What broke the rental market (and can it be fixed)? | ABC News In-depth

for most of us whether we own or rent the home we live in is our single biggest expense an expense that keeps getting more and more well expensive in the last couple of years the cost of renting nationally has spiked I watering numbers going up faster than inflation and wages all of a sudden we're spending more and more of our income on rent it's never been harder to find somewhere to live RS have hit a new record high record highs weekend after weekend people are lining up fighting for the few places left on the market it's so hard a lot of them feels like you don't have a chance there is no doubt right now we are in a rental crisis right around the world it's the same problem in New York City rents have shut up 20% in London average rents are up 13 and 12% and in Singapore rentals went up by nearly 30 % so we're going on a hunt hitting the streets of some of the world's biggest cities to see what your money can buy or rent in 2023 uh there's a lot of dingy places in London it is quite original we'll try to figure out why things got so expensive all of a sudden what caused this Spike and why did it happen all over the world all at the same time the rental system has to change this is not a niche issue 30% of our rent nearly one in three of us paying more for seemingly worse places they're like roaches rats it's dirty so you could be paying an arm and a leg and barely get a closet it's a common problem does it have a common solution what broke the rental market and can it be fixed there's an often used rule for assessing rental affordability especially for low-income families you want to spend less than 30% of your income on rent that's the threshold used by some government departments to measure housing stress and even before the pandemic lots of people were exceeding that 30% threshold in the private Market about 30% of households spent more than that that grows to nearly 60% of low-income households and among them nearly 1 in five are spending more than half their income just on rent and that was 3 years ago when we weren't really talking about a rental crisis if you're a single person on Sydney's median income looking to affordably rent on your own good luck to stay below the 30% rule you need to get by with just $261 a week here's a room you could get in a boarding house in inner Sydney for 250 a week with shared bathroom and kitchen but if you don't want to share your only hopes a studio apartment this one in black Town's a little over budget and if you're on a low income the rental affordability scheme might help you secure this one in bankstown that couch by the way it's also your bed if you want a place with both a bedroom and a kitchen you're either going to have to spend more or find someone to live with for two people how much of a challenge is finding something decent our team's on a mission in some of the biggest cities in the world armed with 30% of the median household income in their City from New York to Tokyo London and Sydney the challenge for them is to see how far their money can go and which city gives you the best bang for your buck well they be living in a shoe box sharing an apartment with cockroaches or commuting into the city from the other side of the country or can someone find a diamond in the rough we'll start with a reception room here at the front of the property proba actually it may not fit no it's way too narrow nice and sunny over here oh I can see the pool the door pretty much ends at this wall small a bit small while they go house hunting let's look at the state of the market right now core logic has been estimating the median weekly rent of all homes in Australia for 17 years now and for years that trundled along growing by a bit over 2% a year but then in 2020 something happened globally that sent rent spiraling we saw that prices didn't fall anywhere near as much as you might have expected given circumstances and their return has been incredibly rapid take a look at this chart here's the 30% Rule and it shows us that rental affordability has been deteriorating things weren't great a decade ago but the typical portion of income needed to pay the rent slowly fell through the decade but this is the shock of the pandemic it's back above our 30% threshold and remember this is an average so for some people things are much worse especially lwi income earners they're seeing much higher levels of incomes uh likely required to service rents finding something affordable is one thing the first step is finding anything at all core logic's seeing half as many rental listings now as it was 3 years ago it's simple supply and demand and the vacancy rate the share of rentals that aren't occupied has tumbled from a decade average of about 3% to about 1% now that has KnockOn effects uh and the next step for a lot of these people um our citizens is to be living in cars and couch surfing and that is an outrageous situation that we find ourselves in in this country we're seeing an increase in requests for homelessness services in Australia and we've seen that increase every year since 2012 um we've seen an increase in Social housing weight list which is now well over 100,000 nationally so prices arise Rising there are fewer listings and more people looking all the ingredients of a rental crisis I've been in the industry for 30 years and I've never seen a housing affordability crisis as bad as what we're experiencing right now everyone's on edge I think tenants are on edge I think landlords are on edge no one knows what's happening with interest rates we had 40 groups inspecting obviously that can only go to one group you know it's hard to say 39 groups not get approved for 5 years I was renting a two-bedroom apartment on my own for 400 a week the owner of the apartment I was renting had to sell and then to have to go find one-bedroom apartments for over 600 was um a bit of a shock the cues and the crowds that turned up was just crazy I wasn't expecting that being a landlord initially was quite a great experience unfortunately with the impact of Co everything got quite crazy people couldn't afford for to pay their rent the rents don't cover my investment at all are they going to keep me on am I going to get a rent increase what's going to happen and yeah that's kind of the worst part the uncertainty and then of course if you do get an eviction notice or rent increase what's your next step where are you going to go what are you going to do so how did it get so expensive like all things economic it's about supply and demand demand first the number of people looking for rentals went up the pandemic forced a lot of us to re evaluate how we live and who we live with people spread out across the rental market share houses broke up relatively quickly the average number of people living in each house fell to 2.5 that might not sound massive but the Reserve Bank says it led to 120,000 new households being created 120,000 households that need a house being in a share house in such a stressful environment can really take a to post lockdowns something else pushed up demand as we reopened Australian borders to overseas visitors we saw a big catch up in overseas migration new arrivals are more likely to rent than buy now that might be temporary as the lockdown era of the pandemic Fades we might see share houses get back together and migration return to normal levels but that won't be the end of demand issues okay government report in April forecast that in the decade ahead new homes built won't keep up with new demand and most of that shortfall is in apartments so where's this new housing stock going to come from because there are some real bottlenecks in Supply we haven't been able to build houses quickly enough um particularly at the affordable and social end of the housing Spectrum there was actually a boom in home building in the last decade in Australia and most of the increase was in apartments but that boom was well and truly ended so there's a lot in the construction pipeline right now but when that's done when that's complete I think you're facing a bit of a vacuum of new projects for 2024 with that you might be tempted to pack up and leave the country in search of Cheaper housing but is the situation there any better our team's been out and about hopefully they can answer that they have just 30% of the median household income in their City to find something decent one of these on yeah Welcome to New York this is one of the world's great cities and when it comes to renting it's also one of the most popular a little over 2/3 of homes here are rented with one3 owned by the people who live in them in other parts of the US those stats are basically opposite so it's no surprise that prices here are hot I've been given $ 612 Australian dollars to find a place to live and I can tell you now that doesn't give me many options Manhattan is particularly pricey but I've managed to find an apartment in Greenwich Village although it might not be to everyone's taste Jen hi hey J thank you very much for showing yeah no problem so this is apartment 17 and it's a studio with a shared bathroom shared shower we're going to get um like a small type of electric stove so but this is pretty much it she's not wrong that is pretty much it at about 14 square m it's tiny there's room for a bed and not much else so you do have this big window here this is I would say one of the main features you have trees Greenery and yeah it's not that common this is I would say this is great and it's pretty hot in here is there air conditioning so that's what we would have to work on so we would have to put a window a SE which may cover the light of it you know it's all about making things work for the budget it's you know it's a challenge but it's feasable to get to the bathroom we need to head down the hallway okay do you want to go in and check it out uh yeah I'll have a look so six people share this one well we don't six people we don't know if there are couples or anything but it's six unit six units uhuh okay so we could be dealing with up to 12 people here let's hope they keep it clean got it all right and the toilet where's that the toilet then is right here this is what it's just separate from the the shower so how do people tend to feel about sharing bathroom facilities with other residents so because the neighborhood is so desirable when I've shown it my experience has been that people have seriously contemplated it I mean it's a serious Contender so could I actually afford this place with my budget there's no guarantee so how much would this apartment cost to rent so we would have to negotiate that right now so we would we would basically have to put put um an offer on the table maybe for a longer lease the these are things that we need to consider to sort of make you stand out it's time to look for some other options so I'm making my way to Brooklyn to check out what's known as co- living stand clear of the closing doors please nice to meet you welcome to the Williamsburg house uh let's go show you around great this is kind of like an ordinary share housee except there's a total of 160 people living in this building split into four bedroom units each apartment has a shared living area and kitchen and two bathrooms it's already furnished and the common areas are cleaned weekly but you don't get to pick your housemates and you can't have anyone stay the night this type of living has been nicknamed dorms for adults in New York City is Supply constraint there's not a lot of uh housing available we facilitate uh um this process of sharing an apartment so this is one of the bedrooms living space a couch a desk and a window and then the bed is up here I couldn't stand up straight I hit my head on the roof and if you look here it is climb but because of these high ceilings they've been able to cram more into this pretty small space and the cost around $780 a week way over budget this hasn't been easy we had a pretty narrow range of options to begin with and a couple of places fell through at the last minute because they were snapped up it gives you some sense of just how competitive this Market [Music] is on the other side of the pond rental prices in London aren't much [Music] better3 2ford Bridge just like New York this city attracts young professionals and Global Nomads who are much more inclined to rent than to buy and the proportion of renters is growing back in 1991 just 14% of London's population was in the private rental market but 30 years later it had shot up to more than 1 in four there are more renters competing for fewer properties and for young people on Lower incomes it's especially hard but I'm lucky because for this task I've been given 30% of the median London household income a budget of 253 per week even so I can tell you it's not going to be easy to find a decent place in a central location I'm starting my search in West London for many years Shepherd's Bush was one of those London suburbs that was synonymous with Australians it's got transport links shops bars and restaurants and for many Aussies it's been good value for money I'm going to find out whether the area still lives up to that reputation hi rupo Nick nice to meet you through thank you real estate agent rupor Patel has taken me to see one of the cheapest places he's got on his books with that in mind I'm a bit worried about what I'll find come through Nick thank you so we'll start with the reception room here at the front of the property love it the property is approximately 500 sare ft completely refurbished you've got wooden flooring throughout this place is much nicer than I was expecting and now I'm worried about the price the apartment has a decent sized living area a bathroom with a shower only a separate bedroom and a kitchen so this is our shower room here once again just like the rest of the property it's been completely refurbished and a beautiful shower with a bit of storage there as well looks like a good shower head it is great pressure here as well got a heated Tower just behind you as well so now to the kitchen we have our oven and microwave integrated there just on the left of you we've got the dishwasher full size which is actually good to see in the FL that's important yeah we have our breakfast bar just here as well come for Nick so we have our outside space here well this is nice it's very nice maybe a bit too nice an outdoor space will only add to the price it's time to go back inside and talk money what's this place going for so this is actually very reasonable this is on the market at £1,900 per Cal a month so my budget is actually only a little over 1,000 a month is there anything on your books well to be fair you wouldn't even get a studio apartment in this area for that money now look a little a bit further out unfortunately you know and you I'm not even talking eing or or Wembley you would have to go you know on the outskirts of London well that was a bit of a wakeup call even though I've been given a theoretical budget that's bigger than many londoners that place wasn't affordable for me not even close this next place I'm going to look at is in East London it's a short walk to shops and there are buses and trains close by judging by the pictures it does look a little bit rough around the edges but I think I am going to have to sacrifice a bit to get something that's within budget right come on in thank you you're all right uh Welcome to our three-bedroom property in East London so we have the living room it comes with its own balcony nice and Aira this apartment is definitely roomy the living area is a good size and there's two double bedrooms plus another half which could be a study coming off the hall is a toilet and a separate bathroom and at the end is the kitchen so we this is bedroom number two this is bedroom number two indeed Nick is is that uh is that the built-in this is the builtin yes or what used to be and it's uh it's wonderful to have you know space that is ready to have a wardrobe there next uh you've got so you've got a split bathroom uh and this and this properties small but functional small but functional test it out let's see does the job it works all right the rest of it and here's the other half of it it is the other half indeed so you've got the bath um and you've got the sink and that's about it there's no shower not even a mirror okay so nice big kitchen nice big kitchen what I wouldn't have to have a kitchen of this size so a very very big kitchen again you can put your own stamp on it so they as you can see initially there's a bit of uneven painting so you're welcome to repaint and space for dishwasher too space for a dishwasher exactly if you'd like to add a dishwasher any any appliances that you'd like to add it's it's highly likely that you'll find space in this kitchen when it comes time to talk price I'm amazed this place is going for just £210 per week that's about $415 Australian dollar finding a light filled 2 and2 half bedroom home in London is hard enough let alone one that's close to work and for me it would be about 35 minutes door Todo which is a big selling point best of all this home is within my price range but there's a catch this apartment is cheap because it's scheduled to be redeveloped nobody knows exactly when but I could be given as little as one month's notice to get out it is tempting but it would be a bit of a Gam then again renting in London is not for the [Music] faint-hearted with more than 39 million people greater Tokyo is the most popular city in the world it's notoriously packed and it's famously tiny Apartments means renting here can give you little bang for buck to top it off the average income in Japan is a bit less than you might expect it means I've got the smallest amount of money to spend in this challenge about $420 Australian doar a week or 40,000 Yen this might be tough my search is taking me to two quite different parts of Tokyo first up the trendy area of megao where the main beats of Tokyo are right around the corner Hello Alex good to see you good to see you thanks for showing me around I believe you got an apartment for me I do you want to go see it let's have a look sure all right you ready for this y let's have a look here we are yeah take off shoes in the front of the apartment because that's what you do in Japan and uh first off you'll notice it's a little bit well cramped it's a bit small a bit small little cozy let's say cozy maybe but this apartment is actually twice the size of what Jade found in New York at 32 square m it has its own bathroom toilet outdoor space separated bedroom with a walk-in closet of course it doesn't have everything what are you missing in the cupboards well yeah take a you can take a look sure uh is it an oven exactly so it's very common in Japan to find that you will not have an oven to be honest in Japanese Cuisine you don't really need an oven so most people just don't have one on the flip side renting in Japan gives you some unique advantages and this is how you hang your laundry and is this one of those fancy Japanese toilets yes this one is this is a wet room style bath right so you can get everything uh wet in here and not have to worry about it and yeah you want to climb in there see so you get a bathtub you do get a bathtub yeah so that's the thing in Japan is that no basically no matter how small the place you get you're going to have a bathtu in most cases because everybody wants to have a bath it's a very cultural thing over here you'll notice that it has a panel over here this allows you to reheat the water in there also you can set how high you want the water to be and at what temperature you want the water to be as well so uh it's a very high-end bath and a bonus the whole room can dry your clothes panel out here so if you just press on this button you can dry the entire place so a lot of people use this as an actual clothing dryer right so another space saving measure for one person it's pretty comfortable but remember our budget is for two people so here is your bedroom okay right I can almost touch the walls this would fit literally a bed it is a bedro in the most literal sense it's a room just for your bed and as oh how tall are you uh just under six foot so just under six foot okay so yeah that is it's doable I'm touching the power power point at the end I I wouldn't do that up you all right the important question how much is this price all right so I did the math for you this one comes out to $427 do dues a week okay $427 Australian dollars yes which is a bit over what you were saying but you're very close to anything you would want to go to okay so what if I need something bigger well for that we need to travel now this is one of the best things about living in Tokyo we're heading to tachikawa it's well over an hour's drive from Central Tokyo or 40 minutes on most trains but we're taking the special rapid train it runs a few times an hour and only takes 25 [Music] minutes and here's the entrance again shoes off this place is a little bit larger little bit it's double the size at 60 square m it has two bedrooms and well everything's just a bit more generous so first thing you might notice about this kitchen is that it has an extra burner yes this is a three burner stove unlike the first one but still no oven right still no oven but you do have this okay which is a a fish grill okay there's also a traditional tatami room so what's the purpose of a tatami room is this a living room or is this a bedroom yeah so it's an interesting combination of both uh it can be used as a bedroom so basically you would put your bedding into here your futons into here and then roll them out and sleep on them at the night and then during the day you would put them back in and then you would usually have a fold out table that you would put here uh just to have tea or something like that so it's a relaxing room but there are hidden costs you'll notice that this room is a little dark and good reason for that because well there's no light that is the socket for a ceiling light and that's a standard socket in Japan it means you have to go and buy your own bring your own light bring your own light so I'm bringing my own lighting and I'm bringing my own air conditioning that is correct it is $383 a week so we're under budget definitely under budget it's a nice place but you're further from the action and the station is a 15-minute walkway which in Tokyo is considered kind of ah both places I found were close to budget and there's a reason for that which I'll get into later if you don't mind the quirks the smaller spaces and you love a bath then renting in Tokyo certainly has its advantages Sydney it's the most expensive city in Australia to be a renter whether you want a house or an [Music] apartment for most people the cost of renting a house in the harbor city is completely out of the question but even an apartment here is now a stretch for many the average rent for a unit here is $688 per week that's followed by the nation's capital camber Melbourne maybe a little surprisingly comes in at fourth with Perth and at the bottom of the list is adelade it's the country's most affordable Capital to rent in so I've got my work cut out for me picking a place in Australia's most expensive city especially if I want to be in Striking Distance of the CBD I'm looking in the inner West suburb of D Hill which is about 7 km from Sydney CBD real estate agents agreed to show me a few places to see if I can find anything in my budget of $620 a week for two people I'm starting at a place just off the main shopping strip close to the station and Light Rail it looks amazing split over two levels it has two bedrooms two bathrooms and one parking spot but there's a catch so this one here Angelique is a very modern apartment it's split level it's got a beautiful kitchen with stone bench top it's got lovely Timber floors a really sunny Outlook and this complex actually has a swimming pool it has a bedroom and a bathroom on this lower level nice and sunny over here oh I can see the pool yeah yeah so this is an one of two bathrooms in this property yeah so this is one of two bathrooms it's quite a good size shower considering this apartment looks slick but it comes at a cost and it's pushing my budget before Co or during Co it was sub 600 and now we're promoting it at 680 there are a lot of modern properties that are renting in the moment in this area and they range from about $650 all the way up to $800 for two bedroom and two bath this is probably one of the most inferior of the most modern with two bathrooms so we've priced it at 680 so how much interest have you had for a place like this we've actually had more than 10 people inspect this property today so competition is fierce I really like the look and feel of this place it's big and modern it's no wonder it's so popular so I don't know if the camera can really show what it's like in here but this bedroom is massive and there's a lot of lovely natural light coming through but unfortunately this place is out of my budget it's $680 and I have $620 for two people so Angelo was taking me to another place about a 10-minute walkway this time it's a two-bedroom one bath one parking spot property they're asking for $540 a week but I might have to make a few compromises okay so you're going to love this one it's a two-bedroom Art Deco apartment it's on the top floor of just two apartments it's got heaps of natural Light District views right next to the station School polished floors throughout it's got a built-in wardrobe and it's got a brand new kitchen and stove this has just recently been installed during Co actually about a year ago just to update it because at the time we couldn't get tenants at loving properties like this Angelo sales pitch is glowing but this place is an obvious step down so this one hasn't got a renovated bathroom unfortunately um so it is quite original original is one way to put it and how would have this place gone before Co it would have struggled to actually lease but now we're seeing this as being a very popular property MH oh yeah overall I'm pretty happy with what I found and I think I did pretty well compared to the others in London and New York however it was really difficult to stay under budget and both places were rented out immediately after we had a look at them whether you live in Sydney London Tokyo or New York what we're seeing is that all over the world people are having to stretch their budgets that means less money to spend on other things and less money to save what broke the rental market we could just blame the pandemic and call it a day but some would argue it was broken long before that we have gotten used to a poorly run renting system it does not achieve what should be its primary purpose of delivering good homes to people in the areas that they needed and with the size and quality that they're looking for he says that housing should be treated like an essential service and that just like governments regulate markets for other services like electricity and water we should be regulating housing to ensure some minimum standards are met that's a big conversation and politically a difficult one to have in the meantime we have to stop biting the hand that feeds us and the hand that's feeding us right now is the Mom and Dad investors what if the government just put a limit on how much landlords can raise rent rent price regulation means that the uh system can better meet people's needs while we sort out the changes in Supply and building in the background it's something being tried in Cambra which has had rules since 2019 limiting annual rent increases for ongoing tenants to 10% above inflation rent can only go up by more if the tenant agrees all the landlord gets approval from a tribunal the rules only apply to people on month-to-month periodic leases every time a new lease is signed landlords can raise the rent more whether it's a direct result of the rent rules or not CRA despite having very high rental values overall has had some of the lowest rent increases in the country recently there are some merits to it and I can see why you would want to try and limit the increase on rents each year here having said that I think to introduce it to investors that bought into the market maybe a decade ago or even 5 years ago not expecting that kind of Regulation to be put on their property it probably is a bit unfair this idea it's a bit novel in Australia but limits on rent increases aren't uncommon in other cities you'll find them in some European countries like Germany in parts of Canada and in New York [Music] New York City has a rental regulation system covering more than a million homes one of those policies is called rent control this dates back to the second world war and strictly limits how much rents can be increased by rent control departments are usually much cheaper than Market rates but the scheme has been phased out the number of units has dwindled and really now the only way to get access to one is if it's passed down to you by a family member rent stabilization is more common in these units a board appointed by the mayor decides the percentage by which rents can go up each year and in most cases tenants have the right to renew their lease as you can imagine competition for those types of Apartments is fierce and so a lot system helps to decide who gets one hi hey hi welcome thank you hbd great I've come to meet Ahmed tagani he's from the government agency that runs the lottery and he's going to show me how it works the housing lotteries is our process for making sure that anyone who needs uh a unit of affordable accessible housing has access to it in a fair and transparent way so when a building is financed with HPD or city dollars it goes through this online portal where people can apply the type of property you can apply for depends on how much you earn and the size of your household it covers people on very low to Middle incomes and preference is given to city workers like teachers and police officers just randomly family of three 60 ,000 a year uh you can see that we have at least you know two pages of different buildings that are available and roughly how many people apply per property what kind of odds are we talking about here uh we have about 400 applications on average for every one unit that we have available 400 to one they're pretty sobering odds but what can these apartments look like for the people who do manage to get one welcome to my apartment thank you tell me about this place um I am obsessed I've been living here for about 2 years now and it's one bedroom one bathroom one bedroom one bathroom there's laundry downstairs in the basement um we also have a gym in the [Music] basement na AI spent several years is applying to the lottery and now helps others to navigate the system so how do you get a rent stab apartment it sounds great G wall they she'd rather not say exactly how much she pays in rent and it's not cheap but she's able to get a lot more for her money than she ordinarily would without the housing Lottery do you think you could find a place like this in your budget no absolutely not so I do think some of my neighbors pay probably twice what I pay for this apartment um and I definitely don't think I would be able to afford it especially not now that I'm a student again New York's rental regulation system is controversial the biggest argument against schemes like this is that it's unfair to landlords and if landlords can't make money it will end up having a longterm negative effect on the overall supply of housing stock the fear is that it it decreases the supply of rental housing in general and drives up the cost of those unregulated rents it is a very good protection of the people who are lucky enough to have a rent regulated unit it is not a protection for the people who need an apartment and can't find a rent regulated apartment which is most people who are searching housing affordability is a complex problem in New York this is a densely pop populated city and people want to move here from all over the world it means that many will continue to struggle solving the problem of Supply might seem simple just build more homes but you can't just rock up and build a house or a block of Apartments wherever you feel like throughout Australia lands assigned to zones roughly broken into residential commercial industrial mixed use public use Agricultural and beyond that every state and territory has its own system dividing the zones into subcat iies within each of the zones there's rules about what you can do and what you can't do it's all horribly complicated but what if zoning laws weren't so [Music] restrictive unlike other major cities Tokyo doesn't have a housing shortage quite the opposite if we look at the supply of housing we can see Tokyo the the blue line has outperformed other major cities like London New York and Paris for decades there's some 10 million unused dwellings in the Japanese Capital so why does Tokyo have so much I'm grabbing a coffee with Tokyo based architect jge almazan who offers a simple explanation well you can build a house everywhere well almost Tokyo has 12 zones here they are on the map residential commercial industrial but these titles are a little misleading because you can actually build homes in all of these zones there is one exception and that's exclusively for industrial use and You' probably not want to live there anyway the fact you can build a home in almost every Zone 11 out of 12 zones what does that do for housing Supply well I guess um you know there the city can react organically to to demand basically if there is demand in in certain area um of course you can provide housing even in that most residential Zone you have you can have like small workshops uh small bar small restaurant small boutique so it's it's still mix and that's where this giant map comes in rather than telling you what the zone is it tells you what's actually been built and the sheer explosion of colors shows you just how mixed the city is I think this map probably doesn't exist in many other cities because basically in other cities the zoning is a zoning right is what you get but not in do the big Central hubs are obvious but you can also see the smaller commercial hubs dotted throughout what would normally be Suburbia all of this is connected by an intricate and reliable rail network if you want to live in the city center it's going to be expensive I mean I think this is a something that we need to clarify but if you don't mind living a little bit outside outside I would say the central 23 warts or even in the let's say outskirts of the 23 wart you can get quite reasonable housing and the secret of course is Transit uh I mean everywhere in the Tokyo Metropolitan Zone you can get in less than 1 hour compared Tokio to New York over there zones are more rigid these yellow areas are for single or two use only areas for Commerce are just that no housing it's called ukian zoning and it's what's used in most American and Australian cities the problem is if an area fills up there's no scope to add anything else and that starts to push up prices whereas Tokyo I would call it more like an emergent process in which you don't have so much of a top down control but it's more more like a bottom up process and I think Tokyo offers that diversity I think that's the main lesson there are some drawbacks developers have far more free reain and residents have no guaranteed rights to complain so long as construction fits within the generous zoning laws we hear in Australia the expression nimi which is not in my backyard people who don't want higher density or commercial in their neighborhood yeah do we see that in Tokyo that attitude uh I would say is um less prominent than Australia or also the United States I think is quite common but I think citizens in in Japan and Tokyo they should be allowed a little bit more of participation I think that would be positive for the city Tokyo hasn't experienced the big sharp rise in house prices that we've seen elsewhere and we have to keep in mind prices in Japan have been stuck in a bit of a Time Warp with wages inflation economic growth stagnating after a big crash in the '90s but like everywhere else the cost of living here is going up thanks to the pandemic and Global inflation so is all this extra housing stock helping is it the solution we take a look at this the cost of small apartments has stayed pretty consistent there's been a more noticeable jump in bigger Apartments but now let's add the average rental prices for Australia it's clear that Japan's price Rises haven't been as sharp and experts will tell you that's got a lot to do with Supply there's something else we should consider who is supplying rental properties into the market there are more than 2.2 million private landlords in Australia and most of them own a single investment property rather than several and the homes owned by these people they make up most of the properties on the market we need to stop being so reliant on just Mom and Dad investors um to supply the rental stock that's why we need more social and affordable housing from governments social housing owned by by Australian governments and designed to be affordable and stable for lower inome people used to make up a bigger share of Australia's housing stock but over time States and territories have withdrawn from the market so if you look at dwelling approvals and the portion of those dwellings that are government owned it's come down from about 8 or 9% in the 80s and 990s to less than 2% today I think that the withdrawal of government hous over time has removed that kind of cushioning especially for the most vulnerable in the rental market um when you do get fluctuations in the private rental market we really should be aiming for at least 10% of our housing stock to be public or community housing in some countries 10% would be regarded as low nearly three in 10 homes in the Netherlands are social housing nearly a quarter in Austria and about 177% in England when you look around London it's sometimes hard to believe there's such a shortage of affordable rentals in almost every neighborhood you'll find block after block of social housing or at least that's what it used to be this is a council estate in London between Battery Park Road and the railway 28 blocks population over 7,000 people the Nationwide program to build affordable homes gained pace through throughout much of the 20th century good morning my deal from the tennis Association but in the'80s it started running out of steam prime minister Margaret Thatcher favored home ownership she let people who lived in social housing buy their own home at reduced price which is obviously in itself not a bad policy but she never replaced those homes with new social homes the overall stock has been really seriously defeated there are 1.5 million fewer social homes today than there were were in 1980 and there are 1.2 million households waiting for accommodation with a limited Supply only those in the most critical need can qualify forcing millions of others to try their luck in the private rental market as we've already demonstrated if you're on a modest income it is very difficult to afford your own private rental anywhere Central here and that's pricing out a big chunk of the city's workers people that London desperately needs teachers nurses police officers people who should be on decent wages are having to funnel more and more of that salary into rent and for some the only solution is to leave to try to prevent that Exodus the mayor of London runs a scheme called London living rent the rents aren't tied to the wild market prices they're tied to what people actually earn so you quite often find that um young professionals are spending maybe 50 60% of their income on rent which obviously then means that they can't afford to save in order to raise the deposit to move into a purchased home so this London living rent it meets a really important need while private landlords might be charging a premium under this scheme tenants would have their rents set at no more than 30 % of the average household income for the local area and the leases last for a minimum of 3 years they've got the Peace of Mind of knowing that they've got security of tenure for that period of time and at the end of three years they can renew for another three years and then renew for another three years um but at the end of the 10 years um then the property does have to be sold many of the homes available under the scheme are new or recently built I've come to see a development in Hayes in the city's West not far from Heathrow Airport but on a new Railway line into London so this is the master bedroom this would be the master bedroom yes um there's a fitted wardrobe in in one of the each of the bedrooms nice this one has an on Suite excellent this one's got three bathrooms actually three bathrooms you need three bathrooms you got three bedrooms standards have really changed haven't they oh gosh yes people's expectations a three better here is renting for $513 Australian dollar a week which is well below the market price each apartment that's advertised gets hundreds of inquiries for obvious reasons this place is brand new it even smells new it's light it's not dingy like so many other affordable places in London it's not in the most ideal location but you can still get into Central London in half an hour on the train so it will take a lot of boxes for a lot of people but not everyone can qualify for this scheme you have to meet certain eligibility criteria so your income has to be below 60,000 a year um and that's a household income so two joint incomes of 30,000 will take you to the Limit um you um mustn't own any other property either in the UK or overseas everyone regardless of income regardless of job should be living in a home that is safe and dignified and stable but what if you don't qualify for social housing or the government's affordable housing schemes a potential solution might lie deep inside some of London's otherwise abandoned buildings it's called guardianship so Catherine why is this home under guardianship what's the plan for it yeah well this block as a whole is about is going to be um regenerated in the next couple of years so they're going to build brand new Flats under the guardianship model renters can live inside The Unwanted buildings until the demolition Works begin it could be months or it could be years so it's much better for everyone if someone's living here treating it as their home taking care of it in the way that you would your home anyway which also means that the people living here can get much cheaper housing than they could anywhere else some properties under guardianship go for half the market price demand is so high Catherine's firm only selects candidates who can prove prove they do volunteer work perhaps the biggest hurdle though is uncertainty Guardians can be told to leave within 30 days so this solution is definitely not for everyone it's not it's not a good match for people who are vulnerable for people with kids but they do need to be flexible and resilient so that when we ask them to move out it's not a catastrophe for them it's really important to be clear that property guardianship is not a whole solution to the London the UK's housing problem like it's it's one really good solution but we do really need to build some more housing and that's something almost everyone in this city can agree [Music] on so we've looked at government-owned social housing and the relationship between private landlords and renters but are they the only two options could there be another [Music] way here in Australia there's been a lot of focus on housing affordability and possible solutions like rental caps have already been ruled out and zone is not going to change anytime soon but there's another possible solution the build to rent sector well they're homes that no individual will ever own and they're springing up all over Sydney under this model a property is owned by a single person or company and is professionally managed for the so purpose of being rented on paper Bill to rent promises a lot of things they offer long long-term Tendencies on-site management and the ability to make alterations like painting and decorating they are also built to solely increased rental stock it's a relatively new market in Australia there are already projects in Sydney Perth and Brisbane but there's one city that's leading the way more than 50% of build to rent projects are in Melbourne while it's just getting started in Australia it's already huge overseas the American dream isn't for sale it's for rent in this community near Atlanta Georgia in the US almost 6 and2 million homes have been developed since 1992 I'm here in the Sydney suburb of marville to check out a very new build to rent property this is Nightingale marville the land was donated by a church to a not for-profit developer they're working with Charity fresh hope to rent out affordable units at a discount to low or middle inome workers it doesn't look like much but in a couple couple months time this building is going to open to just renters if you want to live here you have to join a rental Lottery just like we saw with Jade in New York let's go have a look so this is one of the units in this building yeah so this is typical of the 54 affordable homes in this building um small footprint home tile housee apartment that we call them um has a full kitchen has a full bathroom I have to say I'm very pleasantly surprised at how efficient the space has been used here it's no secret that land is expensive in Sydney and the reason these places are so small is to keep cost down okay so rents here set at 70 to 80% of market rate but as we know rents have never been more expensive is this actually affordable yeah it's a it's a great question to jump into you know 50 40% of people's of Market rent there needs to be significant inut from government so that place showed a lot of promise but don't you hate it when you don't get to see the finished product let's go have a look at a build to rent in another area I'm heading to the West C Sydney suburb of homebush to have a look at what a build to rent property looks like once it's up and running these rooms are rented out at full Market rates and they're a more typical example of what the housing model looks like this is coming from one of the country's biggest developers mvac no discounts in this building Angel this is our permanently set up display apartment so we've got a one-bedroom apartment here on the ground floor 50 m internally with a 24 M Courtyard so this is a one-bedroom Place yep one-bedroom apartment it has no doubt that a place like this looks really lovely but at $680 per week it's on the pricier end of the spectrum but build to rent properties have to make a profit so why would a builder or developer undertake a build to rent project rather than a build to sell One You're Building to sell down and the other you're looking to hold for the long term and looking to drive quite stable long-term sustainable income streams from it one of the benefits of a buil to rent property like this is the stability it offers because it's run by a big business they usually offer you long leases which means you're not likely to get kicked out when the owner wants to move back in it's built solely for renters for anyone that's kind of stressed about housing or is really stressed about um renting I would strongly suggest looking into the build to rent option because it buys you the flexibility but the security and Independence to kind of live as you would in your own property I think that what we're seeing today is that we're at the infancy of the industry and while the commercial return is there for Market build to rent it's really challenging to deliver affordable product at the same at at the same level what we really need is more government support in this area there's nothing about build to rent specifically that makes it more affordable the only way it's easing pressure on the rent rental market is indirectly because it might be taking some pressure away from other types of rental properties no denying that for many people the experience of renting just sucks data from New South Wales suggests that most tencies are less than 547 days that's a year and a half people are uh really want to have communities they want to know the people around them and you just can't do that as a renter because you can be forced out not only of the home but of the community For Better or Worse in Australia people often view renting as a temporary Affliction something that must be endured on the way to home ownership that's not the case everywhere in Vienna Austria's capital most people rent and renting for life is entirely normal but that's the result of very different decisions about housing made a century ago maybe build a rant offers one step in that direction but one solution won't fix this problem unscrambling the egg is difficult when everyone in the market whether they're a renter or a landlord has something at stake we've looked at some of the Dynamics affecting rental costs but not all there are too many to cover in an hour Supply is undoubtedly one big piece of this puzzle we've seen how different philosophies of development can drive a lot of new construction but Australia has a very different mindset to Heritage and zoning and change isn't easy we've seen how rent stabilization can help some people secure a pretty decent home the sky hasn't fallen in New York nor in CRA but equally it alone hasn't resolved rental pressures rental pressures are probably going to start to ease up a bit in 2024 I really hope that doesn't mean that we let go of this conversation and rights for tenants and the provision of Social and affordable housing because if we do have a shock in the future we don't want to be going through something like this again there's no Silver Bullet here it will be a mix of different ideas and programs that help correct the market the solutions we've seen from around the world could all play a part in that the only way to fix something that's broken is to work hard at repairing it just like a home drawing up the plans is one thing turning it into something concrete is much much hotter

Channel: ABC News In-depth

Views: 436,321

Keywords: abc news, australian news, abc news indepth, documentaries, long-form journalism, rental crisis australia, rental crisis, rent, expensive rent, affordable house, landlords

Id: FFsN5SlDklw

Length: 58min 42sec (3522 seconds)

Published: Fri Aug 25 2023