Renters deserve better and landlords should take their job more seriously: new report

Renters deserve a higher level of service for the rent they pay and should no longer be considered second-class citizens, according to a new research paper.

The Australian Housing and Urban Research Institute report, released on Wednesday, also encouraged landlords to stop viewing rent as an informal arrangement to let someone use their property but rather treat rental property investment as a small business.

The study, led by researchers from Swinburne University of Technology, University of New South Wales and Curtin University, suggested a public register of landlords, where landlords were required to prove they were “fit and proper”, be established.

The private rental sector, now the fastest growing part of the Australian housing system, is “critical to the success of a range of public policies”, the report said.

In 2016, there were 2.1 million households in the private rental sector — up 38 per cent from 1996. And, according to census data, 42 per cent of all private renter households were families with children. 

Lead researcher Chris Martin said the figures showed that the traditional view of renting as a stepping stone to home ownership was outdated and reflected the need for both cultural change and a regulatory overhaul. 

Landlords — typically middle-aged householders on a dual income — should be accountable for the services they provide, he said.

“We talk about landlords being passive when they actually have a job to do,” he said.  “They’re not just buying a cash flow, they’re not just buying an investment.

“They should be looking at themselves as if they bought a business and that business provides housing services.”

The study reported there was still a low standard of education among property managers, broadly attributed to the traditional view of renting as the ‘poor cousin’ to property sales in real estate agencies. 

The research paper also found: 

• The portion of lone-person households in the private rental sector has declined, possibly due to affordability issues. 
• The share of properties under management of real estate agencies has increased, despite new digital technologies.
• Rent rolls have significantly grown as a source of real estate revenue.

Concerns over data collection

New technology and intermediaries in the rental sector have raised concerns about data collection. The report found the collection and use of information about tenants was proliferating. 

“It may be more convenient to do your applications online through one form,” Dr Martin said. “But there is the other aspect of it which is how much information is being collected about tenants and how is that used.” 

“The regulation hasn’t quite kept up with the development in information technology,” Dr Martin said. 

Currently, 1form aggregates tenants’ data to generate reports about rental market demand. 

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The report quotes an anonymous online real estate advertiser saying they looked forward to tenant application data being joined with tenancy history data to create comprehensive records. 

“A by-product of this process is that we will ultimately be ranking renters,” they said. “I know it sounds horrible to rank people, but it is life, and I don’t look at it as poor people or negative people getting disadvantaged, I look at it as good people getting advantaged”.

Agents and landlords have access to residential tenancy databases — known as blacklists — run by private companies, but there are tight rules in all states and territories, except the NT, about how a tenant can be blacklisted.

Sharehousing portals gaining traction

Sophisticated online portals for share housing arrangements have improved the security and reputation of share house advertising, the report said. 

Such portals now advertise people seeking rooms as well as rooms to let, enabling a matching service. In the future, the report noted this could be capitalised upon by a service such as Airbnb, if it were to offer long-term rental housing. 

“A comprehensive review of the renting-by-room sector is warranted, including contractual issues, the operation of online matching portals, and the regulation of use of premises, change in building structures and safety,” the authors said.

allison.worrall@domain.com.au