NSW Greens rent price caps won't work- and might make it harder to rent

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The key to cheaper housing is more supply, not rent controls.

The NSW Greens have demonstrated how differently they see the housing market to the Future Party. Today they have announced policy, including increased rights for renters (good) and rent price increase caps (really, really bad). We've had a generation of Greens councillors preventing redevelopment, which pushes up prices by limiting supply of new housing. Now they want to prevent rental price increases from rising above the rate of inflation.

The idea that the price of rental housing is bound to some range of consumer products is a fundamental misunderstanding of economics. They propose limits on rental increases, yet the price of owning will still be allowed to float. The inevitable results will be:

  • rental accommodation being sold to home owners in periods of tight supply, further tightening rental supply;
  • rises in rent of exactly CPI every year, to ensure landlords don't get legally locked into lower rents;
  • a massive increase in rents across the state in the period just prior to this legislation being passed;
  • only established renters being able to rent. Tight supply will lead to no new properties coming on the market, and people who are currently in housing never leaving;
  • deliberate ghettoing of properties (because it won't be worth maintaining properties to get higher rents);
  • renters offering alternative methods of payment to make up the shortfall. This could include under the table payments, or paying 6-12 months in advance, further locking out the young and the poor.

The Future Party has a plan to increase housing supply greatly, which will shift the market from renters fighting for properties, to landlords fighting for tenants. This is the only way to ensure that renters are given a fair price and are treated well.

In essence we need an alternative to the big incompetent parties, but the Greens are not that alternative. If you want to help us in a campaign to get elected in NSW, email volunteers.manager@futureparty.org.au. We need every little bit of help we can get.

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