Why Rent Control Might Work Here In Australia


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With all of the debate and consternation around the Victorian Government’s recent legislation to slug investors with stamp duty while removing it from first home buyers, we can stand to learn a bit from the United States – considering their population is about 13 times larger than us.

In the 1920s the US introduced rent control and rent stabilisation policies that still stand today in cities with large tenant populations such as New York City, San Francisco and Los Angeles among others.

While economists believe a restrictive price ceiling reduces the supply of property to the market, I think there is some value in considering rent control in Australia.

Rent control works effectively to ensure regular people aren’t squeezed out of cities where housing costs are soaring. Cities like Melbourne and Sydney.

As house prices rise, more and more people will become lifetime renters. What are we doing to protect tenants though? Currently there are few – if any – controls to protect the many Australians who rent. Singles, families, older people.

Rent control provides long-term stability to renters, which allows them to invest in their home without the fear the landlord will be the only one to reap the benefits of improvements.

In addition, where landlords can claim depreciation tax benefits while raising rents, it restores balance to these tax incentives that renters cannot benefit from and are usually impacted by.

Why would we consider such a measure? Slugging investors with stamp duty isn’t the answer to a fairer and more affordable housing market.

They’ll just go elsewhere, and Victoria’s housing development will suffer – not ideal given that supply is one key solution to affordability concerns. There is a case to consider the application of rent control to new-build investor owned apartments.

  • This measure doesn’t penalise investors, reducing the impact on the housing supply.

  • It provides Melbourne’s renters with confidence, insulating them against the price rises we all expect in a city on a growth trajectory like ours.

  • Our city doesn’t lose skilled people to outer areas or other cities because they can’t afford our rents.

  • Investors are given confidence in the market, from a supply perspective and from a tenancy aspect.

  • Investors therefore eventually dictate what they’ll be willing to pay for Property.

  • And perhaps if developers are willing to provide elements rent control in their projects, this could assist in State planning outcomes. E.g. Additional density


There are plenty more reasons. To me, most compelling are the stories I hear from friends looking to move and going to open for inspections where they apply in competition with a crush of other people, only to have to go through it all again in 12 months when their landlord raises their rent. (Mind you this is well within the landlords’ rights.)

One of the hardest parts of a model like this for Australia isn’t just the politics, but also the mentality around renting.In a city where owning your own home will become a rarity, we need to change our attitudes to renting. And rent control – being assured the place you rent will be your home long-term, and you can maintain and improve it– is one step towards that.

This is just one alternate aspect and simply a thought. A thought that I think would be more beneficial to the public (than say, deterring investors and therefore reducing supply) and dare I say, to developers.

By the way, I’m not saying that rent control in the United States is perfect. Just like any idea we can take into consideration – we’ll have to put in our own variation, to fit within the boundaries of our needs and laws.


About the Writer – Mohan Du

Mohan is the Founder and Managing Director of multi-faceted property development group Capital Alliance. Globally focused and internationally connected, he’s driven to create landmark destinations for the modern urban living. Wanting to create extraordinary, he founded Capital Alliance Investment Group in 2012 to focus on his passion for thinking and property.


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