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A proposal by the New South Wales Greens to allow councils to impose rent and price controls on property investors has been labeled disastrous by the Urban Taskforce.
The Taskforce’s chief executive, Aaron Gadiel, said the proposal, which was reported in the Sydney Morning Herald on Thursday 24 February, was not the solution to housing affordability.
Any law requiring homes to be rented or sold below the market price would make the housing shortfall dramatically worse - if the losses investors suffered weren’t covered by government subsidies, he said.
Mr Gadiel also cited research by the Organisation for Economic Co-operation and Development (OECD) last month which found no clear evidence that comparative average rent levels are lower in countries with stricter rent controls.
“Without compensating government subsidies, stringent rent regulation leads to lower levels of new construction and reduced maintenance in regulated properties.
“That’s because a landlord’s returns are capped, and investors shift the money into more attractive investments.
Mr Gadiel said the solution to housing affordability is simple.
“Boost housing supply, by reducing the restrictions preventing the construction of new homes, reducing the huge regulatory costs faced by developers and investing more public money in the infrastructure of high growth communities,” he said.