Locals living in limbo during Covid housing crisis

UPPER Hunter residents are being priced out of the local rental market, landlords are kicking out tenants to raise rents, social housing organisations are stretched thin for options and there aren’t enough rental properties available.

The moratorium which protected private tenants during the pandemic ended on March 26 and landlords have started issuing “no grounds termination notices,” forcing tenants leave within 90 days. Once the old tenants have gone, the rent is raised beyond the reach of both lower and middle income earners.

No longer able to afford private rentals, people are now seeking social housing options, only to be faced with long wait lists. The waiting lists in Scone, Muswellbrook and Singleton is two to five years, but Merriwa is 10 years.

See local housing figures below.

Upper Hunter Compass Housing manager, Emma O’Hara, said the organisation has noticed a substantial increase in people looking for temporary social housing accommodation.

“It’s not just people who are receiving benefits or classed as low income earners who are affected by the market increase, medium income earners are also finding themselves trapped in the Covid housing crisis,” Ms O’Hara said.

“There’s a lot of families at risk here who are sitting in that middle income band as well and they don’t get the support of services such as Compass or Housing New South Wales to provide them that service and safety net,” she explained.

“We had a client who approached us several months ago after the moratorium ended. They received a termination notice no grounds, the landlord just wants the property back to do with it what they please. There were no tenancy breaches, so the client had no choice, they won’t win that in a tribunal setting,” she said.

“That client approached us for assistance and unfortunately, due to their financial circumstances, they weren’t eligible for assistance from us, but they also cannot access the private market because it’s so tight,” she said.

“Because they’ve been given notice of termination, automatically, even though its a no-grounds termination, other agents will see that as a negative. If a client also has a larger family or pets, again, that’s another thing that will lock them out of the market.

“What we’re seeing in the Upper Hunter, is we have all these organisations in place designed to help those low income earners or people on benefits, but it’s those middle income earners as well that tend to be forgotten because they’re not eligible for our services because of how much money they earn and even if they’re just over the income threshold, unfortunately by government legislation and policy, they’re not eligible. There’s no other support and assistance for them.

“We’re approached by people who are in crisis and don’t have any family or don’t have anywhere where they can safely sleep, whether that’s couch surfing or sourcing their own short-term accommodation to resolve that immediate need,” she said.

“Over that Covid period from around March to December last year, we averaged eleven approaches per month, but to put it into perspective, say in July, we received 18 approaches, whereas in May we got twelve.

“Eleven per month might not seem like a lot, but when you compare to the six months prior, we were only averaged seven approaches per month.

“A lot of the reports we are receiving from people accessing our services is that they’ve been given those grounds for termination or their rent has increased and they simply can’t afford it . . . because the owner wants to increase the rent more than they legally could if the tenant was still living in the property, the quickest way around that is to terminate the tenancy and start a new tenancy at the higher rate,” she said.

“If you go onto realestate.com, for this area, even the cheapest private rental property and I’m talking a one-bedroom granny flat, it’s above the affordable rate for a person on a job-seeker pension,” said Ms O’Hara.

Compass Housing is currently facing the same problem as private rental seekers, lack of available safe accommodation and highly competitive private rental prices.

“Temporary accommodation is exceptionally difficult for us to access in this area. Finding providers who are able to assist our clients and also have the capacity to assist. We have a lot of contractors in town that take that temporary accommodation, or take the motel accommodation up, but finding places to put people safely is very difficult for our team,” Ms O’Hara said.

“We’re struggling the same as everybody else to access the private rental market, it’s very competitive. The prices are well above median rent in most locations, which is our guiding financial principal for picking up head lease’s (private rentals sub-leased to approved social housing tenants), because you only get so much government funding,” she said.

Although there is no official data to show the direct impact the pandemic has had on landlords and tenants, the financial impacts of Covid have likely played a large role in the rental market price rise and the growing need for social housing.

“This has been driven by the circumstances around Covid and the financial impacts for owners and all those other things that play into it,” Ms O’Hara said.

“An immediate solution would be more regulation on the private market. You see the social and community housing association and our industries are heavily regulated, but that same regulation doesn’t really apply to the rental market,” she said.

“Landlords and agents, as long as they’re acting within the broad guidelines of the legislation, can really do what they want with the ethics around it. That’s very challenging for us as well, but is the reality of the moratorium of the evictions that ended in March. There is a six-month transition period, but we’re already seeing people being issued those termination noticed and they’re coming to us,” she said.

“While we are still living in limbo and are not seeing any end to the Covid restrictions and snap lockdowns, I don’t believe that we’re going to see an end to the current circumstances were in,” said Ms O’Hara.

Compass Chief Operating Officer, Gwyn Williams said the housing problem is not confined to the Hunter or New South Wales and needs national attention. 

“According to research for the Everybody’s Home campaign, there is a 500,000 shortfall in social and affordable homes across Australia,” Mr Williams said.

“The most recent Federal Budget was disappointing, with no focus on housing aside from a few home buyer grant schemes that will have little impact,” he said.

“We need the Federal Government to create a national housing plan and invest money into helping state governments to build more social housing. Building more housing also makes economic sense as we recover from the pandemic, it creates jobs for local people,” he said.

“The New South Wales Government is investing record amounts into social housing and homelessness programs but the crisis is beyond one level of government. We need to look at government spending on social housing as an economic and social investment, not a cost,” said Mr Williams.

Facts and Figures:

Scone real estate prices

Compass Housing Upper Hunter Manager Emma O’Hara says while they are funded for median prices, the real market is now well above reach, preventing many in the community from being able to access help.

• Units to buy: $225,000;
• Units to rent: $280 per week (median price);
• Houses to buy: $380,000;
• Houses to rent: $370 per week (median price).

Upper Hunter vacancy rates as of May 2021

• Aberdeen: 0 percent;
• Scone: 0.1 percent;
• Murrurundi: 0.5 percent;
• Muswellbrook: 0.5 percent;
• Singleton: 0.5 percent;
• Merriwa: 1.1 percent.

NSW Department of Communities social housing waiting times and applicants as of June 30, 2020

Muswellbrook: 2-5 years for 1,2 and 3 bedroom, 5-10 years for 4 bedrooms (130 applicants, 6 priority applicants);

Singleton: 2-5 years for 1 and 2 bedrooms, 5-10 years for 3 and 4 bedrooms (94 applicants, 9 priority applicants);

 

Scone: 2-5 years for 1,2 and 4, bedrooms, up to 2 years for 3 bedrooms (29 applicants, less than 5 priority applicants);

Aberdeen: 2-5 years for 2 and 3 bedrooms, up to 2 years for 4 bedrooms (7 applicants, less than 5 priority applicants);

Merriwa: 10+ years for 2 and 3 bedrooms (less than 5 applicants);

Murrurundi: 5-10 years for 2 bedrooms,  2-5 years for 3 bedrooms (less than 5 applicants);

Denman: up to 2 years for 1 bedrooms, 2-5 years for 2,3 and 4 bedrooms (less than 5 applicants);

New South Wales Total: 46,087 applicants and 5,308 priority applicants.

Compass Housing properties

• Upper Hunter Shire: 160;
• Muswellbrook: 480;
• Singleton: 435.