Rent rises at one of Australia’s largest providers of independent living units for seniors have been found to be “unreasonable” by a state regulator – but the company plans to continue with them anyway.
Eureka villages can be found in outer suburbs and regional communities across Australia, claiming that they offer “affordable rental housing” to independent seniors.
But over the past 12 months, residents of some of its 52 villages – the majority of whom are age and disability pension recipients – have been receiving notices from the company that have given them concern.
They start with:
“We are so delighted you are part of the Eureka Family.”
It goes on to list some of the benefits of living in a Eureka village: “fresh and nutritious” meals prepared by a “Village Chef”, “beautiful” gardens and grounds, pets allowed and family welcome to visit.
And then at the end:
“To ensure we offer the best facilities and lifestyle, we have reviewed the cost to operate the Village with our terrific staff and services.”
The notice then says the rent will be going up by $50 a week.
At a Eureka Village in Hobart, residents in one-bedroom units will have to pay $482 per week, which is 77 per cent of the age pension.
The rent rise has pushed some into seeking social and public housing, trying to find a private rental in markets with few one or two-bedroom options, or reducing their spending further just to cope.
Rent rise pushes Julie into social housing
In the Hobart suburb of Glenorchy, Eureka Village resident Julie Rookyard noticed her neighbours starting to receive the $50 rent rise notices one by one.
On the age pension, the rent rise meant she would be left with less than $300 per fortnight for living expenses. She said the food and services of Eureka did not justify the cost increase.
“It was just out of the question for me … I just couldn’t keep up with my budget,” Ms Rookyard said.
She felt she had no option but to move out, and the Salvation Army assisted her to find social housing in the town of Richmond, 25 minutes away.
Ms Rookyard, who has recently moved out of Eureka Village, felt fortunate to find somewhere else to live, but feared others in the complex – particularly those with mobility issues – would have no option but to pay the increased rent.
“A lot of people are on expensive medications as well. And that’s got to be found out of what’s left of your pension,” she said.
Ms Rookyard said vulnerable residents were reluctant to complain.
“They were worried about what the repercussions of it would be,” she said.
Some residents appeal to regulator – and win
One resident who felt comfortable to complain was Bronwen Dodson.
She is one of 24 residents at Eureka villages in Tasmania who took the matter to the state’s Residential Tenancy Commissioner (RTC), arguing the increase was “unreasonable”.
“I’ve lived in two villages before this. And the rents have gone up by $10 a week, [not] $50 a week,” Ms Dodson said.
“It’s very unaffordable.”
In Tasmania, rent rises can be appealed if tenants feel they are not in line with surrounding neighbourhoods.
Eureka Group said it commissioned an independent report last year to “quantify the value of savings” for its tenants, in comparison to the private rental market.
The company argued that the increased rent was due to a new breakfast service, but the RTC found there did not appear to be an opt-out option.
Ms Dodson – and other residents spoken to by the ABC – described the breakfast as “very basic”.
So far, the RTC has ruled in the residents’ favour in every case, deeming the rent rise to be “unreasonable”.
Eureka rent rises well above average for region
In its decision, the RTC compared the rent with “similar properties in gated communities” nearby – also owned by Eureka Group.
“I consider an increase of 11.56 per cent is unreasonable in this instance and note the proposed amount … is higher than the increase seen in southern Tasmania in the 12 months to December 2023,” the decision reads.
“For this period rents for one-bedroom properties in the greater Hobart area saw decreases in the second and third quarter and have seen increases of 3 per cent in the final quarter.”
The RTC ruled that Ms Dodson’s rent will instead increase by $20 a week, rather than $50. It was the same outcome for other Glenorchy village residents who complained. Launceston tenants also received a partial discount.
Ms Dodson said it vindicated the residents’ concerns.
“Some said it wouldn’t work … ‘Oh, they reckon they can get the rent down for us,'” she said.
“Well, we’ve proved that we can.”
Only those who complain get the lower rent
But the reduced increase will only apply for those who complained.
The Tasmanian Tenants’ Union asked Eureka if it would apply the RTC’s decision to all residents at its five Tasmanian sites as a “gesture of goodwill”.
In reply, Eureka said it “diligently adhere[s] to all relevant tenancy acts and regulations”.
The $50 a week increase will remain for most of the other tenants.
Tenant Sandra Flintoff felt that was unfair, and she will try to find a private rental instead.
“That’ll be a hardship for a lot of people,” she said.
“I worry about these people. I don’t know where they’ll go, what they’ll do, if they don’t have families. And a lot of them don’t have any family at all.
“I will be moving out.”
In a statement, Eureka Group said its rents had remained “steady” during the COVID period, and it was incurring greater operational costs.
“In Tasmania alone, Eureka has incurred a substantial increase in operating expenses led by a 15 per cent increase in wages for all staff employed under the Aged Care Award and Australian food inflation, which is currently tracking above CPI,” the statement reads.
“To maintain our high standards and to ensure the quality-of-service delivery, it is necessary for rental rates to increase.
“However, Eureka believes that its rental rates represent exceptional value for residents whilst remaining market competitive.”
In late 2023, Eureka Group’s wholesale property fund acquired a further six villages in Western Australia for $44 million.
The company describes its financial position as “strong”, and reported an after-tax profit of $19.2 million in 2022/23 – an increase of 134 per cent on the previous year, underpinned by “organic growth in existing villages”.
Broken Hill mayor frustrated with Eureka rent rises
It’s not just Eureka Villages in Tasmania that are seeing rent increases.
Last year, residents at Shorty O’Neil village in Broken Hill, New South Wales – also a Eureka site – were told their rents would increase by $50 a week.
Broken Hill mayor Tom Kennedy said this had negatively impacted the lives of elderly residents.
“A lot of those residents will have to make the decision whether they look for somewhere else, but that’s difficult in Broken Hill,” he said.
“They’re stuck between a rock and a hard place. There’s actually no rental properties for them to move into.”
The council conducted a market analysis last year, in response to the rent increases, and estimated the village had an annual surplus of $150,000 – factoring in income and operational costs.
Cr Kennedy said the village should have stayed in council hands as a public asset, and he believed Eureka was acting in the interests of its shareholders, not its tenants.
“You’d like to see Eureka take a balanced position where they look after the residents and the community, and still make a small profit.”
Eureka rejects claim of ‘one-size-fits-all’ rent rise
In its statement, Eureka Group said it does not apply a “one-size-fits-all approach” to its rental rates.
“Eureka does not apply rent increases on a national basis, but assesses each village and market individually, with consideration given to the local socio-economic environment,” the statement reads.
Eureka Group defended its meal services – including against claims from a Tasmanian site that they are pre-frozen and highly processed.
“Over 90 per cent of the meals provided in our villages across Australia provide residents with fresh and nutritious home-style meals and there have been very few occasions where processed or pre-frozen food has been provided because of extenuating circumstances,” the statement reads.
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