Suggested formula for renting

OVER the past months there has been much concern and reports of the cost of renting a house or flat being out of the economic reach of many people who require this style of accommodation. It appears the situation may be the result of speculators buying property for the sole purpose of making large profits by capitalising on the shortage of rental properties available on the open market. This situation exacerbates the problem of affordable rental properties being unavailable and insufficient social housing for those in need.

The Government could counter this trend by applying a legal formula to the amount permitted to be charged for rent. A simple formula would be based on a defined percentage of the rateable value of a property e.g. using a rental formula of 35% of the rateable value.

On a property with a rateable value of $500,000, 35% equals $1500; this sum divided by 52 weeks would represent the maximum rental on this property, being $336 per week. Lower rateable values would, of course, involve a lower rent. e.g. a rateable value of $200,000 would incur a rental charge of $134 per week. Any breaches of the set formula would be adjudicated by the Tenancy Tribunal.

This type of rental control would reduce the amount being taken from taxpayers by the Government to supply emergency accommodation, such as motel rental. At this time the general New Zealand taxpayer is supporting the speculator in their rental ventures. Bill Allen

Dunedin