State Government Seeks New Powers to Set Minimum Rental Standards

On 10 August 2017, Minister for Housing, Public Works and Minister for Sport Michael de Brenni introduced the Housing Legislation (Building Better Futures) Amendment Bill 2017 into the Queensland Parliament. The Bill is designed, among other things, to build the legal framework through which the state Government could prescribe minimum housing standards for private rental accommodation.

It is understood that through this Bill the Government wants to create a set of conditions or standards that all rental accommodation in Queensland must comply with, and should they succeed, these conditions will be retrospective. This means in addition to applying to new homes being built, anybody who owns an investment property today will have to make their property comply with these new minimum standards.

Minister for Housing, Public Works and Minister for Sport Michael de Brenni introduced the Housing Legislation  Amendment Bill 2017 into the Queensland Parliament.

While there is little detail in the Bill regarding what any new standards may entail, industry bodies have released some detail around what they believe may be included. Minimum room sizes, minimum number of windows, and a green star energy efficiency rating of the dwelling are all on the table, according to the Real Estate Institute of Queensland (REIQ).

While these proposed minimum standards may seem innocuous and perhaps welcome to some, the fact that in Queensland 34 per cent of the population are currently renting means that a large number of properties will be affected. In real terms, this equates to more than 550,000 dwellings, according to the 2016 Census data. The responsibility to make the dwellings compliant with the new standards would fall to the landlord and/or the property manager, and as mentioned earlier the standards are set to be retrospective.

 

Desired vs Actual Effect

Industry bodies have voiced some concern over the proposed Bill, as many believe this will reduce the housing supply available to renters in Queensland. The Real Estate Institute of Queensland (REIQ) made the following submission to the State Government, citing the dangers of setting minimum enforceable standards on landlords.

“It is the REIQ’s view that not all owners of the approximately 566,478 private rented dwellings in Queensland will be prepared (or in a financial position) to absorb additional costs that may be associated with ensuring those dwellings meet minimum housing standards and it is likely instead that many may either pass such costs onto tenants through gradual rent increases or if such costs are too prohibitive, not renew the tenancy at all.”

While these concerns may seem as though they are coming only from a landlord’s perspective, that isn’t the case. The desired vs actual effect of these proposed amendments must be weighed against the any potential benefits to tenants, as that is the crux of the proposed amendments. While property standards may lift in the short term under these initiatives, the long term structural health of the rental market, including supply, may be negatively affected due to the increased burden on landlords.

Despite this, there seems to be a nationwide push for a more equitable solution to the housing affordability ‘crisis’, yet little detail has been provided other than the broader aims.

The Bill has been referred to the Public Works and Utilities Parliamentary Committee for review, with a report due by 28 September 2017. Watch this space.

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