Public housing need ‘to surge’
Wait lists for public housing are already stretched to record levels but property professionals are warning the Government’s new tenancy laws will lead to more people joining the queue.
There are now nearly 22,500 people on the public housing register, which means that despite the Government ramping up the building of new public housing, demand far outstrips supply.
At the same time, rents in the private rental sector, which provides about 600,000 rental properties and houses about 1.5 million Kiwis, have been climbing steadily.
With private rental stock tight, particularly in the affordable space, landlords report it is now commonplace for 50 to 100 people to apply for a rental property.
That’s already forcing more people to turn to the state for their housing needs – and property market insiders believe the trend will only escalate once the reforms to the Residential Tenancies Act come into force in February.
Property management consultant David Faulkner, of Real iQ, said the focus has been on whether the new law would lead landlords to leave their rentals empty, or sell them en masse, but the real issue was that many tenants would now find it harder to get a rental.
He supported the tenancy reforms overall, as the law needed to change to offer better protection to the growing number of renters. But the removal of landlords’ ability to issue ‘‘no cause’’ notices meant they would be far more selective when choosing tenants, he said.
‘‘That will impact on tenants at the lower end of the rental market. Where landlords would have once been willing to give people without a squeaky clean record a chance, now if they have an inkling of doubt about someone they won’t and those tenants will have to go for public housing.’’
Auckland-based landlord
Andrew Bruce agreed the tenancy law reforms would up the ante on tenant selection and that would increase the number of people needing public housing.
‘‘The reality is there are a lot of tenants around who are marginal, due to bad credit ratings, unstable incomes or other factors, and the new system makes it harder to deal with issues, like rent arrears, which can arise.’’
Having recently experienced himself how the new system would work with a problem tenant, he would not be taking any such risks in future – and nor would property managers and more professional landlords, he said.
‘‘So the unintended consequence of the reforms will be that more marginal tenants will find it harder to get a private rental property because landlords will be more vigilant on their tenant checks. And public housing will only get bigger and bigger.’’
In response to the rapidly increasing need for public housing, the Government last week announced plans to deliver an extra 18,000 public and emergency housing units by 2024.
But these plans have been criticised as inadequate by opponents and commentators across the board.
National Party housing spokesperson Nicola Willis said leaving the Government in charge of building public housing was not going to be enough and the private sector should be freed up to build more houses too.
‘‘We need to see urgent action from the Government to make it easier for developers to build more houses, and that means removing the regulatory barriers currently stopping them.’’
Green Party co-leader Marama Davidson has continued to push for a ‘‘fairer tax system’’, which taxed wealth and capital gains, to address growing inequality.