In 1987, renting a student house at Indooroopilly in Brisbane's western suburbs would set you back $125 per week. That worked out at $33 per week for each of the three larger bedrooms and $26 per week for the small one. Inexpensive housing. Comfortable surroundings with fresh paint and carpet, provided you ignored the termites slowly consuming the downstairs bedroom.
35 years later, the median asking rent for houses in Indooroopilly is $650 per week although that particular house is no longer there. Demolished long ago (along with numerous neighbours) to make way for a car dealership car park.
Public hearings on the Greens' rent freeze Bill were held in Brisbane on 5 December.
Under the proposed Bill, a two year rent freeze will be implemented with the maximum permitted rent being the relevant property's rent on 1 August 2022. Future rent increases (after the two year freeze) are limited to 2% every two years with no end date. There are no plans to implement any form of freeze on expenses such as rates, water rates, land tax etc.
Resolving the current rental crisis is a complex task. However it is not clear that broad-based rent control measures are the answer. Increasing the supply of both public and private rental housing is key. The entire housing stock in that street in Indooroopilly is now lost to commercial development. Rent control measures are likely to stifle private sector housing investment.
Examples elsewhere in the world highlight the housing supply issues associated with strict rent controls.
Ireland’s 2016 rent control measures are considered counterproductive and ineffective and have resulted in a serious lack of supply of residential rental properties available for rent with landlords leaving the market because they are not permitted to charge market rent for their properties.
St Paul, Minnesota is introducing rent control measures from 2023. Ahead of its implementation, the number of building permits issued in St Paul from January 2022 to July 2022 dropped 31.4% compared to the previous four-year average for building approvals.
San Francisco - a Stanford University study in 2017 relating to rent controls implemented in 1994 on small multi-family housing built prior to 1980 found that rent controls reduced residential rental housing supply by 15%.
Qld Parliament rejected the Greens' last attempt to introduce rent control measures in Qld. The Committee is due to table its report on the Bill in February 2023.
December 2022
© PELEN 2022
The content of this publication is intended to provide a general overview on matters which may be of interest. It is not intended to be comprehensive. It does not constitute advice in relation to particular circumstances nor does it constitute the provision of legal services, legal advice or financial product advice.