Melbourne's rental squeeze forcing more people into homelessness

Just six months ago, Belinda Horgan and her family rented a large four-bedroom house in Botanic Ridge, a pocket in Melbourne’s outer south-east.

They now face the prospect of sleeping in a car or rough on the streets after health issues rocked her family.

No longer able to afford their house after her roof plumber partner was injured, the couple unsuccessfully applied for about 50 rentals and settled on a house in Doveton. Upon moving in, it was full of rubbish bags and other hazards. A few months later, they were given notice to vacate.

Unable to quickly find another house, they squeezed their life into a motel room about a month ago — paying $110 a night to stay off the streets.

The family has been turned away by homelessness organisations, and recently applied for 20 more rentals without any response.

Ms Horgan, a hospitality worker turned full-time mum, felt discriminated against by agents despite their $1900 a fortnight government assistance.

“You can imagine when you walk away, [real estate agents] just throw your application in the bin, just by the way they talk to you and look at you,” she said.

“We’ve been in rentals that I’ve got references from, that we’ve paid $500 a week for, [but] now we can’t get anywhere.

“It feels like the world’s just going by around us and nobody sees you or everyone is too busy to care.”

The family is among many who are struggling with widespread anxiety, insecurity and discrimination in Melbourne’s very tight rental market, made tougher by rising house prices.

A recent national survey Unsettled: Life in Australia’s Private Rental Market found 40 per cent of Victorians had been renting for less than five years.

The Council to Homeless Persons pointed to a “rent down” phenomenon, where aspiring first-home buyers locked out of buying saved by renting cheaper properties that might otherwise be available to low-income renters.

“This creates a domino effect, with those on the lowest of incomes pushed out of private rental into rooming houses and caravan parks, or worse, onto the street,” council acting chief executive Kate Colvin said, adding that the intense pressure in rentals was most concentrated at the cheaper end.

“Landlords are able to pick and choose among prospective tenants. The consequence is that there is quite a lot of discrimination, and the irony is that often tenants who are being discriminated against don’t end up necessarily in cheaper properties, they just end up in crappier properties.”

The survey comes as the state government assesses feedback to the options paper for the the Residential Tenancies Act review.

Options include potential changes to the 120-day no reason notice to vacate, more stringent minimum standards and and improving incentives for landlords to make repairs quickly. It is understood policy announcements will be made later this year.

The Real Estate Institute of Victoria is concerned some proposed changes could prompt landlords to raise rents or sell their investment property.

The institute’s property management chapter chairman Sam Nokes said landlords should have the option to liquefy their investment when needed.

Though the REIV supported many minimum standards such as a working toilet, Mr Nokes said additional luxuries such as dictating the number of power points in the bedroom and requiring landlords to install cooling could increase rents, and price out more tenants.

Ms Colvin said her organisation was concerned about allowing landlords put extra terms in lease agreements, which would then be grounds for eviction.

Securing a private rental was already hard enough for people facing disadvantages; such as low income, family breakdown, job loss and mental illness, she said. Last year, 35,000 Victorians in private rental were forced to seek help from a homelessness service.

Victorian Council of Social Service chief executive Emma King said the government’s $2.1 billion social housing package was “absolutely a game changer”.

The package includes a new $1 billion Victorian Social Housing Growth Fund and a further $1.1 million in loans and loan guarantees.

“Over about five years, it’s going to provide over 2000 new properties. And if I was to go back over the last number of years — under either government — I could count the number of new properties on one hand,” she said.

With increasing demand and higher rents, Ms King said, social housing was the most effective ammunition in the fight against poverty.