Rent Setting Practice Scope This practice applies to properties managed by Junction and Women s Housing (JWH). Guiding Principles Market and rent reviews are fair, consistent and efficient. Rents are set and reviewed in accordance with specific funding agreements and the Residential Tenancies Act. JWH is accountable for the way rents and other tenancy charges are set and reviewed. JWH adopts an approach that provides an appropriate balance between organisational viability and social objectives. JWH will seek to optimise the use of the property, therefore the rent on each dwelling shall take account of the following factors to establish price signals: o market valuation o size of the property and occupancy standards based on the Canadian National Occupancy Standard Where tenants reside in properties where the current rents charged do not comply with this rent setting policy, a specific plan will be developed to transition those tenants to this rent setting policy. Individual circumstances will be taken into account, including any commitments made to sitting tenants who were residing in a property that has been acquired by JWH. The Chief Executive Officer (or General Manager of JWH acting as the CEO s delegate) reserves the right to make the final decision on rents. Definitions Assessable Income Unless otherwise noted, all gross household income is assessable income. Commonwealth Rent Assistance (CRA) All income based rent calculations include 100% of the households CRA entitlements. JWH will calculate the amount of CRA that the household is expected to receive based on their income details and this will be included in the rent calculation. Household members Household members are all other people approved to live in the property regardless of their age or relationship to the tenant.
Income Based Rent Income Based Rents provide a rent subsidy by calculating rents based on household income rather than market rates. The value of the subsidy is the difference between the market rent and the amount of rent a tenant pays. If a tenant is paying income based rent, this means that they will pay less than the market rent. Market Rent The market rent is based on how much the property would be leased for in the private rental market. It is set by reference to a valuation or market benchmark and this information is updated in JWH records at least annually by the Manager, Tenant Services following approval by the General Manager. Tenant The tenant is the person or persons that signed the Residential Tenancy Agreement. Vulnerable households Households that are: Mandated as such by Government at its discretion Mental Health SA customers, housed under the Housing SA Mental Health Supported Social Housing Program Homeless Adults, Domestic Violence, Youth, Families and Frail Aged customers, housed under the Housing SA Supportive Housing Program Homeless Ex-Institutional Adults, housed by direct referral through the Integrated Housing Exits Program Homeless Ex-Institutional Youth, housed by direct referral through the Integrated Housing Exits Youth Justice program Homeless Domestic Violence Perpetrators Disability SA customers Generic Stimulus customers Other as identified by Housing SA, or Households that meet Category 1 criteria of need (high needs). Community Housing (debentured) properties Rent Setting Junction & Women s Housing will maintain compliance with all aspects of the Housing SA, Community Partnerships & Growth (CPG) Rent Policy and Procedures in relation to debentured properties, including rent setting formulae. Rent for this group of tenants is set as:
25% of assessable income (where assessable is defined in relevant CPG rent policy and may not include all household income) Plus all available CRA Plus Additional Services Levy (ASL) Refer to ASL section below Additional Service Levy An Additional Service Levy (ASL) is a charge applied to income based tenancies in Community Housing (debentured) properties for additional services not required by law to be part of the tenancy agreement (for example maintenance of some items such as floor coverings). For the purposes of the Residential Tenancies Act, compulsory ASLs are considered to be part of the rental payment amount. For Income Based Rent the combined rental payment including any compulsory ASL s (other than water) must not exceed 30% of the tenant s income, and in such cases, the rental amount is capped at 30% of income plus CRA. JWH has approval to apply a compulsory water levy to tenants of debentured properties. This levy however, can be applied on top of the maximum rent of 30% plus CRA, in accordance with CPG Rent Setting Policy. JWH currently applies two ASL s: Water Usage - $5.30 per week for water usage up to 30kL per quarter. Additional water usage above this will be charged to the tenant directly as per the current practice. Maintenance Plus - $4.20 per week for ongoing maintenance of items that are not normally maintained by Community Housing Providers as part of the basic maintenance standard. For example floor coverings, window treatments and some security features.
Rent Setting for other property streams Maximum Rent Unless specific approval is granted by the General Manager, rents shall not exceed 74.9% of the ATO Benchmark Rate available at: https://www.ato.gov.au/business/bus/gst-and-non-commercial-rules- --benchmark-market-values/?anchor=table5#table5 or Rental valuations provided by a Registered Licensed Valuer which has been increased on an annual basis in line with the rental component of CPI. Rent increases for NRAS properties must not exceed the rent component of the CPI increase for that year. Minimum Rent Unless otherwise approved by the Manager, Tenant Services the following minimum rents shall apply: Number of Bedrooms Minimum Rent Per Week 1 $120 2 $155 3 $175 4 $195 5+ $220 Rent Setting Subject to the maximum and minimum rents prescribed above the following rent setting mechanisms apply: Income Based Rent 25% Income Based Rent 30% Market Based Rent Which properties / streams All NBESP (stimulus) All HASP TWHA Affordable properties with Wyatt funding All THP All AHHN (high needs affordable). Affordable Housing Target Groups Usually vulnerable and low income households, most with PSP or other supports in place Usually vulnerable and low income households with PSP supports Households up to 120% of state median income
Income Based Rent 25% Income Based Rent 30% Market Based Rent Rent formula 25% of all gross household income plus 100% of all eligible (optimised) CRA. Note. All income is assessed. 30% of all gross household income plus 100% of all eligible (optimised) CRA. Note. All income is assessed. 74.9% of market rent At time of tenancy allocation JWH staff must ensure that rent charged will not exceed 30% of all gross household income (tenant would not be offered tenancy if this were to occur). Rental inclusions Aircon: Maintenance and Replacement of airconditioning in JWH owned properties where the airconditioning was installed by JWH after 2010. Does not include servicing of airconditioning. Aircon: Maintenance and Replacement of airconditioning in JWH owned properties where the airconditioning was installed by JWH after 2010. Does not include servicing of airconditioning. Water: First tier or 120kl of water (or pro rata) per annum. JWH will invoice for any water usage in excess of this. JWH may at its absolute discretion waive minor amounts where the cost of recovery outweighs the return. Aircon: Maintenance and Replacement of airconditioning in JWH owned properties where the airconditioning was installed by JWH after 2010. Does not include servicing of airconditioning. Water: First tier or 120kl of water (or pro rata) per annum. JWH will invoice for any water usage in excess of this. JWH may at its absolute discretion waive minor amounts where the cost of recovery outweighs the return. Rental exclusions Water: Consumption charged to tenant Tenant improvements Tenant improvements Tenant improvements Rent Review Twice yearly Twice yearly for THP properties Annually for AHHN. Annually
Rent Reviews There are two types of rent reviews: 1. Tenant initiated reviews 2. JWH initiated reviews Tenant Initiated Review Tenants are responsible for advising JWH of any change in their income and/or household circumstances within 14 days of the effect of that change. JWH will undertake a review of the tenants rent based on their changed circumstances within 14 days of receiving the relevant documentation. Pending the outcome of the review, the new rent will come into effect after 14 days. This does not apply to Market Based Rent tenancies. JWH Initiated Review JWH will review tenants rent payment amount in accordance with the schedule listed above, and at least annually. Tenants will be advised in writing of the need to provide details for the purpose of a rent review and will be advised of their new rent amount which will come into effect 14 days after notice has been given to the tenant. Rent account adjustments Adjustments to tenants rent accounts are made in a manner that is fair and consistent. Adjustments to rent accounts are always made on the tenant s milestone day (regular billing day). Where an adjustment to a rental account is required, the adjustment will be made as follows: Decrease in rent The adjustment will come into effect the milestone day (regular weekly billing day) before the new rent effective date. Increase in rent The adjustment will come into effect the milestone day (regular billing day) after the new rent effective date following the 14 days notice. Hardship and special circumstances A tenant can apply for consideration of hardship based on special circumstance. No income Where a tenant or household member has no income, JWH will assess the rent based on the statutory income the person would normally receive plus 100% of the person s entitlement to CRA. In exceptional circumstances and in cases of hardship, a minimum rent may be applied. Such decision must be approved by the General Manager. Reduced statutory income Where a tenant or household member receives a reduced statutory income, JWH will assess the rent payable based on the statutory income the person would normally receive. CRA will
only be included in an assessment when the person s income and circumstances entitles them to receive CRA. In exceptional circumstances and in cases of hardship, a minimum rent may be applied. Such decision must be approved by the General Manager and for Debentured properties any hardship adjustments must be compliant with Housing SA Policies.