive market where attention is constantly divided, businesses are finding smarter ways to stay visible. Vehicle wraps have em...

Why Commercial Construction Companies Melbourne Drive Large-Scale Project Success

Across office developments, industrial facilities, and mixed-use buildings, commercial construction companies Melbourne play a critical r...

Sleep Apnea Mask Options for Comfortable and Effective Nightly Therapy

Finding the right sleep apnea mask is one of the most important steps in achieving consistent and effective sleep apnea treatment. While C...

Why Knowing How to Find Doctors in Bundoora Supports Better Healthcare Decisions

Access to reliable medical care is essential for maintaining long-term health and wellbeing. Being able to find Doctors in Bundoora gives...

How Lifestyle Awnings Create Stylish and Functional Outdoor Living Spaces

Outdoor spaces have become an essential part of modern living, offering areas to relax, entertain, and connect with the outdoors. Choosing...

How to Use Your NDIS Plan More Effectively With Support Coordination

Having an NDIS plan opens the door to a wide range of supports, but making the most of that plan can feel overwhelming. Funding categories, ...

How Businesses Plan Storage Before They Run Out of Space

Running out of storage space rarely happens overnight. In most cases, it’s the result of gradual growth, shifting inventory patterns, or c...

What a 1% Interest Rate Change Really Does to Your Repayments

Interest rate changes are often reported as small numbers — a quarter of a percent here, half a percent there. On paper, a 1% shift can so...

Why Ceiling Fans Continue to Be a Smart Choice for Energy-Efficient Home Comfort

Maintaining comfortable indoor temperatures without excessive energy use is a priority for many households. Installing ceiling fans offer...

Three Mini Breaks From Melbourne That AREN'T The Great Ocean Road!

The Great Ocean Road is an internationally famous destination, and with its 243 km of stunning coastline vistas, it’s not hard to understa...

Why Dental Implant Treatment Is Considered the Gold Standard for Tooth Replacement

Tooth loss can affect far more than appearance. It can impact chewing ability, speech, confidence, and long-term oral health. Modern denta...

How to Prepare for Painting While Running a Business

Painting commercial premises whilst a business remains open will always involve some level of disruption. However, with careful planning a...

Why Professional Removalists Melbourne Services Make Every Move Easier and Safer

Relocating a home or business involves far more than transporting items from one location to another. Engaging professional removalists Me...

Catering Boxes for Food Businesses: Reliable Packaging for Transport, Storage, and Service

Choosing the right Catering boxes is a key decision for food businesses that handle prepared meals, events, and bulk orders. In catering...

Food Display Cabinet Solutions for Attractive and Safe Hot Food Presentation

Presenting food in a way that looks appealing while maintaining safe serving temperatures is essential for many hospitality and retail env...

Custom Builders in Melbourne Creating Bespoke Homes With Lasting Value

Choosing to build a home from scratch is a deeply personal decision, and working with experienced custom builders Melbourne allows homeow...

Sliding Screen Door Options That Enhance Comfort, Airflow, and Modern Living

A well-designed sliding screen door plays a quiet but powerful role in how homes and commercial spaces feel and function. It allows fresh ...