Entitled, arrogant, ignorant and occasionally abusive – those are some of the accusations that have been levelled at the latest band of baddies to emerge in strata: downsizing Baby Boomers.
Obviously, this doesn’t apply to all Boomers – because we are members of that ageing club too. But, as we discuss in this week’s podcast, making the adjustment from being kings and queens in their own McMansion castles is only half the story.
Finding out that they don’t even own the external walls of their home can come as a shock to some (but not all) downsizers, not to mention the rules and regulations they are subject to.
And all of this is a bit too much for some (not you, of course!) who are used to people listening to them and doing their bidding without question, and who take their frustrations out on strata managers, building managers, committee members and neighbours.
Also in the podcast, a new report asks why so little has been done to remove and replace flammable cladding from our apartment blocks.
And we ask how generous Airbnb is really being with their website that allows hosts to offer their holiday lets to people rendered homeless by recent floods.
What they’re not doing, despite publicity to the contrary, is offering free housing to flood-affected families. What could and should they be doing? We give our rating.
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TRANSCRIPT IN FULL
Due to dubious quality of the original audio supplied to our transcribers, there may be some discrepancies between the following text and the podcast, which has been re-edited and now sounds as good as ever. A big thanks to our heroic transcribers.
Last week, we spoke briefly about the floods in northern New South Wales and the impact that Airbnb, Stayz and the other holiday rentals could have on the homeless emergency up there. That’s been picked up by a couple of MPs, so we’ll be talking about that today. You’ve got some updates on the flammable cladding situation and we’re going to talk about the looming problem in strata (according to some strata managers), which is Baby Boomers. That’s all in this week’s podcast. I’m Jimmy Thomson, I write the Flat Chat column for the Australian Financial Review.
And I’m Sue Williams and I write about property for Domain.
And this is the Flat Chat Wrap.
Last week, we mentioned the possibility of people who have Airbnb properties, helping out people who have been rendered homeless by the floods, especially up in northern New South Wales, which is Airbnb central, basically; apart from Sydney City. There’s a lot of holiday rentals up there.
And also in Brisbane and the Sunshine Coast.
What happened after we recorded our podcast last week, is that two MPs, Tamara Smith and Jenny Leong… Tamara Smith is the MP for Ballina and a Greens MP and Jenny Leong is the Greens’ spokesperson on housing. They’ve come out saying that there’s a housing crisis already, and there was before the floods up in northern New South Wales (which was greatly exacerbated by holiday rentals). According to an article in The Guardian, there were more than 6260 Airbnbs operating in the area and there was a shortage of about 2300 homes, for long-term rental. Now, we don’t know how many Airbnbs were affected by the floods; I’m sure there were some, but I think we can safely say that the situation has not been improved with the floods. Now, Tamara Smith…
And Jenny Leong…
They’re saying “look, we need to get all these properties that would normally be long -term residential rents, we need to get them back into the residential rental market, just to alleviate a situation which was already bad, but is now horrendously worse.”
Because most of these people; their houses have been damaged so substantially, it’s not like they can just clear up and move back in, is it?
No, I mean, some of them have been declared unliveable, because with the amount of water damage; even when they’re dried out, they’ll just be uninhabitable.
That’s right, because I think a lot of the floodwaters and this dirty…
And pathogens inside the wall cavities, as well. So you kind of have to knock them down, right back to the stubs. A lot of people, I think, are knocking their houses down and trying to (if they’ve got any insurance), rebuild in a better way, to make them a little bit more flood and storm-proof in the future.
But, none of that is going to happen overnight.
That’s right, it’s going to be a long-term process, so they really need somewhere to live in the interim.
I’ll come back to the Greens MPs, because they’ve got a whole plan for rentals in the flood emergency; not just up there, but across New South Wales, and I guess, Queensland as well. Airbnb; they’re getting a lot of headlines, saying ‘Airbnb are helping out the flood victims.’ You know, ‘Airbnb are giving people free accommodation.’ Well, they’re not!
It’s the owners that are giving the free accomodation.
What Airbnb are doing is they’ve set up a website, where people can register their properties and say “we’re prepared to give people emergency accommodation for however long. It could be a week, it could be a weekend, or it could be a few weeks. It’s not the same as restoring or returning your property to the residential rental market; far from it, and it’s definitely not Airbnb who are making the sacrifice here. It’s ordinary decent people, who just happen to let out their properties as holiday homes, who are going”well, maybe I will need to help people, as a member of the community; that’s a decent thing to do. We’re not going to get any tourists coming here, anyway and we’re having to refund people who have paid, so we may as well let the property out for nothing.” I mean, maybe I’m wrong, but, I haven’t read anything where Airbnb are saying “if you do that, we will pay the management costs; we will pay for the sheets to be changed.” Well, considering they’re making squillions out of the properties here in Australia, and they pay absolutely minimal tax, it would be the right thing to do. But there’s no evidence that I’ve seen, where they’re doing it. Maybe they are; it would be nice to be proved wrong!
As you say, a lot of this is coming from the people themselves, in the same way… I mean, you’ve probably read about this as well, but lots of Australians are booking Airbnb properties in the flood-affected regions, and not planning to go there at all, but just as a way of giving these people a little bit of of help.
Giving them a bit of income.
For me, it’s great if you’re doing it for Ukraine; a few helping absentee landlords in northern New South Wales, that’s a different thing.
But maybe, they are channelling it towards those ones who are giving up their properties and letting people stay there for free? I’m sure people really, really want to help. We watched a little bit of the appeal on free-to-air stations and people seem to be genuinely, really moved by the plight of those people.
It’s not just that they’ve been flooded out (which is bad enough)… It’s not just that they’ve lost all their possessions (which is bad enough)… It’s, what do they do next? Where do they go? As we discussed last week, these are not the kind of people who are naturally going to want to live in apartments, because they have decided they’d rather take the risk of their house being flooded-out, than have to live somewhere that wasn’t a house.
I mean, we love apartment living; most of our listeners love apartment living as well. I guess there are some people who, have never tried it and for them, it’s going to be completely foreign. It might be people who’ve got a bigger lifestyle block, and they’ve got a few animals and things and so their lifestyle just wouldn’t fit into an apartment. During the floods, and during the torrential rain, it’s been comforting, living in an apartment, because you know, if the apartment is well-built and there are no defects…
You can stand on the balcony, watching the rivers run down the middle of the road, but for some people, that’s a really grim reality. The kind of people who live in those kinds of houses; you know, it’s bigger than a quarter acre block… They’ve got a couple of acres, a big shed where they can go and work and do a bit of carpentry or whatever. They’ve got a couple of cars up on bricks, that they’re fixing up.That’s the kind of thing you just cannot do in an apartment, so I understand people who want to live with a bit of space around their house, but if that trade-off is that now every two years, you’re going to be flooded… They’re going to have to start working on alternatives.
That’s right, because with climate change, it’s unlikely to get any better, so if you think there is likely the prospect of this getting worse and worse every year; that’s an horrendous thought.
Just getting back to the Greens MPs; they came out with a kind of manifesto for what to do after the floods, with rental properties. They are saying, no evictions for 12 month and while the renters might not be able to live in the house while it’s being repaired, they shouldn’t be evicted at the end of the repair process.
Oh gosh, that would be terrible, wouldn’t it?
I bet you it would happen; people fixing up their home and going “oh, this is worth a bit more now.” So, they’re saying no, the renters are going to be able to come back, when the house has been fixed. They’re saying that if a rental home is deemed uninhabitable due to flood damage, they should be eligible for an immediate rent waiver. No questions asked; they don’t have to negotiate, the landlord just says “okay. Stop paying rent.” They should be given bond vouchers, so that when they go to rent another property… Consider this; they’ve lost all their stuff. They’ve lost all their clothes and TVs and whatnot and, they’re trying to rent a new property. The first thing an agent is going to say is “well, you’re going to have to put down a bond.” What is it, two weeks?
Something like that.
Just when they least need their money to be tied up somewhere where they can’t get at it. So, they’re saying a bond voucher, from the government.
That’s an excellent idea.
It is a good idea. There should be no rent increases allowed anywhere in flood-affected areas, for 12 months and there should be an increase in funding for a tenant advocacy and advice centre and they’re talking about a renters’ concierge within Service New South Wales, so that tenants have got one number and one website that they call up. They can say “I’ve got a problem; I need to find a house in this area,” and somebody there with the appropriate connections and expertise, will help them. I know the Greens; the media loves to portray them as being on the ‘loony left,’ but these are incredibly sensible proposals.
I can imagine that they will get cross-party support (one would hope), for all those suggestions, although sometimes when the Greens suggest anything, everybody else kind of runs a mile.
Jimmy Thomson 11:31
They don’t want to be associated with the Greens; they don’t want to give them any credibility, but I think in New South Wales, they’re not as bad as that. Fair Trading; where is our new Fair Trading minister?
Absolutely. I don’t think I have seen anything she’s talked about, about apartments, at all.
Or, anything to do with rentals, or anything like that. It’s all about small business and the only thing that I’ve seen her say about the floods is ‘watch out for scams,” where people are saying “oh, we’re raising money for flood victims.” So, that’s helpful! Anyway, let’s hope that the Greens get a bit of traction on this. It’s good that Airbnb hosts do have a portal they can go to, that’s set up by Airbnb, to put them in touch with people who need accommodation. But really, what’s needed is all those short-term rental properties in flood-affected areas should automatically go back into the residential rental pool, for at least six months. I mean, we’re coming into winter anyway, and the world is about to be hit by a different wave, of a different variant, so let’s just put them back into the residential rental market and they can all get on their lives. After this, we’re going to talk about flammable cladding.
It’s all cheer and light and fun, this week!
Jimmy Thomson 13:12
The baby boomers after that!
Sue, you’ve been looking into a story about flammable cladding in New South Wales?
Yes, that’s right. You might remember the first inquiry into flammable cladding in buildings, after the Grenfell Tower disaster, in which so many people died. They discovered there was so much flammable cladding in our buildings and also, in Melbourne. They had an inquiry and they made lots of recommendations and now, they’ve had this report come out from the second inquiry and they’ve discovered so little has happened… Little progress has been made to date at all, on replacing the flaming cladding in New South Wales. It’s quite depressing… It’s quite shocking. Lots of people have been saying it’s just too hard. Engineers Australia has said that the manner in which the majority of cladding products have been designed and fabricated and installed, makes it a really difficult and costly task to remove and replace non-compliant cladding. They’re saying it’s just really, really too hard. There’s one building that reported that cladding is not simply just in big sheets outside, which might be relatively easy to take off, but it’s also in smaller areas; located in entrances, fire exits, roof areas, balconies and exterior sections as decorative pannelling, because it looks good. It looks fantastic, this kind of stuff, so it’s really, really difficult. Certifiers are saying it’s difficult; they are saying the threshold for replacing the cladding is set too low. The plumbing trades. I mean, so many people have made submissions to this inquiry and they’re saying that of course, they want the replacement of non-compliant cladding, but it’s just really difficult and it can take many years to compete. People are living in danger of their buildings going up, if there’s a terrible fire. Local government stakeholders have said that the councils just lack the resources required, to conduct the regulation and compliance activities that they have to do.
We know that there are something like 240 buildings in New South Wales (apartment buildings), that have flammable cladding on them. Just the other week, we announced our sponsors, Lannock Finance, have been appointed to manage the interest-free loans that are available. What they haven’t yet got, I believe, is somebody to actually provide the finance. They need somebody to provide the finance, but they’re working on that. What’s holding it up? Is it a reluctance, because presumably, there are some strata schemes that don’t actually need to draw down on the loan; they could finance this themselves. They may end up financing it themselves anyway, at some point. They have a legal obligation to maintain and repair common property and this has been established, that it is a defect. I mean, if it was on the outside of a new building (like a building under six years old), then the developer would have to replace the cladding. So, what’s the hold up? What does this report say the hold up is?
There’s lots of hold ups, and they say that the New South Wales Government hasn’t provided a really clear set of standards.
So, who has done this report?
This is from the Legislative Council; the Public Accountability Committee. I think around 74 organisations made submissions and they’re all saying that hardly anything’s been done, because of problems with a lack of clarity about what needs to be done, problems with finding better materials to replace the cladding, unrealistic timelines… Local councils that are having to spend a lot of money, trying to identify the problems with the different buildings, and also, oversee what should be done and then checking to make sure it’s going to be done, according to the right regulations. The New South Wales government said it would give councils a one-off payment of $10,000, but City of Sydney Council, reportedly in three years, has already spent $378,000 on wages for senior building surveyors and management and administration/legal costs. That’s without actually getting any of the work done, so there’s just not enough money going around; there’s just not enough understanding of the issues. There’s bureacratic problems. Engineers Australia say that professional indemnity insurance for facade engineers, remains a severe problem. They just can’t do it. Some of the engineers in Sydney have stopped offering design engineer services, because there’s no insurance, or you just can’t afford the insurance that was being offered; they are so high now. It seems to need a whole of government solution for this, because there’s no doubt that this is a big problem and the risks are massive.
You know how I feel about the risk factor… There have been two cladding fires in Australia, in apartment blocks and no injuries, that alone…
Before Grenfell, there was maybe, only a few fires.
There was one fire in Melbourne, which was before the Grenfell fire and another was after the Grenfell fire… In both cases, the cladding went on fire and raced up the building and in both cases, it never went inside the building, because of sprinklers and fire-safety measures. I know that you would never want to risk, all of those things working at the same time, but I can totally understand the lack of impetus among the strata schemes, to get this done, because I’m sure a lot of them are thinking it’s just a political thing; that nobody wants to be responsible, if there ever is a fire. Neither would we.
I take your point, that maybe, the risks have been overstated, but at the same time, it just takes one big fire, in one big building…
Yes, to cause potentially, catastrophic loss of life.
They need it to be the ‘Swiss cheese effect,’ where all the holes lined up.
And how often does that happen?
Well, that happened in the Blacktown fire, where the two girls had to jump out of the window, because the building was allegedly badly designed. The building allegedly had a canopy that they shouldn’t have had, on the roof. We know for a fact, that the interior of the flat had illegally had a lock put on a bedroom door, which if they could get to a balcony, they would have been perfectly safe (if they’d been able to get there). That’s one of these worst-case scenarios.
Perfect storms; how often do perfect storms happen? They actually happen quite a lot, don’t they really? There’s that other terrible big fire, in the western suburbs of Sydney, where allegedly, the family had taken the batteries out of the fire alarm system and so, the sprinklers didn’t go off. So you know, that kind of thing. Maybe one floor, or maybe, two people might have done that on one floor and then suddenly, you’ve got a potentially difficult situation.
And it’s like that fire that was in New York recently, where the apartment was on fire; the father grabbed his kids and ran out and left the door open. If he hadn’t left the door open, it is more than likely that the fire would have been contained within that apartment. It was long enough for other people to get out, but as it was, it was the smoke from that apartment, that went up the stairwells and that’s where the fatalities occurred, because people was asphyxiated in the smoke. You’re right, you know; the perfect storm still happened.
We’ve got Project Remediate now, which was introduced a couple of years ago, in 2020 and that offers 10 year interest-free loans. At the same time, there are some buildings (well, only very few buildings), which have actually been very proactive and have started their mediation work, and they’re saying “well, we’ve missed out on these interest-free loans. We had to take out loans with high rates of interest, because we’d already started the work!” It’s really difficult, all the way through.
What nobody’s saying is that, in the 139 proposed changes to strata regulations and laws, that accompany any discussion, one of them is that Fair Trading will be able to go to NCAT and say “you should order this building to fix common property.” At the moment, it’s up to owners to take action against their Owners Corporation or their committee, to say “there’s a common property problem here. Can you order them to fix it?” NCAT normally will, but then a lot of owners; they don’t either want to pay their share of the bills, or they don’t want to be abused by their neighbours, for bringing trouble into the building. Fair Trading will be able to (if this goes through) initiate that action and have orders. Now these backsliders in the flammable cladding area could find that; okay, on the one hand, Fair Trading is saying “here’s an interest-free loan to get it done… On the other they’re saying “oh, by the way, we’re going to take orders against you, if you don’t do it,” so that could change the whole landscape.
Absolutely. When you look over the border, at Victoria, the Victorian government set aside around $600 million to remove the cladding. They’ve had a lot more success, obviously, because they give the apartment buildings the funds to do it themselves. They’ve managed to remove the cladding and replace the cladding, on many buildings. It’s led to much better outcomes than we’ve had in New South Wales, with the New South Wales model.
Which clearly, the Building Commissioner would dispute. I heard him saying just the other day, that there’s all this nonsense spoken about how much better things are in Victoria, but that might be because the buck stops on his desk, for this one, as well. Well, let’s hope things keep moving forward now, but it seems to be quite a slow pace.
It does. It’s interesting, because they’re saying that so little progress has been made, hopefully, that’s going to actually start spurring people on, because nobody under any government’s watch would want anything awful to happen. Suddenly, the flame could be shooting back to them.
Time has passed, since the Grenfell Tower; is it five years now, or more?
It feels like it, doesn’t it?
It could have been done by now. When we come back, we’re going to talk about the new bugbears of strata; downsizing baby boomers.
Why are baby boomers suddenly, the biggest thing in strata living?
Well, I was going to ask you the same question. Why would you think that downsizing baby boomers are causing problems in strata?
Well, I reckon a lot of them are coming from big family homes, where they’ve kind of been the King of the Castle, so suddenly, they’re having to come to strata, where they’re just one voice, among many.
I think there’s also an element that many of them have retired and they’ve been successful in business and they’re used to people listening to what they have to say. Now, they’re working into a group where there’s a lot of voices, and they all expect to be listened to as well and they also come in with two things; a lack of understanding of how strata works, and a sense of entitlement. “I’ve been a successful in business, and I’ve got one of the biggest apartments in the apartment block, so don’t bother me with all this bylaw nonsense and stuff, just do…”
It’s just common sense and you go, “no, it’s common property.” There’s a big difference in strata. But, these other people, who have time on their hands, they will pick up the phone. According to the strata managers I was talking to the other day, they pick up the phone, they’ll abuse the strata manager and the strata managers are tearing their hair out, going “well, first of all, I don’t have to listen to this one owner. I have to listen to the committee, that represents all the owners and I’m bound by the law.” The fact that somebody wants to build a gazebo on their terrace; I can’t see any reason why we shouldn’t be able to do it. Well, that’s something that they have to learn; not I have to learn, why that might not work.
No, you’re absolutely right. I think it’s difficult when people have been successful business people and they can have firm views on things, but they can start trying to see the strata committee and the Owners Corporation being run as a business, rather than being run as a community. They start talking about ‘user-pays;’ that’s not really appropriate for a strata community, at all.
The thing is that a lot of these people have skills that they’ve acquired and employed over the years, but won’t be useful for strata. A lot of them just get bogged down in the politics; failing very quickly and in the worst case scenario, they start clustering. As you say, they’re saying “we’re going to run this building like a business.” No! Run it in a business-like manner, but it’s a community.
Many are on fixed incomes now, so they often don’t want to up-keep the building, or they don’t want to see the facilities kept up-to-date. Remember, in our building at one point, somebody said “oh, we should turn off the swimming pool heating over the winter, because not too many people swim in the winter.” Yes, but there are people who swim over winter and that’s an integral part of the building, but because they don’t want to spend any money, it kind of ruins it for everybody else. That can be a huge problem, as well.
Which is true. We’ve been through the whole range of things, like cutting down the concierge services to save money. What happens then, is all you have to do is alert all the owners in the building to what is going on and the majority of owners will say “no, that’s not why we bought into this building and we don’t mind paying (the cost of a cup of coffee and a muffin a week), extra, to keep concierge’s in the building.” But, in getting that message across, it is so disruptive. You have to be disruptive, or people are just not aware that there was a problem.
Absolutely. The strength of your community is in having lots of people of different backgrounds; different ages.
Talking about ages, we should point out that we are baby boomers!
I’m only just one. Often, younger apartment areas, or even tenants, have different priorities to older people. They always want the really good Wi-Fi. For some older people, that will be a priority as well, but for some it won’t. They want electric charging stations, for electric vehicles, in the future. Maybe, some baby boomers might say “no.”
You came across a story about that, didn’t you Sue? Even though he was prepared to put a meter on it.
That’s right, there was an electric vehicle owner in one building. I think we’ve mentioned this before; the strata committee decided that he wouldn’t be allowed to use the electricity from the plug… That’s right and he was willing to pay whatever they wanted and they refused. In the end, he had to take his electric vehicle back and he’s bought a petrol vehicle. He said “this is really ridiculous,” and I quite agree with him. Young people might have those kind of priorities as well, which boomers might not be so sympathetic to.
People will say (like when I was talking about clustering), “look, once a year at your AGM, you get to elect your committee.” So, democracy can work, but what happens is a committee travels along; some people turn up, some people don’t and then somebody, towards the AGM, thinks “I’ve had enough of this. There’s nothing happening here, or I’m not making a contribution, or I don’t like these people,” or whatever. The ruling group will say “don’t resign before the AGM; wait until after the AGM, then resign.” And retain control. There’s a building not a million miles from here, where the current committee has not stood in a contested election, for about seven years. It’s all being done by corruption. I started talking to somebody the other day who said “I’ve been here for five years, trying to get on the committee, and this person just moved in a month ago and I’ve suddenly seen their name on the committee list. I’m thinking, what did I do wrong?” I said “your critical error was trying to get on the committee.”
It is quite funny when you talk about boomers being entitled, isn’t it really, because we’re so used to thinking about millennials and saying that they’re the ones who are entitled; young people. In fact, some baby boomers are really entitled…Incredibly.
I mean, some of the biggest problems we’ve had in this building have been because of individuals throwing their weight around to get what they wanted, when strata law, and the community didn’t want division. It costs everybody a lot of grief and it costs them a lot of money. Ultimately, these things shake out, if you give everything a chance for the strata laws and the regulations to do their work. Everything will even out, and everybody’s kind of looked after, or, the essence of compromise is everybody loses, to some extent. But you know, these things can work out, but people come in and say “I’ve been the CEO of a blue-chip company for the past 10 years, and I pretty much know how things should work, so this had better happen in the next month or so.”
Or, “I’m going to take legal action.” They’re all kind of captains of industry; it’s a very expensive building and that becomes a huge problem.
One of the first stories we ever covered was a building; it was actually a company title, where there were two captains of industry, who were living on the same floor and one of them wanted the carpet in the lift lobby to be vacuumed so that the pile was standing up and the other one wanted that to be done so the pile was lying down and that ended up in the Supreme Court.
And how much money would that carpet have taken?
Okay, we have now lost half our audience, because we’ve been rude about boomers and Airbnb. A marathon podcast, this week, but so much to talk about. And thank you for coming and talking about it all, Sue and thank you all for listening. We’ll talk to you again soon.
Thanks for listening to the Flat Chat podcast. You’ll find links to the stories and other references on our website flatchat.com.au And if you haven’t already done so, you can subscribe to this podcast completely free on Apple podcasts, Google podcasts, Spotify, Stitcher, or your favourite pod catcher. Just search for Flat Chat Wrap with a W, click on subscribe, and you’ll get this podcast every week without even trying. Thanks again. Talk to you again next week.