The Guardian June 28, 2000


by Magda Hansson and Kerry Ans

Sydney's homeless numbers are beginning to jump as rents climb and greedy 
landlords evict tenants in the runup to the Olympics. The imposition of the 
GST will further aggravate the situation as rents are pushed up even more. 
Sydney rents are already running at an average of $225 per week which is up 
to a half of the take home pay of many low income wage earners.

Another factor pushing up rents is the inflow of financial capital looking 
for a "safe" and profitable investment in Australia. With Sydney becoming a 
financial centre in the Pacific, multi-national financial institutions are 
now locating here. The so-called "Asian economic crisis" has meant a flight 
of capital from that region and overseas companies and their wealthy 
executives are moving in.

These factors have contributed to a crisis in the availability of low 
rental accommodation even though many buildings which were previously 
factories and warehouses have been renovated as Australia's manufacturing 
industries close down. Older home units and boarding houses have also been 
bought up for investment purposes. Many inner city suburbs have seen 
radical changes in their housing stock.

Investment companies like In-West Holdings, which had invested in low 
budget boarding house type accommodation, are now getting out of this 
increasingly shaky "market". The imposition of the GST will increase their 
costs but it will be virtually impossible for these investors to raise the 
rents for the clientele they now cater for. 

Tent city

Welfare agencies are finding it impossible to cope with the steady rise in 
calls for help. In response to this tragic situation, welfare groups are 
planning the erection of tent cities for the many thousands of Sydney 
homeless. One of the suggested sites is a park in Ashfield on the main 
route to the big Olympic venues at Homebush Bay. 

While the government is funding landlords to provide some beds in low cost 
accommodation welfare agencies maintain that it is not enough.

Planned homelessness

Poverty and homelessness do not "just happen". They are the result of 
deliberate policies that benefit one group  those that have capital and 
access to it, against another group  those that do not. The private 
rental market does not want to and cannot provide for the housing needs of 
the poor. 

The mentally ill and disadvantaged are being particularly hard hit. Many 
were previously secure in an institution but were forced out when 
governments closed the institutions declaring that they were better cared 
for in the community. As their existing low-rent accommodation closes the 
only alternative is the street. 

Let them eat cake!

With the supreme arrogance of one who is out of touch with the  real world, 
the Treasurer, Peter Costello, says that people  who rent can afford a rise 
in rents. 

The government has refused to exempt caravan park and boarding house 
tenants from paying GST on their residential rents and the estimated 
increase to ordinary renters has more than doubled to 4.7 percent. This 
represents an increase of $11 on the median Sydney rent of $225 per week. 

The residents of caravan parks and boarding houses are some of  the most 
disadvantaged and marginalised persons in our society.  Over 50 percent 
rely on social security for their sole income  support. 

Many boarding houses are de facto institutional care facilities for the 
mentally ill that the government no longer sees fit to care for and 
protect. Legally, they have little tenure on their meagre accommodation, as 
the Residential Tenancies Act does not cover them. NSW State parliament 
rejected a bill eight years ago that would have rectified this situation, 
capitulating to pressures from the hotel and motel industry.

Welfare for landlords

While rejecting the demands of some National Party MPs to scrap  the tax 
for the residents of caravan parks and boarding houses,  they did agree to 
the Democrats proposal to increase rent  assistance by 10 per cent. This is 
in keeping with the ideology of both the Democrats and the Liberal Party. 
What they are in effect doing is paying over one and a half billion dollars 
each year into the very deep pockets of private landlords as the rent 
assistance will be paid straight to landlords in increased rent. People 
will still struggle to pay their increased rents but the pain is eased for 
their landlord. 

Meanwhile, the queue for public housing gets longer. The effect is that 
rents remain high. But it is not tenants that this government wants to 
protect. Their priority is with the owners of property.

This gigantic subsidy to private landlords should be put into low rental 
public housing stock. It has come from public money in the first place. The 
private rental market would then be forced to compete in the provision of 
accommodation and rents would be reduced. All tenants, both public and 
private, would benefit.

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