In additional comments tabled as part of the senate committee inquiry reporting today, Senator David Pocock has urged the government to consider key amendments to the build-to-rent legislation to ensure it delivers more affordable housing benefits and better outcomes for tenants.

The Senator's call comes after witness testimonies during the inquiry raised concerns about the lack of additional protections for renters and the need for clearer affordability outcomes and security of tenure.

“Supply constraints in the face of growing demand are driving a continued sharp deterioration in the affordability of housing to both buy and rent, tipping more households into mortgage and rental stress and exacerbating the homelessness crisis,” Senator Pocock said.

“Responding effectively to this crisis requires all governments to pull all available policy levers in response - no single measure will solve it. Build-to-rent has the potential to play a role in addressing the housing affordability crisis, but only if we get the policy settings right.”

The Property Council of Australia warned the senate committee that without amendment the legislation wouldn’t add to new housing supply. A number of witnesses including Dr Megan Nethercote, Senior Research Fellow at RMIT University, emphasised the importance of safeguarding and governing affordable housing over the long term, while Ani Landau-Ward, Researcher and Lecturer at RMIT University, stressed the need for better outcomes for tenants with regard to security of tenure and longevity.

In response to these concerns, Senator Pocock said the bill should pass with amendments to give effect to a joint proposal from the Community Housing Industry Association, National Shelter and the Property Council. 

Their proposal recommends:

• Revising the definition of affordable tenancies to ensure they are available to moderate income earners, with at least 20% allocated to low-income earners. Rents would be set at up to 74.9% of market value or no more than 30% of household income, whichever is lower.
  
  
• Lowering the managed investment trust (MIT) withholding tax rate concession to 10 per cent and ensuring a level playing field for domestic superfunds.

Modelling by EY commissioned to support the proposal shows the proposed amendments could deliver 105,000 additional homes, including 10,500 affordable rentals at a minimal cost to the government in the form of tax foregone of $9.3m over a 10-year period. Furthermore, extending the 10% MIT withholding tax rate to existing build-to-rent projects could unlock over 1,200 affordable tenancies.

Senator Pocock said, "I urge the government, along with the Coalition and the Greens to consider these amendments to ensure better outcomes for tenants and to deliver clearer affordability outcomes."

You can read the complete additional comments here.