Regulatory Impact Statement: Draft Boarding Houses Regulation 2013

Regulatory Impact Statement

Draft Boarding Houses Regulation 2013

Regulatory Impact Statement: Draft Boarding House Regulation 20131

Document approval

Regulatory Impact Statement: Draft Boarding Houses Regulation 2013 has been endorsed and approved by:

Jim Longley
Chief Executive
Approved: 28/02/2013 / Linda Mallett
Deputy Chief Executive
Approved: 19/02/2013

Document version control

Distribution: / Public

Regulatory Impact Statement: Draft Boarding House Regulation 20131

Document name: / Regulatory Impact Statement: Draft Boarding Houses Regulation 2013
Version: / Version 1.0
Document status: / Current
File name: / AH13/53749
Authoring unit: / Law and Justice Directorate
Date: / 19 February 2013

Table of contents

Executive Summary

1Introduction and the need for government action

1.1New Act to address identified problems in the sector

1.2Parts of the new Act cannot commence without a supporting regulation

1.3Current regulation has different standards for licensed boarding houses depending on when they were first licensed

1.4Draft Regulation

2Objectives of government action

3Consideration of options

3.1Approach to analysis of options

3.2Costs and benefits of each option

3.2.1Option A: Maintain the status quo

3.2.2Types of costs and benefits for Options B, C and D.

3.2.3Assessment of Option B: New standards to apply to new boarding houses only

3.2.4Assessment of Option C: Proposed Regulation

3.2.5Assessment of Option D: All new standards apply immediately to all operators

3.3Analysis of viability if the draft Regulation is introduced

Appendix AMulti-criteria analysis

Appendix BAssumptions for analysis of viability

Regulatory Impact Statement: Draft Boarding House Regulation 2013

Executive Summary

The NSW Government has recently acted to address longstanding problems identified in the boarding house sector. The Boarding Houses Act 2012 (the Act) was passed by Parliament in October 2012 and parts of the Act commenced in January 2013. The remainder of the Act cannot commence until a supporting regulation is in place.Until a new Regulation is brought in, the Youth and Community Services Act 1973 and the Youth and Community Services Regulation 2010continue to apply to licensed (now called ‘assisted’) boarding houses.

The draft Boarding Houses Regulation 2013 (the Regulation), has been developed for public consultation. This Regulatory Impact Statement analyses the costs and benefits of the draft Regulation and compares these to other options to help inform public consultation. It includes specific questions to help focus stakeholder consultation, but comments are invited on any part of the draft Regulation.

The NSW Government recognises that the boarding house sector has an important role in providing affordable accommodation, particularly for people who may otherwise struggle to access private accommodation or have difficulty accessing social housing. Together the Act and draft Regulation are intended to address concerns that the sector is not consistently meeting current expectations of accommodation and service standards for boarding house residents, in particular, people with additional needs.

Many of these concerns are reflected in recent reports of the NSW Ombudsman and the State Coroner in relation to boarding houses licensed under the Youth and Community Services Act 1973. A 2011 report by the Ombudsman refers to allegations of physical and sexual assault and intimidation of residents, lack of support in accessing healthcare, problems relating to food provision and hygiene, and restrictions placed on residents’ contact and communication with family and friends.[1] A 2012 coronial inquiry into the deaths of six residents of a licensed boarding house reported on inadequate staff training and poor quality and coordination of health care.[2]

The Act establishes a simpler and stronger framework for the delivery of quality services in boarding houses and for the promotion and protection of the well being of residents. It provides for the registration of boarding houses as either a general boarding house or an assisted boarding house. An assisted boarding house accommodates two or more persons with additional needs, defined by the Act as persons with age related frailty, mental illness and/or other disability, who require assistance with daily personal care tasks such as bathing, meal preparation, or medication monitoring.

The Act provides for occupancy principles to be observed for residents of all registrable boarding houses. It also allows for service and accommodation standards for assisted boarding houses to be specified in the Regulation.

Since 1995, improvements to accommodation and service standards for boarding houses for people with disability have been limited. The draft Regulation seeks to bring standards for assisted boarding houses into line with community expectations and Australia’s commitment to the United Nations Convention on the Rights of Persons with Disabilities, ratified in 2008.

The draft Regulation includes many of the same provisions in relation to assisted boarding houses as those in the existing Youth and Community Services Regulation 2010. It also provides for:

■the introduction of new accommodation standards, in particular, the requirement for single occupancy rooms and the establishment of a limit of 30 residents – these standards apply to any new assisted boarding houses and to existing assisted boarding houses within five years of the Act’s commencement;

■enhancements to certain service and facilities standards including a requirement for call bells;

■the keeping of a number of additional records;

■minimum staffing levels and a process to assess sufficient levels;

■required qualifications and skills of staff;

■requirements for staff to undergo criminal record checks;

■the requirement to have procedures for dealing with complaints; and

■an increase in the range of notifiable incidents.

The draft Regulation also specifies additional particulars to be notified to the Register of Boarding Houses, permits the publication of information relating to enforcement action taken against general or assisted boarding houses, and sets out the penalties for relevant offences under the Boarding House Act 2012.

The costs and benefits of the draft Regulation have been identified and compared to the status quo and two other options.

Analysis of the options indicates the draft Regulation is preferred over the other options. It provides significant benefits to residents of assisted boarding houses by improving privacy and amenity and reducing risks to residents’ safety, welfare and wellbeing. The benefits would be for residents of all assisted boarding houses (new or existing), although some benefits would only be realised once all existing assisted boarding houses transitioned over the next 5 years to single occupancy rooms, the new staffing requirements, and a proposed maximum limit of 30 residents. This transition period provides scope for operators to plan for and adjust to the new requirements over time.

The draft Regulation includes additional administrative requirements for assisted boarding houses. The benefits of these are improved information about the sector and the support residents require – allowing the NSW Government to better understand and provide for residents – and greater capacity to enforce operator compliance with requirements.

The new requirements will impose costs on the operators of assisted boarding houses. The most substantial are:

1. capital costs if they choose to modify their existing premises (e.g. to create more single occupancy rooms), and
2. reduced revenue if the changes mean they can accommodate fewer residents.

It is possible that these costs will mean more operators of existing assisted boarding houses exit the industry compared to the status quo. A proportion of residents would then be displaced and need alternative accommodation, which is likely to be provided at relatively high cost to the NSW Government. Some assisted boarding house operators may elect to convert their premises to a general boarding house (since these are not subject to the higher accommodation and service standards) or exit the industry altogether. Conversely, the new registration and inspection requirements may help to identify currently unlicensed boarding houses that should be categorised as assisted boarding houses. This could result in an increase in the number of assisted boarding houses, but would depend on the effective implementation of compliance and enforcement mechanisms.

These newly identified assisted boarding houses would be required to meet the higher standards for the benefit of residents but would also face the higher costs of compliance. Some operators may elect to avoid these by changing their operations to qualify as general boarding houses.

Despite the higher costs associated with higher accommodation standards and services, some new operators may be attracted to the sector if the new regulatory framework is effective in improving its profile in the community and because of greater certainty around their obligations. During consultation on the Act, stakeholders reported there remains strong demand for this type of accommodation and high level analysis suggests operators can remain viable despite the higher costs. Returns to operators are strongly linked to property values (and their growth over time) as well as the revenue generated from boarding house fees.

The sustainability of the sector is a priority for the NSW Government. The Minister for Disability Services, the Minister for Family and Community Services, the Minister for Fair Trading and the Minister for Local Government will report back on the impacts on the Boarding House industry within 18 months of the commencement of the Act, including examining the need for further incentives and assistance to support the supply of boarding house accommodation.[3] This has the potential to counteract the impact of any additional costs incurred by operators as a result of the new standards and support a more sustainable sector.

Submissions on the draft Regulation can be made to:
Boarding House Reform
Law & Justice Directorate
Ageing, Disability and Home Care, Family and Community Services
Level 4, 83 Clarence Street
Sydney NSW 2000
A copy of the draft Regulation and further information about the consultation process may be found at
Enquiries about this Regulatory Impact Statement and the draft Regulation may be directed to ADHC at or on (02) 9248 0835.
Submissions must be received by 5pm on Monday 15 April 2013.

1Introduction and the need for government action

Boarding houses play an integral role in the provision of affordable housing, particularly for people who may otherwise struggle to access private accommodation, or have difficulty accessing social housing. There are also some residents who choose to live in boarding houses over other forms of accommodation as it suits their lifestyle in that they don’t have to provide furniture or because they are attracted to the sense of community in a boarding house.[4]

There are currently two types of boarding houses in NSW: assisted boarding houses (previously known as ‘licensed residential centres’), which accommodate two or more people with disabilities who need daily care,and are required to be licensed under the Youth and Community Services Act 1973and theYouth and Community Services Regulation 2010; and ‘general’ boarding houses, which do not house people who require daily assistance.

There is concern that existing regulation does not reflect current expectations about the quality of accommodation and services provided to people with disabilities who need daily support or care (defined as ‘people with additional needs in the Boarding House Act 2012).[5] The NSW Government in Stronger Together: A new direction for disability services in NSW 2006-2016 committed to improving accommodation standards for people with disability, including closing down or redeveloping Ageing Disability and Home Care (ADHC)-owned or ADHC-funded residential centres that house more than 20 people. Residents from these larger centres are being moved into smaller group homes.[6]

Longstanding concerns have also been expressed about boarding house conditions and their impact on the safety, welfare and wellbeing of boarding house residents.

Further, there are concerns that the existing regulatory framework creates difficulties for the administration of boarding houses more generally because of constraints for service providers accessing properties, and because requirements are split across different pieces of legislation. Other issues that have been identified include:

■inadequate information about the unlicensed sector;

■gaps in protections for residents; and

■a lack of occupancy rights.[7]

These concerns are reflected in reports from the NSW Ombudsman. A 2011 report from the Ombudsman to the NSW Parliament refers to allegations of physical and sexual assault, intimidation of residents, lack of support to access healthcare, problems relating to food provision and hygiene, and restrictions placed on residents’ access to a telephone, contact and communication with family and friends, the community and their own money.[8]

In a 2012 inquiry into the deaths of residents of the 300 Hostel in Marrickville Sydney, the State Coroner found that poor hygiene, malnutrition, neglect of premises, poor maintenance, failure to keep records, a lack of first aid training for staff, and over-prescription of antipsychotic medication by a local GP contributed to the death of six residents in the space of 14 months.[9] These findings demonstrate the severity of the risks faced by boarding house residents, and highlight the need for government to act.[10]

1.1New Act to address identified problems in the sector

In response to these concerns, the Boarding Houses Act 2012 was passed by the NSW Parliament in October 2012. The object of the Act is to:

“establish an appropriate regulatory framework for the delivery of quality services to residents of registrable boarding houses, and for the promotion and protection of the wellbeing of such residents, by:

(a)providing for a registration system for registrable boarding houses, and

(b)providing for certain occupancy principles to be observed with respect to the provision of accommodation to residents of registrable boarding houses and for appropriate mechanisms for the enforcements of those principles, and

(c)providing for the licensing and regulation of assisted boarding houses and their staff (including providing for service and accommodation standards at such boarding houses), and

(d)promoting the sustainability of, and continuous improvements in, the provision of services at registrable boarding houses.”

The object of Part 4 of the Act specifically is to enact provisions for standards that are consistent with the purposes and principles in the United Nations Convention on the Rights of Persons with Disabilities.[11] These provisions seek to protect people with disability from discrimination, uphold their liberty and privacy, provide access to the highest attainable standard of health care without discrimination and protect their right to live independently and be included in the community. The fundamental aim of the Convention is to ensure persons with disability are not discriminated against on the basis of disability, and are given the same rights as other people in the community.

Deficiencies identified with the previous regulatory regime were:

1. Difficulties for ADHC staff in gaining entry to licensed boarding houses for the purpose of effective monitoring and enforcement;
2. Difficulties for ADHC in obtaining a warrant to gain entry to unlicensed premises;
3. Inadequate penalties for offences outlined in the legislation;
4. Inadequate provision for the issue of temporary licenses in certain circumstances (such as when a licensee dies);
5. Inadequate requirements for criminal history checks on boarding house staff;
6. Ambiguous and outmoded licensing provisions;
7. Exclusion of smaller boarding houses from shared accommodation standards;
8. Difficulties for local councils in gathering information to support inspection activity;
9. Difficulties in resolving disputes in boarding houses and lack of rights protecting residents and operators;
10. Difficulties in gathering information about residents’ needs;
11. Difficulties in gathering information about trends in boarding house supply; and
12. Difficulties for local councils and operators caused by complex regulatory arrangements.

The box on the following page provides some information about the scope and scale of the sector and identified problems, although comprehensive information about unlicensed / general boarding houses is not available.

Box 1: Scope and sale of the problem[12]

The Act goes some way to addressing the identified deficiencies, although its effectiveness will depend on the level of compliance.

Under the Act, a ‘registrable boarding house’ is either a ‘general boarding house’ or an ‘assisted boarding house’. Boarding premises are a ‘general boarding house’ if the premises provide beds, for fee or reward, for use by five or more residents but are not assisted boarding houses. An ‘assisted boarding house’ is required to be authorised under Part 4 of the Act and includes boarding premises that provide beds, for a fee or reward, for use by two or more residents with additional needs.

1.2Parts of the new Act cannot commence without a supporting regulation

Part 2 of the Act concerning the registration of boarding houses commenced on 1 January 2013. This Part includes requirements for information to be recorded on the Register of Boarding Houses. It outlines responsibilities for proprietors in providing this information, and penalties for proprietors if they fail to provide required information, and it includes requirements for certain particulars of boarding houses to be made available for public access.

It also specifies details around initial compliance investigations for registered boarding houses, including powers of entry. This Part of the Act helps to ensure there is consistent up-to-date information on boarding houses in NSW, including the number of people living in boarding houses who may have additional needs. This will make it easier for government agencies and local councils to determine the type of support needed by boarding house residents and ensure that support is provided. It also addresses some of the difficulties around government authorities gaining entry into licensed boarding houses for effective monitoring and enforcement.

The remainder of the Act cannot commence until a supporting regulation is developed. Part 3 of the Act details requirements for occupancy agreements and principles for registrable boarding houses, and the enforcement of these. Once in operation, this part of the Act will help to ensure that residents’ rights are enforced and that disputes around occupancy principles are effectively resolved.