10 Ways to Fix Rental Crisis

It is widely recognised that insufficient supply of housing is the main cause of rising rents. It’s a simple supply and demand equation; low supply plus high demand equals higher rents. Astonishingly, the main supplier of the rental homes – family investors – are mostly ignored by governments and are actively vilified by the Greens.

Policies that disincentivise the suppliers of rental homes, such as rent caps or rent freezes, end up diminishing the supply and rents continue to rise. With changes to Stage 3 tax cuts heading through parliament, debate around negative gearing and capital gains tax policy settings has been re-kindled with speculation that Labor will go back on another election policy promise and dust off policies they took to the 2016 & 2019 elections. This would be a very bad idea. 

In the absence of an alternate plan to deliver affordable rental homes, private unsophisticated investors remain the answer to supply and policy changes that turn them away would make rental affordability far worse.

Here’s a practical ten-point plan to help tenants:

1. Coordinate State and Territory bond agencies to track data on tenancy numbers and tenures.
2. Monitor rental pain points, particularly tenancies not professionally managed.
3. Develop a cohesive national industry-government program of awareness materials for renters.
4. Develop incentives for vacant properties and short stay rentals to bring them back to long-term rentals.
5. Commit to long term stamp duty reform; and offer immediate stamp duty waivers for purchases of rental properties in areas of high need.
6. Commission an immediate occupancy audit across Government owned and funded housing.
7. Develop a feasibility study for re-purposing non-residential real estate into residential housing.
8. Examine options for non-conventional rapid build homes in high areas of economic growth and housing need.
9. Implement the National Cabinet target to build 1.2 million homes by 2030 and have performance mechanisms that hold governments and industry accountable to achieve this.
10. Keep current tax settings for negative gearing and capital gains tax.