Tenancy databases, professional practices and housing access among low-income tenants in the private rental sector in Australia Patricia M. Short, John Minnery, Elspeth Mead, Martin O’Flaherty, Andrew Peake School of Social Science, The University of Queensland, Brisbane, Queensland 4121, Australia, Tel: +61 7 3365 2248, Fax: +61 7 3365 1544, email:
[email protected] The use of electronic, tenancy databases (Tenancy databases) has become widespread in Australia, as elsewhere. Sold by commercial market providers as a professional tool to protect the interests of property owners, Tenancy databases are used by Property Managers to screen prospective tenants and thus reduce property owners’ exposure to rental tenancy risks. This paper addresses the impacts of Tenancy databases upon social relations in the field of private rental tenancy in Australia. Insights arise from research carried out in 2002-03, in the Eastern, mainland states of Australia, that included a series of face-to-face semi-structured interviews (both individual and group) conducted with tenants, tenant advocates, property owners and representatives of the property management industry. Australian property owners and their agents view tenancy databases as an essential professional, risk-management tool. Property managers legitimate their use of Tenancy databases by reference to a culture of professionalism that is held to render misconduct or improper listings extremely unlikely. They marginalise cases in which tenants have been unfairly treated and maintain a strong symbolic discourse of effective (even excessive) tenant protection within existing legislative frameworks and processes of formal appeal. Within this discourse of professionalism and risk-management, tenants are individualised and are expected to actively work to construct and maintain their reputation as a ‘good tenant’. For tenants, tenancy databases play a particular and definitive role in constructing their reputation as tenants. They are, on one hand, one of a number of verifiable records by which tenants can demonstrate a satisfactory history of tenancy. ‘Not being listed’ (along with getting a full bond refund, references from previous landlords, and so on) is an indicator that helps build a satisfactory rental history. In the field of rental tenancy, a ‘good rental history’ has emerged as a key aspect of identity capital that, alongside specific forms of material and social capital, works as a mechanism of inclusion in the private rental market. On the other hand, being ‘listed’ is read as an indicator of deficit and effectively overrides all other aspects of a tenant’s application for tenancy. ‘Listed’ tenants find themselves being forced to negotiate individualised pathways that take them further and further away from the formal rental market and, ultimately into far less secure and inappropriate housing arrangements at the periphery.
Introduction The use of electronic, tenancy databases has become widespread in Australia, as elsewhere. Their uses and impacts in the Australian private rental market have received growing attention among housing analysts (Seelig, 1997, 1998; The Age, 1997; Gregory, 2001). Guthrie (2002) has attributed their emergence in Australia to two factors. First, she argues, databases provide the technological ability to enable personal information to be readily stored and accessed at relatively little cost. Secondly, under Part 111 of the Commonwealth Privacy Act 19881, access to an individual’s credit history is restricted solely to credit providers And, in this situation, Tenancy databases have provided a legitimate means of tenant screening, accessible to rental property managers. In this context, we have been drawn to investigate the significance of Tenancy databases for property managers and tenants at the ‘lower-end’ of the private rental market - the disadvantaged tenant sub-market. At a time when access to state housing is becoming increasingly limited and more highly constrained, a political economic analysis of housing provision in the field of private rental tenancy is warranted. We provide such an analysis at close range, by examining the impact of Tenancy databases on social relations and personal experiences of property managers and disadvantaged tenants, as they encounter and negotiate risks and act to protect their interests. As is the case outside Australia, tenancy databases are operated by commercial market providers selling subscriptions mainly to registered real estate agents or owner-managers with large property holdings (Adkins et al, 2003; Guthrie, 2002). They are designed and marketed as a professional tool for identifying ‘difficult’ or ‘problem’ tenants in the screening phase of property letting. Clearly, the management of risk is an important element in their adoption and use (Seelig, 2001; Guthrie, 2002) but they also provide a tool for speeding up the approval process for tenancy applications and, thus, minimising the time taken to lease vacant rental property (Kipnis, 2000; Short et al, 2003. Within some databases (e.g. National Tenancy Database Pty Ltd) a ‘risk’ tenant is not listed unless they have lost a formal Tribunal hearing. In others listing information is not drawn necessarily from a Tribunal matter (such as has been the case with Tenancy Information Centre Australasia Holdings Pty Ltd (TICA)2). Tenants may not be aware that information about them has been listed although, under relatively recent changes to Privacy legislation in Australia, agents are now required to seek consent for specific uses of personal information. Tenants may access listed information, although this is often at a cost to the enquirer. The scope of subject records, the breadth of the subscriber base as well as the access arrangements for data-subjects are variable and any comparison of Australian operators in terms of these factors is extremely difficult, given different contexts of privacy, fair trading and rental tenancy legislation from state to state. As indicated by references, above, to relevant legislation, responses to the emergence of tenancy databases in the private rental sector in Australia have been generally to amend
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For information on current Privacy Legislation in Australia see Office of the Federal Privacy Commissioner (2001). It is a matter of note that on April 19, 2004, the Australian Privacy Commissioner issued four complaint determinations under the Commonwealth Privacy Amendment (Private Sector) Act, 2000 that enhance tenants’ privacy rights by ensuring that records about their tenancy history are accurate, up to date and can be accessed for a reasonable fee.
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legislation and policy at the State and Commonwealth levels3. The legislative and policy frameworks within which tenancy databases operate emphasise self-regulation on the part of property managers and database operators (Adkins et al., 2003) and they require tenants to be proactive in seeking information and redress for inaccuracies. Two key questions arise from this: 1. What processes and practices are pursued by Australian Property Managers to regulate the use of tenancy databases in the management of risks in the private rental sector? 2. How do tenants respond to the requirements and impacts of being a database subject and what are the effects upon housing access and tenure options in the disadvantaged tenant sub-market? The research reported here has addressed these by providing some understanding of the implications of tenancy databases for tenure management (from a tenancy management perspective) and housing access (from a tenants’ access perspective) (Short et al, 2003). First, however, we give brief consideration to the relevance of the account of ‘risk society’ provided by Beck et al (1994) for the analysis of the field of rental housing in Australia. Risk in the Field of Housing The rhetoric of risk, according to Beck, Giddens and Lash, informs an increasingly central logic of practice in contemporary society. They assert that the notion of ‘risk’ is central to ‘modern culture’ since so much thinking is of the ‘as-if’ kind (Beck et al, 1994: vii). A key aspect of the emergence of the risk society is the process wherein ways of life become disembedded from the networks and relationships on which industrial society was based and then re-embedded with a presumption of an individualised subject who is: actor, designer, juggler and stage director of his or her own biography, identity, social networks, commitments and convictions. …[and a] compulsion to find and invent new certainties for oneself and others without [the certainties of industrial society. (Beck, Giddens and Lash, 1994: 14). We have noted elsewhere (Adkins et al, 2003) that for property managers, the rhetoric of risk establishes their responsibility to acknowledge and act upon the risk that tenants may default or damage property. Their responsibilities are greater because they are managing properties on behalf of other people and tenancy databases are promoted as a means of informing the processes and choices associated with tenant screening. It can be argued that in the private rental field, the rhetoric of risk establishes a practice of abstracting tenants from the contexts that have led to tenancy problems, positioning them as individual data subjects and thereby, creating new dimensions of division and difference (Forrest and Kennett, 1997:352). This, in turn, raises questions about tenants’ experiences of ‘individualisation’ and their personal practices as data subjects. This perspective provided a starting point for the research presented here. The “Uses and Impacts of Tenancy Databases” Study Informed by this framework for analysis of ‘risk society’, the “Uses and Impacts of Tenancy Databases” Study was carried out in 2002-03, in the Eastern, mainland states of Australia. 3
An overview of the relevant legislation is provided in Adkins et al. (2003) and Short et al. (2003), from which greater detail can be obtained.
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The research involved two main stages. The first was a discrete scoping exercise to understand the operation and use of tenancy databases as part of broader risk management strategies in the rental housing market. The second stage involved focus group interviews and semi-structured face-to-face interviews in each state with representatives of key stakeholder groups. In all, 10 professional property managers, 9 owner-managers, 38 tenants and 15 tenant advocates participated in the research in Stage 2. This paper draws upon the second stage of the research and focuses most particularly upon professional property manager and tenant perspectives as these express the two most salient positions of practice in the field of private rental tenancy in Australia4. Property managers were recruited for the study through the Property Management Chapters of the Real Estate Institutes in each of the states included in the study. Tenants were recruited by referral from various tenant advocacy groups in each state. In recruiting tenants, we sought participation specifically from tenants who (a) were considered ‘at risk’ by advocates and/or (b) believed or knew that they were ‘listed’. It is a matter of note that few of the tenants recruited knew that they were listed on tenancy databases though most felt strongly that they ‘must be’. All interviews were structured to explore the uses and impacts of tenancy databases at different stages of tenancy (application, occupancy and vacation of premises) from different stakeholder perspectives. In discussing each stage, questions were asked about uses/experiences of tenancy databases and about strategies to avoid risk or negative outcomes at that stage. This interviewing strategy emerged from two fundamental features of rental tenancy as a social and economic arrangement that were recognised in the context of our focus on risk: (1) rental tenancy is a process involving different forms of risk-taking and riskmanagement by different parties, over time, and (2) rental tenancy is accomplished through strategic relationships between tenant/s and property managers/owners. Databases in Tenancy (Risk) Management At an early stage of this project, we identified an imperative for property managers to conduct themselves in a professional manner and engage, reciprocally, in risk management through the use of databases or other ‘expert’ technologies (Adkins et al. 2003). Within this discourse of professionalism and risk-management, tenants are individualised and are expected to actively work to construct and maintain their reputation as a ‘good tenant’. Misconduct or improper listings by property managers are downplayed or are considered extremely unlikely. Cases in which tenants have been unfairly treated are marginalised and Property Managers maintain a strong symbolic discourse of effective (even excessive) tenant protection within existing legislative frameworks and processes of formal appeal. Property Managers use tenancy databases in ways that work both practically and symbolically into the key risk management practices of (1) screening (2) ‘communicating’, and (3) ‘listing’ and tenancy databases play into these processes in complex but specific ways at each stage of tenancy. These key practices and the role of Tenancy databases in them will be examined in more detail.
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Adkins et al (2003) and Short et al (2003) contain more detailed discussions of these and other stakeholder ‘interests’ in the field of rental tenancy.
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Screening Property managers routinely screen tenants in various ways. At the formal, ‘professional’ end of the market, identifying risk has been codified into a set of industry practices that centre around a written application for tenancy and the supply of sufficient information to make checks on an applicant’s rental history5. The principal categories of information required were those that enabled property managers to assess each tenant applicant’s ability to afford the rent being asked, their capacity to pay on a regular basis without interruption and the likelihood that they would not damage the property. Among professional property managers, it has become routine practice to use this information not only to obtain references from listed referees and to verify the information supplied but also to check for and access any entries on tenancy databases. Under the requirements of the Commonwealth Privacy Act, applicants must be informed of and consent to their information being verified - but if they do not consent to checks being made, they are unlikely to be considered for tenancy. Refusal to consent is tantamount to disqualification. [We] verify employment; talk to current agent/private landlord. If [the] applicant has sold [their] own property and is moving to a rental – they need to produce an old rate notice. We check passports; ensure visa is valid for rental period; ensure they are allowed in Australia. [We] routinely check that they are allowed in Australia via passports and visa and photocopy them …everybody. If applicant does not want to provide these details …they don’t come back as they feel uncomfortable. This results in a process of elimination [PM 4]6. If a tenant doesn’t agree to be approved … through a database …we won’t even bother to put the application through …and we’ll explain to the landlord why. [PM 5] According to property managers, assessing risk is a complex and multi-faceted process, the outcomes of which depend on the relative economic power of the lessor and lessee - that is, on local demand and supply. When all facets of information have been taken into account, the dominant strategy of selection is, quite simply, to ‘pick the best and dump the rest’. This is clearly a rational strategy for minimising risk in rental property investment but the effect of property managers having access to database information is that the riskiest, prospective tenants can be, ever more efficiently, ‘dumped’ into other segments of the market. Among the most frequently mentioned categories of ‘risky’ tenants were known defaulters, tenancy database listed applicants (who may or may not be defaulters), low-income single and family households7, and those ‘new’ to the rental market (with no or limited rental history) such as young renters, refugees and recent migrants. From the professional property managers’ 5
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Example applications can be accessed on line http://www.mcgrath.com.au/renting/index.cfm?fuseaction=tenantappform. and typical terms and conditions applicable to the Tenancy Application Form at http://www.raywhite.com.au/rw/i/docs/rwcom_tenancy_app_qld_Jul03.pdf . Examples are also provided, as appendices to Short et al (2003). To preserve the anonymity of research participants, they are identified here only as ‘PM1, PM, etc’, for individual Property Managers, and ‘T1, T2, etc’, for individual tenants.
Whilst ‘low-income’ households were frequently mentioned in discussion of potential or actual rent arrears, property managers also emphasised that low income tenants were not necessarily the greatest risk. One example was related in some detail where a tenant who had provided ‘evidence’ of substantial financial collateral (from the sale of real estate) and high income had agreed to rent an inner-city, high cost rental property and had fallen into arrears and was unable to pay. It appeared that the tenant had provided fraudulent ‘evidence’ of his financial status. The estimated cost to the landlord of this breach was some $10,000.
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perspective, the tenants they (and their colleagues) reject go into the kind of rental where both routinised surveillance and checks but also (protective) statutory processes may be less stringently applied (see below). Most property managers indicated that, normally, they would only pursue the application of a listed tenant and raise the matter with the tenant applicant if there were or were likely to be few other applicants for the property or if, on the basis of other information, the applicant appeared very suitable. Thus, only when a risk of vacancy seemed very possible, or when there were no clearly preferable applicants, would property managers be likely to pursue the application of a listed tenant. Mostly, ‘listed’ tenants are rejected outright very early in the screening process. The sharing of information (however unreliable), by electronic means, clearly sharpens and speeds up the process by which ‘risky’ tenants can be forced to move (perhaps progressively) into less formal and more marginal segments of the rental market such as caravan parks and boarding houses. This ‘dumping’ may progress into areas controlled by ‘unprofessional’ property managers, or into informal share housing arrangements where a person’s name may never appear on a tenancy agreement, or in the informal economy of kinship provision or in ‘black economy’, ‘backyard’ arrangements - strategies identified by both property managers and tenants as ways tenants might deal with the negative impact of database listings. ‘Communicating’ A central theme that emerged in property managers’ discussions of on-going tenant management practice was the importance of ‘communicating’- between property manager and tenant on the one hand and between manager and landlord, on the other. References to ‘communications’ were varied, and carried several meanings, ranging from ‘informing tenants of the rights and obligations’ and ‘being clear, up front, that you’re never going to tolerate late rent’ to ‘listening to tenants and landlords’, and ‘building trust’, through to ‘reality checks’ and issuing ‘warnings’ to tenants that they may/will be ‘listed’. The forms of such communications were also varied from informal, verbal exchanges through to written notices to tenants that they risk being listed if they do not comply with the conditions of their agreement and/or formal notices of breaches of agreements. Most professional property managers indicated that they had, on occasions, used a pro-forma letter provided by a tenancy database operator (see Short et al. 2003) to increase pressure on tenants to comply. It is a matter of some significance, in the present context, that ‘warnings’ of possible listing on tenancy databases are typically issued prior to or instead of any formal, legal notices of breaches. Such strategies may be seen as operating outside or alongside (but not, strictly, within) the legal framework of state Residential Tenancy Acts8 that are set up to protect tenants’ and landlords’ rights, and which many property managers believe are biased towards protection of tenants. These strategies may be effective precisely because they are outside this legislation since tenants believe they have no legal recourse to these actions. It is clear that these communication strategies are used, in part, to circumvent what is perceived, by property managers, as a too-lengthy process of legal redress. 8
Queensland – Residential Tenancies Act 1994, New South Wales - Residential Tenancies Act 1987 and Residential Tribunal Act 1998, Victoria - Residential Tenancies Regulations 1998, Tasmania - Residential Tenancy Act 1997, South Australia - Residential Tenancies Act 1995
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Property managers also made it clear that the non-statutory processes of communication noted above are used as levers in negotiation with tenants. Arrangements arising from such negotiations may be favourable for both landlord and tenant, securing continuing (even if reduced) income for the landlord and renewal of tenure for the tenant. Nonetheless, when negotiations over special arrangements to address rental arrears or property damage involve ‘reality checks’ and ‘warnings’ that invoke the threat of being listed, these strategies of communication may be seen as a central aspect of non-statutory power exercised by property managers. The highly targeted marketing (to licensed property management agencies only) of subscriptions and access to tenancy databases, along with limited public knowledge (noted below) and ambiguity in the conditions and procedures for entry and deletion of database records support such strategies of control. ‘Listing’ Most property managers indicated that they do not usually ‘list’ a tenant until the tenancy has been terminated but the variability, within the industry, of ‘protocols’ for entry and alteration or updating of records was a salient aspect of the descriptions by property managers of their uses of tenancy databases. Varied but specific practices and conditions for viewing and entering data were reported by the Property Managers who participated in the study as well as methods of ensuring security of information and compliance with National Privacy Principles9. At the same time, some property managers expressed their belief or claimed to know that other, less scrupulous, property managers had not established protocols and were likely to be more ad hoc in their practices. This, and the fact that professional property managers described highly variable practices (among themselves and more broadly, across the industry) for accessing data may be seen as indicative of the light weight of industry self regulation in the current context of tenancy database usage. All property managers who were consulted as informants for the study said that, as a matter of routine practice, they endeavoured to notify tenants when they had ‘listed’ them but they also indicated that they were not always - indeed, not often - provided with a forwarding address for tenants. Therefore, although they may make every effort to notify a tenant, the tenant’s last known address may be the premises that they had vacated or from which they had been evicted. The practice of updating or amending tenant records was not evidently integrated into professional practice nor routinised as were the practices of viewing or entering tenant records. Importantly, none of the property managers who took part in the study spoke about ‘listing’ tenants who were not delinquent or not judged to be a risk for future, potential lessors. ‘Listing’, as a practice, is very clearly intended to be a barrier or, at least, a significant hurdle to listed tenants’ future access to rental accommodation. Property managers saw such listings as part of their professional obligations to other professional property managers, helping to reduce the risk of the impact of defaulting or otherwise ‘bad’ tenants on the industry as a whole. It thus becomes a strategy that works to exclude delinquent or offending tenants from the ‘formal’ end of the rental market whether they know of their listing or not. Tenants’ perspectives on Risk Management 9
The Real Estate Institute of Australia has produced An Introduction to the New Privacy Issues in the Real Estate Industry to inform its members as well as Guidelines to the National Privacy Principles and the Code Development Guidelines. See http://www.reia.com.au/government/privacy.asp
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For tenants, tenancy databases are yet another tool available to property managers that further supports the presence of a clear power discrepancy in the field of rental tenancy. Tenants draw their knowledge of tenancy databases from a variety of sources but they lack clear and concise information about commercial tenancy databases. A number of tenants interviewed mentioned that they had seen or heard about the use of databases on television, radio and/or in newspapers but most had gained their knowledge through personal experience or personal knowledge of others’ experiences of barriers to housing access. In the context of broader discussions of perceived barriers to rental tenancy, tenants often talked about ‘blacklists’ rather than ‘tenancy databases’ and their accounts reflected their personal histories of exclusion as a result of information being shared among property managers through less formal systems of referral or through personal communication, prior to the widespread use of tenancy databases. Yet, it is clear that in their electronic form, Tenancy databases play a particular and definitive role in constructing the reputation of tenants and determining their access to housing. Tenancy databases are, on one hand, one of a number of verifiable records by which tenants can demonstrate a satisfactory history of tenancy. ‘Not being listed’ (along with getting a full bond refund, references from previous landlords, and so on) was understood as an indicator that helps build a satisfactory rental history. On the other hand, there was a clear realisation amongst tenants that a listing would exclude them from the formal rental tenancy market. In the field of rental tenancy, a ‘good rental history’ has emerged as a key aspect of identity capital that works, alongside specific forms of material and social capital, as a mechanism of inclusion in the private rental market; being ‘listed’ is read as an indicator of severe deficit and effectively overrides all other aspects of a tenant’s application for tenancy. The social-psychological concept of identity capital is particularly relevant here. This idea implies that in a contemporary ‘individualised’ society a store of ‘personal resources’ is required to ‘negotiate life passages’ (Côté, 1996). The concept draws attention to those personal resources necessary to participate in and function between large-scale, poorly integrated institutions like education, the workplace and (we might add) the rental property market. In late modernity, in these institutional settings, ‘tradition-based’ relationships and networks cannot be relied upon. ‘Left largely on their own’, individuals must develop and organise their personal resources to take advantage of opportunities or compensate for deficits arising from the absence of tradition-based ties and institutional supports (Côté, 1996; Côté and Schwartz, 2002). In the Tenancy Databases Study, tenants’ articulated their understandings of ‘identity capital’ in terms of: • A consciousness that personal resources act as a type of ‘capital’ that can open and close pathways in the rental market; • A desire to build and maintain identity resources in order to successfully compete in the rental market; and • A need to repair ‘damage’ to their identity resources (capital) as a result a listing on a TD. These aspects of identity and experience in the private rental market were iterated through the ways tenants talked about the three structured phases of tenancy. From the tenants’ perspective, these phases are best characterised as ‘like applying for a job’, ‘making your (own) history’ and ‘repairing the damage’. “It’s like applying for a job”
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As noted above, verifying the nature of a tenant’s reputation takes place when an application for a particular tenancy is submitted. Applying for a private rental tenancy is seen, by tenants, as similar to applying for a job. The application process involves their providing property managers with a range of information about themselves, including an overview of their ‘rental history’, and having their credentials verified by a third party. A stable rental history (a continuous, long-term, clean record of rental accommodation) has become an essential means of access to rental housing and, through the requirements and practices of proving a good rental history, an ideal ‘good tenant’ has been discursively constructed. The ‘good tenant’ can provide, at the point of application, a passport, driver’s license or other photographic evidence of identity; supply current and previous addresses verified by rent books, electricity/gas accounts or rate notices and real property descriptions in the case of previous owner-occupiers; and provide positive, verifiable references from previous rental agents or landlords. Tenants were well aware that it was important to demonstrate their ability to pay the rent; having a history of stable long-term full-time employment was most advantageous in this respect. They also suggested that it was important to make the ‘right’ impression on property managers; personal presentation and dress are important. On the other side of the balance sheet, several attributes were considered by tenants to be a distinct disadvantage (a deficit in identity capital) when applying for a tenancy. Tenants believed that young people were less likely to be trusted by property managers and being a single mother with young children would cast doubt over one’s ‘ability to pay’ and negatively affect chances of gaining a tenancy. Within the whole process of application and screening, tenancy databases present a particular quandary for prospective tenants. Though a ‘clean record’ can ensure that other credentials are taken into account, a listing on a tenancy database will effectively override all other aspects of a tenant’s application. The imperative of the verifiable personal ‘rental history’ effectively individualises tenants and abstracts them from the social and economic contexts of their lives. “Making your (own) history” Tenants are expected to actively work to construct their reputation as a ‘good tenant’ and they know that tenancy databases play a particular and definitive role in this. Tenants realised that if they have a history of paying their rent on time and have avoided breaches they would be viewed favourably but they need to work at constructing their reputation as a ‘good’ tenant. While it was possible for the tenants whom we interviewed, to recite a list of personal attributes, obligations and responsibilities as constituting ‘good tenant’ status, the practice of building and maintaining their identity capital in the rental market is a much more complicated process. The ways the disadvantaged, tenant participants spoke about problems in tenancy revealed a fundamental tension they had experiences between meeting their obligations to real estate agents and property managers (the institutions that regulate and control the private rental tenancy market) and meeting their personal obligations to friends, family and housemates, that is, those they would need to turn to for support in times of need. Often times, especially for those in low-income social networks, these obligations are in conflict. The honouring of family or friendship obligations to provide emotional support, ‘a place to stay’ or emergency financial assistance could lead to breaches of formal obligations. ‘Getting behind in the rent’
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and ‘having to pay for damages’10 were two of the most salient issues in the stories tenants recounted. As noted above, property managers use various, complementary, formal and informal sanctions to promote compliance with the terms of tenancy agreements. Formal sanctions include the issuing of breach notices and the like. Informal sanctions can take various forms. The practices of informal sanctioning are very much up to the discretion of property managers (and arise from their particular interpretation of and commitment to ‘professional’ practice). This ‘discretion’ is especially relevant in the use of tenancy databases, for a property manager may ‘warn’ or threaten a tenant by referring to their power to list a tenant on a database. Such a threat can occur without transparency or recourse for the tenants involved. Yeah they [tenancy data bases] contribute to an atmosphere, the emotive atmosphere, often people will be reluctant to exercise their rights because they’re scared about being blacklisted, and because the information is not up front … its not very public. I mean we really don’t know how they operate. Rumour tends to feed that sort of fear (T 5). Some property managers indicated that, from their perspective, some form of ‘rent guarantee’, for low-income tenants, managed through ‘partnerships’ with the state or community organisations, would be desirable. One strategy, available to those in receipt of state income support, that tenants know is likely to increase their identity capital and is to enter into a ‘Centrepay’11 arrangement that would ensure regular payments of rent directly to the agent/landlord. Such arrangements were perceived by property managers as a way of meeting the needs of property owners for income and preventing situations likely to lead to warnings of listing, formal notification of breaches or actual listing. Tenants knew the value of setting up secure rent payment arrangements such as a direct debit or Centrepay since this would be perceived as evidence of good faith and preparedness to provide a form of third party guarantee. “Repairing the ‘damage’ “ Despite their efforts to be ‘good tenants’, most of the tenants who participated in the study had, at one time or another, fallen into disrepute. Many tenants, particularly those who had not had their beliefs about being listed verified, talked about ‘blacklists’. Their beliefs about ‘blacklists’ are based largely on informal information networks and are, for the most part, based on speculation, hearsay and rumour. The tenants viewed ‘blacklists’ as the principal way that tenants were excluded from the rental tenancy market; they understood these as lists put together by professional property managers employed by real estate agencies and used both to screen applicants who approached their agency and to provide information (to verify 10
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Incidents of damage to rental properties that were recounted by tenants involved in the study had resulted, in most cases, from situations of extreme economic and/or emotional stress, domestic violence or intoxication, though not necessarily on the part of the tenant. In the situations described, the links between housing and non-housing (social) risks were apparent. Centrepay is a free direct bill paying service offered to customers receiving Centrelink (Commonwealth Government income support) payments. Through Centrepay regular money for rent, electricity, gas, water and other ‘essential living’ expenses can be deducted from a payment. The organisation to be paid must be registered with Centrepay. These payments are voluntary. See http://www.centrelink.gov.au/internet/internet.nsf/services/centrepay.htm
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rental histories, supply tenant references and, most particularly, to provide information about tenants’ breaches and misdemeanours) to other agents. We usually discuss sort of things, like you know, conspiracy theory based on that idea, well they probably all collude in handing information between each other in terms of estate agents and so I mean I’m not surprised to discover that there’s actually these databases at work…[T 2] Tenants suggested that this information is distributed via networks between property managers in a particular geographical area or through real estate chains. These ‘blacklists’ were believed by tenants to be relatively informal and/or localised. Tenants believed that there was little or no form of redress and that tenants’ particulars were noted and distributed at the discretion of property managers. The way tenants talked of ‘blacklists’ and their lack knowledge about commercially operated tenancy databases is consistent with their feelings of disenfranchisement within the field of rental tenancy. The respective rights and responsibilities of tenants and database operators and subscribers are poorly regulated. For example, until recent changes to Privacy legislation, database operators were not obligated to inform tenants of what particular information constituted their listing. Even under current privacy laws, the onus is on the tenant to make the enquiry. In Queensland, it is only since August 1, 2003, that property managers (but not database operators) are obliged to inform tenants of the content of their listing made on a tenancy database. Thus, to date, tenants have been, for the most part, removed from the circulation of information that determines their reputation in the field of rental tenancy. Despite this, they feel that the onus is placed squarely, by all the parties involved, on tenants themselves to ‘fix’ the situation. Tenants, particularly those ‘high-risk’ tenants who knew they were listed, were concerned about the accessing, verifying and correcting the information. Yet, most did not know how or if they could ever repair their tenancy record. Mostly, they did not know whom to contact if they believed that their listing was ‘unfair’, ‘retaliatory’ or ‘incorrect’. Those who did had been discouraged by the cost of telephone access to confirm a listing12 and the requirement to make a written request for information about their record13. Furthermore, seeking information, at considerable cost, about a personal record which they believed they had little recourse to change, was not an action that tenants felt able to pursue at a time when their need for accommodation was urgent. Strategically, tenants usually turned their attention to their most urgent need, which was finding accommodation and they viewed databases as existing outside of the sets of check and balances present in the wider rental tenancy market. What do you do? Once you’re on there and you’re a bad tenant what on earth can you do? You can’t do anything [T 4].
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For example, TICA has a helpline for a tenant to make enquiries or correct incorrect information. In Australia, calls to TICA have been charged at $5.45 per minute with a higher rate applicable from mobile / pay phones. As an alternative to this, TICA recently offered an option to make enquiries by mail which costs the tenant $11.00. The tenant has to supply their personal details (including driver licence or passport number) and can have information returned to them in 10 working days. It is important to note that both tenants and tenant advocates recognised that vulnerable tenants are very likely to be disadvantaged also by personal difficulties with literacy and social skills.
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They did, however, identify several potential strategies they could put in place when they knew (or believed) they were listed14. For the most part these revolved around avoiding the formal rental tenancy market. These strategies could be triggered even if tenants were not sure that their name was on a database; for some the mere suspicion was enough. Alternative strategies for finding accommodation included seeking to rent directly from an owner manager15 – a ‘private landlord’16. Tenants believed that private landlords were far less likely to subscribe to tenancy databases or to have access to ‘blacklists’ and that, on the whole, they were relatively lax in their screening processes. This presented tenants with a better opportunity to gain a tenancy. Tenants suggested that owner managers were also more likely to be open to negotiation and that gaining a tenancy might just be a matter of ‘getting along’ with a particular owner. … she [the landlady] bought this place as an investment … we are her first tenants … she is very nervous and if she found out I was blacklisted there is no way I would ever have got it … she liked the baby … [T 1] Another way tenants negotiated their exclusion from the formal rental tenancy market was through informal arrangements with partners, friends and family. This, for the most part, involved moving into a pre-existing tenancy that is formally held under another name or through other people. Since then I’ve just been staying with friends… we’re actually moving into a place around the corner in two weeks. Another three New Zealand guys got their own flat around there and I’ll directly pay them cash and I don’t, haven’t had to sign an agreement [T 6]. … at the moment I’m at Mum and Dad’s, … I’m trying to save to actually get a deposit on the place, … a girlfriend has an investment property, she let me rent there. I’m just lucky I guess. Another friend had a six-bedroom house and he was looking for some people to occupy that, so I moved in there [T 7]. I rented a house through my Mum … in Mum’s name … the agent didn’t know … [T 1] For some this involved moving into share house accommodation where they were not obligated to place their name on a lease or formal tenancy agreement. Others moved in with partners who had a tenancy arrangement. Some suggested changing their names, or getting parents or friends to sign a lease for them. These opportunities were not open to all people and, in any case, were often forced choices that might ultimately lead to further insecurity and vulnerability17. Some tenants made an active decision to completely remove themselves from the rental tenancy market - for these, particularly younger tenants, moving back into the family home was considered the only option available. 14 15 16 17
Here, the ‘formal rental tenancy market’ refers to tenancies controlled by property managers working in licensed real-estate agencies. Property owner-managers are generally recruited as subscribers to tenancy databases; small holders are not seen to be ‘eligible’ by database operators. This term ‘private landlord’ was used consistently by both tenants and professional property managers to refer to those landlords who dealt directly with their tenants rather than through professional agencies. Professional property managers indicated that ‘stayed with parents/ family/ relatives’ entered on a rental history was a cause for suspicion and equated to a poor or non-existent tenancy record.
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For several tenants these stopgap measures had provided short-term security but, in the long run, they recognised that informal arrangements were likely to disadvantage them in the formal rental market, if only because they would constitute ‘gaps’ in their rental history. Issues in the broader rental tenancy market also play a role in pushing these tenants further away from stable living arrangements in the formal rental sector. Low-cost housing close to services, especially in the major capital cities, is scarce and in high demand. Tenants with a database listing find themselves completely excluded from a market that is already highly competitive. Conclusion This research has demonstrated that the concepts of ‘risk’ and ‘individualization’ as elements of ‘risk society’ are salient in the private rental tenancy arena, supporting the perspective of Beck et al (1994). Both personal strategies (on the part of both Property Managers and tenants) and institutional ways of managing risks have been revealed. For Property Managers, all tenants represent a potential risk to themselves (as professionals) and to property owners (their clients) and they rely on their professional practices, including the routine use of electronic tenancy databases, to identify and reduce perceived risks of rental tenancy. In the field of private rental tenancy, tenants are individualised and the medium of electronic tenancy databases has increased the speed and scope of this process. The strategies recounted by the tenant group for managing their risk of marginalisation in the private rental market are very much centred in accumulating (or concealing deficits in) personal and social capital and documenting their individual ‘rental history’. When tenants talked about tenancy databases, they referred to issues of power and identity, at the personal level of ‘lived experience’. Their perspectives were derived from their felt lack of negotiating power within the general field of rental tenancy. The tenants considered that property managers are gatekeepers who have a disproportionate and relatively unregulated amount of power that can be used to reject and eject tenants from the formal market; they see that the odds are constantly and explicitly stacked against them. It is evident from the complexity of social relations and the constructions of risk in the field of rental tenancy that neither state regulation of the operations and uses of tenancy databases nor public education campaigns will change the prospect that low-income, ‘high-risk’ tenant groups will slip away from the formal end of the rental property market and will be constrained to accept inappropriate housing arrangements or homelessness. Legislative or educative responses will offer some protection to ‘marginal’ tenants by ensuring that they are treated more fairly in the processes of screening and tenancy management. The scope and efficiency of electronic record keeping means, however, that tenants whose rental histories indicate that they are highly likely to breach agreements or offend property managers, landlords (or neighbours) will continue to be excluded from the formal private rental sector. Truly high-risk tenants may also be ineligible for or excluded from public housing. It is apparent from this research that electronic databases do enable property managers to exclude high-risk tenants more efficiently and effectively (with effects stretching beyond local rental markets). It is also apparent, however, that the vulnerabilities experienced by ‘high-risk’ tenants arise not only from their ‘listed’ status and consequent marginalisation in the field of rental housing but from the fundamental incapacities – economic, social and personal - that are likely to lead to their being ‘listed’. The social risks of poor housing and
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homelessness cannot be addressed through the tightening of legislative controls over rental tenancy and risk-management practices in the private rental sector. Indeed, the regulation of risk-management practices, including the operation and use of tenancy databases in the private rental sector in Australia, whilst protecting tenants from unjust treatment, is also likely to improve the reliability and efficiency of screening practices. It is only by acknowledging the non-housing issues that shape risk in the private rental sector and by ensuring the provision of appropriate and affordable housing for low-income and high-risk tenants and that risks for both property owners and tenants will be reduced. References Adkins B., Short P., Mead E., Minnery J., Owens R. & Heffernan M. (2003) Tenancy Databases in the Context of Tenure Management: Risk Minimisation and Tenant Outcomes in the Private Rental Sector, Positioning Paper, Melbourne, Australian Housing and Urban Research Institute. Beck U., Giddens A. & Lash S. (1994) Reflexive modernization: politics, tradition and aesthetics in the modern social order, Polity Press in association with Blackwell, Cambridge. Côté, J. (1996) “Sociological Perspectives on Identity Formation: the culture-identity link and identity capital”, Journal of Adolescence, 19: 417-28. Côté, J. and S. Schwartz (2002) “Comparing Psychological and Sociological Approaches to Identity”, Journal of Adolescence, 25, 571-86. Forrest R and Kennett P, (1997) “Risk, Residence, and the Post-Fordist City” in American Behavioural Scientist, November/December 1997, Vol 41:3, pp342-359. Gregory J. (2001), ‘More tenants flee as rental debts mount’ in The Courier-Mail 16/7/2001: 7. Harloe M (1985) Private Rented Houses in the United States and Europe, Croom Helm, London Guthrie, F. (2002) Recommended Queensland Strategy Regarding Tenancy Databases, Residential Tenancies Authority, Queensland. Available at: http://www.rta.qld.gov.au/ Kipnis Barry, (2000), Dehart Cites Heightened Interest in Resident Background Checks, MultiHousing News, April: 25-26, Subscription available at: http://www.multihousingnews.com Office of the Federal Privacy Commissioner. (2001) My privacy my choice: Your new privacy rights. Available at: http://www.privacy.gov.au/publications/npr.doc Seelig T. (1997), Privacy Issues in the private rental sector: The growth of tenant databases in Australia, National Housing Action, Volume 13(1). (1998), ‘Tenant Advocacy in the private rental sector: addressing power imbalances in rental housing’ contained in T. Burke (ed) Responsive Jurisdictions for Changing Times: Third Australasian Conference of Tenancy Tribunals and Associated Bodies, Centre for Urban and Social Research, Swinburne University of Technology, Hawthorn. Short, P., J. Minnery, E. Mead, B. Adkins, A. Peake, D. Fredrick, M. O’Flaherty (2003) Tenancy Databases: risk minimisation and outcomes, Final Report to Australian Housing and Urban Research Institute, Melbourne. The Age (1997) ‘Landlords ‘must have’ data on tenants’, January 18: 6.
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