Housing crisis panel: Drivers and solutions

Anika Legal’s recent Housing Justice panel, moderated by journalist Jacinta Parsons, advocated for the need to address Victoria’s rental crisis. It explored the root causes of the crisis and proposed practical steps to support renters.

You can watch a recording of the Housing Justice panel by clicking here.

Panellist Emma Dawson, Executive Director of Per Capita, argued that the Great Australian Dream of home ownership has been built into the Australian psyche from the days of European colonisation. Many of the people who stole this land from its original inhabitants came from classes in England that would never own land. The idea of owning your own patch of land is deeply embedded in our cultural identity, and policies intended to incentivise property investment have built on this perception.

These policies, such as negative gearing and the less discussed but equally important Capital Gains Tax discount, and a lack of investment diversity in our economy, have led to the economy being overinvested in the property market. This is made clear in our retail banking sector, where 60% of business comes from residential mortgages, where the UK’s portion is just 15%.

From this, hobby-investors are in a position where they would be “crazy not to invest in property”. In their design, these structures incentivise investors to ignore maintenance requests and merely stand by as their property values double every seven years.

Compounding these incentives is the housing crisis, which has further exacerbated the power imbalance between landlords and renters, and made it harder for renters to fight for their rights. Panellist Noel Lim, our CEO, highlighted that tenants can be evicted at any time. When tenants are uncertain about their housing situation, they become less likely to assert their rights. This means enforceable regulations intended to support renters become a “toothless dragon”.

Noel suggested a combination of actions to empower renters to self-advocate without fear of losing their homes:

1. Enabling CAV to impose (and publicise) strong civil penalties on landlords and agents for egregious breaches of the law, as a deterrent to bad behaviour.
2. Limiting rent increases – similar to the ACT model.
3. The prohibition of no-fault evictions.

Panelist Ryan Batchelor, State MP, Southern Metropolitan Region, who is currently leading an inquiry into the housing crisis in Victoria, pointed out that in addition to the cost crisis, there is also a crisis in the poor quality of rental properties. He suggested that state reforms alone would have limited impact without changes in federal policy, and that cooperation between state and federal governments is necessary. He emphasised the current state government's efforts to improve minimum rental standards and increase the maximum standard lease to five years.

Emma supported Ryan’s cautious approach, highlighting that excessive and highly restrictive policy changes could make way for a High Court challenge under the Australian Constitution, with its strong clauses regarding the acquisition of property and the requirement for just compensation.

The Great Australian Dream of property ownership has been shattered for younger Australians. As this cultural shift progresses, we must embrace a shift towards life-long renting in a safe and habitable home and empower renters as a socially responsible resolution.