Rent controls may be off the immediate political agenda, but they are very much an issue for the nearly 30% of voters who rent. As more and more people face deep poverty and homelessness, the ethical imperative for revisiting rent controls is impelling. And yet, the recent negotiations between the government and the Greens revealed a conceptual stalemate crying out for attention.
One of the barriers to those negotiations was the near-consensus provided by mainstream commentators that rent controls ‘do not work’. Not all analysts dismissed rent controls, some were critical of ‘partisan arguments’ and a powerful essay by Kate Shaw analysed the ideological underpinnings of opposition. But the view heard most frequently and insistently was that rent controls are counter-productive: they reduce housing stock by deterring investment, they encourage the sell-off of rental properties and lead to landlord neglect. This mantra was not really surprising. For most of their history rent controls have been subjected to rancour and dispute – they were blamed for ‘the Fall of France, the fall of democratic government in Austria, the decline of the birth rate and a good many other things’, according to Canadian legal scholar John Willis. They did, after all, seek to constrain landlords’ interests.
Australia’s earliest intervention into rent controls in the early 1910s did not rate a mention in the recent debates, though historical examples were trotted out from around the world. But the Australian case offers the chance to chisel away at the current impasse: it challenges the trope that rent controls do not work, highlights the role of mass mobilisation in achieving social change, and reinforces the crucial importance of understanding context in the making of political reform.
Rent controls were not extensive in Australia but their founding moment was significant because, unlike in most other polities, agitation for rent controls preceded the crisis of World War 1. Labor came to power in NSW in 1910 with a housing crisis high on its agenda: demolitions due to plague and city improvement measures exacerbated the on-going mismatch between working class wages and the rents charged by investors in residential housing.
The ‘house famine’, as Sydney University economist R F Irvine termed it, drew the everyday power imbalance between tenants and landlords into the political arena. Tenants protested at evictions, held ‘monster meetings’, formed a Rent Payers’ Association and gave compelling evidence to a Select Committee of Inquiry about ‘unscrupulous landlords’, ‘blackmailing agents’, and rents rising while wages remained static. In fact, it was not until 1915 that the Fair Rent Act was passed – a Bill introduced in 1913 was blocked by the non-elected Legislative Council – but Sydney renters’ challenge to ‘the laws of economics’ was, according to Willis, a first in the ‘modern history of rent control’.
Two important points emerge from this moment. First, the evidence suggests that the Fair Rent Act did not lead to a decline in investment, a sell-off of rentals, or landlord neglect. A.B. Piddington, chair of the 1919 Interstate Commission on Prices, found that while there was a ‘disinclination to invest’ in Sydney, it was also manifest in Melbourne and Brisbane where there were no rent controls. Piddington saw any effects of the new law as ‘supplementary’. A later long-range study by urban studies scholar Patrick Troy concluded that private investors were not discouraged by rent controls because, at each census between 1911 and 1947, there was a large increase in the number of dwellings built for rental in NSW. Nor were properties more neglected in Sydney than in Melbourne – the advocates of ‘slum’ clearance in both cities were disgusted at landlord indifference. These outcomes likely reflect the fact that the Act was not particularly strong: it required individuals to take their case to a Tribunal rather than legislating across the board, and rents could be fixed for between six and 36 months. Piddington nevertheless considered it a ‘formidable bulwark’ against raising rent where ‘no additional service is given by way of accommodation or equipment’.
The second point this moment focuses is that the implementation of rent controls is as much a political problem as a technical one. Like the public housing builds of this period, rent controls were the product of Labor’s commitment to new liberalism after two decades of parliamentary experience had relegated socialism to the back burner. Both were limited in scope but both represented a break with the past. This is not to endorse their limitations but to emphasise the importance of context in explaining them.
To call for recognition of context in explaining social change may seem gratuitous, if not laughable, until we recall that studies of rent controls usually abstract them from context and treat them as an independent economic tool. Indeed an Australian Housing and Urban Research Institute (AHURI) explainer, published at the height of this year’s negotiations, warned that ‘care needs to be taken in generalising from the results of research’ because much of it is ‘econometric’ and ‘takes advantage of natural experiments’. In other words, it interprets them in terms of a chosen set of variables whose results are transferrable over time and place. Without context, however, there is little scope to imagine contingency or to envision political interactions that might enable social reform. There are powerful interests, of course, who do not want reform. At worst, as Shaw argued, the current orthodoxy is used to sustain and increase ‘profits for the already privileged.’
Renters have long been obscured by the home ownership ideal in Australia but for most of its settler colonial history renters have been between about 50% and 30% of the population. To acknowledge this is not to disparage home ownership, but to recognise that its dominance in social memory has obscured the fact that some people rent their homes for their whole lives. This is, of course, part of Australia’s larger history: First Nations people have never ceded sovereignty or property rights and yet most First Nations people today rent.
The history of Australia’s first rent controls informs the ethical imperative presented by the current housing crisis. The landlord-tenant relationship was patently unfair in the 1910s, as renters knew and as the Rent Payers’ Association made urgently public. But the imperative to eradicate that unfairness is even greater now because a weight of historical knowledge supports the case. We know, for example, that the mismatch between wages and investors’ margins remains largely unchanged. We know that it is more cost effective to provide public housing for the very poor than to abandon them to prisons, hospitals, shelters and the streets. And we know that Australia’s first experiment with rent controls was a response to the mobilisation of renters, and that it was not a disaster. Renters are increasingly recognised as a political force. Prior to that, they are people with the right to safe, secure homes.
Anne O’Brien
Anne O’Brien is Emeritus Professor of History at the University of New South Wales. She has written widely on the history of poverty, welfare, gender, religion and Indigenous rights. She is currently completing a history of homelessness and people experiencing homelessness in Australia, 1900 to the present.
Contributions to Pearls and Irritations
Your contribution will fund quality independent comment and analysis in Pearls and Irritations
Contribute
