Rent rises: Lobby group calls for inflation limit
Giving renters the right to live in a landlord’s property for as long as they keep paying the rent could create a two-tier housing market, landlords believe.
Renters’ lobby group Renters United has launched a proposal to ‘‘fix’’ the rental market and will submit it to the Government, which is committed to reviewing the Residential Tenancies Act as one of its election pledges.
The group’s proposal includes giving tenants the right to stay in a rented property until they choose to leave, providing they continue to pay the rent and do not damage the place or engage in serious illegal or antisocial behaviour on the property.
But tenancies without limit could mean homes with sitting tenants could only be saleable to other landlords willing to commit to a tenant, potentially for life.
Landlord Andrew Bruce likened that to sales of existing homes leased by Housing New Zealand for the long term from private landlords.
Those houses could only be sold to other investors, which meant a limited number of potential buyers.
‘‘I’ve never bought one. If I was looking at a house with a lifetime tenant, I wouldn’t be that interested,’’ Bruce said.
Houses with tenants that could not be removed would also not appeal to buyers looking for a home to live in.
‘‘That would limit your market,’’ Bruce said, as it would potentially reduce the price a property could sell for.
When combined with shutting down tax incentives for property investors, Bruce said the change facing landlords was like ‘‘death by a thousand cuts’’, forcing more more to give up the game.
Renters United members are dedicated to bringing in a more European-style rental system, based on long-term, open-ended rental contracts, and severely limiting landlords’ powers to remove tenants.
At present, landlords can use 90-day notices to order tenants to leave without having to give them a reason, which Renters United wanted to see abolished.
The lobby group called for renters to have the right to a home in which they had both security of tenure, and the right to do many of the ordinary things homeowners do in their houses.
This includes giving renters the right to have pets, make minor alternations such as painting and hanging pictures, and even bring extra family members to live with them if, for example, they had a baby, or had an elderly relative to care for.
There would also be regular Warrant of Fitness checks by local councils, and properties that failed could not be rented out.
Renters United also wants the Tenancy Tribunal to be beefed up with extra money, investigative powers, and the power to even ban landlords from renting out properties if they repeatedly flout the law. And, controversially, the lobby group called on the Government to limit rent increases to the rate of inflation as measured by the consumer price index.
The manifesto of demands had been created to guide renters around the country on what to say when they make submissions to the planned review of tenancies legislation later this year.
Bindi Norwell, chief executive of the Real Estate Institute of New Zealand (REINZ), said she supported moves to lift the quality of rental properties to make them safer and healthier.
REINZ also supported the licensing and regulation of property managers, who were currently unregulated.
But she felt Renters United’s calls for open-ended tenancies, limits on powers to serve notice, and caps on rent rises lacked balance, and risked driving landlords from the market.
‘‘You don’t want it to be too punitive that people don’t want to be landlords. We are absolutely desperate for more rental properties,’’ Norwell said.