Housing crisis in renting more acute
Opinion: For unknown reasons, the housing crisis tends to be debated almost exclusively in terms of house prices and home ownership.
Arguably, the crisis in renting is evenmore acute.
Reportedly, one-third of all Kiwis and half the adult population live in rented housing.
According to Trade Me figures, the national median weekly rent rose by $40 last year to $560 a week.
Even before the pandemic struck, the research data showed that a third of Kiwiswere spending 30 per cent of their income on housing costs, with a sizeable segment of the most vulnerable paying even more.
Rising prices at the supermarket and the petrol pump are now piling on additional pressure.
Despite fears of another case of the dreaded wage/price spirals of yesteryear, the soaring costs of food and energy are not being compensated by anything like comparable increases in wages or benefits which – since 2014 – have barely kept pacewith the rise in rents, anyway.
What to do? The website ‘‘Eat Your Landlord’’ has satirically suggested one solution to the problem, but not one to be taken seriously. Not yet, anyway.
Unfortunately, the official data on this issue seems oddly out of date.
Last week, the Government was still invoking 2018 research that indicated relatively few landlords back then had used the accommodation benefit increases as an opportunity to jack up rents. However, the same research also said those benefit increases were preceded by sharp rent increases so at best, the extra funds were merely playing catch-up.
LastNovember – and again citing 2018 data – the Ministry of Social Development conceded that more than 60 per cent of lowincome renters inNew Zealand were spending more than 40 per cent of their income on putting a roof over their heads, theworst ratio of its kind in the entire OECD.
For decades, wealthier New Zealanders have been given every incentive to speculate on housing rather than invest in innovative, productive enterprises.
Therefore, the extent of multiple rental ownership should hardly come as a surprise. Reportedly, a whopping 70 per cent of the housing stock is owned by people who own more than one property, with one-sixth of investors owning 20 properties or more.
As Stuff research last year confirmed, the fabled mum-anddad investors comprise barely a third of the multiple propertyowning picture.
Despite the national myths about home ownership, many Kiwis are paying through the nose to live in properties that official surveys have found to be significantly more likely to be poorly maintained, compared to owner-occupied housing.
Over summer, the recent changes to bank borrowing criteria have begun having an impact on house prices, although those same stricter lending rules will also mean that softer prices would not necessarily make things any easier for first-home buyers.
Meanwhile, changes to capital rating values in some centres will inevitably see the subsequent rates increases being passed on in even higher rents later in 2022.
The Government and Opposition alike seem bereft of ideas to help renters deal with the deadly combo of high rents and rising inflation. Rent controls have been rejected as a policy option. Rent strikes may be inevitable.
Plainly, something has to give.