Will the Nats correct Labour’s rental property errors?

Will the National Party under Judith Collins vote against Labour’s flawed proposed amendments to residential rental tenancy law and correct the rules and penalties to do with rental property standards, Tenancies War spokesman Mike Butler asked today.

The Labour-led Government is trying to push through changes to the Residential Tenancies Act which would mean that:

  1. Rent arrears debts will become larger, and will take longer and become more difficult to resolve.
  2. Noisy, disruptive behaviour becomes much more difficult to manage, creating a problem for owners and neighbours.
  3. Owners won’t be able to end a tenancy except by selling it or moving into the property.

“Will Ms Collins make a commitment that the National Party would vote against residential tenancy law changes when the bill returns to Parliament after scrutiny by the Social Services and Community Select Committee,” Mr Butler asked.

“In addition, would a National-led government revisit the so-called healthy homes regulations that have turned the business of renting into a nightmare of costly compliance,” he asked.

“Seventy three of the 87 proposed penalties target owners and the fine for owners for not complying with the healthy homes standards is $7200,” Mr Butler said.

“Standards are fine but the requirement to re-insulate beyond that required in 2016 is all cost and little benefit and the heating assessment tool (on the Tenancy Services website) is flawed,” he said.

“The whopping fines and the unnecessary extra insulation should be dropped, the heating tool should be amended to correct its flaws, and the standards should be recommendations rather than punishable rules,” Mr Butler said.

“The proposed amendments to tenancy law plus the Draconian penalties linked to housing standards are driving many residential rental property owners to sell,” he said.

“Labour policies are reducing the supply of rental property at a time when tens of thousands are looking for a home to rent,” Mr Butler said.

“New Zealand’s 290,000 rental property owners need to know where the National Party stands as we prepare to vote on September 19,” he said.

Stop the War on Tenancies is a group that since October 2018 has been highlighting the failure by the Government to create sound policy and law for residential rental property. Much policy has only increased rents and disadvantaged both tenants and owners.

Would Muller fix Labour’s rental property failures?

Since any promises made by former National Party leader Simon Bridges are effectively void, the new leader, Todd Muller, should tell New Zealand’s 290,000 residential rental property owners whether he supports Labour disastrous experiments or whether he intends to restore some sanity to the sector.

Currently, the sector remains frozen under the Covid-19 Response (Urgent Management Measures) Legislation Act which over-rode previous tenancy termination agreements, extended the period of allowed unpaid rent from 21 days to 60 days, and imposed a $6500 fine on any owners who put a step wrong.

During the lockdown, the Government continued pushing through changes to the Residential Tenancies Act that:

  1. Require 118 days of unpaid rent before the Tenancy Tribunal may end a tenancy because of unpaid rent. Currently, 21 days’ arrears are sufficient to end a tenancy.
  2. Require three disturbances in three months before the Tenancy Tribunal could end a tenancy because of anti-social behaviour.
  3. Remove a property owner’s contractual right to end a tenancy – the so-called 90-day no-reason termination.

Rental property owners would like to know whether, before the election, a National Party under Mr Muller vote against those amendments.

We are not the only group to say that the current Government’s housing policies have been a rolling maul of incompetence.

  1. KiwiBuild promised 100,000 new homes in a decade yet in three years was only able to deliver 1535 houses.
  2. The waiting list for state houses reached a whopping 16,309 applicants by March 31 this year, more than double the number when the coalition government was formed in 2017.
  3. Changed tax rules hit on March 31 this year. This ring-fencing of rental property losses will tip up to 116,000 negatively geared owners out of the sector, according to documents obtained under the Official Information Act.
  4. Expensive and poorly conceived regulations on rental properties presented as guaranteeing a “healthy home” brought a regime of spot checks, narking, and massive fines on owners. This will drive more out of the sector once they take effect in the middle of next year.

If Mr Muller becomes Prime Minister, would he:

  1. Work with the private sector to build homes.
  2. Work with rather than against rental property owners to increase the supply of housing.
  3. Revisit the so-called “healthy homes” regulations as his predecessor promised. They should be changed from punitive regulations to recommendations and widened to include other methods to reach the recommended goals (such as shower domes instead of extractor fans). Standards for housing are nothing new and have existed here since 1947 under the Housing Improvement Regulations.

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.

Are Govt controls the answer to the ‘broken’ housing market?

By Peter Lewis

In the time since the recent British elections the results have received little in-depth coverage and analysis in our local media. Apart from the shocked surprise at the outcome by many of those closet-socialists active in the media, most commentators have shrugged their shoulders and gone back to analyzing Trump.

Yet it is interesting to look not only at the overall result but the ebbs and flows of the various UK electorates and the population profiles within and consider how this may reflect potential changes in the New Zealand political arena.

Generally, in mature democratic democracies, politics becomes a competition between two major political parties. For most of recent history, these parties tend to comprise a Conservative party mainly supported by the farming and white-collar business and professional sectors who promote policies intended to create wealth, and a Socialist party supported by blue-collar voters and those who derive their income from the public purse who promote policies intended to distribute that wealth.

However, we now see that these distinctions are breaking down, not only in those who support such parties but also within the parties themselves. This has been coupled with the recent advent of a professional political class. In the past, an individual would move out into the working world, achieve some success and reputation within that sphere, and then be sufficiently motivated both by their own experiences and the experiences of those around them to progress into political action. These people, those who possess actual real-world experience, have now been replaced by theoreticians, those who have formulated their ideas and beliefs second hand by reading, listening and absorbing the pre-packaged opinions of others.

The quite rapid changes in the nature of employment have hastened these changes. Gone are the days when you joined a major employer on entering the workforce and stayed there, secure and well-fed, until you eventually achieved the gold watch and the retirement cheque. As well as now moving from company to company, perhaps from occupation to occupation, many people have also ended up in the gig economy. Self-employed contractors are not now just highly qualified professional experts and consultants, they can be Uber drivers, Airbnb operators and cleaners.  This is insecure employment, vulnerable to any sudden changes in the political or economic environment, and carrying few if any employment benefits.

We can now see that, in the UK elections, many traditionally blue-collar voters abandoned Corbyn’s socialist promises to nationalize this and tax that and opted for more certainty, less change, and (by leaving the EU) reducing the risk of Johnny Foreigner coming in and stealing their jobs. The number of voters choosing this option vastly outnumbered those holding secure office jobs in large prosperous cities who’d like to remain in the EU because it makes it just so much easier to pop over to Majorca for their summer holidays. Thus the working class are now tending to vote conservative while the educated and professional middle class veer towards socialism. Generally, it would seem that  more insecure you feel about your current status in society these days the more conservative you will become.

Our own two socialist parties now strongly exhibit this trend. Gone are the muscular horny-handed manual workers from both the political and electorate ranks of the Labour party, while the ranks of the Greens have, right from the start, been heavily populated by schoolteachers and academics. These days, to become a Labour party MP, forget the hammer and sickle, move from University into either an MPs support staff role or take a job in an NGO, cultivate contacts within your local part branch, and prepare to pounce when the time is right. For National, there is a similar route – possibly moving from University though a top law or accounting firm and on to the governing board of a multinational company before gracefully accepting the offer of a seat in the Beehive.

Thus we now get a Government almost entirely consisting of people who have grown up and matured in a social and economic hot-house, the path smoothed out in front of them and with minimal exposure to the vicissitudes and tribulations of the real world. Having always been able to view humanity from the top down with an air of supreme detachment, they are then able to formulate and enunciate grandiose plans that are quite detached from reality and practicality. The result? –  we end up with lofty promises to end homelessness, reduce child poverty and build 100,000 affordable homes within ten years. After hubris comes Kiwibuild.

Our housing market may well be ‘broken’, as Shamubeel Eaqub claims. However, is introducing a plethora of controls, regulations and taxes the answer? Real world experience indicates probably not. You and I fortunately live in a country where most of us have access to a vast array of clean and generally wholesome reasonably priced food available in almost unlimited quantities. Sure, there are rules around food storage, handling, and other health-related issues, but there is no overriding and controlling Ministry of Food arranging the supply and marketing, it comes to us by the magic of the free market. Yet in societies where rationing, government control, ten year plans and state food markets are imposed we invariably find food shortages, endemic corruption, high prices and poor customer service, sometimes even ending in famine.

So if freeing up the market so that it expedites efficiency and supply works for the food industry, why would it not also work for housing? Do we really expect that the current plethora of limitations, consents, restrictions, imposed costs, red tape, tax penalties, and over-the-top requirements will provide a responsive and freely functioning lowest possible cost housing and residential rental market? And if it does not, will imposing even more of such demands as prescribed by those MBAs and Ph.Ds now holding the reins of power prove to be the solution?

Back out in the heat and dust of the real world, well away from the air-conditioned four-windowed lofty high-rise corner offices of downtown Wellington or Auckland, I suspect not.

Peter Lewis is the vice president of both the Auckland Property Investors’ Association and the New Zealand Property Investors’ Federation.