Going Dutch on rent controls

This week we’ve taken the podcast overseas as we’re recording on a cruise ship off the coast of Norway.

But it gives us an opportunity to look at one of the vexed questions of living in strata in Australia.

You may not know this but there is already one city in Australia that has rent controls.  Do they work? Do they keep rents low or just set a benchmark for rent hikes at every opportunity.

We take advantage of a stop-over in Amsterdam to find out how rent controls work there – where 45 per cent of the population are tenants – and do they solve the housing problems that it too suffers?

And we take a look at the strangest “hotel” rooms in the world and what our cities might be like if everyone rode bikes.  That’s all in this week’s Flat Chat Wrap.

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Flat Chat is all about apartment living, especially in Australia.
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Recorded by Jimmy Thomson & Sue Williams; Transcribed by Otter.ai.
Find out more about Sue Williams and Jimmy Thomson on their websites.

Transcript

Jimmy

I don't know if you can hear the sounds of whooshing in the background, but if you can, it's because we're not sitting in our flat in Sydney, we are somewhere off the coast of Norway on a ship.

Sue

Yes, and it's pretty windy out there and it's actually a bit rocky in here, isn't it?

Jimmy

Yeah, it is. So there will be occasional gasps and and whoo as we try to keep our feet. But all this is relevant because on the way here we went to Amsterdam and we discovered that in Amsterdam, 45% of the inhabitants of that city are renters and many of the houses there and apartments there are rent controlled.

So we're going to talk about rent control. I'm Jimmy Thomson. I write for whoever will publish my stuff and I edit the flat chat website, flatchat.com.au. And I'm Sue Williams and I write about property for the Sydney Morning Herald, The Age, The AFR and Domain. 

And coming to you live from the coast of Norway. This is the Flat Chat Wrap. Music 

Okay, rent control, Sue.

Sue

Yeah, so we were in Amsterdam on our way to Norway and we spent a couple of days there and we went on a boat trip and we kind of...

Jimmy

A cruise up the canals.

Sue

Yeah, and we talked to a really interesting tour guide who's actually from Australia.

Jimmy

Yeah.

Sue

And we was, there was, there's some fantastic houses all along, sorry, fantastic apartments all along the banks of the canals and they're very high and they're very narrow and we talked about those. And basically it's because they all used to be storehouses for all the grain and the goods that came back through the Dutch East India Company. So it was, you know, a long time ago really in the 1700s and 1800s.

And now they've all been turned into apartments and it's great. And I kept, I kept thinking, I wonder how much these apartments are? And I asked the tour guide and he said, well, basically a lot of them are just for rent.

They're owned by families that have owned them for hundreds of years. But the rents are surprisingly small because many of them are rent controlled.

Jimmy

So now we've got rent control, believe it or not, here in Australia, in Canberra, rents are controlled there. And it's the only place in Australia that has rent control. They have a combination of rent control and there's a ban on no fault evictions.

So you can't just throw people out so you can put the rent up.

Sue

Also, I think the rent can only go up by a certain amount every year, can't it?

Jimmy

Well, I was going to get to that. The rent can only go up once a year and there's a limit on how much it can go up, which is the CPI. It can go up by the consumer price index plus a maximum of 10%.

Now that's not like, if the CPI is 3%, that doesn't mean the maximum is 13%. It means 10% of the rise. So if the CPI pushes your rent up by $50, then the maximum it can go up beyond that would be $5 more.

Right. So that's quite interesting. But the thing is, it hasn't really suppressed rents in Canberra.

It did for a few years. In fact, I think last year or the year before, rents actually went down in Canberra when they were going up everywhere else. But now they're at the second highest average rents in Australia.

Why do you think that is, Sue?

Sue

I think it's a population that has plenty of work because you've got lots of government offices in there. So people can actually afford quite good rents. So there is an awful lot of demand for good rental accommodation.

And they haven't really reached that affordability buffer yet that they have reached in many places, like in Sydney, where rents are phenomenally expensive. But it seems that they have the year of government in Canberra as well. If rents rise too much, public servants can go to their masters and say, we need some legislation or we need some new rule changes, really.

So they're quite a participatory demographic in lots of ways.

Jimmy

Right. So they will get organised and they will make a fuss if they think things are not going their way. But also you'd have to think on average, they would have more disposable income than the average Australian city dweller.

Sue

Yeah. They tend to be quite well paid.

Jimmy

So they can afford to be the second highest rent payers in Australia. So getting back to Amsterdam, how does the rent control thing there work?

Sue

Well, it's kind of a points based system. And the system allocates points based on a property's quality and its size, its location and its amenities, you know, whether it kind of whether maybe the building might offer a pool or a spa or probably more likely a sauna in Amsterdam. And that allows the government to determine a maximum allowable rent for that property.

So if a property isn't so fabulous and it scores below a certain threshold, then that becomes rent controlled. So that goes on the rent control market. If it's like a really fabulous property and it scores really high on the point system, then that tends to go into the free rent market.

Jimmy

Right.

Sue

So it's the lesser apartments, ones which are not quite as desirable.

Jimmy

The cheaper nurseries.

Sue

Or not necessarily the cheaper nurseries, certainly not quite as desirable that would come into the category of controlled rents.

Jimmy

Now, Amsterdam has had its problems with Airbnb as well. I seem to recall that they've tried to put restrictions on Airbnb because it would be the perfect place for Airbnb to flourish, wouldn't it?

Sue

It certainly would. There's lots of different types of accommodation in Amsterdam as well as we saw. You can Airbnb a houseboat.

Lots of people live in houseboats. You can Airbnb a little building on the canal, which used to be...

Jimmy

Oh, well, there's those bridge houses. That's right. That's it.

Sorry. Bridge houses. Now, those bridge houses have actually been bought by a hotel group called Sweet, S-W-E-E-T.

And they're funny little places because they used to contain the mechanisms for opening and closing lock gates and bridges, of which there are many in Amsterdam. And we almost rented one when we were there. But our tour guide, whose name is Julian, and I think he's from Adelaide, said that, yeah, it sounds like a nice idea until you get there and realize the gates and the locks are still opening and closing.

Constantly. Constantly. So you spend a lot of time being woken up by clanking and thudding and whatnot.

So it's a romantic idea, but maybe not that great in practice.

Sue

And it's interesting, Amsterdam, it's a really residential city. There's not much industry there. Lots of people live in this...

It's kind of opposite to many places in Australia. People live in the center of the city.

Jimmy

Yeah.

Sue

Among all the canals. It's really nice. But then they go outside to work.

Jimmy

Bicycles. On bicycles. It's mad for the bicycle.

Sue

Yes.

Jimmy

I mean, I can imagine Sydney drivers would go absolutely insane in Amsterdam. You know, the kind of drivers that blast their horns at people on bikes just because they're on bikes. Everybody's on a bicycle.

And you have to watch all the time. And I was watching some of them. They're weaving in and out of traffic with such sort of dexterity.

I mean, these people grow up on bicycles. And it seems to be a thing that you must never put your foot on the ground. It's a point of honor.

Yeah. They never stop dead. They'll always weave around things.

And the bikes are all sorts of shapes and sizes.

Sue

Not many electric bikes, though. I suppose Amsterdam is very flat.

Jimmy

Julian said there was a lot of electric bikes. So we were surprised how few they were, proportionately, because compared to what you get in Sydney and elsewhere. But they're quite few.

And the reason is, you know, you don't really need them because there aren't any hills. But they still have a problem with them, young people especially. But that was an interesting statistic that he came up with, that 40 percent of the one vehicle accidents on bicycles in Amsterdam involve people who are over the age of 60.

So it's just old codgers like us sort of losing their balance or forgetting to brake at the right time.

Sue

Or riding too slowly, perhaps.

Jimmy

Or riding too slowly. But one of the things they're thinking of doing in Amsterdam with electric bikes is, first, one thing they're going to do is limit their speed to 20 k's. And they're going to make people who ride electric bikes wear helmets.

Because nobody in Amsterdam on a bicycle wears a helmet. They don't have a helmet law there.

Sue

Absolutely.

Jimmy

But they're thinking of bringing them in for electric bikes. And that could actually put a damper on the whole electric bike thing. Because one of the things about living in Amsterdam is it's very important to look cool all the time.

Right. Well, that was our journey to Amsterdam. A little sojourn.

A shorter flat chat wrap this week. Because we are sailing, as Rod Stewart would sing to you endlessly. And at some point, the whole internet is going to crash again.

So we'll get this edited and online. And when we talk to you next week, we will be in Poland.

Sue

Yeah. And I mean, Norway's been really interesting, hasn't it? Unfortunately, the weather's not great.

We're just about to go into the fjords, which will be really entertaining. But it's kind of weird because the sun sets about 11.15 every night. And the sun rises about 3am every morning.

Jimmy

You exaggerate slightly, but we get the idea.

Sue

No, no, no. Apparently, it's 3.10 the sun rises.

Jimmy

Really?

Sue

And the sun sets at 11.14. Wow. They announced today, the captain.

Jimmy

My goodness. Well, he would know.

Sue

Yeah, exactly.

Jimmy

It's important for him to know.

Sue

So we're both actually a bit tired because we keep going to bed so late because it doesn't feel like night time. And then you get up quite early.

Jimmy

And one of the other things we've discovered that's odd about this part of the world is on this very well catered cruise ship. I mean, there's more food than you could possibly ever taste in all the different places. We found a cheese board with no crackers, lots of cheese and no crackers.

And we ended up going to the Mexican stall.

Sue

First world problem, do you mean?

Jimmy

To get corn chips to put our cheese on. And we discovered that Dutch people eat their cheese. They just get a lump of cheese and stick it in their mouth and eat it.

No crackers.

Sue

We're on a Dutch ship.

Jimmy

That's why we're on a Dutch ship to Rotterdam.

Sue

But one of the most interesting things in Norway, I think I've noticed so far is that there's lots of buildings and they have grass growing out of the roofs. And one building we saw yesterday actually had trees growing out of the roof as well.

Jimmy

Yeah, that was in the open air museum. But they say that people who've got their holiday cottages will have grass on the roof.

Sue

Yes. It's a great idea, isn't it? It looked fantastic.

Jimmy

It does look fantastic. But you have to have a pretty strong roof.

Sue

Yeah, I suppose. But it probably stops it getting really hot and it probably keeps the house a bit cooler as well, your apartment a bit cooler as well.

Jimmy

It's like apartment blocks with pebbles on the roof. That's there to control the heat. People don't realise that.

Sue

No.

Jimmy

They take the pebbles off when they renew the membrane and think, well, what's the point of having these pebbles here? We'll just dump them somewhere. And then the people in the top floor flat are saying, how come my flat is so hot all the time?

So we did get back to apartments.

Sue

We did.

Jimmy

We did. We did. All right.

Thank you very much for listening if you have been. And if you haven't been, well, what can we do? We'll talk to you next week from somewhere in Poland.

Sue

Bye.

Jimmy

Bye. Thanks for listening to the Flat Chat Wrap podcast. You'll find links to the stories and other references on our website, flatchat.com.au. And if you haven't already done so, you can subscribe to this podcast completely free on Apple Podcasts, Google Podcasts, Spotify, or your favourite podcatcher. Just search for Flat Chat Wrap with a W, click on subscribe, and you'll get this podcast every week without even trying. Thanks again. Talk to you again next week.

 Transcribed by TurboScribe.ai.