Every year I challenge myself to eat a reasonable amount of food on Christmas day and every year I fail miserably. This year was no different as we feasted with family and I hope that you managed to do the same. It felt strange being so excessive mid week with that level of consumption (and gluttony on my behalf) being more suited to a weekend activity.
I'd be lying if I said that Christmas has come easily this year. It’s always a huge financial burden on most people and given the current state of affairs we’re already starting on the back foot. Luckily I’d just watched a Netflix documentary called Buy Now - The Shopping Conspiracy which at least made me feel like our small pile of presents was the responsible thing to do at least.
The kids didn’t care at all of course. They’re lucky to have a generous extended family and by the time they get through everyone’s gifts on christmas day the car is overflowing. We’ve also got slightly older kids who are starting to appreciate the value of quality over quantity. Alice is still sitting on the fence about Santa with her still believing just in case. Frank did the maths and Santa’s travel schedule alone is impossible so he plays along with Alice while giving us a knowing nod.
Matt and I have been quite preoccupied this christmas as our conversation keeps getting pulled along a train of thought we’ve had about Rental Permits. After last week's blog about our rental property being one of 30 that had been brought up by a Queensland property agent, we received many cries of outrage. People were as shocked as us at the inhumanity of it all. The only way for Matt and I to get total housing security is to buy our own home and as we all know it’s becoming less of an option as property prices continue to rise.
Then Matt had a thought - what if you had to have a Residential Leasing Permit to rent a house to someone and it was based on the current energy star rating for housing. It would start at 4 stars - if you own a house or apartment that has an energy rating of 4 stars or more you can charge market rental rates. If your rental property is under 4 stars the amount of rent you can charge is capped for example, 1 star - $100 per week, 2 stars - $200 per week, 3 stars - $300 per week.
In capping pricing several things would happen. Firstly the people who live in the house will have more disposable income to pay for the utility bills which are astronomical for poorly insulated homes. Secondly it would encourage rent seekers to invest and improve their properties so they can charge market value. This will cause the quality of rental properties to increase. Thirdly, if landlords don’t want to improve their houses then they could sell them. If a rent seeker is only earning $1000 per week on ten 1 star rated properties with no intention to improve them then this is now a bad investment.
As a renter I would be able to search for 4 star properties in my neighbourhood and know that I’m getting a better quality home that is worth paying for. 1-3 star properties will still be available and it would create a supply of affordable housing for people who need it. Hopefully by capping rent for 1 to 3 star properties we’d remove the incentive for rent seekers to blindly invest in properties that they never intend to improve and there would be a flood of entry level housing into the market.
If you are an investor and own ten 6 star apartments then nothing changes but if you own 10 2 star properties then you may have to sell a couple to improve the rest. This is a win-win for renters and first home buyers. It’s not penalising landlords but it is setting a clear standard that if you are willing to invest in a human right then you’re responsible for the liveability of it as well.
We’re heading towards a two tier housing system with houses being bought and improved by the home owner to live in or being bought by rent seekers who are speculating on the value of the property with no intention to improve the quality. Alan Kolher says we need to stop the increasing price of housing in this country and the continued tightening of these requirements (start with 4 stars, then increase to 5 stars, 6 stars over several years) will help close the gap between the haves and the have nots.
To argue against this type of permit is to argue against equality. While it may cause many rent seekers to reassess their portfolio’s, it will ultimately create better quality housing for those who may never be able to afford, or want to, own a home of their own. Aligning rental properties with the energy star rating required for new builds is how we close the gap. Making owners accountable for the wellbeing of their tenants by capping rents will hopefully encourage investment and a more respectful relationship between landlord and tenant.
This is a pretty wild idea but Matt and I have plenty of wild ideas. All we need is a few influential people to agree that this is a great idea and who knows how far we’d get. I feel ‘white paper’ is coming and maybe if anyone is holidaying with the Minister of Housing or Alan Kolher they could mention our plan and see how it lands.
