Security weak spot in downsizing

Tasmanians should be aware of trends in apartment living, says Erika Altmann

APARTMENTS and unit complexes are associated with compact cities that limit urban sprawl and its associated transport issues.

Older Australians are frequently urged to embrace the more compact lifestyles and downsize into units and apartments.

Leaving aside the known shortage of such properties to move into, the high costs of property transfer and the fact that older Australians are expected to be in the workforce until they are almost 70 years of age, apartment and unit living is increasingly associated with insecure tenure for both homeowners and tenants.

Loosely put, security of tenure is the right to live in a particular property that you have paid for or are paying for.

For a tenant this may be through a long-term lease or series of medium-term leases.

Tenants who have leases less than 12 months are considered to have insecure tenure. Short term leases and insecure tenure is often seen as a sliding slope towards homelessness.

Tenure security allows you to put down roots and connect with your immediate community, gives you the opportunity to access education, employment and can provide a general sense of wellbeing. You are not constantly worried about having to move, spending copious amounts of time searching for a new home or worried about housing affordability issues.

For homeowners, secure tenure relates to the ability to live in and own a property until they are ready to sell. Buying a home gives us security of tenure — or used to.

For a growing number of homeowners across Australia, security of tenure is a thing of the past. This is because for an increasing number of Australians, our homes are in apartment buildings, units or townhouse complexes or lifestyle villages. The 2016 ABS Census found that the number of occupied apartments flats and units in Australia has increased by 78 per cent. One in four Australians live in this type of housing already and in cities such as Sydney and Melbourne, the figure is one in three people.

Whether you are a homeowner or tenant, if you live in a strata titled complex containing apartments, townhouses, units or the like, you are likely to be affected by the introduction of “termination” legislation.

Because Tasmania’s strata laws have not been updated for almost 20 years, we are now one of the last states to introduce it.

In other states, and across the Asia Pacific region, termination legislation applies to those who purchase into unit, townhouse, apartment, or other types of collective strata title arrangements. Owning an apartment means that you have a collective responsibility to other owners in that complex as well as restrictions and rights. Decisions about the overall building complex are negotiated and mediated through the bodies corporate.

When sufficient owners decide that a building complex is not worth the effort of maintaining, or that they want to pull down all the individual flats, units or apartments to build a bigger, better, more profitable building on the same land, then they can agree to terminate their particular strata scheme.

Such a weighty decision would, you may think, require the agreement of all owners. However, this is not the case.

New South Wales legislation allows a majority of 75 per cent of owners voting to terminate the strata scheme to override the rights of the 25 per cent of owners who do not want to terminate the scheme and move elsewhere.

Some states have a sliding scale for votes relating to termination of the scheme based on the age of the building. The scale is applied to buildings that are 10 years of age or older.

Generally, any unit or apartment complex more than 25 years of age is considered past its prime and suitable for demolition. This is because multi-storey buildings are built on commercial construction principles and consequently more difficult to renovate than a standard house.

For a growing number of homeowners across Australia, security of tenure is a thing of the past.

I raise this issue because of the persistent and frequent calls that more apartments in central Hobart will build housing supply and that this, on its own, will magically transform into housing security or security of tenure. It does not. Whether interstate or overseas, the right to security of tenure for property owners and their tenants will continue to be eroded.

Those most affected will be downsizers who think they have found a worry-free environment to live out the rest of their days.

Moving into an apartment with the belief that it is worryfree, maintenance-free or that you will not be forced out of it by others at some future point in time is a head in the sand approach. Policy makers and academics who continually call for older people to downsize into more compact forms of living are increasingly condemning older people to tenure insecurity.

Yes, we need more compact forms of living, but at what cost to an increasingly older population?

The last thing that a frail, elderly person needs is a forced move that has been decided on, not by them or their family, not even by an appealable government acquisition, but by a group of their neighbours.

When security of tenure cannot be guaranteed for homeowners, then it cannot be extended to tenants either.

Dr Erika Altmann is an Adjunct Researcher with the School of Social Sciences at the University of Tasmania and co-editor of Multi-Owned Properties in the Asia Pacific Region: Rights, restrictions and responsibilities, a Palgrave McMillan publication.