Rent Setting Policy

Purpose

This policy establishes the approach of Inner East Social Housing Group Limited to setting rent in its long-term rental housing programs. 

 

Scope

This policy applies to all long-term rental properties owned or managed by Inner East Social Housing Group Limited under all relevant programs.

 

Policy statement

Approach to rental affordability – guiding principles

Inner East Social Housing Group Limited sets rent to fulfill its social mission and to ensure that its housing relieves households from rental stress.

 

Accordingly, Inner East Social Housing Group Limited will:

  • set rent in accordance with established affordability benchmarks;

  • communicate clearly to applicants and tenants as to how Inner East Social Housing Group Limited sets and reviews rent;

  • respond appropriately to changes in household circumstances to prevent undue hardship; and

  • comply with its contractual, legal and regulatory obligations relating to affordability of rent.

 

Approaches to affordable rent

 

Inner East Social Housing Group Limited sets rent as follows:

 

The lower of:

  • Household income based Rent;

  • Maximum Rent

 

Household-income based rent

This is determined as:

  • 25% of Gross Household Income plus

  • + 15% Family Payments plus

  • = Total Rent Payable

 

Gross Household Income is determined in accordance with the DHHS Assessable Income Guidelines.

 

Maximum Rent

This is determined as:

the greater of:

  • 75% of the Property Rent; and

  • 75% of the ATO Benchmark Rent,

but no more than the Property Rent

 

Discount to market-based rent

This is determined as:

75% of the Property Rent

 

Additional Property Costs for Some Properties

 

Inner East Social Housing Group Ltd. properties provide facilities and utilities to residents or tenants that would normally be paid for by residents or tenants in addition to rent. Examples of these additional services include:

•              electricity

•              gas

•              water

•              central heating

•              laundry

•              other services or facilities made available to the resident or tenant

 

The cost of providing these items will be incorporated into the calculation of the rent, as explained in the materials given to each resident/tenant at the start of the residency/tenancy. This additional part of the rent will reflect the actual costs to Inner East Social Housing Group Ltd. of providing these facilities and utilities. The total rent charges will not be greater than for a similar room or apartment in a similar building in a similar location in the private rental market that provides the same facilities and utilities.

 

Provision of information about household income

 

Tenants and applicants are obliged to provide to Inner East Social Housing Group Ltd. reasonable evidence that establishes their total household income when requested by Inner East Social Housing Group Ltd.:

  • before being offered a tenancy with Inner East Social Housing Group Ltd.; and

  • when Inner East Social Housing Group Ltd. carries out their annual rent review.

 

Inner East Social Housing Group Ltd. may increase a tenant’s rent to .75MR at the next rent review if the tenant does not provide the information within the timeframe required – that is, within 14 days of the original request. 

 

If a tenant subsequently provides information about reduced household income after a rent review, changes will only take effect on and from the date the tenant contacted Inner East Social Housing Group Ltd. and provided reasonable details of the household income.  Inner East Social Housing Group Ltd. may agree to back-date changes in rent in circumstances where Inner East Social Housing Group Ltd. determines that the hardship provision of this policy applies. 

 

Determining the approaches to affordable rent

 

Inner East Social Housing Group Limited will determine the approach to rent that applies to the property or tenancy prior to an offer of a tenancy being made.

 

In determining the approach that applies to a property or tenancy, Inner East Social Housing Group Limited will comply with legal and contractual obligations that may apply to a particular property.

 

Inner East Social Housing Group Limited will not offer a tenancy to an applicant for housing unless it is satisfied that the approach to the affordability of rent is appropriate and sustainable for that household.

 

Reviews of calculation of rent / rent

Inner East Social Housing Group Limited will provide tenants with a clear and transparent explanation as to how their rent has been calculated.

 

All tenants have the right to ask Inner East Social Housing Group Limited to review the way that Inner East Social Housing Group Limited has determined their rent and to provide a further explanation.

 

Determining the Property Rent that applies to a property

To determine the Property Rent that applies to a property, Inner East Social Housing Group Limited will generally carry out an independent open market rent valuation of all properties every three years.

 

Inner East Social Housing Group Limited may also from time to time adjust Property Rents based on a review of publicly available data on market rents for comparable properties.

 

For properties owned by the Director of Housing and managed under a general lease, DHHS provides the market rent.

 

 

Response to changes in household circumstances

 

If a tenant contacts Inner East Social Housing Group Limited and is facing hardship with paying rent, Inner East Social Housing Group Limited may determine:

  • to re-assess the tenant’s rent based on this policy;

  • to determine that a different approach to rent should apply to that tenancy; or

  • to back-date an adjustment to the rent payable by the tenant to which the tenant is entitled in accordance with this policy.

 

Generally, such changes will only take effect on and from the date the tenant contacted Inner East Social Housing Group Limited and provided reasonable details of the change in the household circumstances.  Inner East Social Housing Group Limited may agree to back-date changes in rent payable in circumstances where Inner East Social Housing Group Limited determines that the tenant ought to be granted relief from hardship.

 

Inner East Social Housing Group Limited determines hardship by looking at the overall circumstances of the household, including:

  • any unforeseen change to household composition beyond the control of the tenant;

  • any material change in the health (physical or mental) of the tenant or members of their household;

  • any disability of the tenant or members of their household;

  • the impact of family violence on the tenant or members of the household; and

  • cultural considerations, including Aboriginal cultural considerations.

 

Communication

Inner East Social Housing Group Limited will provide clear information to tenants on how their rent has been determined and inform tenants of their right to have their rental calculation reviewed.

 

How the policy can be changed

Inner East Social Housing Group Limited may from time to time implement changes to this policy.  The revised policy will apply to all tenancies on and from the date of the change.

 

Inner East Social Housing Group Limited will implement strategies to mitigate the effect of any changes of this policy on tenants and households.

 

Procedures

Procedures established by Inner East Social Housing Group Limited will include processes to ensure compliance with this policy, including:

to set and review the affordable rent;

on communication with applicants and tenants about how Inner East Social Housing Group Limited has determined their rent;

to identify the rental approach that applies to a particular vacancy, property or tenancy; and

how tenants may ask for a determination of rent to be reviewed.

 

Definitions

In this policy:

Applicant

Means an applicant for housing to Inner East Social Housing Group Limited

ATO Benchmark Rent

Means the amount set by the Australian Taxation Office under the GST and non-commercial rules - benchmark market values for Long-term accommodation

Gross Household Income

Means the total household income assessed in accordance with the DHHS Assessable Income Guidelines.

Maximum CRA

The maximum amount of Commonwealth Rental Assistance to which the household is entitled

Maximum Rent

Means the maximum rental amount payable for a property determined for a property in accordance with this policy

Property Rent

Means the open market rent for a property determined by Inner East Social Housing Group Limited in accordance with this policy

Transitional Housing

means the Victorian Government program to provide housing on a short-term basis to people at risk of homelessness seeking long term housing options

 

 

Related policies

 

Allocations of long-term housing policy

Eligibility for long-term housing policy

Tenant rent payment policy

Tenant rent arrears policy.

 

Legislation and standards

This policy implements the obligations of Inner East Social Housing Group Limited under:

Housing Act 1983 (Vic)

Guidelines for Registered Housing Agencies published by DHHS

Performance Standards for Registered Housing Agencies

 

Transparency and accessibility

This policy will be available on the Inner East Social Housing Group Limited website www.ieshg.com.au

 

Review

This policy was reviewed in August 2020. It is scheduled for review in August 2023.

ABN: 92 882 272 807

            Phone: (03) 9853 7501                                                    Email: prameend@ieshg.com.au

            Fax: (03) 9853 7501                                                         Postal Address: P.O.Box 526, Kew, Vic, 3101