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Greens call for rent freeze

Written By: - Date published: 12:56 pm, April 7th, 2022 - 151 comments
Categories: greens, tenants' rights - Tags: ,

Tēna koe Prime Minister,

Our homes are where we share kai with whānau, where we teach our children to walk and talk, where we shelter, and where we recover our health.

Over the past year, landlords have hiked up rental prices like never before, making it harder for people to afford other essentials such as healthy food and heating in winter.

Despite having so much power over the lives of their fellow New Zealanders, landlords are operating in an almost entirely unregulated system. Successive governments have stood by and done little to change this, instead watching as rents became less and less affordable.

We should not, and must not, do the same.

Working together we can rebalance the rental market in favour of the people who just want to put down roots and make a home for themselves and their families.

We urge you to immediately freeze rents as an interim measure while we work together on a permanent plan to strengthen rent controls – including limits on annual rent increases and linking rents to what previous tenants paid.

Right now, nearly half of all people in Aotearoa rent their home from a landlord. We urge you to make their lives more affordable by backing our plan to ensure renters and their families can put an affordable roof over their heads, make ends meet, and stay in their communities.

A decent, affordable home is a human right. Let’s make it a reality.

Ngā mihi nui,

Marama Davidson and James Shaw
Green Party Co-leaders

Before anyone starts in with rent-control-horror-story rhetoric, how about we look at where rent controls actually work? And then see if the Green Party’s proposition is likely to work well here in New Zealand. I’d like to see some in depth debate about it rather than knee jerk reaction. Full policy document is here.

Looking at rent control in the context of overall liveable city design is brilliant. What if we start with people needing homes and communities and then figure out how to make that happen and how to pay for it?

From the Guardian article,

What I’m seeing from the Greens,

  • up front with values: we need housing for homes for people and whānau
  • inherent in that is that housing is primarily for homes not investment income
  • they want an interim rent freeze
  • they want to work on a plan for a range of rent controls designed to help people afford a home

While Labour are making headway in aspects of housing reform, I’m not seeing anything from them that will make meaningful difference for many low income people who rent. Building more houses for the private market will increase housing prices. Building more state housing will help take pressure off the waiting list and I guess eventually we will catch up, but many people will still need to rent privately. There’s nothing that will bridge the chasm between low income and high rents – if rents aren’t controlled, landlords will keep increasing them as wages and benefits increase.

I’m wondering if the implication from the Greens is a cross-party plan for the rent control strategy. It would be very awesome to see Labour, the Greens and the Māori Party work together on this. Here’s what the Greens are proposing,

  1. Limits on annual rent increases
  2. Linking rents to what previous tenants paid
  3. Temporarily freezing rents until annual limits are in place

Details in the full policy document (PDF) – this is worth reading to see how rentrols could work.

That’s pretty reasonable for the New Zealand context, nothing even close to being a radical communist fest of anti-capitalism (sorry hard lefties). This is something quite palatable for the electorate and it’s smartly done. I fully expect a lot of bleating from the right and parts of the centre left, but it’s a solid proposal we should be looking at with interest to see what can be done.

Not sure why we need a rent freeze? From the policy doc,

Further reading on Green Party housing policy

Acting boldly to address the housing crisis so we all thrive

Homes for All (2020 policy)

151 comments on “Greens call for rent freeze ”

  1. Gosman 2

    Marama Davidson making a mockery of her role as Minister of homelessness

    • weka 2.1

      do you have something interesting or useful to say? Otherwise I'm quite happy to ban you from this post and let people mock you from OM.

      • Mike the Lefty 2.1.1

        The propensity to say nothing other than glib comments.

        Otherwise known as the "Gosman effect".

      • Gosman 2.1.2

        Rent controls on a short term basis help those who already have a home that they are renting but at the cost of those who are looking or who will be looking to rent. If there was one policy that is guaranteed to make homelessness worse it is rent controls. That is why Minister Davidson is making a mockery of her portfolio.

        • weka 2.1.2.1

          Controlling rent means that when someone leaves a rental, the landlord can't put the rent up (beyond what's in the policy) so that it's more expensive for the next person. Which is what is happening now. The policy protects the people looking to rent as well people already renting.

          If there was one policy that is guaranteed to make homelessness worse it is rent controls.

          Really? Do tell.

  2. Tiger Mountain 3

    Excellent proposal–there needs to be a circuit breaker–Rent Freeze now! and legislated Rent Control next. NZ has become a “Tale of Two Cities”.

    Property owners vs. Generation Rent. Too many live in overpriced dumps paying off someone else's mortgage. Rent amounts to unearned income and needs to be viewed as such.

    This kind of talk turns those used to lightly or untaxed capital gains innards to water so lets do it.

  3. Belladonna 4

    What I'm not seeing is how a rent freeze helps with the 'how to get to Vienna' situation.
    The key point in the description of the situation in Vienna is:

    More than 80% of residents rent, and two-thirds of Viennese citizens live in municipal or publicly subsidised housing. Eight out of ten flats built in the city today are financed by Vienna’s housing subsidy scheme. This quality and range helps push down rental prices, meaning low-paid workers can afford to live in the Austrian capital, even in the city centre.

    Which means that the low rents are a consequence of the hyper-investment in public housing – not the other way around.

    • How does Austria finance this huge investment in public housing? (And is it across the whole of the country, or only in Vienna)?
    • How long would it take NZ to get to 10% of publicly owned city apartments in Auckland/Wellington (which could be rent controlled)? 20% 30% 50%
    • How can we get apartments (size/quality) which kiwis want to live in (not just endure until they can afford to move to a stand-alone dwelling)? [Because, apart from the 'luxury' builds ATM, the apartments are small, cramped, and not particularly well served with amenities]

    [As an aside to this. I work with a team of people who've been predominantly working from home for the last 2 years – some time in the office, but most work done remotely. Every single one who has been living in an apartment is looking to shift (or has already done so) – even to somewhere more inconvenient location-wise and/or more expensive – because Kiwi apartments are just too small for 2+ adults to be there all day. Out of interest, I looked at the top end apartment building being developed 3 minutes walk down the road. 2-3 bedroom apartments. Less square footage than my existing 1930s 3 bedroom home, no garden (of course). And price 500K more]

    • weka 4.1

      Great questions! This is the stuff to grapple with. I don't have answers because I live in the rural South Island and the issues are distinct from the big cities. But I do think part of the solution is look at the living cities idea that Miravox points to, drawing together rent, community, transport, less cars, Just Transition and so on. The design aspects become easier then, it becomes more obvious what will work.

      I'll also say that from a sustainability design perspective, solutions are always local (at least in part). So what will work in Dunedin might not be the right thing for Wellington. That's structural/geographical, cultural/social, and economic.

      [are you saying people can't spend a lot of time in an apartment with the same footage as a 3 bedroom suburban home?]

      • Belladonna 4.1.1

        Nope. I'm saying that they can't spend a lot of time (with 2 adults working from home), in the 1 bedroom, tiny shoeboxes that comprise the majority of Auckland's apartment housing stock. Even the 2 bedroom apartments only have 1 living space – and often 3 adults/students trying to work/study.
        The 'luxury' end – with 3 bedrooms is fine – just not actually as big as (in terms of living space) a small 1930s bungalow – but there aren't that many of them, and they are not cheap.

        I think I recall LPrent saying that he's had to hire a separate workspace – since 2 people working in one space, simply wasn't working.

        Particularly in Auckland, there's a lot of 'what if' there's another lockdown….. thinking going on.

        • weka 4.1.1.1

          thanks for clarifying.

          A few things spring to mind. One is to build shared space building in each neighbourhood. Indoor and outdoor.

          The other is that new apartment builds need to have additional space built in. Recreation rooms, quiet rooms, library, gardens, an orchard.

          These are collective responses, and need council and probably central government buy in. It's what would be happening if we weren't just leaving housing to developers.

          • miravox 4.1.1.1.1

            "A few things spring to mind. One is to build shared space building in each neighbourhood. Indoor and outdoor."

            yes, this covers two aspects of living in a city with a long tradition of apartments. Vienna being an example:

            1. Apartment blocks are build looking inwards with courtyards and/or other forms of open space. tbf, some more useful than others (our ‘backyard’ was the gardens of a large ‘summer’ palace – now public space and there were another 3 public gardens within a 15 min walk).
            2. The public open space is really accessible. In Vienna, a huge part of of the city council tasks is to ensure there is plenty going on in the small market squares and civic centre – were locals can meet up.

            Some thoughts (based on living there for 7 years) on Belladonna's questions at 4

            1. How does Austria finance this huge investment in public housing? (And is it across the whole of the country, or only in Vienna)?

            State taxes and investments and the state collects the rents. Having said that, housing as a human right is a priority for them.

            Vienna is a bit unique. In Austria state governments have run their own housing policies

            1. How long would it take NZ to get to 10% of publicly owned city apartments in Auckland/Wellington (which could be rent controlled)? 20% 30% 50%

            It depends on priorities – NZ's govt could have chosen to buy rental houses, for example. A rent freeze is a good move imo, to provide a bit of time for renters and landlords. Apartments in Vienna that privately-owned are still subject to maximum rents – based mainly on floor area (well, the ones we lived in were). It's adjusted annually.

            1. How can we get apartments (size/quality) which kiwis want to live in (not just endure until they can afford to move to a stand-alone dwelling)? [Because, apart from the 'luxury' builds ATM, the apartments are small, cramped, and not particularly well served with amenities]

            Much of Vienna's early council-owned apartments were built around the same era as NZ's public housing builds. They were built with the philosophy that people, rich or poor, deserved decent housing. We've moved away from that concept, Vienna hasn't – and the state is still funding new, quality home building.

            Weka alluded to cultural and historic differences. If it's of interest the Red Vienna era is worth reading about https://en.wikipedia.org/wiki/Red_Vienna – for starters. At the end of world war one, Vienna had basically imploded with the end of the Austro-Hungarian empire. There really was little choice but to do something about housing. What they did in 20 years – both the building and the philosophical underpinning, have lasted until this day, with the consent of the public (free elections have always gone to the Social Democrats – now joined by the Green party in Vienna).

            • weka 4.1.1.1.1.1

              most of that speaks to me of values (and crisis pressure). We're going to get the crisis pressure here (climate on top of unaffordable housing). Maybe the task here is to have a public conversation about values.

              • miravox

                "most of that speaks to me of values (and crisis pressure)"

                Absolutely it's about values. And yes, crisis pressure – and I've also heard my mother talking about a tent city in Hamilton when she was younger – obviously not as extreme as the capital of a defeated nation after a war, but in NZ we had the same values as the Viennese state – our government built houses, controlled rents, made buying first homes affordable. Somehow, around 40 years ago, we lost our values that supported quality, affordable housing along the way…

                "Maybe the task here is to have a public conversation about values."

                Yes, it is. we can't afford to bide our time with incremental shifts We need to talk about what world we want now, and do that well – now. Or the future is looking very nasty, I believe.

        • lprent 4.1.1.2

          LPrent saying that he's had to hire a separate workspace

          Basically a permanent large carrel in a multi-user workspace with a lot of other people around. During the last lockdown I was the only person working here. I have a massive screen, a dock for the work laptop, and few working issues.

          The problem is bit more subtle than just the space. I routinely work with others around me talking on phones or having meetings. They use meeting rooms, but it is often noisy where ever I work.

          I just use various headphones ranging from completely noise cancelling to simple Bluetooth earphones. On my desk at present there are 3 headphones – noise cancelling for music and isolation, head set for meetings, and light weight over ear bluetooth. In my bags there are a pair of earbuds, and the sports earplugs I use when cycling. Basically when I don't want to hear people I just ignore them with headphones.

          If you have a partner working next to you, it is damn near impossible and outright dangerous to simply ignore them. After all this is THE person you HAVE to listen to.

          They are bloody distracting when you need to concentrate. For me, when I have to listen to someone, I'm distracted for a minute or two as I put the current work to sleep and shift focus. That is usually when I find out that the urgent call to attention was because I have done a shit job on putting my cups in the dishwasher! Or she wasn't actually talking to me – the question was for the person on the single airbud on the side if the head I can't see. Or she was talking to the cat trying to lie on her mouse. And the all-day remote meetings ….

          She has a similar pile of issues. I mutter or even talk whilst working out nasty problems, and it often sounds alarming as I curse the idiot who wrote the code I'm fixing – etc. I'm loud when we're doing design meetings.

          Basically it is way easier to work around strangers or in a room where I can't hear the other person as I do a 10 hour crunch through code. It is worth $523/month to work amongst non-family.

          It is also why we're selling up our two apartments and looking for separated office space in a single house.

          • Belladonna 4.1.1.2.1

            It is also why we're selling up our two apartments and looking for separated office space in a single house.

            And this is exactly the experience of my colleagues (at a variety of ages, and stages of family development). Apartment living (in the kinds of apartments we typically have in Auckland) is simply not designed for 2+ adults working at home. Yes, you can buy a 3 bedroom apartment (which pretty much puts you into the 'luxury' build category) – and each have a home office – but it's probably more expensive than buying a stand-alone house (certainly in my neighbourhood – as I said a 500K premium for less space than I have now).

            They too are (or already have) selling up or shifting out.

            Notably, the two families with small children who were in apartments – both shifted as soon as possible after the first lockdown. Auckland apartments are absolutely not designed for working-from-home parents with children who are not allowed to leave the apartment.

            One parent (in both cases, it was Mum) ended up child-wrangling (and completely unable to work), while Dad tried to work through.

            It's interesting to see how the 'costs' of providing a space to work (for the benefit of the employer), have shifted from the employer to the employee.

            • lprent 4.1.1.2.1.1

              It's interesting to see how the 'costs' of providing a space to work (for the benefit of the employer), have shifted from the employer to the employee.

              That is only part of the reason for us. We have a lot of other things we’d like to do with more space.

              BTW: I actually have a company desk. However it is in Hamilton and I live in Auckland. It is in my contract that I was meant to go there for a week or two after starting. Then use it at least once a week for team building reasons for a while. At some point early this year they were going to get a Auckland office running.

              However I have now been working for them for about 6 months. I started work for this company in the second half of September at the conclusion of my 8 weeks notice from my previous employer. A level 3 lockdown was placed on Auckland the day after.

              The Auckland office project is in suspension for the moment, and the brand-new Hamilton office has been on don't go in unless you have to since late February. Since I interviewed for this job back in April a year ago I have been there to their site just once in early Feb.

              But the reason we're looking at buying a house is pretty much because I'm heading towards superannuation and want to start spending more time on my own projects. Since 1995 I have spent at least half of my time doing work from home or a hotel room or on site. I'm really mobile.

              But you need a place to lay out stuff to work on when you do your own projects. We don't have enough office space or room to just site or store the electronics I want to work on as well as work systems. In the current apartment, I don't have space to more than two computers running at a time – and I have about 6 that I use regularly.

              My personal laptop seldom gets opened because of the space issues. That is the one with the latest compilers and kernels that I want to play with. I only open it at present to play Civ 6 while I'm idling on the bed or draped over the sofa.

              I have now gained an interest and skills in programming ARM based IoT type boards. But don't have the space to make up cables or even to have a accessible soldering kit. I have android tablets that I want plug in so I can drop code on them – but have nowhere to set them up so I can see the display while programming apps on a decent computer with a decent screen. I want to start shoving up aerials because playing with AIS and ADS is fun. I'd love to have a rack for the computer gear and build a really large storage array.

              My partner is the same. Large chunks of her remote work are in places like New York and various isolated parts of NZ. It has probably been at least a year since she did work in Auckland.

              No point in her having a really expensive video kit if you literally have no place to store it. She could really use a sound proofed area. More screens on her video editing box. Plus she likes reading archaically with wood pulp. But has no place to indulge in her wood pulp hoarding, and for some reason doesn't like me siting soldering irons above the wood pulp.

              It always used to be the one of us was usually working at home, and the other was working somewhere else. But increasingly we're both wanting to do stuff at home.

              I'd prefer to move out of Auckland because we can get more space cheaper. But I have been overruled on that for the moment.

              • Belladonna

                Speaking as an owner of multiple 'archaic wood pulp' reading materials – I'm cheering your partner on 100%.
                My hoarding involved removing a whole interior wall, and replacing it with a double-sided bookcase. The builder was very surprised when he came back to find it filled floor-to-ceiling with actual books (apparently most people use bookcases for 'display')

                • lprent

                  Before my partner took up residence, I had a 6m long by 3m high book case down one wall of a hallway in my apartment. It was filled with manuals, history books and major archive of science fiction pulp accumulated over several decades.

                  However we need to move both to deal with my partners documentary and with water tightness renovation for about four years. Had to pull down the bookcases when I rented out the apartment after the water tightness was finished.

                  After moving my books two times, I decided that enough was enough and gave them away before I moved back in. I copied some to epub, got copies of others as epub, brought the ones that I missed as epubs, and then seriously increased the size of the library so I now seldom read any books more than 10x (which used to be my minimum level) because I can afford 4 or 5 books for the price of a newish pulp book.

                  Now my books have electron weight, and fit on a single blu-ray as a hard backup.

                  My partner gets to move her own pulp when we move house. It will be good for her. She doesn't read enough – may as well get exercise from her purchases.

          • RedLogix 4.1.1.2.2

            Here in Brisbane we live in a tiny studio unit utterly unsuited for work, so I routinely go to the office. Hilariously I often find myself the only person in the place most of the day. Mondays and Fridays especially.

            • Belladonna 4.1.1.2.2.1

              Ha! My brother in London did this during the height of the pandemic – when everyone was required to work from home. He said he was the only person working on an entire floor of IT.
              Eventually the management found out about it (security card access, I think), and he was told he had to work from home. Think the decision was driven by H&S policy – rather than pragmatism – since he was zero risk to himself or anyone else….

  4. pat 5

    Austrian model looks to have great potential….if only there wasnt an idealogical resistance.

    We've been here before though….almost 10 years ago with another crisis that provided opportunity that we not only wasted but actively made worse…and lost needed talent along the way.

    https://www.greaterauckland.org.nz/2013/11/22/christchurch-from-the-ground-up/

    • weka 5.1

      One of the things the Greens so well is shift the Overton window, or at least normalise the discussion. I agree about ideological resistance, but the policy is smart in that it's not asking for the earth. It's bold enough to make a difference, but not to far out there that people can't get the value (in time).

      The handling of the Chch quakes was a travesty, one of the best examples of why not to vote National.

    • weka 6.1

      Superb, thank-you.

    • Ad 6.2

      Our one at Hobsonville is larger, also built on a former airfield, and very high quality.

      If you are going to link, do us a favour and show why it's relevant.

      • weka 6.2.1

        what would be the main difference between Auckland and Vienna.

        • Incognito 6.2.1.1

          Very long historical framework.

          • miravox 6.2.1.1.1

            Yes, and skipping the neo-lib economics in the 80s. Sort of ironic really, given the school that led the ideology behind it.

      • weka 6.2.2

        this? https://hobsonvillepoint.co.nz/about/

        I see there are lower cost houses via Kāinga Ora https://axisseries.co.nz/

        Did they do any social housing?

        • Belladonna 6.2.2.1

          They aren't cheap. Just looking at the website: apartments from 985K (1 bedroom), terrace houses from 1,450K.

          I just don't get why intensive housing is the same price (or more expensive) than existing stand-alone ones.

          I have 2 friends who bought into the HP development area. One loves it – really enjoys what she describes as the 'community feel' – kids go to the local (new & flash) HP school. The other has moved out. She felt it was claustrophobic – and like nappy valley of the 70s (she's moved to Sandringham – and loves the mix of older houses, established parks, local shops, ethnic restaurants, etc.)

          • weka 6.2.2.1.1

            The axis houses are in the $450,000 – $650,000 range. They come up for ballot. Maybe all the houses should be by ballot if that keeps the price in a set range.

            I have mixed feelings about such developments. Obviously they're doing some good stuff. But it looks like creating a class structured set of suburbs to me, and that's a choice. The neoliberal argument presumably is that to get it built you have to let the developer do certain things.

            Why not put social housing in as well? Keep some of the land for tiny housing. It's not like people aren't still going to buy there, I assume it's philosophical and about developer profits.

    • miravox 6.3

      Nerd alert – we went to the opening of the u-bahn station at Seestadt 🙂 All those cranes – at once. It was awesome – the Viennese will make any excuse for a party! Crazy people – they put all the transport infrastructure in before the city was built. Coming from the other end of the earth, we'd never seen anything like it.

      Not a joke though, that after years of studying urban geography – and academics arguing the toss between 'market' and 'planning' that day condensed all that is good about planning for future population growth, environmental sensitivity (a brownfield site) and putting people first.

  5. SPC 7

    About time – a rent freeze while Labour looks at the viability of rent controls is appropriate while the market sorts itself out.

    Allowing rents to rise while phasing out interest deductability is a recipe for rent increases.

    The rent freeze would not apply to new builds, so is no disincentive to new building.

  6. aom 8

    A rent freeze while sorting out controls would be a good start. The next step would be to abolish the Accommodation Supplement to make the rental market perform more on the basis that landlords should not be state beneficiaries, since obviously, if the subsidies increase it can be almost guaranteed that rents rise, as surely as night follows day.

  7. Weka, from the Vienna article you link to:

    "In fact, accommodation in Vienna is plentiful and cheap,…"

    So, I would say that the reason that rent controls are working there is that the supply side is "plentiful". So, perhaps the market is over-supplied and landlords are happy for whatever rent they can get for the houses.

    It also demonstrates that sorting the supply side also sorts the rent side.

    Contrast that with Holland, where there are major shortages and rents are high. Although there is some social housing, it is very hard to get into.

    https://dutchreview.com/expat/housing/why-is-there-a-housing-shortage-in-the-netherlands-the-dutch-housing-crisis-explained/

    We were over there several years ago (pre-Covid). I met up with an acquaintance who lives in Holland. He told me that to get a rental over there you go on a waiting list. At the time I was there, the wait was 7 years. He had started at number 700 and something and was down to 20 something at that time.

    The example from Vienna contrasted with the example from the Holland demonstrate that the solution isn't fixing rents, but rather increasing supply.

    Pity that Labour has made such negligible progress on its promise to build 100000 houses. Sigh…

    • weka 9.1

      Did you read the policy? The point is to intervene now, freeze rents, create some kind of limit so that people don't slip further and further into poverty.

      Unless you have some way to produce all the houses we need this year, I can't see the sense of your argument.

      • tsmithfield 9.1.1

        Actually, I can suggest at least part of the answer.

        What the government needs to do is to stop punishing people for renting out their properties by hitting them by measures such as making interest non-deductable, making it harder to evict problem tenants etc.

        If people actually felt that it was worthwhile renting out their properties they might actually do it.

        Also, a lot of landlords are selling up their rentals at the moment due to increasing government interference.

        My brother-in-law is one of the top real estate agents in Christchurch. Even before the market started going south he said there had been a huge increase in landlords selling up their rentals due to the increasing government pressure.

        He said that landlords were evicting tenants before the houses were even sold, so they could be put on the market without all the drama of having to arrange viewing times with tenants etc.

        You may well say that landlords selling their houses just provides an opportunity for first home buyers to enter the market.

        That may well be true. But a lot of first home buyers are often living at home with their parents, or flatting with friends, so may have no urgent housing need. But when they purchase a house from a previous landlord, it may well be a young couple displacing a large family. So, the housing supply has effectively dropped.

        So, I stand by the point I was making. As can be seen from my comments, increasing the supply of housing doesn't necessarily mean building more. The houses may already be there.

        The problem with rent freezes, is, that in spite of the noble intent, it doesn’t magic up more houses. So, if there is a shortage before the rent freeze, there will be a shortage afterwards, and it will probably be worse.

        • weka 9.1.1.1

          The houses may already be there.

          The problem with rent freezes, is, that in spite of the noble intent, it doesn’t magic up more houses. So, if there is a shortage before the rent freeze, there will be a shortage afterwards, and it will probably be worse.

          Ok, so let's have the rent freeze, followed by rent controls, and regulation to free up housing not being used.

          No-one has a right to investment housing. The good landlords will be ok so long as they've got some space in their finances. If they don't, they should get out now.

          Most of what you are talking about isn't relevant to this post. No-one, esp not the Greens, is saying let's have a rent freeze but not do anything about making houses available.

          • John K 9.1.1.1.1

            What houses are you going to make available? All of the houses sitting around empty, yeah right.

            The government has already proven they can't build houses at scale. I've built more houses then they have.

            We need less regulation not more. Free up consenting, building requirements, reduce monopolies. It's all of the controls that drive up costs.

            Landlords are not the issue, they are part of the solution. Landlords put their life savings at risk to provide rental housing and you want to attack them again. Stop biting the hand that feeds.

            • felix 9.1.1.1.1.1

              About half of the houses in my provincial town sit empty most of the time, yep.

              • weka

                how many are holiday houses?

                • felix

                  A lot. Many are rented out every weekend on aibnb and bookabach, but there are also a lot that just sit vacant for 50 weeks of the year.

          • tsmithfield 9.1.1.1.2

            "No-one has a right to investment housing."

            Weka, it seems to me this is more of an ideological response rather than a pragmatic one.

            Let me ask you a question:

            If you knew for certain that making things better for landlords also made things better for tenants, would you be able to hold your nose and unwind some of the recent changes if you were in a position to do something about it, despite any ideological position you may hold?

            • roblogic 9.1.1.1.2.1

              how about a scenario where there is a pack of hungry wolves hunting a flock of sheep, what’s good for “both” is a state of equilibrium. but sheep still get eaten regularly.

              and thousands of children in NZ grow up in poverty and acquire respiratory diseases and suchlike from living in slums or in tents.

              but woe is us if anything endangers the profits of landlords (or the wolves’ hunger for blood)

              • Belladonna

                Well, in your biological scenario, if you remove the wolves, the sheep have a population explosion – and either take over neighbouring habitat (driving other species into extinction), or die of starvation (population crash to well below pasture carrying capacity)

                You could draw the parallels… unkindly…..

                But, what I think it shows, is that this is a pretty silly analogy.

            • Jimmy 9.1.1.1.2.2

              Good question. Has it been answered?

              • weka

                I don't know what the question means. What recent changes? What ideology?

              • Incognito

                The question sucked big time. It was hypothetical and speculative with too many if’s and based on a presumptive premise. It was obvious that the questioner has a very weak grasp of the topic, i.e. it is futile engaging.

          • RedLogix 9.1.1.1.3

            No-one has a right to investment housing.

            This ideological obsession with a 'right to housing' is exposed for the absurdity it is.

            Obviously no landlord has a right to a 'free house' to rent out.

            Equally no-one has a right to a 'free house' to live in.

            This conflating of 'rights' with what is essentially an economic issue just muddies the water and takes the discussion nowhere useful.

            What we can ask is for governments to manage their housing economic and technical policies so that over time we minimise substandard accomodation or frank homelessness.

            • weka 9.1.1.1.3.1

              The UN's Universal Declaration on Human Rights (which NZ helped draft) says that housing is a human right. This is supported by the NZ Human Rights commissioner,

              https://www.greaterauckland.org.nz/2020/02/17/the-human-right-to-housing/

              • RedLogix

                So this means 'free houses'? If not what exactly do you think it means?

                As far as I can tell introducing ‘rights’ to an economic argument doesn’t build one single house.

                • weka

                  I haven't said anything about free houses. I haven't seen anyone else say anything about free houses. This is an argument of your own, and as you know I have zero interest in strawmen.

                  • RedLogix

                    OK so we have established that a 'right to housing' does NOT mean anything automatic. That because you are a citizen of NZ does NOT mean you get to have a house just because. So we can agree on this.

                    My question was – exactly what does bringing the concept of 'rights' into what is essentially an economic argument. No-one serious thinks homelessness and people living in tents in the Masterton campground is a good thing. In my view the only thing that will get them into decent homes is govt policy to add to the supply of homes across all sectors, but there are multiple layers of wrong-headed policy and decades of industry failure to turn around before this can be achieved.

                    If the Greens were talking to this I would be impressed – but primarily framing it as an ideological right, and pointless rent freezes, adds nothing of value. Other than lending the far left an unearned sense of virtue that is.

                    It reminds me of the same issue the Greens have with nuclear power – all talk about how they love the planet, and then reject the one actual technology to hand that would have made a difference.

                    • Drowsy M. Kram

                      Nothing wrong with turning a modest profit, as long as the basis of that profit is clear to all.

                      Imho the best solution to homelessness, poverty and inequality isn't for the government to (continue to) facilitate the expansion of landlord profiteering, however "modest" the return from "the most vulnerable." A better solution is to increase the availability of not-for-profit homes. And until they’re available, why not a rent freeze?

                      Salvation Army: It is a housing catastrophe, not a crisis
                      We aim to shine a light on the issues that affect the people most in need so that we as a nation can make the necessary changes to improve the wellbeing of the most vulnerable and make society better for everyone.

                      Community housing is a form of affordable housing working alongside private housing in the open market. Typically, community housing organisations are not-for-profit groups meeting housing need through a range of affordable rental and home ownership options. They provide an alternative to the public housing provided by Kāinga Ora (formerly Housing New Zealand) and local authority housing.

                      The community housing sector in New Zealand is small compared to other countries and we know there are many New Zealanders who still need access to good housing. Community providers are striving to increase the number of homes available to see all New Zealanders well housed.
                      https://communityhousing.org.nz/what-is-community-housing/

                      Habitat for Humanity is a non-profit organisation that helps families build and improve a place to call home, here in New Zealand and around the world. We believe affordable housing plays a critical role in strong and stable communities.
                      https://habitat.org.nz/

                      Housing Foundation is a not-for-profit, charitable trust that assists lower income renting households to become home owners.
                      We have successfully helped hundreds
                      of households into affordable home ownership, mainly in Auckland and Christchurch through shared ownership and rent to own programmes, and by building, managing or funding the construction of more than 800 new affordable homes.
                      https://www.nzhf.org/

                      Few individuals need to own more than one dwelling. One person owning more than one dwelling, and being incentivised to own more, is a significant hindrance to higher rates of home ownership, imho.

                      Living in Godzone has gone badly awry for some – that stinks.

                      Article 21

                      Everyone has the right to take part in the government of his country, directly or through freely chosen representatives.
                      Everyone has the right of equal access to public service in his country.
                      The will of the people shall be the basis of the authority of government; this will shall be expressed in periodic and genuine elections which shall be by universal and equal suffrage and shall be held by secret vote or by equivalent free voting procedures.
                      

                      https://www.un.org/en/about-us/universal-declaration-of-human-rights

                    • weka

                      OK so we have established that a 'right to housing' does NOT mean anything automatic. That because you are a citizen of NZ does NOT mean you get to have a house just because. So we can agree on this.

                      I don't think so, although tbf I don't fully understand what you are trying to say. I believe that every person has the right to a safe and healthy home that is relatively secure. Don't even have to be a NZ citizen. People get to have housing simply by being alive. Otherwise we'd be saying that being homeless is ok.

                  • RedLogix

                    "People get to have houses simply by being alive."

                    In what practical way does this differ from free houses? By making this a ‘rights’ issue it turns into a nonsense.

                    No-one serious is arguing that poverty and homelessness are good things, so why the ideological strawman?

                    • weka

                      free houses sounds to me like someone is just given one (don't know though, it's your concept and you haven't explained). The human rights declaration and NZ interpretations are talking about societal obligations, as am I. I'm not saying that society should provide everyone with a free house.

                      No-one serious is arguing that poverty and homelessness are good things, so why the ideological strawman?

                      All I did was say if you don't have housing as a human right, you have people living on the streets. If you want to argue that housing isn't a human right, then please explain how people would all have a decent place to live.

                    • RedLogix []

                      You are clearly demanding that everyone gets a house.

                      Well let's consider what they cost to provide. A typical three bed home in one of the cities is now roughly $1m.

                      At 4.5% interest only, insurance, rates and maintenance adds up to about 50k pa. Or 1k pw.

                      What is your idea of affordable because any rent lower than this is effectively being subsidised one way or another.

                    • weka

                      honestly, I have no idea what you are on about. Maybe explain your own position instead of trying to box mine into a corner.

                      the post is about a policy that a party in parliament has put out, there's been very little actual explanation of why it can't or shouldn't work, just lots of people objecting because they don't like it. Molly put forward an argument against, but even then she's just pointing out that it needs to be in the context of a broader set of policies (which the GP would agree with)

        • mikesh 9.1.1.2

          Also, a lot of landlords are selling up their rentals at the moment due to increasing government interference.

          My brother-in-law is one of the top real estate agents in Christchurch. Even before the market started going south he said there had been a huge increase in landlords selling up their rentals due to the increasing government pressure.

          Isn't this a good thing. It seems to be generally agreed that the ratio of house prices to incomes is too great at present. And the word "interference", in this context, seems unnecessarily pejorative. The move against interest rate deductibility is sensible; and this seems to be the change that is causing headaches in over leveraged landlords.

          I think it would better if intending landlords were not allowed into the market unless they can provide mortgage free properties for that purpose. Too many landlords trying to meet mortgages is, I think, one of the factors pushing up property prices. Another factor is too many trying to enter the market in competition with "home" buyers, which increases demand artificially, also helping to push up prices. Restricting entry into the market to landlords with freehold properties would, I think, ease the pressure from demand.

          Ensuring that all rentals were freehold would make the market a level playing field. Different interest commitments would seen to mitigate against this. However one would need solve the problem of knowing what to do about leveraged landlords already in the market.

          • Jimmy 9.1.1.2.1

            A lot of people renting are often not in a position to buy. A few of the house sales may go to first home buyers which will be seen as a good thing, but many do not.

            • Incognito 9.1.1.2.1.1

              Many struggle to save up enough for a deposit and with rents and house prices outstripping wages and lending rules being tightened the dream of owning your own home is turning into a nightmare and disappearing into the darkness of despair. These are generally younger middle-class Kiwis with a good education and good jobs. The less well-off are even more stuck where they are with even fewer prospects of moving up the ladder.

    • Incognito 9.2

      In the private sector rents are capped at annual inflation (Dec-Dec) + 1% max. in the Netherlands (i.e. 3.3% in 2022). In the social sector rents have been frozen until 1 July 2022 after which they can go up by a max. of 2.3% (i.e. inflation in 2021).

      These are price controls aimed at affordability for existing renters.

      This is different from measures aimed at supply issues, which your link was about, but it didn’t mention anything about rent controls.

      I believe the OP is about rent control.

      • Ad 9.2.1

        The Netherlands has nearly 30% of its housing owned by the state.

        New Zealand has about 2 million dwellings and the state only owns 69,000 of that. Not even 4%.

        Even with all its masterplanned large scale housing, it's hardly a market maker.

        Kainga Ora already has rent controls through ensuring it's only 25% of income once the supplements come in.

        • Incognito 9.2.1.1

          The ownership distribution is indeed very different from NZ, but this doesn’t change the fact that both the whole private and social sectors, regardless of ownership, are having rent control and capped annual rent increases coupled to inflation. These measures are for the renters and not for the owner/landlords – both know what to expect within relatively narrow limits. Rents are determined by a points system.

          • Ad 9.2.1.1.1

            The ownership structure difference is important because most of the lower income housing in the Netherlands is either state owned or owned by large association collectives. That makes it much easier to apply the rent controls which apply to those lower income places.

            Rented housing | Housing | Government.nl

            The complete guide to renting in the Netherlands | Expatica

            It would be great if New Zealand had the kind of social democratic fabric that the Netherlands have which enables such a high degree of regulation, but we only had it for four decades and now it's gone.

            No one is in any mood for a huge wholesale state control of anything right now.

            • Incognito 9.2.1.1.1.1

              I don’t think it requires much state control at all, it requires [a] Law. The state is hands-off in the Netherlands when it comes to rents. The problem here in NZ will be the Mom & Pop investors owning one property and the other problem will be setting the baseline for rents. And, of course, the transition will be problematic, as are most transitions.

              I can’t see any real reason or obstacle of technical and/or democratic nature other than the political will (i.e. guts) and the stamina & thick skin to go against a forceful minority.

              Somewhere in my comment I may have touched or covered your “social democratic fabric” 🙂

      • tsmithfield 9.2.2

        As I pointed out below, rent controls don't actually solve the problem, but rather exacerbate it. In the Vienna example, there is "plentiful'' housing. So, rent controls are much more likely to have little effect on housing supply in that scenario.

        Rent controls might help some renters in the short term. But it doesn't solve the actual problem which is not enough houses. And if it disincentives landlords to rent their houses out, the shortages will just get worse. So, while some renters may enjoy lower rents, there will be a lot more who struggle to find a house at all.

        • Incognito 9.2.2.1

          Wrong tree, dog wrong.

        • miravox 9.2.2.2

          Rent controls are part of the solution, not the whole solution, but integral to it. The other part is the role of the state in planning, infrastructure and building. Vienna does this very well. We could learn something from they way they do things

          Other bastions of 'socialism' to look at are – Singapore and New York – they both have rent controls.

          Vienna still has a private rental market and landlords still make money. And no, they don't like the system – but the landlord class doesn't hate it enough to to make itself extinct.

        • mikesh 9.2.2.3

          And if it disincentives landlords to rent their houses out, the shortages will just get worse.

          Measures suggested by TOP would perhaps help in this situation. They suggest levying a tax based on the risk free RoR where houses are left empty. Such a tax would incentivize these landlords to either rent their houses out or exit the market.

          • weka 9.2.2.3.1

            third moderator comment. You’re now in the ban list until you start responding. I’ll see your comments in Trash and sort it out once you fix your username. There is a strong expectation here that commenters don’t just post and run. You need to look at who is replying to you. You’ve made three comments this morning and as far as I can tell you’re not looking to see if anyone replies to you.

            • weka 9.2.2.3.1.1

              if that seems harsh, it’s just that the main mods are so over people not paying attention and the amount of our personal time this sucks up as a result.

          • weka 9.2.2.3.2

            out of the ban list now Mike. Don't worry about the past comments, but please do keep an eye on ones going forward, cheers.

    • pat 9.3

      The goal must surely be to reduce the cost of housing….method secondary.

      Every dollar paid to the banks in servicing costs is a dollar lost to the real economy and a loss of investment in productive activity…..if that means the government provides, either directly or indirectly, housing for the population it is a positive….they dont need to subsidise purchasing merely place a ceiling on rental returns…..those who wish and are able can still purchase…..Kiwibuild was the wrong approach from the word go….quality public housing at an affordable rate and at an appropriate scale should have been the plan, and still could be….but 18,000 units over a decade is nowhere near enough, and they know it.

      It is deliberate.

    • felix 9.4

      "He told me that to get a rental over there you go on a waiting list. At the time I was there, the wait was 7 years. He had started at number 700 and something and was down to 20 something at that time."

      Not saying that time-frame sounds ideal, but it is worth remembering that once you do get to move into a European apartment you are pretty much guaranteed that you can stay there for the rest of your life and treat it as if you own it.

      i.e. it's your home.

      Not comparable to the NZ rental market at all where you just buy someone else a house but have no security whatsoever and live there almost entirely at their good graces.

      • tsmithfield 9.4.1

        The guy I know was still living with his parents with his girlfriend as well. She was the ex of my son, actually. After they had broken up she moved back to Holland as her parents are Dutch. We kept in touch and met up while on holiday in Holland.

        A bit sad for them and probably the parents as the houses aren't huge over there.

        It is a bit weird because they seem to have huge pressure on housing but there also seems to be plenty of open land that we could see as we got about by train.

        • Incognito 9.4.1.1

          It is a bit weird because they seem to have huge pressure on housing but there also seems to be plenty of open land that we could see as we got about by train.

          Farm houses are huge, although the actual living quarters are not, but you won’t see many in the middle of urban areas, which is a bit weird too.

          Edit: I forgot to put the quoted text in quotes, apologies.

  8. James Simpson 10

    Rent definitely.

    But we shouldn't be stopping there. There needs to be greater price control across the board.

    • James, it is a well established economic principle that price controls cause shortages.

      From the article linked to:

      "Despite the frequent use of price controls, however, and despite their appeal, economists are generally opposed to them, except perhaps for very brief periods during emergencies.''

      Shortly after the Christchurch earthquakes we had problems with frequent power outages. Due to that, candles were in short supply. I remember going to Mitre 10 where a box of candles had gone from about $3 per box to about $11 per box.

      They had become incredibly expensive, but at least there were plenty around and we could get them if we needed them.

      The funny thing was, it wasn't long after that that the power problems were sorted and the prices for candles crashed back down again. I assume Mitre 10 had paid a much higher price for the candles themselves. So, they probably lost a bundle having to flick them off at the current market price.

      But if price controls had been levied on candles then hardly anyone would probably have bothered stocking them and those who wanted candles would have missed out.

      • Ad 10.1.1

        Also, NZ landlords don't have the oligopolistic power that exists in our petrol, supermarkets, airports, airlines, building supplies, tarmac, dairy, fish, electricity generation, gas supply, shipping, and many others.

        Yet even when in some of those industries such cartel-like arrangements have some regulation, consumers still get screwed wholesale. Supermarkets and electricity being the recent notables.

        In fact even when action is taken and they are forced to open their books to public scrutiny – like the fuel companies two years ago – things not only don't change they get worse and they just extend the middle finger to the government.

        If the Greens are going to propose a massive market intervention they had better spell out what kind of legislative power they are going to try to get passed.

  9. Ad 11

    Measure 1: the annual limit on increases. Well that would require a regulator so big and so powerful that it would need access to every single personal and business account in the country, in order to prove it. There is no cartel setting rent prices, so it would need fresh legislation that is much more powerful and more invasive than the Commerce Act. Certainly it would need something vastly bigger and faster than the Commerce Commission, Tenancy Tribunal, or Land Valuation Tribunal, or indeed all three put together. In New Zealand the idea is unenforceable.

    Measure 2: a requirement that landlords disclose what the previous rental price was. I’m not quite sure how that would make TradeMe or other market mechanism more open. Would it not be easier to just ask?

    Measure 3: Freeze rents until rent controls are implemented. I’m just old enough to remember Muldoon’s price freeze. Inflation exploded soon after. Current policy is that rent levels are set for a year as is one’s tenancy.

    Better to wait for feedback on whether this new pretty strong policy is having the right effect.

    • weka 11.1

      Well that would require a regulator so big and so powerful that it would need access to every single personal and business account in the country, in order to prove it.

      Why? Why not just use the Tenancy Tribunal. If the landlord wants to raise the rent and the tenant thinks they're breaking the law, they lodge a complaint. We already have some rules around rent rises, and this is the system that is used afaik.

      Measure 2: a requirement that landlords disclose what the previous rental price was. I’m not quite sure how that would make TradeMe or other market mechanism more open. Would it not be easier to just ask?

      What's it got to do with TM? The policy is for landlords to tell the tenant, I guess during the initial viewing.

      Measure 3: Freeze rents until rent controls are implemented. I’m just old enough to remember Muldoon’s price freeze. Inflation exploded soon after. Current policy is that rent levels are set for a year as is one’s tenancy.

      how would the Greens' policy cause exploding inflation?

      Lots of people don’t have one year tenancies, often they are less.

  10. For the record, I very much agree with the sentiment of this post even though I don't agree with the proposed solution, and even though I come from a different political standpoint to most here.

    I do think housing is a basic human right. I would hate for us to be like some countries where poor people live in shacks made out of what ever they can find while wealthy people live in luxury. If we want a good society, we need to invest in that.

    I do think we should be building a lot more social housing, and that the housing should be good quality. I like the idea of "pepper potting" so we don't end up with ghetto type settlements like are often found overseas, and in some places New Zealand.

    I think one thing that would make a big difference is to incentivise the building of long-term rentals where people are able to settle down and basically make it their home for as long as they want. I think we have some of that sort of thing happening in New Zealand now, from what I remember.

    This sort of option would recognise that many that will never likely be able to purchase their own homes will still be able to have the stability that home ownership provides for.

    • Ad 12.1

      Here I would give a shoutout to Mike Riddell who died last week. As the Minister of Ponsonby Baptist waayyy back when the John Banks Auckland Council liquidated several decades of social housing by selling it and turfing thousands out, he went to a Council meeting and threw a large handful of 50c pieces on the table and told them all they were Judases for selling out the poor.

      He and a bunch from that church then formed the Community Of Trust and bought a wee old weatherboard house in Ponsonby for people who were damaged. That was a church worth belonging to.

      For over a decade it was a collection of less than 20 houses all sheltering people with mental illness.

      Fast-forward 25 years and it is one of the largest property owners and landlords in the country.

      In most respects that old state and that old local government is never coming back, and the social sector has often done a better job as landlords for those who are doing it tough.

      Rest In Peace Mike you made a difference in this world.

    • Incognito 12.2

      For the record, you don’t agree with the proposed solution because you’re barking up the wrong problem. Thus, discussing this with you becomes moot and futile.

      • tsmithfield 12.2.1

        Incognito, I think we all want the same thing, which is more affordable rents for tenants. I have been quite shocked at some of the rents in my area for quite basic houses. I honestly wonder how people can afford it, yet alone save for a deposit for a house.

        But I do think the supply side is the problem. That is why I referred to the Vienna example that Weka gave in the article.

        In that situation the precondition was plentiful housing. Rent controls may work in that environment. But I would also argue that "no rent controls" would also work because in an environment where there is plentiful housing there is little pressure on house prices, and by implication, little pressure on rents either.

        If we accept that landlords are going to be a large part of the housing solution for a long time to come, as much as that may be unappealing for some on the left, then making it easier for landlords is going to be part of the solution, not part of the problem.

        • Incognito 12.2.1.1

          Nope, the primary and most pressing problem is the very steep rent increases for existing tenants. These can be slowed down (i.e. capped) relatively easily and quickly. This is in essence the solution to the problem as identified and targeted by the Greens.

          Increasing supply won’t do anything for affordability, particularly for low-income housing, unless it is done within a proper framework such as in Vienna. In Vienna they don’t just build!

          Finally, it’s crucial to note that just 7.4% of all housing stock is for-profit rental without rent regulations. Affordable housing and the profit motive do not mix; Vienna has ensured affordable housing for all its residents by largely removing the profit motive from the housing system.

          https://housing4.us/how-vienna-ensures-affordable-housing-for-all-with-an-extremely-complicated-housing-system/

          • Jimmy 12.2.1.1.1

            Rubbish. I agree with TS. Supply is the problem. If there was an extra 50,000 houses available for rent in Auckland, existing landlords would not be able to put through steep rent increases.

            • Incognito 12.2.1.1.1.1

              Utter bollocks, but I can play the if-game too. If those 50,000 magical homes were expensive to build, which they are, and expensive to maintain & service, which they are, and if they were owned by existing or even new landlords, which a large number would be, then these landlords would still be able to charge an arm & a leg, which they would, in order to cover their costs, as it is business after all.

              • weka

                it's such a fatuous argument but it's reached epic meme proportions. BUILD MOAR HOUSES and everything will be ok.

                But really what is means is: we don't want anything to touch capital gains of the property classes, so let's find a faux solution that will soothe the consciences of the progressive property owning class, help select people into the middle classes via first home buys, and protect our assets. Let's not talk about the people who can't afford rent. Nor how we imagine that rents would drop from $500 a week to $200 a week (no-one ever explains that one).

              • Jimmy

                Rubbish again!

                If there is plenty of choice for renters, as to which house they rent (ie. excess supply v demand, Economics 101), landlords will have to lower their rent else they will have an expensive vacant house probably with a mortgage to pay and no rent coming in.

                It is irrelevant how much the house costs to build for the tenant. If me as tenant can rent a similar house for $150 a week cheaper just down the road, that's what I'm gonna do.

                • Incognito

                  You guys are no fun debating 🙁

                  If there is plenty of choice for renters …

                  If me [sic] as tenant can rent a similar house for $150 a week cheaper just down the road … [my italics]

                  If pigs could fly, we would need more traffic control and vets.

                  Someone has to pay for a new build house and it ain’t Santa Claus.

  11. Cricklewood 13

    A big difference is that housing isnt treated or able to be treated as an investment vehicle.

    Realistically house ownership is so far out of reach for many people now we need to figure out how we solve the affordability problem and relatively quickly.

    Looking at countries like Austria and Switzerland is great place to start but I dont think a solution in itself in NZ.

    • weka 13.1

      I see it as a first step to affordability. If Labour's plan is centred on jobs and increasing wages, then you need something alongside that to prevent housing costs from rising while wages rise.

      The Austrian example stops people running lines of how terrible rent control is. NZ will need its own solutions, but we should be looking at the places that have done this.

      • tsmithfield 13.1.1

        Weka, looking at the Green's plan, an immediate objection is tying to measures such as inflation. The problem is that inflation is an average, and costs can inflate at different levels within that. Bank interest rates for example.

        So, landlords could be under water if, for example, interest rates rise faster than the general rate of inflation, or council rates or whatever. Under the Green's model, landlords would be less likely to want to rent out properties because they would see that as a risk.

        Renting housing is a business just like any other business. As a business owner myself (not a landlord btw) I would strongly object to any suggestions my prices should be capped by anything other than market forces. The reason is, that I may need to make a strong profit this year to make up for the big loss I might have had the previous year.

        • weka 13.1.1.1

          that says to me that you believe that business needs should trump housing needs. This is why you and I have different views on rent control.

          No landlord has to be a landlord, but everyone needs an affordable home. It really is that simple.

    • Incognito 13.2

      Rental housing as investment is not a problem per se. In the Netherlands it is perhaps more of a low-yield low-risk investment for institutional investors with the added certainty that it is coupled to inflation, i.e. it is buffered to some degree.

      https://think.ing.com/articles/current-rent-control-in-the-dutch-private-rental-sector-barely-affecting-institutional-investors-returns/

      • tsmithfield 13.2.1

        I do think more low-yield models (rent-controls or not) are better suited to social housing from the government and social providers, and institutional long-term investors. So, we obviously need a lot more of that.

        That is why I like the idea of long-term rentals where tenants can basically stay there for life if they want to, and effectively be in the same position as a home owner.

        • Incognito 13.2.1.1

          Agreed, which means shifting a whole lot of small investors to other forms of investment unless they’re prepared to wait for (i.e. speculate on) a large future capital gain. However, that would mean selling up and cashing in (or not) and this may require some protection of existing tenants. It would be a more long-term strategy with low yields and a lot of hassle unless you outsource the hassle to professionals such as property managers and accountants.

          • tsmithfield 13.2.1.1.1

            If the government was meeting the social end of the market more effectively, then private landlords would probably focus on the higher end of the market where rent controls are not really necessary.

            It is a damn pity the government's 100000 houses promise wasn't much more than an election slogan. If they were on target with that it would be increasing the overall house supply by now, and exerting downward pressure on rents.

            • Incognito 13.2.1.1.1.1

              You just keep beating the same drum.

              Government can break the upward cost spiral, starting with rent controls, but also for overall construction costs of new builds. Unfortunately, the NZ focus has been and still is way too much on home ownership, as if this is the Holy Grail of life. This may be the Kiwi way, but it is not serving everybody well and many miss out altogether.

            • aom 13.2.1.1.1.2

              You are sounding like a typical capitalist Tbar- let the taxpayer provide social housing but don't expect landlords to ease up on their easy and profitable income streams. Just to help the poor sods out, give them plenty of tax breaks and subsidies.

              What could be wrong with this picture?

      • Cricklewood 13.2.2

        Yeah I've no issue with that sort of model. But that's very different to NZ settings where it's more of a get rich quick off capital gain type scheme.

        Rent in Switzerland if I understand correctly is tied to mortgage interest rates, they also have an independent body that has the power to mediate rent increases etc.

  12. "A decent, affordable home is a human right. Let’s make it a reality."

    What about the rights of landlords? You know, the people who are investing their life savings in a property that they rent out. If you make it too difficult landlords will sell up, and then what, where are you going to live then, the motels are already full.

    No, we don't need rent controls. We need more affordable housing. So instead of attacking landlords yet again, the people providing rental property, the hand that feeds, you complete incompetent idiots, try making it more attractive for people to build and own rental property. More supply equals lower rents.

    • pat 14.1

      If the landlords sell up, who will be the buyers?

    • weka 14.2

      No, we don't need rent controls. We need more affordable housing

      Rent controls = more affordable housing. Apparently no-one knows how to build affordable houses any more, nor rent them out, so it's going to take state intervention.

      I'm not against some protection for people that own a second house and rent it out, but landlords who are running a business would indeed need to find a different business if they cannot make landlording work with rules that mean people have homes.

      • RedLogix 14.2.1

        Rent controls = more affordable housing

        What you usually get is some housing that is affordable, but not near enough of it.

  13. Woolly Mammoth 15

    John K, as a landlord I fully support the proposals and hope they're the start of something more comprehensive.

    Where on Earth do you get this idea that we're an altruistic lot? Try wailing and gnashing your teeth about the rights of less-privileged groups.

  14. RedLogix 16

    Right now in Masterton the camp ground is full of families, many in tents. My daughter regularly delivers there and sees first hand what is happening. It dismays me to listen to her accounts of this.

    In the same town we have 7000 sqm of land that we have been trying to build on for at least a decade now. We could easily provide homes for 8 – 10 families but between absurdly high building costs and punitive taxation the numbers never stack up even when the land owes us nothing.

    We don't want a massive profit, just something that is going to break even on the day and give a modest return over time. But like thousands of other like us – we have found government policy stands firmly between us and making a difference.

    • Incognito 16.1

      What are your views on rent controls, if I may ask?

      • RedLogix 16.1.1

        Overseas experience with them seems to have been mixed to say the least. They are probably a poor substitute for a decent supply of social housing.

  15. adam 17

    Hard to read all the poor me, I'm a troubled landlord shtick on this thread.

    Well at least weka is flying the flag for the left, thanks for that weka.

    • weka 17.1

      cheers Adam. I was so excited that a mainstream party did something I could fly the flag for, lol.

  16. Mike the Lefty 18

    A rent freeze should have happened after the first lockdown in 2020.

  17. Ross 19

    Any policy has to be realistic and this one isn’t.

    Rent can be increased only once every 12 months and with two months’ notice. Any increase has to be reasonable as tenants are entitled to complain to the Tenancy Tribunal.

    https://i.stuff.co.nz/life-style/homed/renting/127802737/property-managers-recommend-big-rent-increases

    • weka 19.1

      The current policy isn't stopping rent rises Ross. I get that some people object to the policy, but no-one has put up an actual decent argument yet for why it can't be done.

      • RedLogix 19.1.1

        Rent controls can be done easily enough. Just unlikely to reduce the number of people living in substandard accommodation – garages, sleepouts, tents, cars or worse.

  18. Molly 20

    I'm supportive of any moves to ensure NZers access to healthy, affordable, secure housing.

    I'm sorry to say, that I don't think this is the answer.

    It starts off with the premise that private landlords are the reason that housing is unaffordable, but the reality is it is the policies of successive governments that has created, fueled and supported the housing crisis.

    From my personal perspective, if we want to be anywhere near the Vienna model, it needs to be government planned and built housing made available to all for as long as the tenant wishes to stay.

    It is ONLY the government that can see the SROI (Social Return on Investment) monetised in other areas – ie. health, education, mental health etc. Private landlords are business owners, they need to balance their income against expenses.

    It seems obvious to me, that coming after changes that don't allow landlords to claim interest on their business loans, a rent freeze policy is intended to make private landlords financially stressed. A really clumsy way of trying to get rental properties on the market.

    The rest of the policy is short-sighted, and their Homes for All link mentions state housing builds, but along the lines of helping people buy.

    This is the disconnection between Vienna and this housing strategy. Even the Greens are focused on home ownership, not housing security.

    Fletchers are buying Ellerslie racecourse, in order to build 300 homes on 6 ha. A prime location in terms of accessibility, and community.

    Kainga Ora could buy this and build up to 1200 households, have 30,000m2 retail and show what good apartment building is:

    See 8 House for example built on 2.2 ha in Copenhagen:

    Design specs and costs here: https://www.archdaily.com/83307/8-house-big

    Youtube of finished product.

    I firmly believe you have to consider the housing crisis from multiple angles, including but not limited to:

    1. Housing provided from now on has to consider climate change, and so includes suitable planning and transport access for the locations.
    2. The most effective and efficient guarantee of housing security, affordability and access for those who are struggling to be housed is a massive state building project to provide secure rental housing. (This project could also provide a massive training, apprenticeship scheme improving the number and quality of tradies in NZ).
    3. Address the overseas landlords/funds profiting from high housing costs in NZ.
    4. Aim for a falling house market, and protect NZers from the high financial hits when this occurs using some form of state mechanism. ie. Housing NZ home loans at low/no interest rates for owner occupied housing. Allow landlords to claim interest as an expense. (This is fair, address other concerns in ways that are also fair).
    5. Improve planning and consent processes. At present these often include an incestuous relationship between council and private business that increase paperwork and cost. Improving this will help reduce costs, and allow alternative housing developments to occur, such as co-housing, council initiatives such as the one showcased on the series The Street, which followed the Netherland Almere model, and others. Chile – which has a guarantee of housing in their constitution – approaches the building of houses for ownership very practically:

    https://www.theguardian.com/artanddesign/2016/apr/10/architect-alejandro-aravena-pritzker-prize-elemental-housing-iquique-constitucion-tsunami-defences

    https://www.archdaily.com/797779/half-a-house-builds-a-whole-community-elementals-controversial-social-housing

    1. If we want housing to be truly sustainable, and long-term transitioning homes, then we need to provide housing within communities. Currently our planning, and development models are poor at doing this.

    Somewhat disappointed that I have to say that I don't support the Green's policy.

    Not for any partisan reasons. I just don't think this approach will work.

    • RedLogix 20.1

      A comprehensive and thoughtful response Molly. I totally agree that the root cause of this housing crisis goes way deeper than the private rental sector.

      I agree that high rents are a painful symptom of the problem, and a satisfying soft target politically to the far left – but rent controls will do little to get so much as one family into a decent home.

    • weka 20.2

      that's an overview of what the Greens would do if they were a majority government, right?

      I see five main values in this policy.

      • it prevents rents from rising faster than wages
      • government can do this now (not over the next decade it takes to build social housing)
      • it buys time to develop an integrated, long term policy while taking some pressure off low income people
      • it's possible to do now given the electorate, Labour, and the make up of government
      • it shifts the overton window leftwards simply by the fact that it gets discussed and normalised.

      I don't see anywhere that this is intended to solve the housing crisis, or even the rental crisis on its own. As you say, we need multiple, interlocking strategies.

      I agree that part of the solution is in building social housing outside of the private market. Imagine how many heads would explode if the Greens put up a policy around that as the core of the solutions.

      But, to solve the affordability (rather than availability) crisis, you would have to do this in every small town in NZ and above. Is that what you were thinking?

      • Ross 20.2.1

        it prevents rents from rising faster than wages

        Perhaps in the short term and only artificially. Prices are rising at a higher level than many wage increases. Why not implement a price freeze? Presumably because when the freeze is lifted, prices – and rents – would increase to the same level that they would have been in the absence of a freeze. In short, little is achieved.

        Any tenant can complain to the Tenancy Tribunal if they’re unhappy with a rent increase.

        • weka 20.2.1.1

          Perhaps in the short term and only artificially

          You didn't read the policy did you Ross. Did you even read the post?

          Any tenant can complain to the TT, but the TT is still not going to side with them against rent rises unless they are excessive by market standards. Which is why a landlord can currently put the rent up by $50 a week and there's nothing tenants can do if that's normal.

          • Ross 20.2.1.1.1

            Which is why a landlord can currently put the rent up by $50 a week and there's nothing tenants can do if that's normal.

            But any increase can be done only once a year, with two months notice, and it has to be reasonable. If you control any increase now by way of a freeze, but it happens later – as part of a bigger increase that wouldn't have been so large had there been no freeze – what have you achieved? Any policy has to be realistic and, not surprisingly, the Government isn't interested in this policy.

            Why the NZ government is right to rule out rent controls as a housing crisis solution (theconversation.com)

            • weka 20.2.1.1.1.1

              But any increase can be done only once a year, with two months notice, and it has to be reasonable.

              I already explained this. The standard currently is market reasonable, not affordability.

              If you control any increase now by way of a freeze, but it happens later – as part of a bigger increase that wouldn't have been so large had there been no freeze – what have you achieved?

              I suggest you read the actual policy because you appear to not understand that it is designed to control rents long term.

              Any policy has to be realistic and, not surprisingly, the Government isn't interested in this policy.

              Of course not, Labour have no intention of solving the housing crisis, they're neoliberal as and they've been very clear their priority is to protect the investor and property classes.

              The policy is realistic imo, there's nothing there that's extreme or outside what NZ is easily capable of. All you've done is repeat that you think it's not, but you haven't explained how.

      • Molly 20.2.2

        To be honest, I don't think any political party has the will to address the housing crisis effectively. The rising housing market has contributed towards our economy positively (while contributing towards our housing security negatively), and the voting populace will be against the most effective measures, as for many their financial and emotional security is invested in home ownership. For others, it is their only guaranteed retirement assets. We have to also acknowledge it is continuous government policies that have created this situation, and not necessarily individual greed.

        I think that is the real problem that has to be addressed. The cultural view of housing – and the not unrealistic fear that if you lose your home, you are vulnerable and exposed, and less able to withstand life's vagaries.

        The rent control – for me – is poking the bear with a long stick, rather than taming it.

        • weka 20.2.2.1

          who is the bear?

          This policy is the shifting of the cultural view of housing. If the Greens stood up and said what you said above, the first thing that would happen is the Nact machine PR machine would cherry pick the bits that are most easily used to scare the horses and that's what would dominate the debate in the media for the next week.

          This policy otoh, is smart in that it both talks about values up front, and it presents something concrete that Labour voters can grapple with. All those people who've been saying they want to do something about housing and poverty, now is your chance.

          You and I largely agree on what needs to happen, and that it won't happen under the current climate. IMO the Greens are skilled at doing what they can within the system to shift us in the direction of where things might be done well. Their welfare policy is similar.

          • weka 20.2.2.1.1

            if we break it down, what is in the policy that would put off left wing house owning people? Leaving the professional landlords aside, if it's the people who own a second home eg a holiday home or a rental, what are the specific issues?

            • Molly 20.2.2.1.1.1

              I believe we have to recognise that most NZers with limited extra spending, would either invest in small businesses and housing, as opposed to stocks. Whether this is a cultural aspect to do with control and responsibility, I don't know. But successive governments have made this a familiar and profitable option. Many retirement plans are based on income derived from second properties, and we have to recognise that policies have promoted this view. There is a difference between earners with a couple of properties, those who have vast rental portfolios, and even those with vast rental portfolios who are in it only for the capital gains. Whichever group property owners fall into, they are there because of shape and intent of government policies.

              Housing access can be improved by a massive state (not social) housing programme. But that has to be a priority, and it has to consider the frustration and pain of those not currently able to rent a state house, and feeling the precariousness and high cost of the current rental market. So, to counteract this, the state housing/council housing has to also be available to those people. The ones currently without large assets or property, or a housing deposit, and just looking for secure, affordable housing.

              Kainga Ora also needs to put in place assisted housing for those unable to live somewhere without disrupting the neighbours and terrorising communities. Like many, I was brought up in a state housing street, and in the 80 household cul-de-sac, everyone knew everybody else. The lack of transience and the social contracts between households, had influence on the behaviour of those living there. That's hard – but not impossible – to replicate, but it is made improbable if negative behaviours are allowed to continue without consequence.

              For property owners, the reality is, that prices need to drop. While there are inviduals that have benefitted from rising prices, the main beneficiaries have been banks, real estate agents, flippers and short-term investors. Councils too, have been able to continually raise rates without having to really address reducing budgets.

              So, we need to find a mechanism that reduces prices without causing excessive pain. Reinstating Housing NZ mortgages at very low interest rates, will take the profits from the banks, and return that benefit to home owners, particularly those who have recently bought. Eliminating all overseas owners from the residential housing market, will mean that NZers are not paying high costs to improve returns for those who live elsewhere.

          • Molly 20.2.2.1.2

            Sorry, been AFK. (And although I did check the original comment for replies, haven't been back, so am one of those comment and run lately.

            The bear is the housing crisis, in this situation. This policy is a not going to address anything.

            I agree with moving the Overton window. I'm not sure if this is going to do it, or do it well.

            I understand the Greens are choosing to work with what they may get done, but what if they just got on with talking about what the situation is, and open up the discussion about how they solve it.

            I don't have the answers. But one of the problems I have with political parties at the moment is that they almost draft the problem discussions, to suit their proposed solutions.

            This seems to be true for discussions regarding climate change as well. I know the Greens are not in power, but they do have paid positions in government, and can use that time and those resourcll es to get public discussions going that fully describe the problems in front of us all, and encourage possible solutions to emerge.

            Despite all the rhetoric, I don't see that the Greens policy has truly identified the problem. Just the problem they wish to fix. (That will result in other problems and not address the full issue of housing security and affordability).

            I'll go an have a look at their welfare policy. I'm still on their mailing list, but not likely to be voting for them again come next election.

        • Poission 20.2.2.2

          The question that arises is why housing costs have risen by 50% under labour,and 34% over covid to now.During covid the population did not increase due to immigration constraints.

          If we look at the investors costs,Rates,insurance,and interest,only 2 increased,and rates was the only one to have double figure increases.

          The investors interest charges decrease each payment,so we are really looking at the local government charges,and insurance.

          What the investor is also doing is effectively revaluing his asset to assess the so called market rent.

          Maintenance costs would have increased slightly,for those that had to be brought up to standard for the healthy homes,which would have been one off in elderly rental inventory.

          There is a lot of windfall pricing as they factor in a ROI increase greater then the actual costs.

          • Incognito 20.2.2.2.1

            If you were to ask a LL with an existing rental property, they might give you this non-exhaustive list of rising costs: rising interest rates, removal of tax deductibility of interest on loans, Healthy Home Standards, rising costs of materials and labour for R & M, in addition to all the other costs that go up each and every year such as insurance, BC fees, and rates. Some LLs may also be in weaker personal financial position to bear/buffer the costs of running a rental. Typically, when a tenancy ends and a new one starts the rent jumps up (because of the 12-month freeze) and if there was more turnover this may have contributed to the increase in average or median rents.

            • Poission 20.2.2.2.1.1

              Rising interest rates only occurred over the last 10 weeks,before that over the last 3 years they decreased.They are looking at the capital payment ttl payment and not the interest proportion which decreases each month.

              • Incognito

                They decreased over the last 3 years? Maybe, or maybe not. But did all LLs with mortgages get the full benefit of this? Probably not, depending on whether they were on short- or long-term fixed or floating interest. The questions always are fix or not, when to fix, and for how long?

                https://www.interest.co.nz/charts/interest-rates/mortgage-rates

                I reckon that many knew that interest rates couldn’t and wouldn’t stay at record lows, so after the relatively short windfall period, for some, they hedged with increased rents if/when they had the opportunity.

                Hindsight is such a wonderful thing, isn’t it?

                • Poission

                  The ones most effected are those with interest only mortgages (which increased leverage) those with table mortgages have a decreasing interest proportion each month.

                  • weka

                    isn't the issue then whether people who have interest only mortgages have more right to be protected than people have a right to live in a healthy home with some security and that they can afford?

        • pat 20.2.2.3

          "The rising housing market has contributed towards our economy positively …."

          For a short period, that period is well past and the policy's medium and long term impacts are decidedly negative.

          As your reasoned (very well) argument @20 notes the problem has to be addressed by Government (of any hue) and be comprehensive and long term focused.

          • Molly 20.2.2.3.1

            The 'positively', was tongue in cheek.

            We have a tendency to measure economic success in ways that are detrimental to well-being. As you imply, that needs to be challenged until it is changed.

    • miravox 20.3

      Well put. We are a long way from the Vienna model indeed, and the Greens policy won't bring us any closer. I also noted that the Greens policy was working with the status quo rather than attempting to change it.

      I do think, however, that a rent restrictions are needed simply to take the pressure off tenants until government and society shift their thinking about what housing is all about. As it stands now, each time changes are mentioned rents go up another notch as if some landlords think the future is not going to look so bright for their investments. A bit like panic buying in a pandemic, really.

      Otoh – in the lead-up to elections the Greens seem to put up a really divisive take on a high interest topic to grab attention, but one that doesn't deal with the crux of the matter (GE being the prime example) this feels a bit like that.

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    BeehiveBy beehive.govt.nz
    3 days ago
  • New law helps secure New Zealand’s maritime domain
    Legislation that will help prevent serious criminal offending at sea, including trafficking of humans, drugs, wildlife and arms, has passed its third reading in Parliament today, Foreign Affairs Nanaia Mahuta announced. “Today is a milestone in allowing us to respond to the increasingly dynamic and complex maritime security environment facing ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Trade and Export Growth Minister to travel to Bangkok for APEC
    Trade and Export Growth Minister Damien O’Connor is set to travel to Thailand this week to represent New Zealand at the annual APEC Ministers Responsible for Trade (MRT) meeting in Bangkok. “I’m very much looking forward to meeting my trade counterparts at APEC 2022 and building on the achievements we ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Government welcomes historic pay-equity deal
    Settlement of the first pay-equity agreement in the health sector is hugely significant, delivering pay rises of thousands of dollars for many hospital administration and clerical workers, Health Minister Andrew Little says. “There is no place in 21st century Aotearoa New Zealand for 1950s attitudes to work predominantly carried out ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Government delivers new ICU space at Christchurch Hospital
    Health Minister Andrew Little opened a new intensive care space for up to 12 ICU-capable beds at Christchurch Hospital today, funded from the Government’s Rapid Hospital Improvement Programme. “I’m pleased to help mark this milestone. This new space will provide additional critical care support for the people of Canterbury and ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Next steps for specialist mental health and addiction services
    Budget 2022 will continue to deliver on Labour’s commitment to better services and support for mental wellbeing. The upcoming Budget will include a $100-million investment over four years for a specialist mental health and addiction package, including: $27m for community-based crisis services that will deliver a variety of intensive supports ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • 195,000 children set to benefit from more mental health support
    Budget 2022 will continue to deliver on Labour’s commitment to better mental wellbeing services and support, with 195,000 primary and intermediate aged children set to benefit from the continuation and expansion of Mana Ake services. “In Budget 2022 Labour will deliver on its manifesto commitment to expand Mana Ake, with ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Belarusian leaders and defence entities targeted under latest round of sanctions
    Foreign Minister Nanaia Mahuta has today announced sanctions on Belarusian leaders and defence entities supporting Russia’s actions in Ukraine, as part of the Government’s ongoing response to the war. “The Belarusian government military is enabling the illegal and unacceptable assault on Ukraine’s sovereignty,” Nanaia Mahuta said.  “Under the leadership of ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Queen's Platinum Jubilee Tree planting event at Government House
    Just after World War 2, there were incentives to clear forest and bring land into agricultural production. In places, the land had been stripped bare as forests were felled for sheep grazing. Today, you only have to look at the hills around Taihape and see the stumps of a once ...
    BeehiveBy beehive.govt.nz
    5 days ago