Greens target ‘sick’ rental market

Tenancy unions, maximum annual increases and a temporary rent freeze. These are some of the options the Green Party is looking at for rent controls.

Although the party has no way of forcing the Government to implement its plans, it is launching a discussion document on such policies, which many economists see as self-defeating.

Its intervention comes after the Government introduced several measures designed to curb property speculation and cool the wider housing market. National has suggested this will see rents rise, something Government officials said was a possible but not certain outcome, as prices were already at about what the market could bear.

Finance Minister Grant Robertson has refused to rule out rent controls, but official advice is generally quite cool on the option, as many economists argue that rent controls discourage people from building more rental properties or improving the ones they own.

Rents have risen much faster than incomes and other inflation in recent years. Figures prepared for the Green Party by the Parliamentary Library show that since 2010, median rents have risen by 50 per cent while incomes have risen by 20 per cent, and normal inflation by 17 per cent.

Party co-leader and renter Marama Davidson said more controls were needed to fix the ‘‘very sick market’’ which houses almost 1.5 million Kiwis.

‘‘Far too many people are paying more than 30 per cent of their income, and that’s too high. Some are paying above 60 or 70 per cent, and that’s just horrific.’’

She was clear that the Greens supported some kind of rent controls that go further than the current system, but was launching the discussion document to see what the wider public backed.

The party didn’t want to discourage people from building new homes or improving existing ones, and said some kind of tenancy database was key, so the Government had a better idea of what was actually going on in the market.

The proposals included either the Government or a new independent agency setting limits on annual rent increases, either across the country or in particularly stressed areas. The Green Party was also interested in increasing the accommodation supplement, but was wary of this simply sending rents up – meaning some combination with rent controls was needed.

Davidson said it was clear that the price rises already happening needed a ‘‘direct solution’’.

‘‘We can’t wait for 50,000 more affordable homes to be built. People right now are having to make decisions between paying the rent and paying for kai or their power bill.’’

‘‘We can’t wait for 50,000 more affordable homes to be built.’’ Marama Davidson Greens co-leader