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Legislative Assembly for the ACT: 2004 Week 10 Hansard (26 August) . . Page.. 4464..

Incorporated document

Attachment 1

Document incorporated by the Minister for Urban Services

Earlier this year I requested that a review of Market Renters in Housing ACT be conducted. This review has been conducted by officers from the Department of Housing, Disability and Community Services, Chief Minister's Department and Department of Treasury. The review examines the historical reasons for market renters renting properties, the profile of market renters, the impact of this group on the operations of Housing ACT, policy options for the future treatment of this group, and makes recommendations.

Market Renters are tenants of Housing ACT who do not receive assistance through the granting of a rental rebate. Every State and Territory has market renters within their public housing systems due to security of tenure; however the ACT has historically higher levels due to the role of publicly funded housing in helping establish Canberra as the nation's capital. Due to the need for increased targeting of assistance to individuals and households with high support needs under the 1996 Commonwealth State Housing Agreement (CSHA), the number of market renters has decreased in all jurisdictions, including the ACT. They currently comprise 15% of all tenants compared with 22% in 2001.

Because market renters do not apply for a rental rebate, they are not required to provide household information and hence less information is available from internal data sources than for rebated renters and their households. However, from a comparison of available internal administrative data and the 2001 ABS Census, it is likely that in general market renters may have larger households, more income units within the household and be more likely to be of working age than rebated renters. They are more likely to occupy houses rather than flats and pay on average between $201 to $250 per week in rent. There is considerable movement amongst Housing ACT tenants in terms of their eligibility for a rental rebate; over a three year period around 70% of tenants received a rebate throughout the period, 12% of tenants were market renters throughout the period, and 18% moved between the two groups.

Housing ACT is required to charge a private market equivalent rent for a property under the CSHA, and employs an independent professional valuer to calculate them using a 5% sampling method. The Residential Tenancies Act 1997 allows for rents to be altered once a year, with Housing ACT conducting a review each October. The Review considered the current process for valuing the portfolio to be cost effective, with an average cost of $4.50 per house per annum. The process is also considered to produce accurate market rents; this being reflected in the low number of appeals being made concerning rent determinations in the Residential Tenancies Tribunal, and the resulting sales of Housing ACT properties based on these valuations that are consistent with market trends.

In 2003 there were 94 appeals as a result of the annual rent review process. Of these, 36 were denied, 40 were varied (usually by around $5), 6 upheld and a further 6 are still pending.

Housing ACT rents and property prices are consistently in the bottom half of the market; the reasons are the generally lower levels of amenity, fixtures and fittings of the stock, and the dominant role of Housing ACT in providing affordable housing to the bottom two income quintiles in the ACT community.

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