The Greens have tabled legislation to cap residential rent increases at the Consumer Price Index plus 10 per cent.
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Under the bill, a tenant would be able to seek a review of an increase by the state's Residential Tenancy Commissioner if it was above CPI.
Greens leader Cassy O'Connor said the proposed cap would create a formula where tenants could be protected from excessive rent hikes.
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She said some tenants were forced to wear big increases as they had nowhere else to go due to a housing shortage.
"Tasmanian tenants should not continue to suffer from soaring rents," Ms O'Connor said.
"Immediate action is required to protect thousands of people from the deepening housing crisis, and from being pushed into financial hardship and homelessness."
Tenants Union of Tasmania principle solicitor Ben Bartl said rents across the state have increased on average by 37 per cent over five years.
"The average renter is in housing stress, having to spend a minimum 30 per cent of their income keeping a roof over their head," he said.
"At the same time, Tasmania currently has the weakest rent control measures in Australia.
"Rents are rising to unsustainable levels for many Tasmanians and any bill that seeks to control rent levels is welcomed."
Mr Bartl said two tenants had contacted the union this week about rent rises of $130 and $165 per week.
Property Council of Australia state executive director Rebecca Ellston said linking rent increases to CPI would not address supply and demand issues with housing.
"Linking rent increases to CPI will be a brake on housing investment which will contribute to a worsening of the current crisis, not an improvement," she said.
Building Minister Elise Archer said the Residential Tenancy Commissioner had received five applications for unreasonable rent increases as at March 12 following the expiry of tenant protections to do with the coronavirus pandemic.
"I would encourage tenants who believe a rent increase to be unreasonable to apply to the Residential Tenancy Commissioner," she said.
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