The public supports stronger tenant rights. The government needs to act

How terribly kind of you. Image: Getty.

More than half of the population (53 per cent) do not think that renting privately works fairly for tenants, according to a recent report from the IPPR.

It is easy to see why. Limited protection from eviction, rising rents and poor conditions all impact on the public's perception of the sector. Hardly surprising then that 61 per cent of people do not think that the sector provides tenants with a long-term, stable home and 59 per cent say it does not provide affordable homes.

As part of our research, IPPR conducted focus groups across the country with tenants and landlords, aiming to understand more about people’s experiences of the tenure and what they would like to see done to reform it.

Through our in-depth conversations with tenants we found that many remain very concerned about the insecurity of private renting, worrying about having to move at short notice and putting them off complaining about repairs or poor conditions for fear of appearing as a nuisance. The high cost of rents, fees and deposits contributed further to this insecurity and caused hardship for a number of those we spoke to.

Experiences with poor conditions were commonplace, as were difficulties in getting landlords to complete repairs. Moreover, tenants often did not feel at home in the sector, with limits placed on them by landlords – preventing them from decorating for example – making them feel as though they didn’t have control over their home.

From the landlords’ perspective, many were concerned about welfare reform, which made them reluctant to let to those in receipt of housing benefit; reforms and reductions to tax relief on private landlords, which had reduced their income; and the legal system, which many felt was too slow in the rare cases where a tenant was not paying rent, exposing them to many months with no rental income.

Our research also found that tenants and landlords share some key issues. They both lack knowledge on their rights and responsibilities, undermining their ability to exercise them and meaning that tenants cannot assume lawful treatment by default.

They both felt the other party had greater power in the system. Tenants feel that they lack power in the system as a whole, resulting in mistrust, while landlords have expressed frustration at a lack of power in key parts of the process, principally at the end of a tenancy.


Finally, both tenants and landlords have limited trust in the system and the ability of government to reform it, demonstrating that reforms will need to build confidence in the sector if they are to be successful.

However, it was not all doom and gloom. We also found support for reform amongst landlords. Many recognised the impact a lack of security had on tenants, particularly those with children, and expressed a willingness for extra security to be offered to renters.

The government is making positive, though tentative, steps in reforming the sector – banning letting agency fees, consulting on the introduction of longer tenancies and exploring court reform. But, as in so many areas, this important area of domestic policy risks being starved of attention in the face of dealing with Brexit.

Failing to address the issues with the private rented sector would be a major own goal for the government given the widespread support for reform: 72 per cent of the public think government should be more involved in improving and regulating the private rented sector. Moreover, analysis conducted by the housing charity Shelter has shown that in marginal constituencies, private tenants make up a significant block of voters.

That 4.7m households have limited access to a stable home, are more likely to suffer poor conditions and lack control over their home are fundamental issue of justice. But as our work has shown, tackling these issues wouldn’t just ensure that the sector was more just: it would be hugely popular with tenants and the wider public, too.

Darren Baxter is a research fellow at IPPR.

 
 
 
 

A new wave of remote workers could bring lasting change to pricey rental markets

There’s a wide world of speculation about the long-lasting changes to real estate caused by the coronavirus. (Valery Hache/AFP via Getty Images)

When the coronavirus spread around the world this spring, government-issued stay-at-home orders essentially forced a global social experiment on remote work.

Perhaps not surprisingly, people who are able to work from home generally like doing so. A recent survey from iOmetrics and Global Workplace Analytics on the work-from-home experience found that 68% of the 2,865 responses said they were “very successful working from home”, 76% want to continue working from home at least one day a week, and 16% don’t want to return to the office at all.

It’s not just employees who’ve gained this appreciation for remote work – several companies are acknowledging benefits from it as well. On 11 June, the workplace chat company Slack joined the growing number of companies that will allow employees to work from home even after the pandemic. “Most employees will have the option to work remotely on a permanent basis if they choose,” Slack said in a public statement, “and we will begin to increasingly hire employees who are permanently remote.”

This type of declaration has been echoing through workspaces since Twitter made its announcement on 12 May, particularly in the tech sector. Since then, companies including Coinbase, Square, Shopify, and Upwork have taken the same steps.


Remote work is much more accessible to white and higher-wage workers in tech, finance, and business services sectors, according to the Economic Policy Institute, and the concentration of these jobs in some major cities has contributed to ballooning housing costs in those markets. Much of the workforce that can work remotely is also more able to afford moving than those on lower incomes working in the hospitality or retail sectors. If they choose not to report back to HQ in San Francisco or New York City, for example, that could potentially have an effect on the white-hot rental and real estate markets in those and other cities.

Data from Zumper, an online apartment rental platform, suggests that some of the priciest rental markets in the US have already started to soften. In June, rent prices for San Francisco’s one- and two-bedroom apartments dropped more than 9% compared to one year before, according to the company’s monthly rent report. The figures were similar in nearby Silicon Valley hotspots of San Jose, Mountain View, Palo Alto.

Six of the 10 highest-rent cities in the US posted year-over-year declines, including New York City, Los Angeles, and Seattle. At the same time, rents increased in some cheaper cities that aren’t far from expensive ones: “In our top markets, while Boston and San Francisco rents were on the decline, Providence and Sacramento prices were both up around 5% last month,” Zumper reports.

In San Francisco, some property owners have begun offering a month or more of free rent to attract new tenants, KQED reports, and an April survey from the San Francisco Apartment Association showed 16% of rental housing providers had residents break a lease or unexpectedly give a 30-day notice to vacate.

It’s still too early to say how much of this movement can be attributed to remote work, layoffs or pay cuts, but some who see this time as an opportunity to move are taking it.

Jay Streets, who owns a two-unit house in San Francisco, says he recently had tenants give notice and move to Kentucky this spring.

“He worked for Google, she worked for another tech company,” Streets says. “When Covid happened, they were on vacation in Palm Springs and they didn’t come back.”

The couple kept the lease on their $4,500 two-bedroom apartment until Google announced its employees would be working from home for the rest of the year, at which point they officially moved out. “They couldn’t justify paying rent on an apartment they didn’t need,” Streets says.

When he re-listed the apartment in May for the same price, the requests poured in. “Overwhelmingly, everyone that came to look at it were all in the situation where they were now working from home,” he says. “They were all in one-bedrooms and they all wanted an extra bedroom because they were all working from home.”

In early June, Yessika Patapoff and her husband moved from San Francisco’s Lower Haight neighbourhood to Tiburon, a charming town north of the city. Patapoff is an attorney who’s been unemployed since before Covid-19 hit, and her husband is working from home. She says her husband’s employer has been flexible about working from home, but it is not currently a permanent situation. While they’re paying a similar price for housing, they now have more space, and no plans to move back.

“My husband and I were already growing tired of the city before Covid,” Patapoff says.

Similar stories emerged in the UK, where real estate markets almost completely stopped for 50 days during lockdown, causing a rush of demand when it reopened. “Enquiry activity has been extraordinary,” Damian Gray, head of Knight Frank’s Oxford office told World Property Journal. “I've never been contacted by so many people that want to live outside London."

Several estate agencies in London have reported a rush for properties since the market opened back up, particularly for more spacious properties with outdoor space. However, Mansion Global noted this is likely due to pent up demand from 50 days of almost complete real estate shutdown, so it’s hard to tell whether that trend will continue.

There’s a wide world of speculation about the long-lasting changes to real estate caused by the coronavirus, but many industry experts say there will indeed be change.

In May, The New York Times reported that three of New York City’s largest commercial tenants — Barclays, JP Morgan Chase and Morgan Stanley — have hinted that many of their employees likely won’t be returning to the office at the level they were pre-Covid.

Until workers are able to safely return to offices, it’s impossible to tell exactly how much office space will stay vacant post-pandemic. On one hand, businesses could require more space to account for physical distancing; on the other hand, they could embrace remote working permanently, or find some middle ground that brings fewer people into the office on a daily basis.

“It’s tough to say anything to the office market because most people are not back working in their office yet,” says Robert Knakal, chairman of JLL Capital Markets. “There will be changes in the office market and there will likely be changes in the residential market as well in terms of how buildings are maintained, constructed, [and] designed.”

Those who do return to the office may find a reversal of recent design trends that favoured open, airy layouts with desks clustered tightly together. “The space per employee likely to go up would counterbalance the folks who are no longer coming into the office,” Knakal says.

There has been some discussion of using newly vacant office space for residential needs, and while that’s appealing to housing advocates in cities that sorely need more housing, Bill Rudin, CEO of Rudin Management Company, recently told Spectrum News that the conversion process may be too difficult to be practical.

"I don’t know the amount of buildings out there that could be adapted," he said. "It’s very complicated and expensive.

While there’s been tumult in San Francisco’s rental scene, housing developers appear to still be moving forward with their plans, says Dan Sider, director of executive programs at the SF Planning Department.

“Despite the doom and gloom that we all read about daily, our office continues to see interest from the development community – particularly larger, more established developers – in both moving ahead with existing applications and in submitting new applications for large projects,” he says.

How demand for those projects might change and what it might do to improve affordable housing is still unknown, though “demand will recover,” Sider predicts.

Johanna Flashman is a freelance writer based in Oakland, California.