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Why NSW landlords didn’t use COVID-19 concessions

By Juliet Helmke
23 November 2021 | 1 minute read
NSW landlords

NSW paid only a small portion of the $210 million it budgeted for subsidies to landlords aimed at encouraging them to implement rental concessions for COVID-19 impacted tenants.

Analysis from the Tenants’ Union of New South Wales revealed the low take-up, citing data from Fair Trading NSW that showed the program had fallen far short of its capacity.

Between the program’s start on 10 August and 5 November 2021, just six days before the payment to landlords was set to wind up, the numbers of applications for the subsidy, and the amounts paid out, were as follows:

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  • 16,432 applications received
  • 15,160 applications approved ($35.26 million)
  • 782 applications declined
  • 490 applications in progress
  • $28.03 million paid to applicants with a further $2.96 million to be paid on 12 November 2021

It’s perhaps unsurprising that the government felt able to increase the initial rent relief payment from $1,500 to $3,000, then eventually up to a maximum of $4,500. Even under these increases, the total came nowhere near to reaching the program’s capacity, which was budgeted at more than $200 million based on estimated need.

The union noted that it’s not that the estimations were off, rather that the program failed by serving subsidies to landlords without accounting for the behavioural factors of the parties involved.

They put the issue down to the “split incentive” that the subsidy created. Namely, that a landlord will be disinclined to bear the cost for something that will benefit the tenant without obvious return to the landlord. 

It’s a frequent roadblock in programs aimed at improving the energy efficiency in rental homes, for example, and came into play here by requiring landlords to go through the process of filling out paperwork to receive a grant that’s for the ultimate benefit of the renter.

In winding down support for tenants impacted by COVID-19, the NSW government has transitioned the subsidy over to one where a renter can apply directly for assistance – a move that was welcomed by the tenants union.

Beginning on 11 November, renters have been able to directly apply for a relief payment of up to $4,500, even if they are no longer residing in the property but are in arrears to a landlord for missed payments.

To apply, tenants must prove they experienced a reduction in their household income of at least 25 per cent since 14 July. Payments will be deposited into a landlord or agent’s account as a rent credit. Renters will receive the full $4,500 unless the landlord has already accessed a portion of the rebate.

Why NSW landlords didn’t use COVID-19 concessions
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ABOUT THE AUTHOR


Juliet Helmke

Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.

 

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