Queensland Toys With Rent Controls as Homelessness Rises 22 Percent

Queensland Premier Annastacia Palaszczuk speaks during a press conference in Brisbane, Australia, on Dec. 13, 2021. (Dan Peled/Getty Images)

Landlords in Queensland could be forced to keep rents artificially low as the state government considers ways to deal with its housing crisis.

Over 150,000 families were dealing with housing stress in the state, with 100,000 of those eligible for social housing—the current waitlist is 27,000—according to a new report by the Queensland Council of Social Service (QCOSS).

“We have hundreds of thousands of people, many of whom are children, waiting for social housing for more than two years,” said Aimee McVeigh, CEO of QCOSS, in an interview with ABC Radio on March 20.

While homelessness has risen eight percent nationally, in Queensland, that number has reached 22 percent since 2017.

The issue comes as residential rents soar across major cities like Gladstone (up 80 percent), Noosa (51 percent), Gold Coast (33 percent), and Brisbane (30 percent) over the past five years.

Interstate migration during the pandemic years—from those escaping lockdowns—has also played a part in driving up demand. Further, building costs and timelines have grown in response to supply chain and worker shortages.

Meanwhile, the proportion of rental homes considered affordable for low-income households has also halved from 26 to 13 percent.

Further, one in 10 households in the Logan, Beaudesert, and Gold Coast regions were either homeless or living in unaffordable housing.

Rental Caps One of Many Ideas in the Works

In response to the report, Queensland Labor Premier Annastacia Palaszczuk confirmed rent caps were on the agenda for the upcoming Housing Summit to be attended by government, industry, and advocacy groups.

“I understand that this is a big issue for families; they are constantly being faced with huge increases in rent,” she told reporters on March 20.

“We’re looking very seriously at how a rental cap can be put in place.”

She confirmed that the Queensland government would also be stepping in to buy 5,000 properties that were under the federal National Rental Affordability Scheme, which is now being wound back.

“Where the federal government is stepping out, we are stepping up.”

According to estimates from QCOSS, 11,000 new affordable homes will be needed each year over the next 20 years to deal with the backlog.

Direct State Intervention Not the Answer, Think Tank Says

Graham Young, executive director of the Australian Institute of Progress, said the government should “scotch” the idea of rental controls, suggesting the housing crisis needed a two-part solution.

“The short-term solution has to be an increase in emergency housing. People shouldn’t be forced to camp out in parks in tents because there is literally nowhere for them to rent,” he told The Epoch Times in an email.

Young said underutilised government facilities and buildings could be made available, including the infamous Wellcamp Quarantine Facility that the Queensland government spent $223 million to build before closing it just six months later.

“There is other government land and buildings that could be temporarily used for demountable housing or emergency accommodation,” he added. “It might even require emergency and temporary rezoning of land to allow it to be used for temporary housing.”

Young also said international immigration should be restrained as well to slow down demand—Queensland will likely need to absorb another 60,000 migrants this year.

Over the long-term, instead of the government building homes, it should instead galvanise the private industry by cutting approval times for new developments, putting money into infrastructure, and encouraging private investors.

“Rent caps will interfere with the long-term solution because they will discourage investment in new housing,” he said. “If you cap rents, you force existing landlords to bear the cost of these cost increases, causing many to sell, and you discourage new investors from investing.”

Not The First Time Rental Caps Have Been Used

Queensland is not the only jurisdiction to toy with rental caps.

The Republic of Ireland has begun looking at winding back its caps, which have been blamed for driving away private investors and leaving the country with just a few hundred homes for rent.

After the housing crash of 2008, the government responded with a swathe of regulations to protect the renter, including moratoriums on evictions, the removal of tax deductions for investment properties, and rent controls.

On the latter, within 50 designated Rent Pressure Zones, rent increases were capped yearly at either two percent or in line with the inflation rate, whichever was lower. So, if inflation were to increase by 1.2 percent, then landlords can only increase their rent by 1.2 percent.

These tight restrictions have slowly chipped away at the pool of landlords previously willing to offer properties for rent.

“People just think it’s probably easier to put their money somewhere else, either into the stock market, commercial property, or other asset classes,” said Pete Wargent, co-founder of BuyersBuyers in Australia, in an earlier interview with The Epoch Times.