Rent freeze: everyone’s talking about it but is it the answer to the rental crisis?

by | Jul 20, 2023 | 0 comments

Skyrocketing rents are crippling the finances of many single mother families living in rental properties, chewing up an unsustainable percentage of their incomes and reducing the stock of affordable housing. Renters are calling for government intervention, and often that call includes the words ‘rent freeze’ – but would a legislated temporary halt to raising rents really help, or just add fuel to the fire. Let’s investigate. 

The case for a rent freeze 

The Greens have been very vocal in their calls for the Federal Government to implement a country-wide rent freeze. Under their proposal, landlords would be unable to raise the rent of existing renters for two years, and increases would be capped at two per cent every two years after that. 

A rent freeze worked during other emergencies, they say, and it will work now. 

“National cabinet introduced a rental eviction moratorium during the COVID pandemic, while the Tasmanian, Victorian, South Australian and Western Australian governments all froze rents,” says Greens housing and homelessness spokesman Max Chandler-Mather. 

“When the energy crisis hit, Labor recalled parliaments across the country to coordinate a response, so in the middle of the worst rental crisis in Australian history, Labor must do the same for rents and coordinate a national freeze on rent increases.” 

During this period of high inflation, say the Greens, when the price of everything from groceries and petrol to gas and electricity is growing, a halt to rent increases could provide families with some certainty and security until inflation once again comes down. 

The case against a rent freeze 

Many experts are arguing that a national rent freeze could actually worsen the rental crisis. It could, they say, incentivise landlords to sell up, or take their properties off the long-term rental market and turn them into short-term rentals on sites such as Airbnb, to maximise their return on investment. 

Critics of a rent freeze also argue that landlords would have little incentive to maintain their property because they can’t recoup their investment in raising rents. 

The current surge in the cost of rents, they argue, is a result of the COVID lockdown rent freezes, with landlords – the majority of which in Australia are ‘mum and dad investors’ not big business – now making up their losses. 

“A rent freeze is unsustainable in my view,” Brian Howe, former cabinet minister and deputy prime minister under the Hawke and Keating governments, recently wrote in the Guardian. 

“A measure to regulate rental increases that I think deserves attention and has been advocated for by Tenants Victoria, is limiting rent increases in the private rental market to a legislated “fairness formula”.  

“Annual rent increases that are orderly and transparent, perhaps in line with an index such as the consumer price index or average weekly earnings, could materially assist in alleviating rental stress as part of a broader package of measures. Other ideas, such as encouraging longer-term leases, should also be considered.” 

A single mother lens 

There are few single mothers who are not being impacted by the current housing crisis, and CSMC is lobbying government to make sure that any proposed action not just benefit renters, but also considers all single mothers, and that includes those who are servicing a mortgage, those who reside in community housing and those who are in insecure housing or homeless. 

In our 2018 National Survey, 50 per cent of respondents were renting in the private market, 10 per cent were mortgage holders, 21 owned their house outright, 7 per cent were in social housing, and 13 per cent were in insecure housing or homeless. We are still crunching the numbers from our latest survey, but the numbers look largely unchanged. 

Watch this space for the release of the second National Survey report in the next couple of months. 

What do you think? 

The housing crisis is now getting more traction in the halls of Parliament with both Victorian and Federal governments holding inquiries into housing, and the debate about possible solutions rages on.  

The Senate Community Affairs References Committee is inquiring into and reporting on the worsening rental crisis and they are inviting individuals to share their experiences and opinions. This page will take you straight to the online form.

We want to know what you think. What is your situation? What do you think would help improve all forms of housing in Australia? Email your thoughts and suggestions to action@csmc.org.au. 

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