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Labour’s support for renters

Written By: - Date published: 7:05 am, September 4th, 2017 - 54 comments
Categories: housing, labour - Tags: , , , ,

National have bungled the housing market and the crazy prices are turning us into a nation of renters. Renting is the norm in many countries, but they typically have better legal protection for tenants than us. So this move by Labour is both realistic and timely:

Making renting secure and healthy

“Labour is committed to restoring the Kiwi dream of owning your own place. We also recognise that long-term renting has become a reality for more families, but the current law creates instability and insecurity for many.

Labour will extend notice periods to 90 days so that renters have the time they need to move their lives. We will also abolish “no-cause” terminations. Rent increases will be limited to once a year instead of the current six months, and the formula for increases will need to be set in tenancy agreements so that tenants know what to expect. Letting fees will also be abolished.

“Labour will pass the Healthy Homes Bill into law, ensuring that all rentals are warm, dry, and healthy to live in. We’ll help with this by offering landlords $2,000 grants for insulation and heating. These measures will help stop our kids getting sick and dying of preventable diseases that have no place in a country like New Zealand.

“This package has been designed, based on international examples, to get the balance between tenants and landlords right.

“It’s time to make renting a stable, healthy option for families. Let’s do this,” says Jacinda Ardern.

Coverage:
Decision 17: Labour takes the side of renters
Labour strengthens renters’ rights with limits on rent rises, 90 day notices
Labour’s rental plan: no more letting fees and longer notice periods
Labour’s generation rent plan

While National revert to type with populist scaremongering, Labour is getting on with the business of releasing practical policy that supports real people and addresses real problems.

54 comments on “Labour’s support for renters”

  1. Carolyn_nth 1

    I want to know how this compares with TOP, The Green Party and NZ First policies.

    TOP Home not Houses Policy

    Tax reform on assets plus:

    TOP will change the regulations around residential tenancy law to match the German approach. Under this model the default standard lease makes it far easier for a tenant to remain in the premises long term. This will be achieved by restricting the conditions under which a landlord can evict a tenant to those of non-payment of rent or property damage. Sale of a property is not necessarily a legitimate reason for eviction.

    OP will expand the supply of social and affordable rental housing provided by not-for-profit organisations. We will achieve this by gifting Housing NZ stock to these community housing providers, giving them the equity and land they need to invest in expanding social housing and at-cost rental housing stock.

    Green Party Residential Tenancies (Safe and Secure Rentals) Amendment Bill

    Clearly they’ve spent a lot of time on this, and haven’t just parachuted it in to the election campaign, as it’s a Bill prepared a while ago.

    This Bill will:

    Remove the obligation on tenants to pay leasing fees
    Set a default of three years for fixed-term tenancies on the standard tenancy form, while maintaining the provision for both parties to opt out and set the term of their choice
    Remove the ability of landlords to give a reduced notice period of 42 days in the event that they decide to sell their tenanted property, and restore the standard 90-day notice period
    Limit rent increases to no more than once a year, regardless of tenancy type or term
    Require that the formula for calculating any future rent increase be included in tenancy agreement forms
    Allow tenants right of renewal on rental agreements

    And the Bill includes:

    Clause 6
    amends section 51, which relates to termination of tenancies by notice, to
    remove a landlord’s ability to give a reduced period of notice when the rental prem-
    ises are sold

    NZ First Housing policy includes:

    Encourage private investment in upgrading rental housing through the taxation system. Owners of rental houses could invest in specified qualifying home improvements and be able to expense them for income tax purposes in the year in which the expense is incurred, including home insulation, solar heating, heat pumps, HRV heating systems, wood pellet and other approved burners, earthquake strengthening, fire, food and other disaster protection.

    So, basically, good on the Labour Party for following the Green Party lead. And the GP have long been working on improving home insulation. In addition, the GP will make the default rental period 3 years, and will give tenants right of renewal of tenancies.

    I’ll also go and look at the rental policies for Mana and the Mp.

    • Carolyn_nth 1.1

      Mana Party housing policy:

      has a lot of focus on state housing, with income related rents.

      Private rentals

      Develop an income rent control system for the private sector
      Introduce a ‘warrant of fitness’ for all rental housing

      Māori Party Housing policy:

      Create a Minister for Māori and Pacific Housing so work to address the huge challenges whanau / fanau / ainga face, from homelessness to home ownership, can be prioritised.
      Develop a National Housing Strategy taking into account the specific rights and interests of Māori under Te Tiriti o Waitangi.
      Establish a Housing Sector Committee within the first 3 months of the next Parliament to co-design a 25-year government enabled housing strategy that addresses the entire housing crisis.

      Homelessness

      Require the government to set a target to eliminate homelessness by 2020.
      Address the over representation of Māori and Pacific whānau in severe housing deprivation.
      Build 90,000 affordable houses by 2022 (60,000 in Auckland and 30,000 in other areas where there is severe housing deprivation).

      Supporting tenants

      Improve the rights of renters.
      Freeze rents on all social housing stock and review every five years.
      Enforce compulsory annual warrant of fitness for all rental homes.
      Introduce a cap on rent increases for all sate-owned social housing stock and explore rent caps for private rentals.
      Review the bond refund system and create fairer and more streamlined processes to get bonds released sooner.

      • Siobhan 1.1.1

        Don’t forget Nationals policies!…getting tough on Meth Heads (ie at least 70% of tenants if what I read in the Herald is anything to go by) and, erm, helping their Corporate pals Sanitarium and Fonterra earn brownie points by feeding the children of the ‘meth heads’ breakfast.
        Though I would have thought getting Sanitarium to pay tax would pay for something a bit more substantial than weet-bix.. paninis for breakfast?.

        for anyone curious, here’s Nationals rather esoteric policies…

        https://www.national.org.nz/10_ways_national_is_helping_families_get_ahead

  2. Stuart Munro 2

    I really think that the cost of rentals needs to be addressed too. I know the idea that market rents should prevail is deeply entrenched, and that landlords and speculators will strongly oppose any regulation of cost. But letting them have it their way is part of what got us into this crisis. And one of the roles of government is to correct the imbalances of power between groups. I doubt the rental market will be greatly improved by any measure that does not address cost as a primary aim.

    • Carolyn_nth 2.1

      As far as I can see, Mana is the only Party with a policy of rent caps.

      • Stuart Munro 2.1.1

        Maybe we need to survey offshore solutions – since our own major parties are too… comfortable… to look seriously at resolving this.

    • UncookedSelachimorpha 2.2

      Bring in comprehensive rent control. Other countries have it, with very good outcomes.

      It is not like the gouging we encourage in NZ is leading to anything good – there is not a flurry of housebuilding driven by high rents etc.

  3. Ad 3

    There could not be a more direct on National’s big donors in the property management arms of Bayleys, Barfoot and Thompson, Augusta Group and the others laundered through the Waitemata Trust. The very definition of rent-seeking.

    Banning letting fees is seriously massive and will enrage those rich corporates against Labour.

    Labour better be ready.

    • Enough is Enough 3.1

      Good

      It shows Labour is finally doing something right if the rich are getting pissed off.

      Lets not appease these types, lets draw them out into the open and have them attack the socially just policies.

  4. Ethica 4

    Right wing headline lies from property industry and advertisers in the Dom Post today “Labour plan ‘may hurt renters’.”

    • tracey 4.1

      Rather than Labour offers landlords money from taxpayers to improve the value of their properties

      • Karen 4.1.1

        I have a niece with 5 kids living in a cold draughty rental. You can see the ground through the floorboards, the walls aren’t lined and the windows have gaps. She is on DPB and she lives there because it is all she can afford. If her landlord had to pay for insulation to meet new standards he’d put the rent up, if he can get a grant then maybe he won’t.

        I doubt whether $2000 of insulation makes any difference to property values, but it sure as hell can make a difference to people’s lives.

        • tracey 4.1.1.1

          I was being slightly tongue in cheek but yes insulated homes have greater value than not. For good reason Greens and now Labour are now proposing incentives to landlords to do the right thing. They could propose no such incentive and have large fines for the recalcitrants. But in some quarters this is still painted as so hard on the poor landlord. Pah!

          Can you imagine if we paid beneficiaries a 2000 incentive to go to job interviews 😉

          • Antoine 4.1.1.1.1

            Speaking as a landlord I thought the $2000 grant sounded quite helpful

            I understand you already must provide insulation under the law change coming in soon, so getting a grant to partially pay this would be beneficial

            A.

            • tracey 4.1.1.1.1.1

              I am glad cos it is very helpful and very generous. How will you feel being a beneficiary? 😉

              • Antoine

                My place is already fine, but no doubt other people will get the benefit

                A.

              • One Anonymous Bloke

                Just so long as he isn’t cohabiting with anyone he should be fine.

                Antoine, bring all your financial records to our offices and three different case workers will lose them for you.

                • Antoine

                  I am very much cohabiting with someone 🙂 🙂

                  > Antoine, bring all your financial records to our offices and three different case workers will lose them for you.

                  Thanks but I am quite capable of losing my own records without assistance!

                  A.

                  • One Anonymous Bloke

                    Your inadequate record keeping has been recorded for training purposes. You may hear from one of our investigators.

                  • tracey

                    And we will not tell you exactly when we are coming to check your compliance but if you are not there and we cannot inspect we can still fine you for not allowing us access

    • Et Tu Brute 4.2

      That is why Labour addresses both sides. Of course this will put upward pressure on rent. But then Labour will increase Working for Families and other tax credits to compensate. Letting Fees now are paid at the beginning of a tenancy. Under Labour, these will be paid by landlords or factored into management fees. So at most a 2% increase in rents, or say $10 a week for a $500 a week property. WFF will at the same time go up $50 or more a week above what National proposed.

      • Carolyn_nth 4.2.1

        So, for those of us that don’t get WFF, rent privately, and have been in the same rental for a few years (hence no more letting fee), will we still get the same rental increase as others?

        I think WFF is just another subsidy to landlords and employers, and contributes to pushing up rents across the board.

        • Et Tu Brute 4.2.1.1

          Yeah well it is upwards pressure. It doesn’t mean the end result will be evenly applied. But it does mean more vulnerable tenants won’t have to front up with the money at the start of their tenancy. And yes, the more money people have in hand the more they are willing to pay in rents, so prices go up.

    • The Chairman 4.3

      “Lies” you claim.

      Can you substantiate your claim?

  5. tracey 5

    Landlords getting a nice taxpayer subsidy to increase the value of their property.

  6. Antoine 6

    > Labour will extend notice periods to 90 days so that renters have the time they need to move their lives.

    Would be nice if landlords could also get 90 days notice from tenants

    A.

    • Carolyn_nth 6.1

      The problem for tenants is that it’s hard to find a new rental in a few weeks. I’ve sometimes ended up paying rent on 2 properties for a week or two. When I’ve found a new place to rent, generally, the landlord wants me to move in pretty quickly.

    • tracey 6.2

      Leases helped by fixing terms. I had a hell of a time breaking my lease from end of 1 Nov to 1 September even though I gave 2.5 months notice. I had to pay a week rent plus gst with no guarantee a new tenant would be found.

      I guess the problem with 3 mobths for tenants can be they get a job in another town and city and cannot wait 3 months or afford to pay in two places at once?

      • Antoine 6.2.1

        I was being snarky. I don’t really think tenants should have to give 3 months. I don’t particularly think landlords should either, but I guess it’s better than the more extreme scenario where the landlord simply can’t get the tenant to leave unless they stop paying rent etc.

        A.

        • One Anonymous Bloke 6.2.1.1

          Renters need security of tenure. I’m sure landlords will get over having to put up with reliable income from long-term tenants.

          Such a burden!

          • Antoine 6.2.1.1.1

            I’m sure landlords will get over the 90 day thing (with a certain amount of groaning and financial losses).

            The ‘can’t get the tenant to leave’ scenario would be worse. I guess I think about this in a simplistic way. Consider the scenario where the homeowner knows they are travelling for X months or Y years. They want to rent the house while they’re away and they want to move back in when they come back. If you can’t do a true fixed term tenancy, this becomes impossible.

            A.

            • Carolyn_nth 6.2.1.1.1.1

              As a renter, I think landlords should be looking on renting out properties as a business venture, not something for property owners to dabble in when it suits them.

              • Antoine

                What else are you supposed to do with a house you’re not going to be living in for a known period, other than rent it?

                A.

                • Carolyn_nth

                  An owner still has the property. Lucky them if they own property and can travel overseas as well. I don’t think that qualifies as being on the breadline.

                  Better still, there needs to be more properties available for long term rentals. Having more state houses for rent at income related rents, will ease the situation.

                  Then those people wanting to rent out their properties for short periods, will need to find short term tenants.

                  • Antoine

                    > Then those people wanting to rent out their properties for short periods, will need to find short term tenants.

                    Right, my point exactly, you need to be able to have short term tenancies by mutual agreement. This is possible under the status quo, also possible under Labour’s proposed changes, not possible under some other policies that have been proposed by Greens and TOP from time to time.

                    A.

                    • Carolyn_nth

                      Possibly – if they can’t find a short term tenant.

                      Renters need somewhere to live – most of them long term these days. So there need to be an adequate supply of long term rentals. Too many landlords are currently dabbling to suit themselves.

                    • Antoine

                      (Sorry Carolyn the Nth, I edited my comment while you were replying to it, hence the exchange looks a bit disjoint at this point.

                      Yes ‘an adequate supply of long term rentals’ is a fine thing, while noting that an adequate supply of short term rentals is also good, as sometimes people only plan to live somewhere for a short period.)

                    • Carolyn_nth

                      I think the GP policy is that the default position should be 3 years minimum. That doesn’t mean shorter tenancies wouldn’t happen.

                      If it’s just a few months, then it’s more like a holiday rental.

                      But really. I don’t think the main bulk of rental housing should be to suit owner occupiers’ travelling arrangements.

                      i know the situation on Waiheke has been that several landlords rent properties to people wanting somewhere to live. Then terminate the tenancy around Xmas, so the owner can go stay on Waiheke for their summer hols.

                    • Antoine

                      As opposed to e.g the TOP policy where the landlord simply cannot opt for a fixed term lease (http://www.radionz.co.nz/news/political/336605/give-up-on-home-ownership-strengthen-renters-rights-morgan)

                    • Carolyn_nth

                      the TOP policy does not say fixed term leases cannot happen. It follows the German model, which does allow fixed term rentals:

                      http://www.rp.army.mil/sponsorship/German%20Landlord%20Tenant%20Law.pdf

                    • Antoine

                      The German model allows fixed term leases, the TOP policy seems to depart from it in this respect. If it is described properly at http://www.stuff.co.nz/dominion-post/news/politics/95505946/Gareth-Morgans-TOP-rental-policy-would-make-it-far-harder-to-kick-out-tenants – “Lease terms would essentially be abolished, with the assumption that all tenancies are long-term.”

                      (I guess Stuff could have got it wrong)

                      Irregardless of what daft ideas Gareth may have, can we agree that “you need to be able to have short term tenancies by mutual agreement” and leave it at that?

                      A.

                    • Carolyn_nth

                      That Stuff article doesn’t say there wouyld be no fixed term leases under TOP policy. They are just indicating they would be relatively rare.

                      Seriously, this is a red herring. Rental housing should mainly be a long term thing. Landlords may have to leave their homes empty while overseas. Renting homes should not be something home owners dabble in when it suits them.

                      Edit: when renting a property, I don’t want somewhere with all the landlord’s stuff in it. I’d prefer totally empty where I can bring my own furniture, as I’ve found when renting overseas.

                    • Antoine

                      > Landlords may have to leave their homes empty while overseas.

                      Well, I’ll disagree that that would be a good outcome, and leave it there

                      A.

            • One Anonymous Bloke 6.2.1.1.1.2

              What an insurmountable problem! No wonder you’re hysterical with fear.

              No, wait, what if fixed term tenancy agreements were possible? Hallelujah!

              • Antoine

                That’s right, the problem I am discussing occurs neither under the status quo nor under the Labour policy, only under some other policies that have been discussed from time to time. So not a major at this point.

                A.

                • Carolyn_nth

                  I don’t see any policy which says fixed term leases cannot happen. But the aim of the policies of TOP and The Greens is to make most rentals be available for long term rentals. At the moment the assumption is that most tenants only want a place relatively short term.

  7. David Mac 7

    For good reason another house or 2 has become our superannuation policy of choice. 85% of rentals are owned by people that have 1 or 2 rentals. Over a decade or 2 no investment class can hold a candle to the advantages of gambling our non-working futures on a rental property or 2.

    This is not healthy for our society, swapping escalating assets between ourselves and all-comers. It doesn’t grow NZ, it’s treading water. But this is the way it is, you’re a mug if you’re not sticking your under the mattress money into a house.

    With almost everything we rent, car, canoe or motel unit we’re saddled with and accept onerous conditions. It seems fair that the owner sets the terms… “It’s mine, these are the rules”. Housing needs to be handled differently because it’s a fundamental need for life.

    Increasing the rights of non-owners to determine the future of these assets will of course diminish the rights of those that own them. They will become a less attractive Mum and Dad superannuation option and we will see increased corporate ownership and management of rental portfolios and an increase in overheads that will settle with the end users, the empowered tenants.

    Beyond improving conditions for tenants I see sliding in this direction as a positive move for our nation. Mums and Dads parking their money in replanting our felled Pinus Radiata makes a whole lot more sense than playing Monopoly with our houses. There is lots and lots of community owned housing in Sweden. Their well known world brands, Scania, Ikea, ABB, Husqvarna etc etc, that’s where Swedish Mums and Dads have their under the mattress Kronor parked, where they work. Not unlike Draco’s co-op model. Made sense to me.

    • Antoine 7.1

      > increased corporate ownership and management of rental portfolios and an increase in overheads that will settle with the end users, the empowered tenants

      Increased corporate ownership and higher rents, this doesn’t actually seem like a fantastic end game to me?

      A.

      • David Mac 7.1.1

        Hi Antoine, subsidising rent has become an intrinsic feature of life in NZ. By way of a full benefit, accom supp or WFF…If a govt were to pull the pin on it, tenants and rent dependant investors alike, our nation would fall over.

        Housing NZ have determined that to lead anything approaching a reasonable standard of life for the vast majority of us, a third of our income spent on housing is a reasonable expectation. I agree with this, I think most of us would.

        Yes, empowering tenants will push up costs for renters, this can be met by increasing govt paid rent subsidies that slowly push most of us towards that optimum 1/3 figure.

        How to pay for this? When Mum’s and Dads aren’t parking their rainy day money in do nothing houses and into flourishing Forests_R-Us, the purchasers of their logs can meet the increased housing subsidy requirements via the tax Forests-R-Us will pay.

        I’d take it a step further, an individual or couple could direct their rental subsidy into paying off a mortgage on their own place if that is what suited them.

  8. AsleepWhileWalking 8

    Instead of continuing subsidising rents that ratchet higher let’s just amortise (hope that’s the word)/roll up the subsidy projected and let people buy their own damn home.

    I’m sick of hearing landlord whining. You are supposedly running a business, therefore its your job to figure things out not the government’s to do it for you.

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