Podcast: a Perrottet and Petinos poser

Look, we know it’s all done and dusted. David Chandler has re-extended his contract as NSW Building Commissioner, John Minns is back as Property Services Commissioner and Victor Dominello has returned as Fair Trading Minister (for now).

In short, the band is back together and former Fair Trading Minister Eleni Petinos – the Yoko Ono of the strata Beatles – has retreated to Miranda where her skills and character are more fully appreciated.

However, we can’t let it lie. Premier Perrottet insists, Eleni was not sacked because Big Dave and the “other Minns” resigned.  But they definitely would not have performed their synchronised 180s, which would have done ice-dancers proud, if she was still there.

So forgive us if we take one final poke at that recent example of political roadkill to see where the tyre tracks lead.

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LISTEN HERE

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Elsewhere in the pod, Jimmy comes up with an idea for a fast-track Fair Trading dispute resolution system, based on common sense and … um … Judge Judy.

And we try to make sense of an almost incomprehensible report by four universities for the Australian Housing and Urban Research Institute (AHURI) which comes to the stunning conclusion that developers want to make money on their projects.

Who knew?

It also claims that unpredictability makes developers nervous and they need more certainty form government but government probably can’t provide it. Or something like that.  Judge for yourself here.

And we celebrate a small but significant success by one of our Flatchatters in bringing his strata block back from the edge of the cliff of chaos.

All that and more in this week’s Flat Chat Wrap.

If you enjoyed listening to this podcast (or reading the transcript), please share it with your friends using the social media buttons on this page.

TRANSCRIPT IN FULL

Jimmy  00:00

I got a very pleasant message from David Chandler, the other day.

Sue  00:03

Did you?

Jimmy  00:04

Well, everybody got a message from David Chandler, but it said some nice things… I can’t say it said it about me, but the subject line on this email was ‘Jimmy Flat Chat,’ and it said how great it was to have support among people who actually cared and wanted the whole development thing to be better. So we’re going to be talking about how he is back and why he is back; all that stuff. But we’re also going to talk about the mess that the previous Fair Trading Minister left, before she got shown the door. We’re going to talk about a report from AHURI, The Australian Housing and Urban Research Institute. Now, they brought a report and I have got to be honest, I don’t actually understand what it means, but we’ll have a chat about it. And we’ll talk about some measures that places are taking, to try and get more rental accommodation available. And we’ll talk about a couple of things that have come up in the forum. I’m Jimmy Thomson, I write the Flat Chat column for the Australian Financial Review.

Sue  01:16

And I’m Sue Williams and I write about property for Domain.

Jimmy  01:19

And this is the Flat Chat Wrap.

[MUSIC]

Jimmy

Okay, Eleni Petinos, the former short-lived, Fair Trading and Small Business minister… Now, there’s been a lot of stories around about this. About a month ago, she was relieved of her ministry by the Premier, Dominic Perrottet. He said it was because of allegations of bullying and because there was a report about to come out, about bullying and sexual harassment in Parliament. But, it coincided with a letter from David Chandler, basically saying that he couldn’t work with her anymore and there was government policy that had been agreed on and they were supposedly moving forward with (but they’re basically, stuck in the mud). Then there was a whole business of Ms Petinos having had a meeting with some developers, who had for a while, employed John Barilaro, after he left Parliament, and how Barilaro phoned David Chandler and ‘encouraged’ him to meet with these people…

Sue  02:46

That’s kind of real ‘interfering in the process.’

Jimmy  02:48

Absolutely and then, we found out later that John Minns, the Property Services Commissioner (I was just reading the other day), hadn’t been able to do any work, from the moment he stepped in the door. He was appointed as Property Services Commissioner; Eleni Petinos was appointed Fair Trading Minister and John Minns just couldn’t do anything.

Sue  03:12

Oh really? Because she took all the work, or she forbade him from doing stuff?

Jimmy  03:16

Basically she said (apparently), that she was restructuring the department and his job was going to be either taken over by, or he was going to be part of some infrastructure…

Sue  03:29

Some bureaucracy, really.

Jimmy  03:30

Yes, that he really didn’t want to be part of. And he was told a couple of weeks ago, that his services were no longer required. So he walked out the same week that David Chandler announced that he was leaving earlier, from having extended his contract. And then this week, David Chandler is back and John Minns is back and Eleni Petinos has gone. I mean, she’s still an MP.

Sue  03:57

Sure, but she is no longer in that ministry.

Jimmy  03:59

She will probably be an MP for as long as she wants, because that seat in Miranda is an absolutely rock-solid Liberal seat.

Sue  04:08

Yes, but will she be endorsed by the Liberals again, do you think? I suppose it depends. I mean, they’re inquiring about these allegations of bullying, aren’t they? Maybe if that’s going to be the result of the inquiry, then maybe they will disendorse her; who knows?

Jimmy  04:25

It’s very risky to accuse a politician of not telling you truth, even though we know perfectly well that a lot of them don’t tell the truth, a lot of the time.

Sue  04:35

But if she has been sacked from her Ministry by the Premier?

Jimmy  04:38

But he says it’s got nothing to do with David Chandler; he keeps saying this.

Sue  04:42

Absolutely. But if she has been dismissed over allegations of bullying, then he must have some kind of case against her. So therefore, you would think she would no longer have his confidence, so it may be possible, that the Liberals could disendorse her, but who knows?

Jimmy  04:59

With an election coming up next next year, it just strikes me; it’s a very good example of how, by underestimating the importance of the Fair Trading Ministry… It’s the Strata Ministry and its also the Ministry for rentals and real estate agents; by underestimating the importance of that, the Premier has put into place a minister who is quite clearly not up to the job. I mean, there’s no question about that.

Sue  05:36

But from now on, maybe it will receive much more of a priority. Maybe, people will look at it much more and be a lot more careful about who they appoint.

Jimmy  05:47

I think they have to seriously consider (I know I keep banging this drum), having a Ministry of Property; Housing, but not public housing. A ministry that says “we will look after strata, we will look after rents, (because half the people in strata are tenants). We will look after real estate, we will look after strata managers.”

Sue  06:14

And housing as well; houses?

Jimmy  06:17

I don’t know. I mean, it’s seems to me that that is a separate area, that kind of looks after itself. That comes more under ‘Planning,’ for me. I mean, the thing about strata is that all these sections; strata and residential tenancy, and real estate agents and strata managers, and building managers and all that… They are all interconnected and there’s enough going on in there, to keep everyone busy. It’s always been ridiculous, that that’s the same ministry that looks after broken toys, and dodgy mechanics and things like that. All that stuff should be over in small business. Put that over in Small Business. Get rid of the whole Fair Trading name, because it has such a bad reputation anyway. Have somebody in there, who’s a cabinet minister, who’s a senior minister, who actually gets the issues that are involved. I mean, there are millions of people involved in this.

Sue  07:32

And they’re growing exponentially. We’re talking about we need more high-density housing. We need more housing, and it’s going to be high -density, so really, why not start dealing with it responsibly?

Jimmy  07:44

When we come back, I’m going to tell you my cunning plan for fast -tracking decisions at Fair Trading. That’s after this.

[MUSIC]

Sue  07:58

So what is this plan that you have, about fast-tracking decisions on strata disputes?

Jimmy  08:03

Okay, so I am going to be in touch once again, with Fair Trading Minister, Victor Dominello and I am going to propose a plan for sorting out disputes in strata.

Sue  08:18

How are you going to do that?

Jimmy  08:20

I’m calling it my ‘Judge Judy solution.’

Sue  08:25

Judge Jimmy, more like it.

Jimmy  08:26

Right. So basically, what happens is, you’re in a dispute with your committee; you go to Fair Trading, and they say “look, we can go through the normal processes of mediation and whatnot and then if you’re not happy and the problem goes on, we’ll go to NCAT. And if you’re not happy with the response at NCAT, then you can always appeal.” At some point, you start chucking money at lawyers and things.

So here’s an option; ‘Fast-Track Resolution,’ and you have a panel of one current or retired strata manager, one current or retired, strata lawyer, and maybe, an independent person, like a Fair Trading mediator would be the third person.

So the plan would be the plaintiff has 10 minutes to state their case. The defendant has 10 minutes to state their case, the committee has 10 minutes to ask questions. At the end of that half hour, the committee goes away to discuss the case. And other three committee members come in and another case comes in.

After half an hour of discussion, the panel comes back and says, “okay, here’s what we’ve decided. A majority of us think this is the right thing; this is the decision, and you can go along with that, or not, if you wish, but that’s what we think.”

Sue  09:10

So that’s a 60-minute solution, isn’t it?

Jimmy  09:39

Yes, and hopefully, they would say “look, you could take this to NCAT, if you want. We don’t think you’ve got much of a chance there, for x, y and z reasons.” The other thing is, if they say unanimously “you’re right, you’re wrong,” then if they do go to NCAT, that decision will go with them. That puts them at the risk of having costs awarded against them. So if you’ve got a vexatious owner, or a really dysfunctional committee, who are just not going to listen to any complaints, by anyone…

Sue  10:33

They will be penalised extra, if they lose.

Jimmy  10:36

If they’ve been told “the three of us have had a look at this case, and we think these people are right, and those people are wrong,” and the people who lose the case say “well, we’re going to take it to NCAT anyway…” Then they say “fair enough,” but NCAT is already allowed; we don’t have to change any laws. NCAT is already allowed to award costs, if they think somebody has taken a case that never had a chance. So if you’ve already had a panel of experts say “you don’t have a chance,” then you’ve got to be very sure of your ground, if you go to the next stage.

So you know, it’s not going to make everyone happy, but people will be able to go in there, get a result and go home and think… At the very least, think “I’m going to give up, because I think the odds are stacked against me.”

Sue  11:26

That’s an interesting idea, because these three people on the panel; they could do seven cases in a day…

Jimmy  11:32

 Easily.

Sue  11:34

Because some of them, they might not even need  a half-an-hour of debate, it might be much more clear-cut than that.

Jimmy  11:38

And you’ve got two panels; you’ve got two panels of three, just interchanging. You could get through 15 cases in a day and people are getting an instant response. It just doesn’t go on for months and months and months.

Sue  11:53

Which is great, because when you have a dispute, and it does go on, it gets worse and worse, and the two sides become more bitter and more entrenched in their positions, and less willing to really negotiate. So yes, I think that sounds a good idea, Jimmy. Are you going to be one of the people on the panel?

Jimmy  12:09

God no! When we come back, we’re going to have a look at this report from the Australian Housing and Urban Research Institute, AHURI. That’s after this.

[MUSIC]

Jimmy

Here at Flat Chat, we are always telling people that one of the benefits of apartment living, is that you can just lock up and leave when you want to take a holiday. Well, if you’re looking for some inspiration on where to go to make the most of your freedom, take a look at mildrover.com, our website for seasoned travellers. It has news, reviews and special travel deals, in which you can literally save thousands of dollars. That’s mildrover.com, the website that takes you somewhere fantastic, even if you don’t leave home. Okay, ask me about this report, Sue?

Sue  13:00

I think you’ve been studying this report for many hours, Jimmy; what does it actually say?

Jimmy  13:04

No idea.

Sue  13:05

What do you mean you ‘have no idea,’ you ridiculous person?

Jimmy  13:09

Well, let me just read the key points from the executive summary. ‘The private sector residential development is driven by profit. Developers want policy certainty, so they can factor these policy settings into their assessment of the potential financial feasibility of a development site. The complexity of the development process, the structure of development organisations, a variety of products delivered, and land ownership issues mean the development decision-making process varies by organisation and site-by-site. Therefore, it is too simplistic to assume policy settings will have exactly the same impact on each and every developer and on each and every site.’ Getting confused yet?

Sue  13:53

Well, so the first thing sounded like it was saying ‘simplify things,’ and the second thing sounds like it’s saying ‘it’s impossible to simplify things.’

Jimmy  14:01

Then it says ‘housing market conditions drive private sector development. Policies that stimulate or restrict market demand, will impact levels of housing supply.’

Sue  14:13

 That’s self-evident, isn’t it really?

Jimmy  14:17

Yes, it is. So basically, what they’re saying… I’m not going to read the rest of this, because it just goes around and around in circles. But basically, what they’re saying is, developers develop because they want to make money. Now for most developers, that’s the case. Some of them will develop properties, only to make money; that’s their only concern. Some of them actually want to build a reputation, and that’s a long-term plan.

Sue  14:42

But then they have to make a profit as well, in order to keep going.

Jimmy  14:46

And what they’re saying is things like, affordable housing adds a factor in there that…

Sue  14:54

 Is an expense.

Jimmy  14:55

 And it also can be seen as detracting from the attractiveness of the product that they’re trying to sell. It’s not necessarily set in stone, but a lot of developers would think that. There’s another thing that I found back in February this year; there was a piece in the Fin Review about how we’re heading for a bottleneck of housing. Basically, even though a lot of people are not in the country now, when the new housing comes on tap, then those people will start returning, anyway. We’re never going to actually get ahead of the game in terms of housing the number of people who need to be housed, just using the housing that is planned; that’s going to be coming along. It pointed out that there was a time when a huge percentage of new houses in Australia were built as social housing. That’s almost disappeared now. So, you combine these two things, and this is, I think, what the message is. The government needs to go to developers and give them guarantees. Developers will go “yes, I can buy this piece of land here. I’ve got approval from the council to build x-number of apartments,” and it will be, generally speaking, apartments that will make the big difference. So I can do that there, but it’s going to take three or four years for this to come up and I’ve got no idea…”

Sue  16:23

What prices are going to do. What the supply disruptions might be, on the world stage. How much building costs are going be…

Jimmy  16:30

So I’m going to be very conservative in my planning.

Sue  16:33

Okay. So basically, it’s saying that the government should offer some kind of guarantees and backing for those developers?

Jimmy  16:40

I think that’s what it’s saying. I don’t know if it’s actually… I mean, five different universities, or four different universities, have contributed to this report. But I think what they’re ultimately saying is, if the government wants to deal with the housing crisis, it has to go to developers and say “you develop these, and we’ll buy the apartments off you. We’ll guarantee you…”

Sue  17:06

Form partnerships in some ways. Work together, rather than it just being a mishmash of a system, with developers coming in and some of them going under and then disappearing and others carrying on.

Jimmy  17:18

If the government has come to the developer and said “right, you’re going to build this big development; we are going to guarantee that you have sold 30% of those apartments, because we’re going to buy them off you.” Now that’s not necessarily for social housing, that’s the government saying “we will guarantee that that you will be able to sell 30% of the apartments.” And then you have a department in the government that says “okay, these are built. The developer bought the land, the developer got the approval, the developer got the finance from the bank… They’ve built the apartments; we now own 300 apartments in an 1000 apartment development. Let’s see what we can do with them. Let’s sell them, let’s rent them out. Let’s have an agency that rents…

Sue  18:04

Let’s have affordable housing, rather than social housing, or social housing. Although, that’s what they did in Wollongong, with that housing complex I visited there. It was a private development, but one agency of the government had promised to buy a certain percentage for affordable housing. So that means for nurses, or police officers, or fire people. You know, with essential services. So that made the development viable, really. And another development by the same developer; Traders in Purple, I think they were called… The affordable housing element was so popular, they ended up buying the whole of the development for affordable housing and it became a real success.

Jimmy  18:48

Well, in that regard, yes, because they sold all the apartments. However, was it the Council or the government, that put a limit on the number of affordable housing units in the new development?

Sue  19:01

I think it’s a maximum of 30%, because they kind of believe that if you have more than 30% of the development that’s affordable, or social housing, then it may become a bit of a ghetto and the private buyers won’t want to buy. But if it’s just 30%, then private buyers won’t be put off. If it’s a good development, of course.

Jimmy  19:21

If anybody wants to read this AHURI report, I will have a link to it on our website. And if you can work out what it means, please tell us!

Sue  19:34

If you’ve got five universities contributing to this, sometimes it’s like a man, who’s got five watches and you never really quite know…

Jimmy  19:40

You keep using that analogy.

Sue  19:41

I know. but I think it’s such a good analogy. Well, five watches, you would have no idea what the time is. Two watches, you might think “well that one’s always wrong.”

Jimmy  19:43

It’s only two watches.  Yes and then there’s the other one, which is, a broken watch is right twice a day. Unless it’s a digital watch. Too much watch talk here!

Sue  20:04

It’s never right is it then; a digital watch, if it’s broken, because it doesn’t show… That’s right. I mean, there’s a huge shortage of rental property everywhere, really and particularly in coastal towns, where lots of people from the cities have been going for a bit of a lifestyle change, during and after COVID. In Kiama, the local mayor apparently is talking about writing to all the owners of properties which are let out on short-term rentals, like Airbnb and Stayz and asking them to convert them to regular residential rentals, to increase the supply of rentals available for people.

Jimmy  20:08

When we come back, we’re going to talk about some radical thinking about what to do about residential properties that have been turned over to holiday rentals. That’s after this.

[MUSIC]

Jimmy

So Sue, you came across a story somewhere about; is it Kiama, where they’re concerned about the number of residential rental properties that have been given over to holiday rentals? But if they make less money off residential rental than they would off Airbnb… You did a really interesting story two months ago, where you discovered that unless you’re actually running your Airbnb’s as a business, (you’ve got several of them in one area), then actually making a profit; once you start paying for changing the towels and sheets and handing over the keys, it’s actually not a guarantee to make money, is it?

Sue  21:45

No, I think a lot of property owners/investors think “wow, I can get $500 a week for my Airbnb property and I’d only get $200 a week, if it was just rented out all the time.” But, once you’ve factored in all those costs, and also, if it’s in a holiday town, and you’re maybe in Sydney or Melbourne; if you’re not able to go and inspect the property regularly, it can get really rundown, because somebody just going into service and clean and wash the sheets, they won’t notice if there’s chips on the wall. They won’t be looking for those kinds of things; they will just be in and out. So therefore, the depreciation can be huge, because you might have nice wooden floors, and they’re all getting scratched, because you’re getting lots of people in there all the time; big turnaround. And so therefore, sometimes you’re just not making as much money as you think. I guess maybe, the Mayor is going to point that out.

Jimmy  22:45

Yes. What we need is maybe, AHURI could get onto this and get five universities to do a definitive study on what is the real profitability, because we’re hearing about towns in America, where they are offering money to landlords, to put their properties back into residential rentals. I believe Tasmania did that.

Sue  23:09

Yes, that’s right, they did.

Jimmy  23:12

I don’t know if they’re still doing it. It hasn’t been a big problem, because of COVID. We’re coming out of COVID; we’re heading into summer…

Sue  23:22

We’re trying to get more migrants into the country, to take some of the jobs that we just don’t have enough people to do. They’re going to need somewhere to live. Overseas students coming back…

Jimmy  23:33

And this week, I’ve been tinkering with our travel website, mildrover.com. I’ve got this software on it, that tells us that we’ve been actually making money from that website, because people go on and they see an advert and they click on the ad and we get a 10th of a cent, or something like that.

Sue  23:54

So how much money have we made?

Jimmy  23:55

$24.00.

Sue  23:57

Enough to retire, obviously!

Jimmy  23:59

Fish and chips tonight! I went into Google ads (AdWords, or whatever it’s called)… I’ve banned Airbnb and Stayz from our website. We will probably be making no money at all, from now on.

Sue  24:15

Well, at least you can sleep with a clean conscience.

Jimmy  24:21

The ads work on a basis that there are keywords in the website that they recognise and they see ‘holiday,’ and stuff like that. We’ve got an ad running on the website from Samsonite, the luggage people. That’s cool, that’s relevant. Anyway, I was feeling quite virtuous this week, because I’ve banned one of the most lucrative sources, which is short -term rentals.

Sue  24:45

We will carry on doing this for a long time then, because we won’t be able to afford to give it up.

Jimmy  24:51

Absolutely. We’ve run out of time, and we didn’t get to the forum, but there’s an interesting discussion going on there, for anybody who’s interested. Really early, we got emails from this person; they’d just moved into this building and found it to be totally dysfunctional. There was three members of the committee that never did anything and the strata manager was pretty useless. This person, this flat-chatter, using the Flat Chat column and advice from other flat-chatters, has basically now got a committee of eight. They’re going to start self-managing. The strata manager is about to be told his services are no longer required. He says it’s not 100% there yet, but everything’s coming together. So that’s a good, positive story.

Sue  25:40

That’s great. Oh, that’s fantastic. It’s nice to know that you’ve been of help.

Jimmy  25:44

Yes, I think we have. So that’s a start and a happy note from David Chandler and a happy note from one of our flat-chatters. And I think that’s enough to be going on with. Thanks, Sue. On Sunday night, you’ve given up your precious time to come and talk to us.

Sue 26:01

Pleasure, Jimmy.

Jimmy  26:02

And thank you all for listening. Talk to you again soon.

[MUSIC]

Jimmy

Thanks for listening to the Flat Chat Wrap 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 podcatcher. 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.