Abstract
An increasing proportion of households in modern societies are housed in the private rental sector (PRS), and some are afflicted by overwhelming housing stress which eviscerates their well-being. Even those with minimal housing stress still face ongoing uncertainty about their housing futures: their fate depends on the whim of landlords or agents. Particularly vulnerable sub-groups include those not in the paid labour force, of older age, those who have caring responsibilities and/or subsist on low incomes. It is therefore a great advantage to housing researchers and policy makers that three senior Australian housing researchers have prepared this well-written, balanced and penetrating review of the sector. The book is based on accumulated research and the international literature spliced with the authors’ own data.
The book begins by building up a framework for understanding the tenant–landlord relationship and then successively examines various aspects of this. In a key passage it is explained that: The landlord–tenant relationship at the heart of private rental experience is a legal one, but it is more complex than this. It is also a power relationship which occurs in the context of different rental market contexts, develops through day-to-day practices, and is suffused with cultural norms about renting, being a tenant and being a landlord. Cultural norms are embedded in and transferred through the language that we use: we own a home but rent a house. (p. 133)
To augment previous research, a face-to-face questionnaire survey of 600 private renters in Sydney and Melbourne in 2015 was carried out. This captured some 200 long-term private renters (ten years or more) and 400 tenants renting for under ten years. In addition, 60 in-depth interviews were conducted with long-term private renters in inner, middle and outer suburban locations in Sydney and Melbourne, which are taken to represent high-rent, medium-rent and low-rent housing markets. These interviewees were drawn from the survey respondents. In addition, interviews with 32 older private renters were also drawn on. Besides demographics and employment status, respondents were asked about their pathways into the PRS, the quality and condition of their accommodation, the terms and conditions of their tenancy, their relationship with the landlord or agent who manages their property, and perceptions of security of tenure, the rent and affordability of their dwelling and future housing plans. While care was taken in selection, it is likely that the data underestimates those in dire straits. The entirely descriptive presentation of the data is appropriate for this book, but it is hoped that more sophisticated data analysis on other occasions will tease out important causal sequences. For landlords, given that 1990s’ Australian Bureau of Statistics (ABS) landlord surveys were not updated, the main (albeit limited) sources are Australian Tax Office records and the ABS Survey of Income and Housing. Notwithstanding these limitations, the survey and interviews provide extremely interesting and important insights into the lives of private tenants.
The chapters comprise:
A history of the PRS, profiles of the contemporary tenant population, and the housing stock portfolio and its ownership. A review of the legal frameworks regulating the PRS, bench-marked against comparator countries, together with discussion of recent and current ongoing struggles to enhance tenants’ rights. An analysis of the dynamics of private rental investment, examining the ownership structure and landlords’ motivations, expectations and experiences, with some treatment of institutional investors, and new investment initiatives such as ‘build to rent’, purpose-built student housing and the rise of Airbnb. Investigating the housing careers of households in the PRS, including an analysis of why some people choose to rent. Examining the challenges faced in finding suitable and affordable accommodation, and whether tenants are able to create a sense of home. Issues around landlord–tenant relations, maintenance, the condition and suitability of the accommodation and the impact of restrictions are also examined. Mapping out the financial stress of renters, their capacity to lead a decent life and provide adequately for themselves and other household members, and the impacts of housing stress on well-being (especially among those on government benefits). Investigating the security of tenants, legally but also in terms of their experiences and perceptions of security and, in particular, how low-income households cope with a rent increase or ‘notice to vacate’. Highlighting the key findings of the study and assessing the future of the PRS.
The book skilfully plots the history of the PRS. Post the First World War, around half of Australian households lived in the stigmatised PRS, denigrated for its low quality and precarious landlord–tenant relations. After the Second World War, home ownership bourgeoned, with private renting mainly becoming a transitional sector for young people and immigrants. Private rented properties – and consequently low-income populations – were concentrated in inner-city areas. However, from the mid-1980s a slow revival of the PRS began, accelerating in the 2000s. With ‘financialisation of housing’, home ownership became a source and store of wealth. There was also a geographical aspect, with more affordable (less expensive) rentals increasingly located in the outer suburbs of major cities, peri-urban areas, and regional areas where land values are lower, although these areas disadvantage renters as they are often poorly served by public transport and are remote from centres of employment and services.
At present more than a quarter of Australian households rent privately, almost all through a real estate agent, and this proportion is continuing to rise. For many, this is a transitional housing tenure, but one third of renters are long term (ten years or more), with some facing life-long tenant status. Access to ownership is constrained as house price increases far outstrip income growth, and there has been a substantial decline of social housing.
The PRS is lightly regulated and provides little protection from eviction, other tenancy termination or rent increases. About two thirds of low-income private renters (households in the bottom 40% of the income distribution) experience rental stress (i.e. they need to devote more than 30% of their income to rent). Drawing on the interviews, the authors illustrate that rental stress impacts badly on well-being, particularly on those tenants reliant on government benefits.
There are gaps in the book, some planned others not. Some sub-sectors of the PRS, such as retirement homes, boarding house room-renters, the homeless and others, are not included and, given the overlap, there needed to be somewhat more attention to social housing. Further research might see the social and cultural embedding of private renters further explicated. Social consequences of characteristics closely associated with this tenure, such as frequent movement, high-rise situations or difficulties in relating to neighbours are not sufficiently highlighted. Perhaps a wider range of considerations might have been picked up in an open-ended query in the survey on good/bad aspects of renting. One consequence of the history of renting in Australia is that any tradition for collective action by ‘housing class’ may well have been lost (e.g. the tactic of rent strikes to secure better housing conditions) but the remnants of a housing class consciousness might still remain (although untapped in this study), including membership of tenants’ associations and those tenants in constant conflict with landlords. Given the crucial importance of the ‘family life-cycle’ stage, this aspect needs to be added to the analysis. The focus on Victoria and New South Wales needs widening. While renters are clearly the central grouping, other actors should be considered, including overseas owners and local agents.
The future of the PRS may involve the continuation of present trends, the engagement of larger institutional investors, and/or increased government support to reduce insecurity. The book clearly points to market failure and limitations that need to be overcome through reforms framed by a human rights approach. Having such a cogent and insightful analysis of the current situation of private tenants provides a useful platform for assisting with the development of such reforms.