Solve housing problem or punish landlords?

Still simmering away below the Covid-19 virus activity is the Coalition Government’s proposed “reform” of the Residential Tenancy Act. Written submissions closed back in March, and oral submissions are being heard right now.

There are calls for the Government to place all such non-urgent business on hold while the current state of emergency exists, as the restrictions now in force hamper the full and democratic procedures that normally function when Parliament is in session. However, despite all the other travails the country is facing, they seem to be absolutely determined to proceed with this one.

Looking at the propose amendments I can see that they are based on a certain view of the rental housing market and of the overall supply of housing within New Zealand.

For at least twenty years New Zealand Governments of all political persuasions have tried to ‘solve the housing crisis’ by enacting various pieces of legislation. Looking at the latest statistics, there can be no doubt that these measures have failed, and failed comprehensively.

There are more than 600,000 rental households in New Zealand with about a million people living in them, up from 453,000 in 2013 and 388,000 in 2006.

The proportion of households that rent has risen from 27 per cent in 1999 to 32 per cent now – and rental households generally have more people in them than owner-occupied housing.

The government cannot build public housing fast enough, and now there are over 14,000 tenants on the public housing waiting list, more than twice as many as there were back in 2017.

That is not 14,000 individuals, but 14,000 prospective tenants, including their families. We could be talking over 33,000 people here.

Around 85% of rental properties are provided by private landlords and 90% of those privately-owned rentals are provided by Ma-and-Pa  landlords who, individually, own just one or two rentals.

In some cases, these landlords rely on those rents to put food in front of their own families.

The public housing sector is and always has been a very small part of our rental housing market, and each publicly owned rental inevitably requires open-ended taxpayer support. The reality is that the Government is a high-cost and inefficient landlord.

Most of the political initiatives around rental housing in recent years have been based on dogma and false assumptions.

All the legislation that has been enacted in recent years has been based on the institutional belief that private landlords are wealthy large-scale operators who habitually hold all the power over their tenants and not only make large-scale profits out of their affairs but are then, somehow, able to avoid paying any tax on those profits.

This view of the rental housing market is totally wrong and entirely misrepresents the way it operates.

Most Kiwi residential landlords are the hard-working, thrifty and goal-orientated individuals that any sane society should cherish and nourish, not vilify and punish. Yet that’s what both the recent and the proposed legislation sets out to do, penalize these people who, I can remind those pushing this legislation, are all voters.

Given my experience, background and industry involvement I think you can assume that I know what I am talking about, but not once, in my almost 30 years as a landlord, has any Government representative come to me and said “We have a rental housing problem. How do you suggest we could work together to improve the situation?”

No-one can be forced to be a residential landlord. If passed, this legislation will give residential landlords another very good reason to exit the market, but what they are then going to do with the resultant huge number of un-housed tenants is anyone’s guess.

That is going to be their problem.

But they should care, because the homelessness in New Zealand is set to get a lot worse. And Government actions intended to create open-ended tenancies and unilaterally impose large fines on landlords will be pretty much entirely to blame for that.

The Government has a choice here. They can work towards solving the rental housing problem or they can punish landlords.

They must choose one, they cannot do both.

By Peter Lewis, who is vice-president of the Auckland Property Investors Association.

Why not free food and power with your free rent?

Why was a call for several months of free rent by a writer in the prestigious but now defunct Metro magazine not accompanied by a call for free food and power for everyone? Tenancies War spokesman Mike Butler said today.

Reacting to news of a mortgage holiday for homeowners, in an article published on Monday, March 27, Tess Nichol wrote “I seriously wonder how much a few months of missed rent should matter”.

Nichol understood both that banks required payment of principal and interest not paid during mortgage holidays, and that “a renter may never pay back the missed rent”.

But with a median rent of $465, a six-month rent holiday that may never be repaid would cost the owner $12,090, while rates, insurance, and taxation payments would continue.

Most of New Zealand’s 290,000 rental property owners own just one or two properties managed in conjunction with a day job which a number would have already lost as a result of the lockdown.

Why does she single out landlords? Why does she not require supermarkets to give six months free food to customers who rent their homes, six months free electricity from electricity providers to renters, six-months free petrol, and so on.

Actually, why does she single out renters?

Why not demand for everyone six-month mortgage holidays that are not repaid, as well as six months free food, electricity, and petrol for everyone?

Rental property owners tend not to speak out or fight back but this is an instance when the absurdity of the attack needs a bit of ridicule.

Stop the War on Tenancies is a group that since October 2018 has been highlighting the failures of successive governments while creating rental property policy and law.