Rent freezes should only be considered as a short-term salve to affordability in times of crisis, a Victorian parliamentary inquiry has found.
A report into Victoria’s rental and housing affordability crisis, tabled in state parliament on Tuesday, made 23 findings and 34 recommendations.
But no recommendation was made about expanding rental controls, despite debate on the subject dominating the upper house committee’s public hearings.
“Although rental freezes provide obvious benefits to renters, the committee believes that they should only be considered as a short-term solution in extreme times, such as in Victoria during the COVID-19 pandemic,” the 388-page report reads.
The Victorian government banned landlords from increasing rent during the pandemic but has not resorted to adopting the measure to combat soaring rents, arguing it would diminish supply.
Evidence on the long-term efficacy of rental caps was inconsistent, the inquiry said.
Greens committee members Aiv Puglielli and Sarah Mansfield published a minority report reiterating their party’s longstanding call for an immediate two-year rent freeze, followed by a permanent cap on rent increases.
They pointed to fresh data, pre-dating the writing of the report, that purportedly showed renters in every Australian capital city were in a worse position than before the pandemic.
“By the report’s own benchmarking, the current rental crisis would call for the urgent introduction of a rent freeze,” they wrote.
The majority of the committee, made up of three Labor members, three Liberals, two Greens and one crossbencher, instead suggested a raft of other moves to tackle the crisis.
It wants the Victorian government to push the Commonwealth to examine its housing-related tax concessions, including negative gearing and the capital gains tax discount for investment properties.
Victoria should also pledge to build 60,000 new social housing dwellings by 2034, separate to the 10-year goal of 800,000 new homes outlined in the government’s recent housing statement.
The Council to Homeless Persons and Community Housing Industry Association Victoria both urged the government to adopt the inquiry’s recommended target.
“Victoria is in the grip of a once-in-a-generation housing and homelessness crisis and does not have time to waste,” Council to Homeless Persons chief executive Deborah Di Natale said.
Other suggestions included the state government abolishing the state’s first home owners grant and transferring its funding to an already established private rental assistance program and Consumer Affairs Victoria considering the creation of an independent rental inspector.
“In Victoria, as across Australia, we have spent too long watching problems with housing grow while delaying taking action,” committee chair and Liberal MP Trung Luu said.
“We can no longer leave this problem for others to fix in the future.”
The Victorian government has six months to respond to the recommendations.
Callum Godde
(Australian Associated Press)
