A Brisbane Greens proposal to slap investors who hike rents with huge tax bills has been met with scepticism by economists and panned by the party’s political opponents.
The proposal was heralded as an effective rent freeze by the Greens on Monday as it would boost the standard rates bill for investors by 750% if they increase rents above January 2023 levels.
The Greens Brisbane lord mayor candidate, Jonathan Sriranganathan, said the proposal was designed to run for two years and would “put downward pressure on rents and house prices so that people can afford a roof over their head”.
“Labor and the LNP are happy for rents to continue rising whereas the Greens want to turn that around,” he said.
If enacted, the proposal would be the first of its kind by the Greens nationally at a council level. Other Greens policies include a further crackdown on Airbnb and a “vacancy levy” on properties left empty for more than six months.
Cameron Murray, an economist specialising in property and urban development, said limiting the amount rents can be increased by while protecting tenants from evictions is a “sensible” response to the housing crisis.
“If it’s a temporary measure there would be some positives for tenants,” he said.
The Greens proposal would apply to each individual property, not individual tenants, which the party says would mean tenants can’t be evicted to increase rents.
But Murray said he was unsure about how the policy would work in practice.
“It’s not clear how you set up a replacement tenant when the maximum price you can charge is below the market rent that people are willing to pay,” he said.
“There is an incentive for side payments, informal arrangements that are higher than the regulated rent.”
Fabrizio Carmignani, an economics professor at the University of Southern Queensland, said while he understands the intent of the Greens proposal, it’s unlikely to solve the issue.
“The implications of these emergency measures in the long term might actually be quite distortionary,” he said.
“The rental crisis that we’re facing is essentially due to the mismatch between demand and supply. So … I’m not entirely sure that this is the best mechanism from an economic point of view.”
Jackson Hills, manager of policy and strategic engagement at Q Shelter, said that while “more needs to be done to protect renters from excessive rent increases and market displacement, we also think it’s critical we look at the right measures and mechanisms to play that role”.
“Whilst I acknowledge the intent behind [the Greens’] proposal, I am not convinced that is best delivered through local government rating categories, as proposed,” he said.
But the Queensland Council of Social Service (QCOSS) chief executive officer, Aimee McVeigh, said a limit on rent increases was essential “to stop pushing more Queenslanders into homelessness or further into poverty”.
“About one-third of Queenslanders rent and in the current housing crisis, and cost of living crisis, ensuring that rents are fair is crucial,” she said.
“Limiting rent increases, and specifically linking that limit to the consumer price index, has already been achieved in the ACT, and this approach would provide more certainty for renters.”
Real estate body, Labor and LNP criticise Greens’ rent freeze push
Both the real estate industry and the Greens political opponents, Labor and the Liberal National Party, were scathing of the proposal.
The chief operating officer of the Real Estate Institute of Queensland, Dean Milton, said there “seemed to be no limit to how far the Greens are prepared to go to punish private investors”.
“It appears they are just throwing around big, arbitrary figures to grab headlines,” Milton said.
“We’re calling on the Greens to release realistic evidence-based modelling for this proposal – not just back-of-the-envelope calculations.”
The LNP’s Brisbane deputy mayor, Krista Adams, said the housing crisis cannot be solved with “more taxes”.
“We would all love to see rents reduced in Brisbane … but that is not going to happen … by charging landlords more,” Adams told reporters on Monday.
Labor also roasted the policy with the party’s lord mayoral candidate, Tracey Price, describing it as “another extreme plan that will not address the critical issues of a shortage of housing and homelessness”.
“If enacted, this policy would push investors outside the Brisbane city council area –meaning renters will have further to travel and it will cost more to access our city,” Price said.
“We need positive plans for more supply of social and affordable housing for owner-occupiers and renters.”
But Sriranganathan said discouraging investors from purchasing property would allow more first-time buyers to get into the market.
“The reality is that if some of the investors are struggling to cover the cost of rising mortgage payments, then ideally they should sell those properties and let someone else buy them,” he said.
“Hopefully renters will be able to start buying some of those homes and there’ll be fewer renters competing for other rental properties.”
