Eviction

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<h1 class="legacy"> </h1>
GUEST OBSERVATION
The <a href="https://www.theguardian.com/australia-news/2020/mar/24/newly-unemployed-australians-queue-at-centrelink-offices-as-mygov-website-crashes-again">queues of unemployed people</a> outside Centrelink offices in recent days are reminiscent of the dole queues seen across Australia during the Great Depression of the 1930s.
At that time, most states provided inadequate food vouchers rather than cash to people in the form of income support payments. This made it particularly difficult for renters, many of whom were unemployed due to the mass closure of factories, to continue to pay rent.
In NSW, lower-income areas of Sydney were particularly badly hit by unemployment, and because the working class was a renting class, this quickly translated into homelessness.
For example, <a href="https://www.propertyobserver.com.au/https://trove.nla.gov.au/work/24918466?q&amp;versionId=45061110">male unemployment reached</a> 38.9% in the then-working class suburb of Newtown by 1933, well above the NSW average of 32% and three times the rate in the affluent suburb of Vaucluse.
Tent cities sprang up in Sydney’s Domain and on the outskirts of the city in suburbs like La Perouse, such as the ironically named tent city, Happy Valley. Although this is likely to underestimate the numbers of homeless at the time, the <a href="http://www.drbilldayanthropologist.com/resources/Freedom%20to%20Sleep.pdf">1933 census reported</a>
<blockquote>
33,000 people [were] travelling in the hope of work and 400,000 [were] living in shelters made of ‘iron, calico, canvas, bark, hessian and other scavenged materials’.
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<img src="https://images.theconversation.com/files/323097/original/file-20200326-168912-a096xu.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
Residents in Happy Valley in the 1930s. <a class="source" href="https://www.flickr.com/photos/statelibraryofnsw/3081780220/in/album-72157616798173209/">State Library of New South Wales</a>
<h2>COVID-19 and assistance for renters</h2>
There are distinct parallels between the severe economic downturn of the 1930s and the economic repercussions of the COVID-19 crisis in terms of mass business closures and worker layoffs.
The Australian government has <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-03-24/renters-desperate-for-relief-as-jobs-disappear-coronavirus/12086080">estimated that one million Australians</a> could become unemployed as a result of the coronavirus. However, it is not clear if this comprises only those who will be directly affected by business closures or includes people impacted by the flow-on effects.
Taking into account the <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0">current unemployment rate</a>, an additional one million Australians would bring the rate to 13% of the Australian workforce, from my own estimates.
Although the increase in Centrelink payments announced by the Morrison government will help those workers suddenly without jobs, additional measures are needed to protect people who can’t pay their rents and are faced with possible eviction
The National Cabinet is working on a range of strategies to assist renters, <a href="https://www.afr.com/politics/federal/tax-breaks-for-landlords-who-grant-rent-relief-20200325-p54dn7">including preventing landlords from evicting tenants</a> directly impacted by the coronavirus and offering tax relief to landlords who reduce or waive rents.
But these need to be supplemented by strong legislative measures, such as the amendment <a href="https://www.parliament.nsw.gov.au/bill/files/3741/Passed%20by%20both%20Houses.pdf">passed by the NSW parliament</a> this week that empowers the housing minister to <a href="https://www.smh.com.au/national/nsw/fundamentally-flawed-nsw-real-estate-body-slams-rent-freeze-bid-20200325-p54dy5">ban evictions for renters for six months</a>.
<a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-03-25/tenancy-law-changes-under-coronavirus-crisis-before-tas-parli/12089798">Emergency laws</a> to protect renters are also currently being debated in Tasmania.
<img src="https://images.theconversation.com/files/323100/original/file-20200326-168918-ngzyi8.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
Queues of people formed outside Centrelink offices nationwide this week. JOEL CARRETT/AAP
<h2>Staving off homelessness in the Great Depression</h2>
There is precedent for legislative reform of this kind from the Great Depression.
In response to the mass numbers of job losses in NSW, the government at the time, led by Premier Jack Lang, passed two pieces of legislation aimed at providing relief for renters. This legislation was very significant, as it was the first of its kind that afforded tenants across NSW any serious amount of protection.
One of the bills, passed as the <a href="https://www.legislation.nsw.gov.au/acts/1931-45.pdf">Reduction of Rent Act 1931</a>, reduced rents state-wide by 22.5% and made leases that did not acknowledge this reduction illegal.
 
The other piece of significant tenancy reform was the <a href="https://www.legislation.nsw.gov.au/acts/1931-30.pdf">Ejectments Postponement Bill 1931</a>. This bill <a href="https://www.parliament.nsw.gov.au/researchpapers/Documents/tenants-rights-in-nsw/09-99.pdf">prohibited eviction</a> from a dwelling house without an order of the court. If the court could be shown the rent could not be paid, the tenancy could be extended indefinitely.
In his second reading speech, William McKell, minister for justice in the Lang government, described the bill as “a bona fide effort to provide against hardship due to unemployment”.
As honourable members are aware, there is a large amount of unemployment, and there are many very deserving and reputable people who, unfortunately, are not able to pay their rent. It is a tragedy that people of that type, with their families, are being evicted from their homes, and the Government is desirous of preventing as far as possible evictions of that character.
Though the government was committed to helping renters, McKell clearly distinguishes between the deserving and undeserving unemployed in his speech, an unhelpful way of thinking that is still with us today.
Although it is not known how many evictions the reforms of 1931 prevented, the new laws were undoubtedly a boon for renters, given the news coverage of the time. Landlords and their representatives complained about the impact the laws had on their ability to evict tenants.
In fact, the Real Estate Institute <a href="https://www.propertyobserver.com.au/https://trove.nla.gov.au/newspaper/article/16830179/1160545">noted the financial hardship</a> the Ejectments Postponement Act was placing on landlords.
Hundreds of cases have been reported to the Real Estate Institute, where the owners of houses, dependent on rents for their livelihood, have been refused possession, and have also been refused relief under the dole system, on the grounds that they are property owners.
Unfortunately for renters, these reforms were relatively short-lived. The Lang government was sacked by the NSW governor in May 1932 and replaced in the next election by the more conservative United Australia Party and Country Party coalition government.
This change in government saw the passage of the <a href="https://www.legislation.nsw.gov.au/acts/1935-33.pdf">Landlord and Tenant (Amendment) Act 1932</a>, which repealed the Ejectments Postponement Act 1931. The rent reduction law was also made more favourable to landlords.
The interests of landlords were prioritised over those of unemployed renters, a salutary lesson to present governments not to let ideology and vested interests get in the way of needed reforms that will benefit a significant portion of the population during a crisis not of their making.<img src="https://counter.theconversation.com/content/134644/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/vanessa-whittington-908975">Vanessa Whittington</a>, PhD Candidate, Institute for Culture and Society, <a href="https://theconversation.com/institutions/western-sydney-university-1092">Western Sydney University</a>
This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/lessons-from-the-great-depression-how-to-prevent-evictions-in-an-economic-crisis-134644">original article</a>.
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j.ballantyne1990-6AQqhLzZaK

Lessons from the Great Depression: how to prevent evictions in an economic crisis

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GUEST OBSERVATION
Following a review of the New South Wales Residential Tenancies Act 2010 in 2016 and extended consultations, the NSW government has introduced a number of reforms to parliament. Debate is expected to occur this week. However, without reform to current eviction proceedings, many housing advocates have expressed concern that these generally good proposals will have little effect. Today, 45 housing researchers from a range of disciplines have signed the following open letter.
We are academics who research and teach about housing. We come from a range of disciplines – for example law, economics, social sciences, planning – and many of us have worked variously with housing providers, tenants’ groups and government agencies on housing issues. We have in common commitment to the principle that everyone should have a secure, affordable home of decent standard, whether they own or rent.
Too often, however, our rental housing sector fails to deliver on this principle. There are numerous reasons for this; one of them is the legal insecurity of tenants under current New South Wales residential tenancy laws. In particular, the provision for landlords to give termination notices, with no grounds, at the end of a fixed-term tenancy or during a continuing tenancy is contrary to genuine security.
“No grounds” termination notices give cover for bad reasons for seeking termination, such as retaliation and discrimination. The prospect that a “no grounds” termination notice may be given hangs over all tenancies, discouraging tenants from raising concerns with agents and landlords and undermining the legal rights otherwise provided for by their leases and the legislation.
The deficiencies of our current laws are becoming worse, as more households rent, and rent for longer into their lives. About 32% of NSW households rent and this proportion is growing. Over the five years to 2016, 63% of the net growth in the number of NSW households was households in rental housing. And 42% of NSW renter households include children.
Our deficient current laws are also increasingly out of step with tenancy laws in comparable jurisdictions. Many European countries, as well as most of the Canadian provinces and the largest US cities, do not provide for “no grounds” terminations by landlords.
Last year, Scotland reformed its tenancy laws to remove provisions for “no grounds” terminations and replace them with prescribed reasonable grounds for termination. In Australia, Tasmania has for some years not allowed “no grounds” terminations of continuing tenancies. This month, the Victorian Parliament amended its residential tenancies legislation to remove provision for “no grounds” termination notices for continuing tenancies and for fixed-term tenancies, except at the end of the first fixed term.
We call on the NSW state government to improve security for renters, by legislating to end no-grounds termination by landlords and providing instead for a prescribed set of reasonable grounds for terminations.
These reasonable grounds would include grounds already in the legislation, such as rent arrears and other breaches by the tenant, and sale of the premises, as well as new grounds, such as where the landlord needs the premises for their own housing, and where the premises are to be renovated, demolished or changed to a non-residential use.
The prescribed reasonable grounds should have different notice periods, reflecting their different degrees of urgency and priority. Proceedings on notices should go, as they currently do, to the NSW Civil and Administrative Tribunal, and the tribunal should determine whether the ground exists and whether termination is justified in all the circumstances.
This reform would make all tenants feel more secure, without unduly restricting landlords in reasonable uses of their properties. The only inconvenience would be to the retaliators, the discriminators and those who cannot cope with even a modest level of accountability. If the reform prompted these landlords to leave the sector, they would sell to a new home owner or to a more professionally minded landlord – either of which is to the good.
There is more to be done across a range of policy areas to improve the functioning of all aspects of our housing system. We need more accessible home ownership, a differently structured and more professional market rental sector and a revitalised social housing sector. These changes require a comprehensive housing policy, coordinated across areas and levels of government and carried out over a long term.
But, in tenancy law, the single most important reform is ending “no grounds” termination by landlords. And the parliament could do it now.
Signatories
Dr Chris Martin, Research Fellow, Faculty of Built Environment, University of New South Wales
Professor Brendan Edgeworth, Faculty of Law, University of New South Wales
Professor Chris Gibson, Human Geography, University of Wollongong
Professor Keith Jacobs, Director, Housing Community Research Unit, University of Tasmania
Professor Alan Morris, Institute for Public Policy and Governance, University of Technology, Sydney
Professor Kath Hulse, Director Centre for Urban Transitions, Swinburne University of Technology
Professor Hal Pawson, Housing Research and Policy, University of New South Wales
Professor Pauline McGuirk, Director Australian Centre for Culture, Environment, Society and Space, Faculty of Social Sciences, University of Wollongong
Professor Peter Phibbs, Urban Planning, The University of Sydney
Professor Bill Randolph, Faculty of Built Environment, University of New South Wales
Professor Eileen Webb, Faculty of Business and Law, Curtin University
Adjunct Professor Michael Darcy, School of Social Sciences and Psychology, Western Sydney University
Associate Professor Hazel Easthope, Faculty of Built Environment, University of New South Wales
Associate Professor Daphne Habibis, School of Social Sciences, University of Tasmania
Associate Professor Kurt Iveson, Urban Geography, The University of Sydney
Associate Professor Kristian Ruming, Department of Geography and Planning, Macquarie University
Associate Professor Judith Yates, School of Economics, The University of Sydney
Dr Gareth Bryant, Political Economy, The University of Sydney
Dr Nicole Cook, Lecturer in Human Geography, University of Wollongong
Dr Louise Crabtree, Senior Research Fellow, Institute for Culture and Society, Western Sydney University
Dr Laura Crommelin, Research Lecturer, Faculty of Built Environment, University of New South Wales
Dr Tanja Dreher, Associate Professor, School of Arts and Media, University of New South Wales
Dr Christina Ho, Senior Lecturer, Social &amp; Political Sciences, University of Technology, Sydney
Dr Justine Humphry, Lecturer in Digital Cultures, Department of Media and Communications, The University of Sydney
Dr Edgar Liu, Senior Research Fellow, Faculty of Built Environment, University of New South Wales
Dr Sophia Maalsen, IB Fell Post-Doctoral Research Fellow, Faculty of Architecture, Design and Planning, The University of Sydney
Dr Daniel Ooi, Research Fellow, Victoria University
Dr Justine Lloyd, Senior Lecturer, Department of Sociology, Macquarie University
Dr Jean Parker, Research Associate, Department of Gender and Culture Studies, The University of Sydney
Dr Madeleine Pill, Researcher, Department of Government and International Relations, The University of Sydney
Dr Emma Power, Senior Research Fellow, Institute for Culture and Society, Western Sydney University
Dr Dallas Rogers, Program Director, Master of Urbanism, The University of Sydney
Dr Ben Spies-Butcher, Senior Lecturer, Economy and Society, Macquarie University
Dr Adam Stebbing, Director of Bachelor of Social Science, Department of Sociology, Macquarie University
Dr Amanda Tattersall, Post-Doctoral Fellow, Henry Halloran Trust, The University of Sydney
Dr Lawrence Troy, Research Fellow, Faculty of Built Environment, University of New South Wales
Dr Robert Mowbray, Older Persons Project Officer, Tenants’ Union NSW
Deb Batterham, Researcher, Launch Housing
Zahra Nasreen, Researcher, Department of Geography and Planning, Macquarie University
Pratichi Chatterjee, PhD Candidate, Faculty of Science, The University of Sydney
Sophie-May Kerr, PhD Candidate, University of Wollongong
Craig Lyons, PhD Candidate, School of Geography and Sustainable Communities, University of Wollongong
Gemma McKinnon, Researcher, University of New South Wales
Bill Swannie, Academic, College of Law and Justice, Victoria University
Alistair Sisson, PhD Candidate &amp; Research Assistant, School of Geosciences, The University of Sydney<img src="https://counter.theconversation.com/content/103825/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
John Watson, Section Editor: Cities + Policy, The Conversation
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/an-open-letter-on-rental-housing-reform-103825" target="_blank">original article</a>.
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An open letter on NSW rental housing reform

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GUEST OBSERVATION
Should private citizens be allowed to force the sale of a neighbour’s property against his or her will?
Let’s ask the question another way: is it fair that just one neighbour, or maybe a small group of neighbours, should be able to block the sale or redevelopment of someone else’s property?
When it comes to collective strata sales, the answer isn’t obvious.
Strata title is the most common form of apartment ownership in Australia. It gives each owner ‘title’ over their own unit and shared ownership of the shared space. Three million people live in them. In most states (except for NT and NSW), 100% of the owners have to agree in order to terminate a strata scheme and sell the block of units.
The need for achieving a unanimous decision makes it difficult for ageing buildings to be sold and redeveloped in order to increase urban density. Until 2016, only 1.1% of all the strata schemes in NSW had been terminated since 1961.
Economists, at least since 1838, have understood that attempts to assemble complementary resources can be plagued by the holdout problem.
A new law, which commenced in NSW in 2016, intends to remedy it. Only 75% of the owners in a strata will have to agree in order to sell or redevelop a site. Early in 2018 the Land &amp; Environment Court issued preliminary decisions in two cases in Sydney. It’s easy to see more will follow due to inherent problems with the solution.
What’s wrong with 75%?
First, the urban redevelopment benefits might not materialise. There’s no requirement for the properties developed to be replaced by properties with increased density.
Second, the legislation gives private citizens a power previously only available to the government: the power to compulsorily acquire someone else’s property. Given the cultural and legal importance of property rights in Western societies, violating those rights is a big step.
Third, the law says the terms of the settlement must be “just and equitable in all the circumstances”. This can be taken to mean the market value of the lot and other costs, such those of moving.
But market value is problematic. The market value of the entire block sold as one will often be much more than the sum of the market value of each unit sold individually. And the market value of an individual unit might be insufficient to purchase a replacement in the neighbourhood after the redevelopment takes place.
The property might be an investment which, if sold, would be subject to capital gains tax. After payment of the tax, the owner might have insufficient funds to purchase a suitable replacement.
And existing owners are likely to value their property higher than the market, otherwise, the property would already have been sold.
A premium is justified, but how much?
The legislation doesn’t define the highly subjective concept, “just and equitable compensation”.
It provides no guidance as to how to separate the true subjective value to the owners from what they might be asking for just because they’re holding out to inflate their financial gains.
Our solution: reducing holdouts while protecting property rights
We believe it is. Most people didn’t want to see a single owner holding out on a development purely for personal financial gain. On the other hand, most don’t want to see a vulnerable resident removed from their home against their wishes.
The method we propose in a working paper coauthored with economists from Florida State University and University of California Santa Barbara assigns to each owner a right to a defined fractional share of any collective sales proceeds, equal to his or her proportion of the overall market value of the whole building, as assessed by the independent valuer (the shares add up to 100%). Then, each strata owner specifies the lowest price at which he or she is willing to sell.
How it would work
Consider an owner called Jo whose share is 10% and who nominates $1.2 million as the compensation she wants (this may well be more than the valuer’s estimate of the market price of Jo’s apartment). For Jo to receive $1.2 million, the whole building would have to sell for $12 million.
Thus Jo, by nominating her required compensation as $1.2 million has, in effect, set a reserve price of $12 million for the whole building. Every owner does the same, each setting the building’s reserve price. The highest of these building reserve prices becomes the actual reserve price and it is what matters: when it is met, every owner will get at least what they asked for.
Wouldn’t the owners all nominate unreasonable and untruthfully high prices? It turns out our scheme gives the owners a financial incentive to set a truthful price, that is to nominate the lowest prices at which they would voluntarily sell their individual properties. If they set a price too high they run the risk of the sale falling through and getting nothing.
How it could be used
It’s an idea that could be applied in other contexts. The sale of group water rights in the Murray Darling Basin is one.
For decisions to sell strata-titled units, the scheme would require the appointment of a neutral agent to receive the individual demands for compensation and to set the (secret) reserve necessary to ensure no collective sale is made unless all demands for compensation are met.
It would eliminate the incentive for holding out. Any collective sale that took place would be unanimous, satisfying the NSW law and also the laws of the states that require 100% agreement.
There’s nothing to stop it being adopted voluntarily, on a case by case basis, now, as an option that will get the best result for development and owners within the laws that we have got.<img src="https://counter.theconversation.com/content/103091/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Duygu Yengin, Associate Professor of Economics, University of Adelaide
Jonathan Pincus, Visiting Professor, School of Economics, University of Adelaide
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/evictions-versus-holdouts-how-to-painlessly-dissolve-a-strata-title-103091" target="_blank">original article</a>.
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Eviction

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