Rental stress and evictions
Leyla’s* unit is in a block of 1960s-era flats on a quiet leafy street in the Melbourne suburb of St Kilda. Across the hall, the neighbouring unit has been empty for months and, with the state’s Covid-19 rental moratorium now lifted, Leyla is worried she’ll soon be cleared out too.
“If I have to move, that’s fine. But how? And to where?” she asks. More than $4000 in arrears, Leyla has been looking for secure work since last year. “My bank is showing I’m not doing well; who is going to accept me?”
At the beginning of 2020, Leyla was living by herself in Melbourne’s CBD, studying business and working part-time as a tutor. “It was perfect. Then, dramatically, everything changed,” she says. Her work started cutting down employees’ hours, and in March, she lost her job. As a migrant from Iran, she didn’t qualify for JobSeeker or JobKeeper government support payments. Her financial situation deteriorated quickly and she was unable to pay rent.
That same month, March 2020, national cabinet met and committed to a six-month moratorium on evictions. This meant that while renters could accrue rental debt during the pandemic, they could not be evicted for this. The emergency measures were put in place to protect the almost eight million people who rent in Australia. At the time, Prime Minister Scott Morrison called on landlords to “do the right thing”.
“We’re all in this together,” he said.
Despite the moratorium on evictions being in place, Leyla was issued an eviction notice in May last year. She abandoned many of her belongings in her former apartment and stayed with friends.
“I didn’t know what I should do,” she says. She was not aware of her renters’ rights, nor the moratorium measures that may have protected her. She struggled with the stress and anxiety of losing her job and home. “My mental health issue just made me just shut down,” she says.
Leyla has since found casual work at Coles, but it’s not enough to cover all her essentials and rent. She’s not sure how she’ll cope if she has to go through the cycle of being evicted and becoming homeless again.
She is not alone. The Saturday Paper has spoken to a number of people experiencing rental stress, many of whom are still recovering from the impacts of the country’s longest Covid-19 lockdown in Victoria.
The Covid-19 lockdowns disproportionately affected renters. These people are more likely to be younger, on lower incomes, in insecure work or on temporary visas. Towards the end of last year, Better Renting estimated that up to 970,000 renters were experiencing rental stress and could face eviction. The chief executive of Tenants Victoria, Jennifer Beveridge, has warned of a “flood of evictions” in coming months.
Last week, Western Australia, New South Wales and Victoria ended their rental moratoriums. They were the last states to do so. Their state governments scrambled to introduce transitional legislation to curb an increase in evictions, and to keep in place some protections for renters for after the end of the moratorium. In Victoria, the amended Victorian Residential Tenancies Act (RTA) came into effect the day after the state’s moratorium was lifted, providing additional protections for renters, including requiring tenants to be given more notice to vacate.
But for many, it was too little, too late. The evictions had already begun, according to Beveridge. “Some people have already received notices to vacate,” she says. “And for us, that’s the tip of the iceberg.”
In February, there was an increase in applications to the Victorian Civil and Administrative Tribunal (VCAT) to evict tenants, according to data published by Nine newspapers. By early March, the Renters and Housing Union (RAHU) began hearing from members who had already received notices to vacate that were forward-dated to March 29.
The secretary of RAHU, Eirene Tsolidis Noyce, welcomed the last-minute legislation from the Andrews government, but said that landlords’ “gloves were off” already.
“It’s just going to be an absolute free for all,” she says. “The homelessness crisis is real, and it is growing.”
In regional areas, the pandemic has compounded issues for renters.
Originally from New Zealand, Jason Clough, 36, didn’t qualify for JobKeeper or JobSeeker when he lost his job at the local RSL in Moe, in south-eastern Victoria, because of Covid-19.
He quickly ate into his savings and put his car loan on hold. Eventually, he was able to reduce his weekly rent payments by $100. But then in March, Clough was advised by VCAT that his landlord and property manager had applied to have his rental agreement terminated. The eviction application has since been withdrawn and instead he’s been advised his rent will increase in April.
Clough has been looking for a new place but, so far, he’s come up dry. There aren’t many houses within his price range and there are a lot more people than usual at inspections. “The demand is particularly high at the moment,” he says.
An influx of tree-changers is one factor driving the demand. The Gippsland region is currently experiencing its lowest ever vacancy rate.
Beyond Housing is a housing and homelessness service that supports people across northern and western regions of Victoria. Chief executive Celia Adams says the organisation has had an unprecedented increase in requests for support from people in private rentals. Its frontline team has been overwhelmed.
“It’s a pretty terrifying time to be working in this sector, knowing that we are going to experience increases in people needing our services and not [having] the housing right now for them to go to,” Adams says.
Leah Calnan, president of the Real Estate Institute of Victoria, which represents about 7000 members in the property sector, concedes demand will drive up rental prices.
“I can tell you from members that we will see rents rise in outer Melbourne, out of metro Melbourne and in regional Victoria,” she says.
“So, there will be a financial strain on low-income families … People might think that I’m being mean, but I’m not. People have to look at the options that are available or look at situations that could provide them with a short-term fix … There will be a slow burn for tenancies to come to an end over the next probably four to six months.”
One of the amendments in the updated Victorian Tenancies Act is aimed at limiting the number of times a property owner can increase the rent. But Calnan says this amendment is going to result in steeper rent hikes.
“Now, because they’ve been pushed into a position where they [the landlord] can only implement an increase every 12 months, it won’t be $5 or $10. It will be $15 or $20 or $25 or $30 increases, particularly in a rising market.”
For many on JobSeeker, a rent increase of this amount is substantial. The 2020 Rental Affordability Index found that even with the coronavirus supplement, which ended on Wednesday, JobSeeker recipients could not afford rents in most metropolitan areas around the country. Rental affordability is also becoming a problem in many regional and outer metropolitan areas in most states.
Beyond Housing’s Celia Adams says it’s about to get much worse. Alongside the moratorium on evictions ending, government support via JobKeeper and the JobSeeker coronavirus supplement has wound up.
“All these factors are colliding at once and are going to have a devastating impact on our communities, particularly those that were already living on a knife edge to begin with,” Adams says.
Some politicians are trying to put the brakes on rising rents in traditionally affordable areas for people on lower incomes. In Tasmania, which now has the worst rental affordability in the country, the state’s Greens leader Cassy O’Connor tabled a new bill to implement rent control.
O’Connor said the bill “wasn’t some fancy new notion”, pointing out that “Tasmania had rent controls in place up until the year 1963”. On March 24, it was voted down.
The housing crisis that was here well before Covid-19 is now deepening. Since January this year, despite Australia’s economic bounce back, the number of financially stressed people has been climbing. According to a recent Melbourne University survey, almost a third of Australians are concerned about being able to afford essential goods and services. The survey found that more than half of under-35s were under financial strain.
A recent Council to Homeless Persons report says that the organisation expects housing stress to increase by 24 per cent nationally and homelessness by 9 per cent, by June 2021. Despite this, the federal government confirmed in March that about $57 million would be cut from the housing, homelessness and family violence services sector by defunding the Equal Remuneration Order supplementation in June.
Currently in Australia, the right to safe and secure housing is not enshrined in law and there is no national housing policy. Yet while a third of Australians are renters, almost 100 per cent of our federal MPs are home owners. More than a third of them also own at least one investment property.
Sitting in her unit in St Kilda, Leyla seems at a loss.
“Some people have six or seven houses and they just invest to get money,” she says, “and I’m failing to just live, to have a roof on my head. It’s just not really fair.
“Somebody told me, ‘Don’t say Australia has class, or that there is low class or high class.’ But it’s not something that if you don’t say the word, it does not exist – it exists. We have to say it and see it.”
* Name has been changed.
This article was first published in the print edition of The Saturday Paper on Apr 3, 2021 as "No vacation from eviction".
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