Concerns planned reforms to 'end secret rent bidding' will introduce rent auctions

Last Friday (2 June) the Tenants' Union's Leo Patterson Ross and Lehana De Silva attended the hearings for the Legislative Assembly Committee's current Inquiry reviewing the Residential Tenancies Amendment (Rental Fairness) Bill 2023. We were on a panel alongside colleagues from NSW Council of Social Service (NCOSS) and Shelter NSW. Homelessness NSW, Public Interest Advocacy Centre, Disability Advocacy NSW and Ageing on the Edge also appeared before the Committee.

We made clear that we welcome the Government's focus on renters and their efforts to introduce better protections and transparency and improve the functioning of the private rental market. However, our organisations are also very concerned about aspects of the proposed reforms aimed at eliminating 'secret' rent bidding.

The proposed changes risk sanctioning - even encouraging - rental auctions that will fuel further rental price hikes in an already inflated market. Renters want transparency, but it does not have to come at the risk of higher rents. Why not ban rent bidding altogether?

For more information about our concerns see our submission to the Inquiry, including (appendix) our joint letter with 18 other housing and community advocacy organisations. 

The Inquiry last week provided an excellent opportunity for decision makers in Parliament to hear directly from stakeholders about the proposed reforms. We look forward to seeing the outcome of the Inquiry (report due by 12 June). We hope once the Committee's report is published we will have the opportunity to work with Government to find a way forward with the Bill, ensuring the best outcome possible for renters.

Below we publish the opening statement provided by Leo and Lehana at the Inquiry hearing on Friday. 

Opening Statement to the Legislative Assembly Select Committee on the Residential Tenancies Amendment (Rental Fairness) Bill 2023

Leo Patterson Ross, CEO, Tenants’ Union of NSW:

First I would like to acknowledge the Gadigal people of the Eora nation on whose land we meet today. I pay my respects to their Elders past and present, and also to all Aboriginal and Torres Strait Islander Peoples here today.

Thank you for the opportunity to appear today. We also thank the renters, community members, community organisations and workers who have shared their views with us over the last 6 months and we seek here to represent their views. 

We recognise this bill is part of a broader suite of rental and housing reforms from the Government and that the intention of those reforms is to create a fair and improved renting system in NSW. We recognise renting as an essential service, and encourage policy makers, industry and the community to do the same. The primary purpose of the renting sector therefore is to ensure that the people of NSW are able to find and keep safe, stable and affordable housing in their communities with all participants a part of achieving this outcome. We must make sure the availability of homes and the regulation of them work together to meet community needs. These current reforms should also be considered with respect to their impact on the sector’s primary purpose.

We acknowledge and appreciate the positive intention expressed through the Bill to provide renters with greater transparency during the application process which has been an area of great frustration for many years, and especially during the current acute crisis. However, we hold serious concerns that the reforms currently at Clause 22B will unintentionally sanction and entrench rent auctions as an acceptable rent setting measure in the private rental sector. We understand this reform is not intended to be an affordability measure, but nor should we risk worsening affordability.

The Tenants’ Union considers that the most transparent approach to rent is that the price you see on the advertisement is the price you see on the agreement.

We make a number of other recommendations in our submission, and I look forward to your discussion and deliberation. Thank you.

Lehana De Silva, Solicitor - Aboriginal Support, Tenants’ Union of NSW:

Housing stress is increasing for all renters in New South Wales, but particularly for populations more likely to face systemic disadvantage.

Approximately, 34% of households which include Aboriginal and Torres Strait Islander people are rented privately. I spoke with the coordinator of a regional Aboriginal Tenants’ Advice and Advocacy Service who has been assisting Aboriginal renters for more than 20 years. He reported that local house prices have climbed to levels that he did not think were possible, and that many people in his community are unable to secure affordable housing. In this type of housing market, rent bidding has become an additional, formidable barrier to accessing housing. 

As stated in their submission, the Aboriginal Tenants’ Advice and Advocacy Services share the Tenants’ Union’s concerns about Clause 22B of the Bill, and support the Tenants’ Union’s view that we need to end rent bidding altogether by prohibiting landlords or their agents from entering into a tenancy agreement at a higher rent than advertised.

Thank you for the commendable commitment to delivering better and practical outcomes for renters in NSW, and thank you for the opportunity to appear today.