Date: 23 March 2008 Media Statement

Concern over long-term renters prompts proposal for tenancy rights

Concern over the long-term increase in families renting rather than owning homes has prompted Minister for Building and Construction, Shane Jones to propose providing stable rental rights, for the benefit of both landlords and tenants.

“It is alarming for me as a Minister to see that we have such a high percentage of our population who are not just students or flatters, but long term renters,” Mr Jones said.

“Our demographic has shifted significantly from one-in-five households being renters in 1996 (272,000) to one-in-four households (366,000) in the 2006 census and; that is why I am look at providing some form of housing equity for them.

“It has to be a win-win situation for both landlords and tenants and something where we can provide stability and security for our families reliant on the rental market as well as good investment returns for landlords.”

Mr Jones said if people were unable to get into home ownership then they should be given consideration to enter another form of housing security, such as an intermediate, new type of property rights.

“I have no interest or desire to make the lives of mum-and-dad landlords difficult under these proposals, but I do believe that under a new model there will be much to be gained for landlords and institutional investors.”

He said has asked the Department of Building and Housing officials to investigate long-term tenure agreements from 15-to-33-year-old leasehold agreements establishing property rights for stable tenants, as is happening in the USA.

“Providing stability through long-term lease occupancy rights, which maybe tradable could allow tenants to take over fit-out and capital developments of the interior of the space without any cost to the landlord, while at the same time giving tenants a long term home of their choice.”

“To that end I am keen to talk with multiple-complex developers and owners because under such agreements they would benefit from an assured long term cash-flow as well as capital gains opportunities under lease-hold residential agreements.

“These proposals are options available in the United States and the indications are that the new Australian government is heading down the same direction,” Mr Jones said.

Mr Jones will tomorrow announce a raft of initiatives in the simplification of building consents for starter homes.

ends

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