Tenants fear rent hike

Tony Hawkins, who is a public housing tenant, will have to pay 37 per cent more in rent come August. file photograph
Tony Hawkins, who is a public housing tenant, will have to pay 37 per cent more in rent come August. file photograph

A number of public housing tenants could be slugged with significant increases to their rent following hikes to the rental market across the Latrobe Valley.

Each year the Department of Health and Human Services reviews the market rents of all public housing properties to ensure public housing rents are consistent with the private rental market in the same area.

Rental reviews are performed every six months and changes are communicated via letters to tenants.

Morwell resident Tony Hawkins, who is on an aged pension, received a letter from DHHS last week stating his rent would increase by $68 per fortnight from August – an increase of 37 per cent.

He pays $182 per fortnight for a one-bedroom unit in Morwell, however, this will jump to $250 per fortnight when the increase kicks in.

Mr Hawkins received a letter from the DHHS last week providing him with notice of the looming increase, which attributed the change in amount to a "recent adjustment of your weekly payment amount".

The DHHS said Mr Hawkins would not pay more than 25 per cent of his income on rent, which doesn't place him in rental-stress, a term used to describe tenants whose rent takes up more than one third of their income.

However, Mr Hawkins is concerned a 37 per cent increase in one hit is too much.

"If I was renting privately, there is no way they could increase the rent by 37 per cent," he said.

"It might not sound like a lot but $68 a fortnight is $68 I could be spending on food ... or petrol."

Victorian Public Tenants Association chairwoman and Churchill resident Margaret Guthrie said many tenants got very confused when they receive the rental review letters every six months.

"You get all of this paperwork and often the first thing people see is the front page which says 'your market rent has increased'," she said.

She said the Department generally required tenants to pay either 25 per cent of their assessable income or the market rent value of the property, whichever was lesser.

"Tenants' rents are based on 25 per cent of their income, unless ... the market rent is less than 25 per cent of their income," she said.

Minister for Housing Richard Wynne said no tenant was expected to pay more than 25 per cent of their household income in rent.

"If your rental prices have risen or your income fallen so that you are paying more than 25 per cent of your income - you can apply for a rental rebate at any time to correct this," he said.

Mr Wynne said letters were sent to tenants following the most recent review of market rents of all public housing properties to notify them of any change in the market - which could be a rise, a fall or no change.

Tenants were given more than 60 days' notice of any increase in market rent and the new rent amounts take effect on 4 August 2019.

He said there was no link between the market rent review process and any maintenance or renovation on properties.

To apply for the rebate tenants should contact their local housing office on housing.vic.gov.au/contact-a-housing-office or phone 1300 650 172.

If tenants believe their increase to market rent is excessive, they can contact Consumer Affairs Victoria for an independent review. Further information is available on the Consumer Affairs Victoria website or by calling the renting helpline on 1300 55 81 81.

Each year the Department of Health and Human Services reviews the market rents of all public housing properties to ensure public housing rents are consistent with the private rental market in the same area.

Rental reviews are performed every six months and changes are communicated via letters to tenants.

Morwell resident Tony Hawkins, who is on an aged pension, received a letter from DHHS last week stating his rent would increase by $68 per fortnight from August – an increase of 37 per cent.

He pays $182 per fortnight for a one-bedroom unit in Morwell, however, this will jump to $250 per fortnight when the increase kicks in.

Mr Hawkins received a letter from the DHHS last week providing him with notice of the looming increase, which attributed the change in amount to a "recent adjustment of your weekly payment amount".

The DHHS said Mr Hawkins would not pay more than 25 per cent of his income on rent, which doesn't place him in rental-stress, a term used to describe tenants whose rent takes up more than one third of their income.

However, Mr Hawkins is concerned a 37 per cent increase in one hit is too much.

"If I was renting privately, there is no way they could increase the rent by 37 per cent," he said.

"It might not sound like a lot but $68 a fortnight is $68 I could be spending on food ... or petrol."

Victorian Public Tenants Association chairwoman and Churchill resident Margaret Guthrie said many tenants got very confused when they receive the rental review letters every six months.

"You get all of this paperwork and often the first thing people see is the front page which says 'your market rent has increased'," she said.

She said the Department generally required tenants to pay either 25 per cent of their assessable income or the market rent value of the property, whichever was lesser.

"Tenants' rents are based on 25 per cent of their income, unless ... the market rent is less than 25 per cent of their income," she said.

Minister for Housing Richard Wynne said no tenant was expected to pay more than 25 per cent of their household income in rent.

"If your rental prices have risen or your income fallen so that you are paying more than 25 per cent of your income - you can apply for a rental rebate at any time to correct this," he said.

Mr Wynne said letters were sent to tenants following the most recent review of market rents of all public housing properties to notify them of any change in the market - which could be a rise, a fall or no change.

Tenants were given more than 60 days' notice of any increase in market rent and the new rent amounts take effect on 4 August 2019.

He said there was no link between the market rent review process and any maintenance or renovation on properties.

Member for Morwell Russell Northe wrote to the Minister calling for him to take action to "remedy the situation".

He said he had been contacted by "a large number of constituents" who had received letters outlining their rent would increase by $60 or more per fortnight. 

"One elderly constituent having to face the burden of a $124 increase per fortnight – and this is a completely unfair, unjust and unacceptable situation. Percentage wise, these increases are 30 per cent and beyond current rental payments," the letter read.

"I can see no solution other than an urgent review of the process undertaken to determine at what level or indeed, even if, the increases should be actioned or forced upon tenants.

"The reality is that any rental adjustment needs to be fair and reasonable, yet what has been proposed to my constituents is the complete opposite."

To apply for the rebate tenants should contact their local housing office on housing.vic.gov.au/contact-a-housing-office or phone 1300 650 172.

If tenants believe their increase to market rent is excessive, they can contact Consumer Affairs Victoria for an independent review. Further information is available on the Consumer Affairs Victoria website or by calling the renting helpline on 1300 55 81 81.

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