Magazine of the Socialist Party, Australian section of the CWI

Ban rent bidding apps!

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If you thought that finding an affordable rental property wasn’t hard enough, life is set to become even harder with the introduction of rent bidding apps in Australia. These apps basically facilitate auctions, where the rental property will go to the highest bidder.

The people behind the apps claim that they are trying to empower renters by bringing “transparency” to the application process, but nothing could be further from the truth. These people are simply seeking to profit off the high level of rental competition. What renters actually need is proper access to stable, secure and affordable housing, not another tool that seeks to price them out of a home.

There are a number of major problems with rent bidding apps. They obviously favour those with more money, but more worryingly, there is the likelihood that a number of people will be led into bidding more than they can actually afford to pay. As anyone who rents knows, competition between applicants is already fierce. These apps will only serve to further pit ordinary people against each other.

Some academics have expressed concern that these apps will lead to impulse bids for amounts that are far in excess of people’s budgets. Already there are reports of renters having to pawn personal items in order to cover the astronomical rents in Melbourne and Sydney. These apps will only exacerbate these types of problems.

Affordable housing for young people from the so-called “generation rent” is becoming scarcer. According to the report “Unsettled: Life in Australia’s private rental market”, a look at the Rental Affordability Index shows that in most Australian capital cities people on the median income pay almost a third of it toward rent, putting stress on their ability to pay for food and other bills. For households whose incomes are in the lowest 40% virtually nothing is affordable. Many low-income households spend between 50% and 85% of their income on rent!

The report also revealed the level of insecurity for renters. Over 80% of renters in Australia have no fixed-term lease, or are on a lease less than 12 months long. Many people also have well-founded fears that requesting repairs will lead to unfair rent increases, or even eviction.

Renters have been mostly neglected in the discussion around housing affordability, with the focus tending to be on those looking to buy a house. This was reflected in the recent federal budget where there were no significant funding increases to public housing, social housing or homelessness services. At the same time, no increase was afforded to those who require welfare in the form of rent assistance.

The poor treatment dished out to renters shouldn’t come as a surprise as both of Australia’s major political parties are tied hand and foot to the big property developers and investors. Regardless of which of them is in power, they use their position to represent their profit interests.

In his analysis of the federal budget, Professor of Sociology Keith Jacobs put it concisely saying: “the state should be understood as an agency that sustains the conditions necessary for the finance industry, developers and real estate agents, along with well-off householders and landlords, to reap profits”. There is no doubt that the key to making housing affordable is removing the profit motive.

In response to the stark situation facing renters, tenants’ unions have put forward some modest demands such as removing “no-grounds eviction”, stronger regulation of rent increases and stronger penalties for unreasonable increases. While reforms like these should be supported we should go further and also demand long term leases and laws to cap rents. Rent bidding should be illegal and the apps themselves should also be banned.

The major parties could be pressured to implement these reforms if a fighting movement of renters was built. But far from relying on the major parties to represent our interests, we need a new political party that genuinely stands up for the interests of ordinary people, especially those forced to rent.

Such a party could champion our needs in the parliament, but could also co-ordinate campaigns for renters’ rights and affordable housing on a national scale. It could explain that as long as profit-driven capitalism exists, houses will continue to be seen as commodities rather than homes.

By Kat Galea

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