Capping rents will make things much worse

The Queensland government should scotch any idea of capping rentals if they want to help people searching for a house to rent, and actually do something, rather than convening more housing summits.

We’ve already had one talk-fest n October 2022, and next Tuesday 5 months later we’re due to have another. Yet there’s been no acceleration in building housing to meet the crisis in nearly half a year.

This housing crisis needs a two-part solution – one part emergency solution, and a second long-term solution.

The short-term solution has to be an increase in emergency housing. People shouldn’t be forced to camp out in parks in tents because there is literally nowhere for them to rent.

There are under-utilised government facilities around that can provide cooking and washing facilities, like the Wellcamp “refugee” village. There is other government land and buildings that could be temporarily used for demountable housing or emergency accommodation.

It might even require emergency and temporary rezoning of land to allow it to be used for temporary housing.

The short-term solution should also involve an immediate cessation of the federal government’s immigration program which will see another 300,000 people in Australia (of which Queensland, with 20% of the population, will see 60,000 at least).

The long-term solution has to be an increase in housing stock. This is not going to be achieved by the state government buying already existing welfare housing from the federal government – you still end-up with the same amount of housing.

Social housing is not the answer either. The state is too cumbersome to build the amount and kind of housing required in a reasonable time frame at a reasonable cost.

The answer is slashing times to rezone land and achieve planning approvals, and extending infrastructure to near urban areas that can be readily developed, and creating a welcoming environment for private investors and entrepreneurs.

Rent caps will interfere with the long-term solution because they will discourage investment in new housing, and penalise existing investors.

The premier has to accept that as costs go up, so must rents. Interest rates are a significant cost for many investors, and they have risen by approximately 90% for investors over the last 12 months.

The cost of new builds has also increased as a result of a boom in land prices, and a shortage of materials and labour.

Capital investments by the state government in large capital projects like roads, the Olympics, and the energy transition, are all putting a stress on materials and labour as well.

If you cap rents you force existing landlords to bear the cost of these cost increases, causing many to sell, and you discourage new investors from investing. Owners will be less inclined to maintain properties properly as well, as they try to limit costs.

The state government has to realise that the party is over, the punch bowl has been taken away, and fantasy solutions will not solve the problem.

Capping interest rates, might be a way of signalling the premier cares, but it will be at the cost of everyone suffering in this debacle – tenants, and their landlords.