Housing and rental affordability is one of the most pressing issues of our time. What are the key issues, how are governments intending to fix it and what role can proptechs play?
NSW Property Services Commissioner talks to the new Rental Commissioner Trina Jones to discuss options.
John Minns
So we've got 15 or 20 minutes to solve the international problem of property management and rentals, so that should be easy. Fortunately, we do have a couple of really great experts with us today. I probably should just to slightly further endorse the very excited to have Trina operating as the first rental commissioner in New South Wales. Former CEO of homelessness New South Wales. This incredible dynamic ball of energy and authority. Who's come in the last few weeks and largely transformed some of the stuff that's happening behind the scenes in The Regulator, which is wonderful, but based on three important principles of fair, quality and affordable trainer for the rental market. So that's all very important things. And I guess, Ben, we've seen you in a variety of formats, CEO and founder of Alo, but it's not often we have real estate royalty on the stage. And the White family, many of you are aware of Ben led Property management, I think, for the Ray White Network as Chief Executive for a considerable period of time and has a long and expert history of leading innovation in the sector.
John Minns
And I particularly like Ben on your website, the Vision Statement, to make every investment a good home and every home a good investment. I'm just wondering if you could talk us through that a little.
Ben White
Thanks, John. So Ailo is a property management platform for those that don't know, and we help real estate agents, landlords, renters and so on, all manage their relationship. And the mission statement you mentioned for us is founded on a core belief of mine, which I don't think one thing if I could change one thing in this industry, change five things, one of them would be this belief that there's a warfare between the classes. Landlord versus renter, property management versus the world, business owners versus property managers, of course. And every other combination that there's a zero sum or certainly an impossibility to solve it. So our mission is fundamentally leaving side. The words in it is the idea that there is a win, win.
John Minns
Win in this and that's what we're that's fantastic. And Trina, we talk about solving problems. You've brought a strong message of collaboration that your viewers to the number one or two problem that we're facing in the rental market at the moment.
Trina Jones
Yeah, thanks very much for including me today and I'm very grateful to be here on the panel with Ben and John. When we think about the rental market, we have to understand that there's a lot of people that are under pressure right now. We know that renters are really doing it tough in terms of cost of living and putting a lot of pressure on them in terms of being able to pay their rent and live their lives in a way that can be decent and thrive in their communities. But we also know that owner investors are under pressure as well. Right now we've done a consultation in Community and had over 16,000 responses and 400 long performed submissions. And all of that feedback from Community is telling us that there's a lot of fear, there's a lot of concern, people are under a lot of pressure.
Trina Jones
And the reason that people are under a lot of pressure is because we simply don't have the level of housing supply available to meet the need that we have. But I will say that it's not just about increasing supply because we've seen increased supply and we haven't seen increased affordability. It's making sure that we get the right mix of supply that can deliver affordability in the rental market. So from my perspective, I'm very focused on fair quality and affordable rental experience in New South Wales. I'm sure we'll get an opportunity to talk to some of those. But on the subject of affordability, for me that looks like investment in social and affordable housing and also supporting institutional investment or an institutional investment framework that can help us have more diversity of supply in the market in terms of rental market and also help homes be affordable to live in.
Trina Jones
So for this group, some of the things that we're thinking about is affordable bond scheme, which would largely be a technology solution that can help people transfer one bond to another. But I'm also very interested in having conversations about homes that are affordable to live in and how can we know what costs to live in our home, like what is the technology available to us. And maybe some people would have heard from CoreLogic earlier today with some of the really exciting stuff that they're working on and I'm very interested in that as well.
John Minns
Yeah, fantastic. So, Proptech founders, I think we've got a couple of big problems there which we're obviously looking to many people in this room to help solve. But maybe Ben, you've thought about this from a business perspective, but I think you've also thought about it at an industry level. What are some of those pain points that you're seeing that need to be solved and either partly solved, already solved or haven't even been thought of?
Ben White
I think there's been a generation of technology, I think we're reaching the end of that generation that hasn't really been about changing the dynamics between the parties, it's been about taking the old world and turning it into software, paper to software. And I think that I imagine most businesses for him aren't that. But that was it for a long time and there was a false dawn and 15 OD years ago when the cloud came and but nothing's fundamentally changed. If you were a landlord and you went back in time or a renter went back in time, in a time machine, 20 years, I don't think your experience would be different fundamentals. It's just more expensive, probably, and everyone's expectations are higher, which I think I actually think it's a good thing that's true. Ultimately. I think as an industry, what we need to be doing is demanding I speak as real estate to proptex.
Ben White
Real estate industry should be demanding a lot more from proptex, and proptex need to really understand the dynamics. It all looks easy from the outside. How hard could it be? To be a property manager is a common thing, I hear, and it's so mistaken and why can't you just do this and just fix that one thing? But everything speaks into something else. You've really got to love it. If you don't love the problem, I don't think you can solve the problem. There's a lot of people I meet and speaking in my Ray White days, I'd get people knock on the door. It was my job to meet all those people and they would often have this idea, but they didn't understand it and they didn't love it. They kind of hated the industry, they kind of hated whoever they were against. That's what I felt, their emotion.
Ben White
And I think you've got to start with the love of it. It's a beautiful industry, it's wonderful people. Everyone's trying renters. There's one third of the Australian population you can't connect with that. There's something wrong with you in Australia is their investment and they're trading wealth for their family and as they perceive it, that's dynamics incredible. So that's probably too high level, John, to your question, but I think unless you're prepared to really understand it and not just complain about it and the most common one I get is property manager. Stupid property manager this, property managers don't change all that stuff. The kind of anti property manager I think you won't find.
John Minns
I think the property industry and the technology industry sometimes ask for trouble themselves. I know when I'm in Sydney I'm renting a property, so I'm using one of the platforms that's out there, which I don't think is represented here today, but I'm not going to throw names out. There was no question it was much easier to sign a lease. But the difference between now and last time I rented, which was probably about 40 years ago, was that I still need to get in touch with the property manager, but they're no more likely to reply to my emails or my messages on the app than they were on the phone before. They're taking too long to do it. So I'm not getting that better experience, I guess. You've been looking at a lot of experiences and you've heard from over 16,000 people about some of the things that they're dealing with.
John Minns
Trina, what are some of those things where it should be obvious that technology could help and improve things such as privacy or communications or otherwise? What sort of things are you observing where it could make a real difference and a step change quickly?
Trina Jones
Look, one of the things I'm really focused on, and there's a few probably, but maybe to give this room something to think about is that pillar around quality. When we talk about quality, we're talking about really safe and decent homes, right? And let's not forget, these are people's homes. Yes, they're assets that can be bought and sold, but ultimately what they're used for is person to live their life for them to connect with their community, to make decisions about where their kids go to school or where they can care for their family members, where they have their celebrations and where they go for safety. Right? Well, hopefully safety. So when we start to think about quality homes, one of the challenges that I have is that when a person goes to rent a property, they do that condition report often. Sometimes it's digitalized, but generally it's paper based.
Trina Jones
They'll do the condition report, and the condition report can ask them, has this property met the minimum standards? And you can say no. And then everyone goes, okay, thanks for your bond, thanks for your rent, have a great time. And one of the challenges that I see is people write to me and they write to Fair Trading all the time and say, my property is not safe, but I can't raise it with my landlord because I'm afraid I'll get evicted. And that's a bit about fairness. Okay. Do we have the right laws to protect people, both landlords and renters? We can talk to that, John, if you want. But on the space of quality, how can we ensure that if there's a situation where the property is not rent worthy that it can't then you can't go forward in the lease, that there must be some kind of mandatory reporting.
Trina Jones
And the way that I think about this is when we go and get in our cars, I'll go and get my car now and the other cars on the road, we can be assured that they're safe because everybody's got to pass that green slip when it comes to the end of the year. Whenever you got to do your green slip, reggo your car, you've got to make sure that it's road worthy. And yet we have homes where people live, and we can't guarantee that they're rent worthy. So how could technology help us to solve for that? When we think about the fact that we've got 2 million renters and high turnover people going in and out of properties, the heavy burden on property managers, how can we link the challenge of this property doesn't meet the minimum standards or needs repair with action must be taken and regulation can be enforceable.
Trina Jones
So I'm very interested in that. And if people have ideas, please get in touch.
John Minns
Sort of talking about that digital filing cabinet, aren't we? We've translated the manual to the digital, but haven't necessarily improved on that. So I guess I'm thinking, Ben, when we're talking about an inventory and condition report that's reported, it exists. It's often in digital form these days, but yet it probably sits in its own silo. Tenants aren't complaining about problems with the property because they're scared they'll get retaliatory action taken by a landlord in a tough market. But that should potentially be a reportable field or could be reported, or it could actually help people improve results. Is that something we should be thinking about?
Ben White
It's a great example of digitizing the paper one. The paper one used to literally be carbonized.
Trina Jones
Sorry, but the service that goes with it is important as well. Right?
Ben White
Yeah, but proptex came and digitized the form. But the step, I don't know. Most inspection apps, the way they work, they send it off and the renter can challenge it. And that's the end. Exactly what you describe that's inegitable. It's just yes, there's a dispute. Let's talk about it at the end of the tenancy. That's how it works. It's like getting a rental. We have any work on this at the moment, and I'm not here to push our stop, but is a very passionate thing for me, this exact topic. It's like going to rental car. You go and circle it. They say it's cleaning. You know, there's a big ding. You give it back and say, okay, well, let's talk about it when you return the car. And that's it. It's unbelievable that we've tolerated it. And because my view, no one's thought about solving problem.
Ben White
They've thought about making it digital. And digital doesn't achieve anything. You've got to rethink it of what the actual point of it is. And the point of it is to resolve for the tenancy the condition of the property. That's it. And if it's not up to scratch, not scratch, and the bond should be returned and the deposit should go back. And poor tenants got a moving van out the front. It's not just the retaliation. There's just the switching costs. My moving van is literally out front. The kids are starting school on Monday and I got to move in today and then you just got to put up with this stuff. It is very a lot of old practices that no one's really addressed. I think some of the thinking that's coming out of the rental commissioner and some of those other things I'm actually really looking forward to which I know some in the industry, in the real estate industry hear that.
Ben White
I think that's I personally think that's misguided and I don't think that's universally held but there are some groups of people in the industry that are going to fight them.
John Minns
I don't think there's any question sorry trendy.
Trina Jones
Yeah, I was just going to say I'm happy to have that fight. Because if people don't have decent and safe homes, then we're not in a position where we can say that we're a community that cares about the people. And also we know that without decent and safe homes, not only do our communities suffer, but so do our economies. So yeah I'm happy to take that one on. Thanks Ben, I'll be with you.
Ben White
Things like bonds, renters have bonds. For the life of me I don't understand why landlord doesn't have a bond as well here. Why not? Why not? And there's some things there's old practice. A lot of the ideas are ante, even prehistoric. Some of the ideas that we live with, and it's not our place. The policy bankers will work out of a solution of a lot of those. And I think what I'm excited about technology is why I've shifted from Ray White into my role is I think the difference now is technology, the modern version, technology can actually be solved. The problem if technology was just let's take the old policy procedures and make some checklists online that wouldn't get me out of bed every morning. But if there's something different there's now what people think is impossible you almost need the naive. The wonderful thing about technology is you almost get to be naive a bit about what you can achieve like maybe there should be bonds.
Ben White
Can we do bonds? And everyone's going to say you can't do it. Why not? Because propertyme doesn't have the landlord bond thing and the bond authority but why not? And I think that's where the technology and regulation, a new wave of regulation, a new wave of technology, I think, is they're going to complement each other than they ever have in I think.
John Minns
You've brought people into the equation. And I think this is actually an important part of we talk about the importance of technology being enabling performance rather than anything else. Look there are some great private rental apps and platforms out there but still in Australia the vast majority of properties are managed through real estate agencies. So I guess part of it is taking the industry who are used to the old ways and in some cases comfortable on the journey. But part of it is also demonstrating how this can add value. So I guess I'm interested from both of you. How can technology enable an agent feel greater about themselves, a residential property manager to do a great job and tenants to have a good experience? What are just a couple of examples, perhaps, where we could make a real difference quickly if people were excited and thought, this is good for me and it's good for you.
John Minns
Win win, as you said before. How do we do that? Any ideas?
Trina Jones
Look, for me, let's think about any scenario in your life when there's a problem, what are the things that can probably solve it? Communication, being able to build a relationship. And I think that technology can create an opportunity for that through promoting rights and responsibilities and having clear goals and roles. Right? So if you can have I'm thinking about the Aillo function and I was so impressed by that because you had clear communication, you can see very clear responsibilities of when things are due and you know what you've got to do and you know what your landlord or your property provider is responsible for. And these are some really good innovations that can give people certainty. And with the innovation comes speed and comes development. And those things are really important. And I think we just have to remember that some people are in that race and they're up the front and they're ready and they've got the digital literacy and they can participate and that's fabulous and it saves them time and they know where they're at.
Trina Jones
But we're always conscious that not everybody's not online and you can't solve everything with an app. I'm a little bit anti app because obviously I love technology and I love the idea of tech for goods. But sometimes I think, don't forget to make a web based platform because you need a credit card to have an app. And some people can't get a credit card and it's not necessarily access to a smartphone. It's actually the Apple Store or the Google Play Store that can sometimes catch people out. So something to bear in mind, but love the idea of being able to not only digitalize paper based forms, but how can we build service in so that you have clear goals and roles? So the tenant knows what they're responsible for, they know what their landlord is responsible and accountable for, and then they can actually work towards those mutually beneficial outcomes.
Trina Jones
And I can really see that. I've had landlord roundtables, I've had renter roundtables, and every time there's an issue that people describe to me and say, that already exists, or did you know, you can go there or you can find out more about that, people just don't know.
John Minns
Anything to add to that.
Ben White
Ben yeah, I wholeheartedly agree with that. One of the things we've seen, we've got a built in two way messaging system between various parties and we recently started publishing response times and so everyone property managers love read receipts on renters and we say that's great, so you'll be read receipted as well and that's a problem. And so that's the deal. If you want to read receipt, that's transparency anyway, you do that and you measure and you see inside a business my response time to a renter might be 19 business hours. Trina's, three and a half and you're one, I got to say two weeks from now mine will be down to like five. Just publishing it has an impact. It doesn't solve the really bad, it doesn't solve the issue regulation needs to solve. But you do get just publishing the data has an effect on what happens next.
Ben White
So I'm a real optimist on there's a lot more to give, it can get a lot better if people just knew. A lot of landlords don't know that they've meant to respond to a repair request in a certain period of time. Now the act doesn't depends what state you're in, if it doesn't really say exactly what that means but you have an obligation or there's certain obligations, I don't really know it, but we're thinking about putting it as like a countdown time, like repairs coming, you got to get onto it and if not, why not? And can another thing we're thinking about is can landlords voluntarily commit to those things? So can a landlord say I'm going to commit to 6 hours, ten business hours? I think just to respond, it's a long story, which is probably not the purpose of this, but a lot of that I see that there's regulation which is to regulate minimums but technology I think is going to allow maximums or whatever the right phrase is and voluntary.
Ben White
I'm not against the regulation, but I think we can go much more. I think the act basically says we're going to regulate the worst people which is guess it's job that what more can we do to create a better society? One third of people, this is one third of the population, most tenants don't trash the property, almost all of them pay on time. Lots of landlords want to do the right thing. How do we allow them to do that so that they're proud of? Most people want to do the right thing. So how do we facilitate that?
John Minns
We could talk for quite a lot more time. We could go quite easily for a couple of hours on some amazing ideas. Unfortunately I'm being glared at from the side of the room that we've actually run over time at the moment. So apology, love to continue the conversation. This is such an important area and such a huge area of opportunity both for prop tech, for real estate and for government. Government won't lead this but government wants to embrace it. So from our perspective thank you Ben. Thank you, Trina. It's been a good conversation. Back to you, Pete.
Ben White
Thank you, John.
John Minns
And thank you, panelists. Rightly. Appreciated.
