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Looting by another name

Written By: - Date published: 7:22 am, March 11th, 2011 - 125 comments
Categories: business, capitalism, class war, housing - Tags: , ,

Last week I wrote about Christchurch rentals as a potential flash point for conflict in the aftermath of the quake. Mayor Bob Parker has now expressed his concerns in the strongest possible language:

Rent hikes ‘looting by another name’ – Parker

Landlords who hiked rents in the wake of last month’s Christchurch earthquake are just “looting by another name”, according to Mayor Bob Parker.

There have been reports that some rents have risen 150 per cent in a city where many have been left homeless by the magnitude 6.3 quake on February 22.

“I think that’s looting by another name. I just think that’s appalling,” Mr Parker told TVNZ this morning. … It shouldn’t be happening. We’re not going to get through this if people take that approach.”

This has provoked a response in Parliament. National is going to “listening to the advice” of Gerry Brownlee. Labour’s Annette King is calling for limits to be imposed on rent hikes in the city.

This is a situation where I think by far the majority of us would react and feel as Parker does. It seems simply wrong to exploit people for profit in a time of tragedy.

But if we can recognise the wrongness of it here – why can’t we recognise it more generally? Looting by another name is pretty the standard mode of operation for unregulated “market forces”. When we make obscene profits by selling medicines at insanely high prices in third world countries, when we charge “international prices” for our food while people go hungry, when we privatise assets already owned by people and sell it back to the rich ones to make a quick buck on, when we let the “invisible hand of the market” reduce us to nothing but consumers and grind us down into low wage poverty, what do you think is really going on? It is looting by another name.

All of my posts for March will finish with this note. While life goes on as usual outside Christchurch, let our thoughts be with those who are coping with the aftermath, with the sorrow of so many who were lost, and with the challenges ahead.

125 comments on “Looting by another name”

  1. vto 1

    Exactly r0b, most of those things you mention are looting by another name.

    Like when tenants take advantage at times when landlords are on the ropes. Don’t seem to be a fig of care at those times coming from tenants – they screw down as hard as they possibly can. It is only because of the numbers of people on the ropes at the moment that this call is being made by Parker. And he is a politician after all.

    But good luck in trying to control the human urge to advance at the expense of others.

    • millsy 1.1

      So vto, do you think that a landlords should have complete power over their tenants?

      • vto 1.1.1

        What? How do you get that question from that comment?

        In fact, if anything my last sentence should answer your rather odd question.

        • millsy 1.1.1.1

          Well you more or less said that landlords should be able to charge whatever they like.

          Even if the house they own is a rat infested hole.

          Admit it, there are a lot of landlords (not all), who want the money roll in without having to bother with tenants.

          And rents have been rising over the past 10 years.

          You are an idiot to think that tenants have *any* power over their tenants. Indeed, a lot of landlords are complaining that they cannot kick a tenant out with 24 hours notice.

          AND – getting a rental property is like getting a job nowadays, you have to fight with dozens of other people.

          • vto 1.1.1.1.1

            Millsy, landlords are in fact able to try and charge whatever they like, subject to restrictions in the act and provisions in a lease. Just as tenants are able to try and pay as little as they like. Perhaps you have never experienced when “getting a tenant is like getting a job, you have fight with dozens of other landlords”.

            And you are an idiot too if you think the laws are weighted in favour of the landlord.

            Anyways, lest this turn into a bickerfest, we just have to agree to disagree.

            Bottom line – when circumstances suit, the landlord will put the boot in and when circumstances suit, the tenant will put the boot in. I seen it so many times from both sides. Nobody really gives a shit in these circumstances…

            • mcflock 1.1.1.1.1.1

              “Nobody really gives a shit in these circumstances…”

              Except the person without a home.

            • Vicky32 1.1.1.1.1.2

              “Perhaps you have never experienced when “getting a tenant is like getting a job, you have fight with dozens of other landlords”.
              When was that ever the case? (I speak as someone who has rented their whole life, since I became an adult.)

              • Drakula

                vto Vicky is right Christchurch has always had a shortage of accomodation since I have been living in NZ, and that was the 70’s.

                I believe that it wasn’t like that in the 50’s and 60’s but that was when the government was building state houses.

                What those predatory landlords are doing is absolutely criminal!!! They should be named, shamed and thrown in the clink!!!!

    • But good luck in trying to control the human urge to advance at the expense of others.

      I see the point you’re making, vto. And as an avowed pessimist and glass-half-emptier I agree that that has become the default position for many, even most, people.

      But – to take the landlord / tenant example – it doesn’t have to be so. Sometimes I’m happily reminded that the other half of the glass is full.

      I had a wine or three with a friend and former colleague visiting from NZ just this week. She’s a landlord x 2 (neither in Christchurch, just to be clear).

      House #1 is rented to three intellectually disabled (is that the PC term nowadays?) ladies. Her comment: “They’re lovely ladies. They come up and hug me in the street every time they see me and say ‘Thanks for the house!’. The rent should have gone up, but how can I…?” She even sends them a present at Christmas!

      House #2 is rented to a Maori family. I should mention, as an aside, it is in Wanganui and the estate agent begged my friend to house the family because, despite glowing references and the backing of the agent, who’d managed their previous home, no one would.

      Apparently the woman loves to clean and the house is spotless, and her mother is so keen on gardening she comes round and does her daughter’s section as well. So a win for landlord and tenant.

      The reason I repeat this here is beause – despite, I imagine, preaching to the choir on this blog – it is only by telling these stories of positive outcomes that we can hope to overcome the media’s unrelenting sensationalist “tenant from hell” and “landlord from hell” stories which, in Australia at least, make up about a third of the content of both nightly commercial “current affairs” shows (along with the latest “miracle diet” and a “dodgy tradesman” story).

      • RedLogix 1.2.1

        Thanks rex.

        As I’ve said over and over, the vast majority of our tenants have been excellent, and would never make a news story. Nor did we ever seek sympathy over the several who have caused problems. Nothing is ever risk-free, we’ve managed our way through it, learnt, taken our loss and moved on. The worst possible conclusion we could come to is that all tenants are bastards…they aren’t.

        Equally the same might be said of landlords. Our immediate neighbour is a working class woman in her early 50’s, divorced from a tough marriage, works night shift in a very ordinary job, suffering from serious long-term illness and yet manages 6 properties on her own. And does a fantastic job of it. She’s nothing like the fat-cat, white bastard, rent-racking pig of a landlord too many people would stereotype her as.

        Time to end the ‘divide and rule’ tactics of the big capitalists, the bankers and financiers who are the real parasites on us all. This strategy of dividing ordinary people against each other is how they maintain their grip on power.

        • Rex Widerstrom 1.2.1.1

          the big capitalists, the bankers and financiers who are the real parasites on us all

          Don’t get me and Draco started on our differing definitions of “capitalist”, RL 😉

          But you’re right… when you’re starving because you’ve got nothing left after paying the rent, it’s bloody easy to blame the landlord rather than the myriad other people responsible for the system which sees you paid so little you have to choose between food and shelter.

        • Anthony C 1.2.1.2

          Are you really working class with 6 properties?

          Jesus Christ.

          • RedLogix 1.2.1.2.1

            Well that’s her background for certain. And if you met her working late shift you’d never guess.

            The point is.. she’s ‘worked’ at it. What class do you think that is?

            • Colonial Viper 1.2.1.2.1.1

              I wonder if you can be a working class capitalist?

              Once you don’t need the direct application of work time to make your income, but instead rely on the returns on capital and assets, it becomes fairly clear that you have joined the capitalist class (of course you can still be very egalitarian in outlook). It becomes even clearer if you are at the stage where you can hire a manager a day a week to look after your affairs and you can distance yourself clearly from all operational activities.

              • RedLogix

                Frankly CV I’m over these tired old class distinctions.

                While it’s true that there is plenty of infantile and pointless class snobbery and petty exploitation of privilege about … it’s only relevant as far as it’s a latent fault line which is routinely exploited to keep ordinary people divided against each other.

                Because any dispassionate look at the world at present roughly divides the world into a tiny group of uber-wealthy who control the vast majority of all new wealth being generated … and the rest of us ordinary people whom this elite treat with utter contempt.

      • Draco T Bastard 1.2.2

        he problem with the news is that they can’t report all cases and so they only report the worst which gives the impression that things are worse than they are.

        As I said before – in a natural disaster prices should be fixed and signing of contracts banned until an appropriate time later.

        • Rex Widerstrom 1.2.2.1

          I’d have (naively, it seems) assumed the behaviour would have been regulated under common law prohibitions on unconscionable conduct in contract negotiations etc.

          Seems it’s not, in which case you’re right – it needs to come under statute law. Quickly. And – I can barely believe I’m about to utter this thought – perhaps retrospectively*.

          [Alright, time to reiterate my position that retrospectivity in law is never justifiable, but to add “other than in times of clear emergency”… and hope I haven’t created a stick with which I can be beaten later].

          • RedLogix 1.2.2.1.1

            I would link to this page again:

            http://www.dbh.govt.nz/market-rent

            It needs to be comparable to the rent charged for other properties of a similar type, size and location. (If you are charging significantly higher rent than for other similar properties, the Tenancy Tribunal can order you to reduce it.)

            • Rex Widerstrom 1.2.2.1.1.1

              Yeah I know RL, but is that really adequate in this particular situation? Is the Tenancy Tribunal even able to operate down there (last I heard, the courts had been shipped out to Riccarton).

              I just think it needs a law that says “when event x occurs, rents shall remain frozen until event y”. No argument, no loopholes. And it would seem to me the declaring and lifting of a state of emergency might work as the trigger events (though perhaps a period after the lifting might work better).

              P.S. Commercial rents too. I hear stories of small business people needing to get up and running again being blackmailed not just into higher rents, but 5 year leases at those levels.

              • RedLogix

                It’s not adequate to this situation I agree, but many people forget this basic and existing provision when they’re ranting about rents.

                • Draco T Bastard

                  The many people that don’t know that that basic and existing provision even exists.

          • lprent 1.2.2.1.2

            cue the appearance of burt?

  2. Wyndham 2

    vto

    “landlords on the ropes”

    When?

    • vto 2.1

      If you haven’t noticed there has been one of the most severe property market depressions in living memory since late 2007. Buyer vs seller and landlord vs tenant with buyers and tenants taking full and complete advantage.

      • Colonial Viper 2.1.1

        Not in the student market. In student suburbs close to campus prices have been going up and up and up.

        The main reason landlords are on the ropes is that many of them overleveraged and negatively geared in the expectation of ongoing capital gains from the housing price bubble.

        But then again, they weren’t really landlords, they were property speculators parking houses as rentals for a time until they could flip them off for a fat capital gain. Yeah, some of them are hurting.

        • vto 2.1.1.1

          No, the reason landlords (residential and commercial) have been on the ropes is because, due to The Great Recession, there are less people in business wanting premises (heard of the unemployment increase?) and less people wanting new houses or able to move / upgrade etc.

          It has nothing to do with the few who may have been “overleveraged”. I mean, what does overleveraged mean anyway? People rabbit on about the bubble being ridiculously above the norm / long term average, but a reality is that the burst bubble is far more below the norm / long term average than the bubble was above.

          And what of speculation? You, as suspected, are a student. What role in society are you speculating that there will be demand for when you leave? Everyone speculates on future demand for their product / service / skill / trade.

          Most property owners in NZ (commercial and residential) are solid, ordinary New Zealanders with little debt. They have worked a life time and see property as somewhere safe for their money which will bring them an income. That income has dropped significantly in many cases, thanks to tenants taking advantage as r0b’s post points out. So yes, they are hurting.

          Why do so many on this site have sympathy for the only their chosen ones and not all who hurt?

          • Colonial Viper 2.1.1.1.1

            I mean, what does overleveraged mean anyway?

            Well there are various yardsticks to use. From a cashflow perspective, setting up a mortgage with payments far in excess of what a property could hope to generate in rental could be considered an indicator of being overleveraged.

            And what of speculation? You, as suspected, are a student. What role in society are you speculating that there will be demand for when you leave? Everyone speculates on future demand for their product / service / skill / trade.

            Yes I am a student of life. Aren’t you? 🙂

            My friend, I am not talking about idle speculation, or day dreaming of the future, when I talk of “speculation”. I mean very specifically the commercial activity of asset price speculation.

            Most property owners in NZ (commercial and residential) are solid, ordinary New Zealanders with little debt.

            I accept that a vast number of properties in NZ are debtfree and are not turned over year to year. I also accept as the asset price bubble has formed the ROI on rentals has gradually deteriorated.

            That income has dropped significantly in many cases, thanks to tenants taking advantage as r0b’s post points out. So yes, they are hurting.

            We are a poor nation. Half of us have incomes less than $28K p.a. Corporate office after corporate office have relocated to Sydney, Melbourne, Singapore and Hong Kong.

            So yeah, I’ll accept your point, a lot of decent hardworking landlords have been hurting and twice now after the burst of the property price bubble.

        • RedLogix 2.1.1.2

          The main reason landlords are on the ropes is that many of them overleveraged and negatively geared in the expectation of ongoing capital gains from the housing price bubble.

          That is very out of date CV. Most intelligent investors have not anticipated much in the way of capital gain since at least 2008, or earlier. And no-one is foreseeing anything other than very stagnant market for a very long time to come.

          Sure there are a small minority who have been rather overleveraged… but that still doesn’t say anything to the fact that for all landlords.. returns have been so low for a decade that most would have made more cash flow leaving the money in the bank.

          Otherwise vto nails it.

          • Anthony C 2.1.1.2.1

            I’m still struggling to think of ways tenants can take advantage of landlords “on the ropes” (on any scale to be noteworthy.)

            The power relationship (and laws) are completely tilted in the landlord’s favour.

            • RedLogix 2.1.1.2.1.1

              If you were sitting on the other side of the fence AC you’d likely have a different opinion. Plenty of landlords with horror stories of scum tenants who’ve ripped them off badly. And not just a little bit. And there are of course scumbag landlords who cause grief and havoc for their tenants. It isn’t a perfect world out there.

              But it’s my observation that the law itself is reasonably well balanced but the mechanisms for implementing it, like the Tenancy Tribunal, can be weak and patchy in their effect.

              • mcflock

                But then plenty of managers have horror stories about incompetent/evil staff they couldn’t fire (mostly because the managers didn’t have the skills for the job).

                But there’s still a major power imbalance.

                colour me short on sympathy for landlords.

                • RedLogix

                  Yes I agree that there is a reasonable parallel between the inherent power imbalance between employers/employees and landlords/tenants.

                  That’s why there is a considerable body of law wrapped around both scenarios to minimise and reddress abuses. But the traffic isn’t all one way; landlords are not looking for sympathy, just fair play.

                  And yes competency is often an issue, in fact what employees/tenants often perceive as malicious bastardry, is more often the result of amateurish bumbling and mishandling. It’s why using property managers is often a good idea for owners not willing or able to put the time and effort in to do the job properly, or are not sufficiently assertive and confident to manage the relationship professionally.

                  After all is said and done, both parties in either case… ultimately need each other.

                  • mcflock

                    However, when the need is unequal but the consistently more powerful party insists on gaining equal recognition/sympathy of their occasional vulnerability, it looks a bit pathetic.

                    Like rich white men who complain about affirmative action.

            • Vicky32 2.1.1.2.1.2

              You’re absolutely right, Anthony C. I have lost count of the times I, my family and friends have been screwed over by landlords… (I should have Tenants Protection on speed-dial!)
              Deb

          • Colonial Viper 2.1.1.2.2

            I run with Steve Keen’s take on this. The industry has to be structured in a way that being a professional landlord, and developing new properties to be rented (not flipped), has to become a more attractive proposition.

            That is very out of date CV. Most intelligent investors have not anticipated much in the way of capital gain since at least 2008, or earlier.

            This may be so RL, but the thing about debt is that it is persistent. If intelligent property investors saw this coming and started liquidating their portfolio and paying off mortgages, who did they sell to? And did the new buyers use debt to buy the properties?

            One thing I do know is that debt is extraordinarily persistent. It takes a day to take out a $250K mortgage, and 15 years to pay it back.

            If I look at the Reserve bank tables, in Mar 2008, foreign debt held privately in NZ = $209B.

            In Sep 2010, that number was $221B i.e. private sector debt went up through the period you say people were deleveraging.

            My conclusion is that yes, some of the intelligent investors sold out and got rid of their debt. By the buyers took on just as much if not more debt to complete their purchases.

            Deleveraging is a very long process as you know so yes, I agree, the market will be stagnant for a long time to come, and with plenty of false starts as well.

            • RedLogix 2.1.1.2.2.1

              I build new to keep. I loath old doer-uppers that are invariably dumps no-one wants to own as their own family home anymore. Frankly there is a big swath of the lower bottom 20% of the entire housing stock in this country that desperately needs re-modelling with a bulldozer.

              Sadly instead of HNZ effectively replacing them with decent new housing, these dumps get rented out to the poorest and most vulnerable in our society. It’s the shameful consequence of running down the idea of social housing New Zealand pioneered in the 1930’s.

              The industry has to be structured in a way that being a professional landlord, and developing new properties to be rented

              As I mentioned a while back, that’s exactly the situation I’m in right now. We’re sitting on a piece of land in a popular Wgtn suberb, full access and all services existing, planning and resource consented for a brand-new 3brdm unit built to a modern, highly efficient standard. Close to rail, shops and schools, off-street parking…just what everyone wants.

              But on the current numbers it’s not going to happen.

              And yes, Steven Keen keeps on making sense doesn’t he?

      • bbfloyd 2.1.2

        utter bullshit vto… which planet are you living on at present? read the paper, or check trademe properties. rents have risen by upwards of 20% across the board in the last six months.. a freind of mine has been looking for a place to rent, and has reported situations of people actually trying to outbid each other in order to get into rentals….. the reality is that it’s a free for all out there, and the landlords in auckland are making large gains from the property shortage….

        argue with that if you will, but the reality won’t change for prospective tenants here untill the so called government starts building state housing again…. the private sector will never fill that gap…

        • RedLogix 2.1.2.1

          which planet are you living on at present? read the paper, or check trademe properties. rents have risen by upwards of 20% across the board in the last six months

          Only one place worth checking.

          http://www.dbh.govt.nz/market-rent

          The numbers on this site are derived from the actual bonds being deposited with DBH.

          What you are saying may be true for some parts of Auckland, but it certainly isn’t true across the whole country.

          • bbfloyd 2.1.2.1.1

            two things RL…. i would challenge you to pick out an area in auckland that hasn’t seen significant rent increases… (for the purpose of balance, i would exclude corporate rentals)..

            and i have noticed a large variation of bond conditions, i;e: landlords asking four weeks bond, or two weeks plus rental fees, plus advance rents.. the variety, and disparity has become noticeable. how much of these cost actually show up in the figures?

            oh yes, rents outside auckland, discounting christchurch are going up, but as you say, not as sharply as auckland…. could you still make that claim if there were housing shortages everywhere as there are here in auckland?

            • RedLogix 2.1.2.1.1.1

              i would challenge you to pick out an area in auckland that hasn’t seen significant rent increases

              Oddly enough…Epsom.

              and i have noticed a large variation of bond conditions,

              Yes landlords are keen to get as much committment upfront as possible. The reason is simple, a bad tenant can easily cause thousands of dollars of damage. Furthermore it can easily take more than 90 days to deal with them through the system, losing thousands more in rent.

              If you try and chase them for it, you are often lucky to get a derisory $20pw awarded. You may as well not bother. Hence the desire for as big a bond as possible AND rock-solid references. With the system as it stands expect this to get only worse.

              could you still make that claim if there were housing shortages everywhere as there are here in auckland?

              Wgtn rents are static mainly because National are busy gutting the public service. Elsewhere I don’t have strong information.

              However one underlying factor that will drive up rents is the underlying shortage of new homes being built, far less than needed to keep up with population growth and replacement of ‘end of life’ buildings. Eventually this will have an impact.

              Another subtle driver is the number of people transitioning from home ownership back to renting because of mortgagee sales.

  3. LynW 3

    Excellent article and comparison re unregulated “market forces” For accountability perhaps name and shame the “looting landlords”. It has also been interesting obseving Fonterra freeze prices ….an obvious case of too little too late!

  4. Pete 4

    Christchurch will need willing landlords if it wants to successfully rebuild, screwing down hard on rentals and prices will discourage this. As always, the right balance of regulation and “market forces” is needed, but in this case a fair amount of leeway towards market forces is necessary – unless the aim is a ghost commune.

    • Colonial Viper 4.1

      Yeah more Friedmanism bull shit.

      The free market is not going to provide to the people of Christchurch because the market does not know what is going to happen in Christchurch.

      The free market places very high premiums on uncertainty and loss of clarity. Prices will skyrocket and speculators will enter, while risk averse landlords will back out. That leaves the profiteers in the game.

      And Pete, since you love the free market so much, do you know what the rational economic response of Christchurch citizens would be, to a town where tens of thousands of jobs have disappeared overnight, and where over a month rentals go up by 25%, 50%, 100%?

      I’ll tell you what the economically rational thing to do would be.

      Leave.

      The only option: the Government is going to have to take an extremely strong lead to provide market certainty. It will probably have to provide guarantees on land lord mortgages and guarantees on land lord incomes.

      Further, the Government is probably going to have to directly provide a large amount of the rental housing itself. Just like it did in the 1930’s, 1940’s and 1950’s.

      but in this case a fair amount of leeway towards market forces is necessary – unless the aim is a ghost commune.

      Back asswards mate, totally backasswards. However because of this ideology, the National Government is likely to make a total hash of this year, and Christchurch will suffer as a result.

      • Pete 4.1.1

        I agree that much government involvement is necessary if Christchurch is to be rebuilt successfully, but much private enterprise is also essential. Working together.

      • vto 4.1.2

        Mr Viper “The free market is not going to provide to the people of Christchurch because the market does not know what is going to happen in Christchurch.”

        The “market” (being all those individuals in Chch in business and living their lives down here on a daily basis) will in fact know what is happening first. The people will respond to their needs and desires and those in business will respond in a flash. The politicans will lag and follow. The bureaucrats will also lag.

        And the best way to get the best outcome is to get those with the most at stake to carry it out. And those are those living their dailty lives and in business in Chch (i.e. the “free market”). Not some sort of overlord from council or wellington.

        • bbfloyd 4.1.2.1

          vto… so you’ve met this “market” bloke, have you? really on to it sort of chap? so he’s not just a measure of economic, and social forces colliding? he’s not just a set of numbers that the “market” reacts to? or to put it another way. he’s not just the quantification of business reaction to existing trends after they have already shown up?

          no… he’s a real person. and not just any person, but one with prescience… what a guy! i wish mr market was prime minister…. oh……..he is.

          • vto 4.1.2.1.1

            bbfloyd, you clearly have one particular type of bee in your bonnet on this entire subject. You should have a look at the other bees flying around too in order to balance your view.

            Or alternatively listen to this thread’s author’s previous post on market forces and its ability to solve problems… http://thestandard.org.nz/the-too-big-to-fail-myth/ r0b has pointed out that the free market would have solved much of the GFC had it been left to its devices. If you disagree that the market is capable of such then take it up with r0b.

            Follow this logic (for commercial premises which Parker was talking about as equally as residential)…

            Rents rise significantly due to an earthquake. A property owner with industrial land sitting idle in some lost backblock of the city thinks “shit, rents now line up with costs (as opposed to value) and I can now afford to build a building to house this new demand. Right, where’s the phone number of me old mate Bob the Builder?”

            ring ring “Gidday Bob, reckon you can put up an industrial building for me on that site that nobody has wanted before? How long to start? How much it cost?”

            “Sure fulla, I will meet you there tomorrow and we can do some sums and get things underway. Council have upped their game due to the earthquake so consent should be out in a week and I could get into it next month.”

            “Great, thanks Bob, see you then.”

            Voila, problem solved. Now, lets try that using some government department… (I aint even gonna waste my time trying)

            And btw, I have met Mr and Mrs Free Market. So have you. You are a free market yourself don’t you realise. The economy and the market are simply the total of millions of individual personal and usually very small transactions which occur every day. Buying your milk in the morning, buying a newspaper, filling the car with petrol. This is the vast vast bulk of the market. Don’t get lost in complexities. It is very simply and more than well enough evidenced by what has happenned in Christchurch..

            Earthquake happenned and nobody could go out and buy their milk and newspaper and petrol so easily. The market and economy has ground right down due to the simple fact that 400,000 people’s daily transactions could not occur.

            • vto 4.1.2.1.1.1

              Actually I didn’t outline that example with Bob the Builder very well. Add this…

              Earthquake smashes city which now needs a whole bunch of new buildings. How to solve this problem and get more buildings built? Market or state?

              • KJT

                I do not have a problem with the market. It has proven to be the best option for the supply of most goods and services provided cheating and cases where natural monopolies would exist are properly regulated.

                The mix of state and market economies in the European social democracies works very well, as it did in the USA and here until the thieves were given free reign.

                The problem is many “free market” advocates actually want them to be free only in the way that benefits them.
                Finance markets want no regulation which could limit their casino profits, but government laws and bailouts when required to maximise their profits.
                Banks, supermarkets and oil companies want to be “free”; to form cartels and rip everyone else off.
                Employers want to be “free” to band together to limit wage rises and raise prices while their work force is banned from withdrawing their Labour or co-operating to ask for reasonable wages. There is no “freedom” to strike in NZ. Sam Purnell would be breaking the law if he “colluded” with other workers to advocate an 8 hour day at present.

                You will hear the screams, soon, when builders start asking for more than the inadequate rates tradesmen have been paid recently, to come back from Australia and rebuild Christchurch.

                The market will sort out excess rents and pricing in Christchurch over time, but Government help and regulation will be required to kick start the market.

                Corporates want to be “free” to operate anywhere with total dis regard for local residents concerns, the environment and community.

                They have been allowed far too much power over our Government and society to the extent they now have a Government they totally own.

                In other words they are totally happy with the freedom to maximise their profits at the expense of everyone else, while trying to limit our freedoms to live a decent life and have a decent society..

              • Billy Fish

                Combination there of is the best option – as far as I can see.
                Free Market tends to have a much shorter term imperative than state (should) so state can provide long term over view, trends and regualtions within which the FM can achieve some goals. A State only or a FM only solution is dogmatic pooh pooh

        • Colonial Viper 4.1.2.2

          Sorry vto I think that you will be proven wrong on this over the next 12-18 months: without an extremely strong Government lead providing the market with certainty and guarantees, the “market” is not gonna help the people of Christchurch by itself.

          By the way, I wouldn’t be so fond of the scenario where the private sector moves ahead in a flash, ahead of bureaucrats and regulation. Good planning and high enforced building standards are what we need in earthquake prone Christchurch.

          As Billy Fish implies, there needs to be strong private-public co-operation in this and the necessary role of Government in assisting the private sector is going to become clearer as the year goes on.

    • millsy 4.2

      Why do you have a big problem with people demanding higher wages, but you think that it is OK for landlords to ramp up rents, by 150-200% (which is way above the rate of inflation). People cant shit out $350 a week for a 2 bedroom shack.

    • bbfloyd 4.3

      so you would say that unfettered profiteering and price gouging is a perfectly reasonable activity when it can be covered under the “market forces” umbrella? so you are saying that any attempt to curb rampant greed would adversely affect the market?

      if that’s true, then we really are stuffed. if rampant greed, and unfettered profiteering have to be tolerated in order for the “market” to operate at a level that would see adequate housing stocks built, then the “market” is no more than a dragging anchor.

      another way to look at it is that, if property costs can’t be kept at realistic rates, then people will move away in even greater numbers than they already are… at this rate, christchurch could end up a stagnating ghost town…. auckland is already approaching crisis point, with people living in makeshift accommodation due to unaffordable housing coupled with a lack of adequate supply…

      if the answer is to freely allow landlords to profit from that, then we really have lost, and will lose a lot more than we will ever recover..

  5. Nick K 5

    It’s not “unregulated capitalism” at all because the Residential Tenancies Act regulates this type of behaviour.

    • Colonial Viper 5.1

      However it will be essentially unregulated up until the time effective action is taken to enforce the Act.

    • ianmac 5.2

      It is hard for a landlord to raise the rent much for a sitting tenant.
      However as one tenant leaves the landlord can ask for any rent he likes for the incoming. Market forces indeed. Wonder how that could be regulated?

      • RedLogix 5.2.1

        That’s very true… many landlords will trade off a few percent rise on a sitting tenant for the certainty of keeping them.

        But when they move on, and this quake has forced many to do so, then that is when the rent is usually adjusted to the current market. As long as we have a property market the short answer is no… there is no sane way to prevent that unless you have rent regulation.

        Which is fine you can do that, but the consequence of rent freezes is usually widespread slums because their owner simply does not have the cash flow to maintain or improve.

        • Vicky32 5.2.1.1

          “then that is when the rent is usually adjusted to the current market. ”
          Jargon. Although it seems to mean charging like a wounded bull! (It could bite the landlord on his fat *rse if no one can pay.. Had you thought of that?)

          • RedLogix 5.2.1.1.1

            (It could bite the landlord on his fat *rse if no one can pay.. Had you thought of that?)

            Of course. There is no rule that says you have to pay what is being demanded.

            Market rents are here. If you think you are being ‘charged like a wounded bull’ then you can easily get some idea of what similar rents in your area are.

            Note carefully:

            Market rent is a useful guide when you are deciding what the rent will be. It needs to be comparable to the rent charged for other properties of a similar type, size and location. (If you are charging significantly higher rent than for other similar properties, the Tenancy Tribunal can order you to reduce it.)

            Sorry to quote this twice in one thread, but it seems lots of folk don’t realise that the Tenancy Tribunal has the power to reduce over the top gouging.

            And of course if you think he’s charging too much then by all means move on to a property where the rent is more reasonable… that is how the market works. Fortunately there are rules to help protect you. Lots more info here and here.

            In particular the law says:

            What notice should be given for a rent increase?

            In a periodic tenancy, landlords must give 60 days’ written notice before increasing the rent. If the tenancy is a boarding house tenancy, only 28 days written notice is required.

            The rent cannot be increased more than once every 180 days (6 months) at either the start of the tenancy or the last rent increase.

      • bbfloyd 5.2.2

        easy answer ianmac…. it can’t at present. i would hazard aguess that the regulations weren’t written with this sort of scenario in mind… it would most likely require a rewrite of said regs to get up to speed on this… which, of course won’t happen under this admin untill far too late to stop any exodus.

  6. Nick K 6

    CV, that’s not really your argument, is it?

  7. Armchair Critic 7

    So, according to Bob Parker, the proposed 24% rent rise for council flats in 2008 wouldn’t have been looting? I suppose the increase has to be 25% or more to fall into the looting category.

  8. Herodotus 8

    I take it that the increases are when new tennants move in. Because somewhere within the tennacy law is a platform as to what $ increases and how frequently they can be applied. I think the reviews are at a min of 6 months, and if increases are unwarranted there is the tribunal to take your case for unreasonable increases, if nothing else at least it delays the time for the increases to be paid, and the landlord may relent and reduce the increase. Perhaps ther eis Citizens advice or an opportunity for local MP’s to gettheir feet wet and issue out advice.

    • Anthony C 8.1

      Don’t think there is anything governing the amount of an increase, it’s just 60 days notice, and no increases within 180 days of the start of a tenancy or a rent increase.

    • bbfloyd 8.2

      they are getting their “feet wet” hero… but because it’s the local labour mp’s doing it, we aren’t going to hear about it. if one one single national mp did what you suggest, we’d be hearing it blasted out on the 6o’clock news for a week or so.

  9. Lanthanide 9

    The issue is less clear for residential rentals, but for commercial rentals the market really is the best mechanism for this.

    I’ll say out the outset the only thing I think should definitely be prevented is from landlords requiring unrealistically long tenancies from their clients. If they would normally have required a 1 or 2 year lease, they should continue to ask for that length of time. If people want to offer longer (or shorter on agreeable terms, eg extra $, fine).

    Now, for commercial rentals, tenants are bidding up over each other in order to get the space they want. There’s nothing wrong with this, because the alternative means “you can’t bid over each other” and essentially the decision of the landlord then becomes “first in first served”, but this isn’t fair nor economically advantageous. If there is a very profitable small business that needs some office space, and another less profitable small business, it is best if the very profitable business wins the office space through paying more. This keeps the very profitable business running, as well as sharing out their profit into the community (via the landlord). Also for small businesses, many of them will find through necessity, that actually remote working from home for some of their staff may actually be more cost-effective anyway.

    If we simply give space up to first-come first-served, then it’s possible that many “more worthy” businesses (eg, ones that employ more people, have a greater turnover because their product/service is superior to the competition) will miss out on the space.

    Now for residential rentals, this is less clear, because the socially ‘more worthy’ tenants would tend to be families, and they will generally have less disposable income than DINK professionals, so hiking rents in this case would have adverse outcomes. At the same time however, if tenants are bidding up the price (because of the demand), I don’t really see a problem with landlords accepting what is bid.

    • RedLogix 9.1

      Now for residential rentals, this is less clear, because the socially ‘more worthy’ tenants would tend to be families, and they will generally have less disposable income than DINK professionals, so hiking rents in this case would have adverse outcomes.

      Absolutely… but right now I’ve one unit renting in Wgtn. Two years old, 120m2, three double bedrooms, two bathrooms, double glazed, heat-pump…. $380pw which is the DBH upper quartile rent for this property in this area. (That’s about 5% return. After rates, insurance, mortgage and maintenance I see almost nothing of that. In fact it owes me about $80k of my own capital.) Right now my partner is fielding at least 8 credible enquiries for this place.

      We’ve had this situation before, and while it’s commercially desirable, it’s also surprisingly uncomfortable for us dealing with multiple tenants all vying with each other in one form or another.

      Last time we picked the ‘most socially worthy’ tenant it ended badly for us. No good deed goes unpunished as they say. In the end that is the proper role for Housing NZ, providing social housing for those whom the market fails.

      • Lanthanide 9.1.1

        “Last time we picked the ‘most socially worthy’ tenant it ended badly for us. No good deed goes unpunished as they say. In the end that is the proper role for Housing NZ, providing social housing for those whom the market fails.”

        Same thing happened to the landlords of where I am now. They have 2 properties on the section, and my bf and I live in the small cottage on the back. Previously we were in the front house with other flatmates, but the landlords sorted their cashflow problems and so swapped back into the main house. Our lease comes up for renewal very shortly and I’m just hoping they’ll give it to us without a rent rise, rather than turfing us out in favour of friends/family who are in need.

        Anyway, they said that they were renting out a house at pines beach to a maori woman who had been going through a tough time with a breakup and I think also a miscarriage. They were renting it out to her at below market rate to help her out. After the last earthquake, suddenly there were 14 people living there (her extended family) and they stopped paying rent, essentially squatting. They got it sorted in the end, but their general advice is that the ones most in need of special help are also the ones most likely to abuse it, so you don’t get anywhere in the long run by being nice to people.

        • Peter 9.1.1.1

          Similar story of a friend who rented to a well referenced solo-mother. Her drug taking friends trashed the house. The landlord is left with a mortgage to pay and no income. Not an uncommon story I suspect.

          For what it is worth my one rental property runs at a loss requiring personal cash to keep it up to standard.

          • bbfloyd 9.1.1.1.1

            wrong peter. that is a very uncommon story…. the vast majority of tenants are responsible, and look after the properties… the story you tell is one that gets recycled over and over so that one could be forgiven for thinking that the problem of irresponsible tenants is widespread and pervasive… no offense, and a shame it had to happen to your freind, but it is simply self serving propaganda… a useful “market tool” if you like…

            btw,… where is you rental? and is your tenant longterm? i only ask because it is most unusual for rentals to not cover the mortgage, or maintainence. i can only assume extenuating circumstances. and how nuch tax releif do you get for the loss making property? assuming you have taken advantage of the obvious facility to do so.

            • Colonial Viper 9.1.1.1.1.1

              wrong peter. that is a very uncommon story….

              bb, I’m completely sure that Peter wouldn’t fabricate a tale like this.

              • RedLogix

                Peter’s story comes in two parts.

                The first about tenants trashing a house is not a common occurence, but neither is it rare enough for landlords to totally ignore the possibility. For sure it’s something always in the back of your mind.

                The second part, about landlords putting their own cash into the business. Yes very common. I had to for many years; I’m only just cash flow neutral recently.

      • millsy 9.1.2

        Ideally, most of the rental property in this country would be owned by HNZ, leaving private landlords to target the DINKs and ultra wealthy, I belive that was the intention when the government set up the state housing system.

        • RedLogix 9.1.2.1

          Actually millsy I can give you numbers.

          At present around 33% of homes are rented.

          Most people start needing a home roughly at the age of 20. Most people cannot afford to own a home until they are about 30. And then go on to stay owning for another 50 yrs until they pass out of this life in their 80’s.

          This means that at any one point in time roughly 1/6th of people will be in the DINK category as you put it… not yet ready or willling to own a home. Which accounts for roughly 15-18% of all people, or about half the rental market.

          The other 15% of the rental market is people who cannot buy a home for one reason or another. Too poor, too broken, criminal record, recently immigrated with no capital; essentially people the banks will not lend to. They consititute the 15% who have a ‘social housing’ need. Most private landlords find dealing with them rather too risky for the very low cash flow they bring in.

          Right now HNZ provides barely 5% of all housing in this country, or about 1/3rd of the requirement they should be meeting. (There is a grey area where NHZ is essentially leasing houses of private owner whom HNZ then rents to it’s clients…. which creates a bit of a hole this simple analysis).

          But overall millsy I’d agree, the HNZ supply of social housing is at least half what it should be. And that IS political.

  10. RedLogix 10

    As I said before, it’s very very easy to demonise landlords. But the simple fact is that they would not be able to raise rents unless there were tenants willing to pay… moreover in many cases… multiple tenants all trying to outbid each other.

    Exactly what is a landlord supposed to do? Take the lowest bidder out of the goodness of his heart? What other business is expected to work like that?

    Historically most properties returned something like 7-15% pa. For at least a decade returns in all but a few odd corners of the market have been half that…3-6% at best. And tenants were universally happy when the market was working in their favour.

    Now all of a sudden when the market swings against them… everyone wants to blame rent-racking bastard landlords. But no-one wants to examine the market mechanisms themselves… and most especially not a word will be said about the four big Aussie banks that have treated this country as a mortgage mine.

    • Rob 10.1

      Some questions:

      1. Could the lower percentage return have something to do with the double-digit growth in house prices experienced in the mid-2000’s?
      2. Does your return on investment take into account any potential capital gain when the asset is realised?
      3. Haven’t other forms of investment (e.g. term deposit rates) also experienced lower returns when compared to historical levels?

      • RedLogix 10.1.1

        1. Could the lower percentage return have something to do with the double-digit growth in house prices experienced in the mid-2000′s?

        Absolutely. But everyone operates in the same market. Take one of my 2-bed units. Right now the rent is $18,000 pa. If the tenant were to purchase the same property with 20% equity at 6% interest, rates, insurance, maintenance, legal costs, and real-estate agents somewhere in the loop….they’d finish up paying around $28,000 pa.

        The point it, there isn’t a separate property market for landlords and homeowners. Buying or selling that double-digit price growth hurts everyone. Personally I hate property bubbles, I’ve commented here frequently against them. The only people who profitted from them were the banks.

        2. Does your return on investment take into account any potential capital gain when the asset is realised?

        Not from a cash flow point of view because I do not intend selling ever. Paper gains are meaningless to me.

        3. Haven’t other forms of investment (e.g. term deposit rates) also experienced lower returns when compared to historical levels?

        Fair enough. But leaving your money in a low risk bank account is tantamount to burning up a portion of it every year; it’s a slow way to get poor.

        Equally remember that many people have preferred property simply because they felt it was still better than having it stolen off you by sharp suited insider sharks in our sharemarket or investment fund industry.

        • Lanthanide 10.1.1.1

          The other thing with property is that being a physical asset, it can’t just vanish when the market crashes. Well, maybe if a huge earthquake strikes and your house collapses and the land is unrepairable. But that’s what insurance is for; you can’t get insurance on sharemarket losses.

          • Rex Widerstrom 10.1.1.1.1

            you can’t get insurance on sharemarket losses

            Anything involving lost of numbers just ends up confusing me but I’m pretty sure that’s exactly what you can do… i.e. “bet” on a market downturn and cover (or at least help cover) your losses… which is effectively a form of insurance.

            Similar (and again, I’m scrabbling at the edges of my understanding here) to the whole sub-prime mortgage collapse, caused by people buying mortgages they knew would fail…

            Could someone who actually understands this arcane stuff come rescue me before I drown here? 😀

            • Colonial Viper 10.1.1.1.1.1

              You can even make money on countries and companies failing to be able to repay their debts.

              Hence the infamous credit default swaps.

              Essentially taking out fire insurance on someone else’s property. (Can’t see any moral hazard in doing that, right?)

              If you want a financial instrument which will make you money the more times Liz Hurley takes a crap in a day, the wizards at Goldman Sachs can sell it to you.

            • Lanthanide 10.1.1.1.1.2

              Shorting, which is what you’re talking about, is not insurance. I’ll give examples.

              For a house worth $400,000, you might pay your insurance company a few $ a year. You expect that you’ll never need to claim, but when you do, you’ll (theoretically) get the whole value of your house back at some point, for just that small outlay.

              With the stock market, you might invest $400,000 with the expectation that the stock will go up and might be worth $450,000 in a year or two. If the stock crashes, then your stock is worth less.

              Now what you talk about making a short, means that at the same time as you have invested $400,000 into the share, you may have also done a $100,000 short sale. Essentially a short sale works like this – you borrow *shares* from someone now, and promise that you will give that same number of shares back to them at a future (set) date. So you borrow the shares, sell them right now, and then sometime between now and the future date you buy that same number of shares to return to the original owner. If the share price goes down between now and then, then you buy the shares cheaper than what you sold them for. If the share price goes up between now and then, then you have to pay more than what you got from selling them.

              If you place a short on a share at the same time that you buy and hold shares, then you are covered in either case of the stock going up or down, but you’ve effectively neutered your returns. If the price goes up, your short position shows a loss while your buy-and-hold gains. If the prices goes down, your buy-and-hold loses out while your short position gains.

              So it’s not really the same as insurance at all.

              Also, mathematically, when buying and holding shares, you only stand to lose as much as you initially invested if the stock goes to nothing (since they generally never go negative) $400,000 in this case. But with a short position your losses can be infinite. If you sell $100,000 worth of shares today, and in 3 weeks time the share price goes up by a factor of 10, it’ll cost you $1,000,000 to buy the shares back and return them – you just lost $900,000 on an investment of $100,000.

  11. nzP 11

    “Landlords on the ropes” – that made me laugh. They must have made some “bad choices”.

    Rent regulation sounds like government enforced ethics and morals – by another name. Kinda admirable, but our governments have been destroying and rearranging ethics and morals to suit themselves since NZ parliament was first formed. Not the most trustworthy bunch to look to.

    The moral and ethical horse had well and truely bolted from NZ society before the earthquake came along. Seems that relativism does in fact a have a price tag. Who would have thought. Suggesting free market this and that – or be nice, be good, be a community – is for comfortable people in comfortable times when there is no largescale irrational desperation. People will clearly now do what they think is best for them.

    • vto 11.1

      ““Landlords on the ropes” – that made me laugh.” – that made me laugh.

      • kriswgtn 11.1.1

        Yeah me too- our last house in wgtn- lived there for 14 years.The landlord did NOTHING- my toilet broke cos it was from the 60’s. 2 weeks i had to wait to get it fixed.The roof leaking in one of the bedrooms.Over 6 weeks

        Then it really leaked so bad that alot of the support beams were rotted.He was quoted 18k.He refused to fix it

        We were paying $290 for a 2 bedroom swimming pool.It was so damp.In the end enough was enough.We moved out after one of the celings caved in

        He still hasnt fixed the beams.He is now renting it out @ $320 a week

        When I think of the amount of $ me and partner paid out to live in a cold shit hole…….well you can guess

        Now we have a 3bedroom house in Paraparaumu Beach with a awesome landlord .we pay $300
        its sunny and warm

        most landlords in Wgtn up rent by $20-$30 every time they let it out

        Most landlords I have come across cry poverty but they drive flash cars

        • RedLogix 11.1.1.1

          Fine, but if your job is in Wgth and you are paying an extra $60-80pw or so commuting how are you better off again?

          Making generalisations about how landlords are all fat cat bastards is about as useful as me making generalisations that tenants are all drunken, cheating scumbag losers. The simple fact is that both tenants and landlords need play to fair to make the game work… demonising each other just makes life miserable for everyone.

          • Lanthanide 11.1.1.1.1

            While generalisations are unfair, I’d say the average landlord is closer to a fat cat bastard than the average tenant is to a drunken cheating scumbag. This should be obvious – to be a landlord you need to have above average wealth (assets, if not cash), whereas to be a tenant you can just be young and not have enough cash saved to buy a house.

            • RedLogix 11.1.1.1.1.1

              Not really.. the comparison is unfair simply because that is how life works. Landlords tend to be older people over the age of 40 who’ve worked hard to get some capital together. Not sensible comparing them to someone still in their 20’s.

              Generally I’d say landlords are not a lot different to their age-peers who have gone on to be small business people, professionals, skilled technicians or done well in a trade. (And there is very large cross-over here; many folk are landlords because they’ve done well in some other line of work…)

            • neoleftie 11.1.1.1.1.2

              Well quite a few baby boomer i know either paid off their home mortgage easily or remorgaged and bought rental properties…These are working class folk who were in a position due to the housing bubble or savings to better themselves. So not all fat cats at all.

              • bbfloyd

                so you’re saying that if you have a rental property, and you come from a “working class” background, then it’s ok to gouge your tenants?

                • neleftie

                  BB – surely gouging is gouging just like ignorance or racism, not class related at all.

            • Vicky32 11.1.1.1.1.3

              Or old, like me – someone who spent their life raising children alone instead of making money, and therefore will never be able to afford a house.

              • neleftie

                Vicky – all i can say thank goodness we have a welfare state.
                well John key would point and say there goes someone who made bad choices because you arent like him.

          • Rob 11.1.1.1.2

            @ RedLogix (10.44)

            Quality of life is not just measured in terms of money. I also lived in a cold, damp house for a few years; my health is better and I’m prob saving on doctor visits …

            Agree 100% with 2nd para. – I guess I started to get my back up with comments “tenants take advantage of…” and “tenants universally happy”, ’cause as far as I’m concerned as a tenant there hasn’t been much advantage of anything over the last 10 years when I compare my pay packet to the rent I pay. (and yes, not my landlord’s problem)

            I accept your earlier comment everyone is hurting, which makes it a bit pointless for tenants and landlords to be slinging mud at each other … I guess the fundamental problem is not enough low-cost housing for that end of the market.

            • RedLogix 11.1.1.1.2.1

              Rob

              I’d agree that cold damp houses are a curse in this country. Everyone is hurt by them, not just tenants. It is why all my units were built new, all have heat pumps and are warm and dry.

              Unfortunately the rental market is an odd thing, I don’t get a cent more in rent for this. The only way I get a payback is that our tenants tend to be happy and stay longer so my ‘occupancy rates’ are very good… but then my rents tend to fall behind the market as I’m one of those bastard landlords who only raises the rent at a change of occupancy.

              The fact is that the rental market rather weakly rewards ‘good landlords’ with respect to bad ones.

              When I said ‘universally happy’ I guess that was a throw-away line in the context only of the comparison I was making… that renting has for a long time been far cheaper than owning the same home.

              • bbfloyd

                RL… would you say that having long term tenants is less costly? i’m assuming they are long term because they maintain the units to a resonable standard, and don’t tend to create damage etc… i ask this because as a long term tenant myself, i tend to do all my own small repairs around the place.(washers, fittings, gardens,etc). have you found this to be the case with your tenants?

                • RedLogix

                  Yes. Absolutely. Happy Tenant = Happy Landlord

                  That is why the usual quid pro quo is that the landlord will put off increasing the rent. Or keep any increase to a minimum on an annual basis. Most landlords greatly prefer a stable, trustworthy tenant they know than bumping up the rent and running the the risk of having to find someone new.

                  Some landlords, especially older ones who are mortgage free, may even allow rents to fall well behind the market for a few years. But for one reason or another they will catch up to the market eventually, and if that situation is badly handled it can cause a lot of grief all round.

                  The vast majority of our tenants have been excellent, some arguably looking after the place better than even we might have. As I said before both parties need to play the game fair or they just make life miserable for each other.

        • Vicky32 11.1.1.2

          “He still hasnt fixed the beams.He is now renting it out @ $320 a week”
          I am reminded of the landlord we had in Mt Eden in the late 90s, who kicked us out because I couldn’t pay the $250.00 a week he wanted to increase the rent to (well above the rents of other similar properties in the neighbourhood.) I told the story before and got jumped on by some nit who thought I wanted the bar-steward to let us stay rent free – suffice it to say that when you assume you make an ass out of you and me, (as my late brother used to say.)
          When I went around to see whether there’d been any post for us since we moved out, I discovered that his new tenant were an immigrant family from Iran I think, eight of them crammed into a two bedroom flat, and he was charging them at least $300.00 a week, which was a swingeing rent for 1996!
          The old ******* was as happy as a pig in shit, but his new tenants were very unhappy. They had had to take what they could get, and lump it. (New Zealanders do xenophobia really well!)
          The trouble had really begun months before when I had asked him to get the sink fixed, and he had refused to call a plumber, had tried to fix it himself and made a right pig’s ear of it. Too greedy to pay a plumber, I ask you!
          Deb

      • nzP 11.1.2

        “““Landlords on the ropes” – that made me laugh.” – that made me laugh.””” – that made me laugh harder.

      • bbfloyd 11.1.3

        of course it did vto… which does no more than illistrate how ignorant you are of reality for the vast majority of tenants… and where your priorities lie…

  12. millsy 12

    Quite frankly the best solution is:

    1) More state houses, and widen the eligilbility criteria for them. I wonder if we would still need working for families if we instead put the money spent into more state houses, etc. Im pretty sure the money saved with income related rents would probably equal the amount revcieved under that package.

    2) Higher wages, and an increase in accomodation supplements. Yes, that means $15 per hour minumum wage. I would tie it to a cut in business tax though, targeted at small businesses.

    3) A return to the 2% housing corp mortgages.

    • Pete 12.1

      Have you any idea what that would cost millsy? You have suggested:
      1) more cost
      2) more cost and less tax
      3) more cost

      • millsy 12.1.1

        Its part of decent society Peter, one where there is no homelessness, etc.

        Cost should NOT be an issue.

        Anyway, #1 should be fairly cost neutral, chopping WFF and putting the money into state housing and accomodation supplements should leave the same amount of people in people’s bank accounts.

      • bbfloyd 12.1.2

        chanting a tory mantra isn’t actually putting anything tangible forward as an argument petey….it’s just a meaningless chant…..a well used brainwashing technique.. apart from a useful tool for cultists, it has little use in a rational discussion.

        • Pete 12.1.2.1

          Cost IS an issue in the real world as it is at the moment, and there’s no escaping it.

          “Have you any idea what that would cost” is a tory chant? What’s the modern socialist equivalent? “Put it on the plastic”? Where the ongoing cost is a far too common millstone.

          Cost should NOT be an issue is a millstone.

          • millsy 12.1.2.1.1

            Tax the high income earners.

            They should be making the sacrifices.

            • Colonial Viper 12.1.2.1.1.1

              Actually millsy I would suggest a property and asset tax on the wealthy, a kind of rates, if you will.

              Kicks in on a sliding scale. Starts for those who have net assets over $500K (a small minority of NZ’ers).

              I figure that the top 100 on the NZ rich list controls about $55B in assets between them.

              Yes we could do with some more progressive strata in the PAYE system, but the eyesore outside the tax base at the moment is assets and capital gains.

    • bbfloyd 12.2

      excellent suggestions millsy….. too bad they amount to no more than a fantasy while the present political environment persists… it would take a truly old fashioned labour govt to achieve these ends…something i feel is still a littleway off with the one we have now…. showing promising signs though…maybe a few dozen gentle, and getting harder, prods might help..

    • RedLogix 12.3

      Totally agree millsy.

      Oddly enough you’d be surprised to learn that most landlords would not see an properly funded HNZ providing for social housing needs as a competitor in the market.

      I’ve long argued that HNZ should be the dominant builder of new low-cost, energy efficient housing in this country, setting a floor in the market that no-one else would find it worth dropping below.

      That would push private investors into the lower risk, higher return higher end of the market where they belong.

    • Kevyn Miller 12.4

      One lesson we should have learned by comparing our previous state housing scheme with that of Sweden is that such a scheme can only avoid driving a country to the edge of bankruptcy within several decades if the houses are in fact small three room apartments clustered around railway stations.

      Housing corp never provided 2% mortgages. The standard rate in the 1960s was 4% with 3.5% available in exceptional circumstances. The standard rate was meant to be the same as the rate the government was paying to borrow the money so that the only direct subsidy was the capitalisation of family benefit and the taxpayer carrying the risk in the event of widespread mortgage defaulting if another depression occurred.

      • Colonial Viper 12.4.1

        One lesson we should have learned by comparing our previous state housing scheme with that of Sweden is that such a scheme can only avoid driving a country to the edge of bankruptcy within several decades if

        Hate to state the obvious but the banks are far more likely to drive a country to the edge of bankruptcy (and beyond), than socialised housing.

        Iceland, Ireland, Spain, Portugal, Greece, US…

        • Drakula 12.4.1.1

          CV I totally agree socialised housing should be an ongoing project that would balance the housing market.

          Would we have that speculative bubble if that was the case?

          I very much doubt it!!!

          Agreed there are ratbag tennents as well as rat bag landlords but letting property is business and profits are involved huge amounts of capital goes into the landlord market which in turn puts them in a very powerfull position.

          Socialised housing will address that problem especially when its financed by a capital gains tax charged after the 2nd house at a rate of 2% on 3rd house 4% on the 4th house, 8% on the 6the house etc.etc.

  13. joe bloggs 13

    Looters are scum. We should shoot the buggers – just like Phil advocates.

    http://nz.news.yahoo.com/a/-/top-stories/8988281/phil-goff-says-call-to-shoot-looters-a-joke/

    So the new Labour policy on Law and Order includes state sanctioned firing squads…

    …nice.

    [Not needed. More in this vein will get deleted…RL]

    Mr Goff said it was clear he was joking.

    “I was making the point that first of all I had absolute contempt for anybody who would exploit other people’s misery at a time like this but I was making a joke … It was obviously not intended to be taken seriously by anyone other than the most dim-witted National Party blogger.”

    • bbfloyd 13.1

      you get the prize for”most obnoxious and irrational statement” so far today joe…. now piss off and leave this to the grownups…

      • joe bloggs 13.1.1

        uh no, Phil takes that prize

        [lprent: No you do take that prize. I read your comment and your link. You seem to have made up your own story without reference to the basic content of linked article. It looks like the pointless spinning of troll lines to me. Do it again anywhere on this site while I have it in memory and you’ll earn my prize to you.

        Hah! I see that RL came to the same conclusion… ]

  14. Colonial Viper 14

    Damn, I almost had 10 comments in a row there!!! 😀

  15. kriswgtn 15

    Something needs to be done re landlords who rent their houses out for cash and dont declare it to IRD
    Like my previous landlord in Wgtn- we got mail for his wife ffs.

    The house was freehold ,paid off in the lat 1960’s 🙂
    He also has over 20 more properties and every 2 weeks he used to come collecting and one sunday we followed him = 21 properties all cash-kilbirnie to miramar to strathmore

    He is and was a slum landlord.and the cheapest bastard I ever come across

    • RedLogix 15.1

      Absolutely… one day IRD will catch up with this cheating prick and crucify him.

    • Vicky32 15.2

      Many landlords are! The guy I’ve spoken about liked to represent himself as a poor but honest retiree with only the one property, but I found out that wasn’t true.
      At least the previous landlords (American and Canadian) were honest about it being their business, and living high on the hog in St Heliers. (They had a bizarre rule – no “blue collar tenants” – back in 1984, before the terms blue and pink collar had even entered the NZ lexicon.)
      Their assumptions bit them on the bum too – when they rented a flat out to a ‘white collar worker’ who was nevertheless a falling-down drunk… At least they had the decency to get help for him, as they kicked him out…

    • Lanthanide 15.3

      You could probably dob him in. If he’s got 21 properties, it might be large enough to pique IRD’s interest. Especially if he’s been doing it for decades.

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