National on tenancy law reform: rent rises, property shortages forecast to worsen

Rents could rise even further and rental properties become harder to find when the biggest shakeup in the $180 billion sector comes in next month, National says.

Nicola Willis, National’s housing and urban development spokesperson, said she fears for some of the people in 600,000-plus rental properties from February 11.

“National is concerned that these changes will push rents even higher and ultimately make it harder for some people to find a private rental property to live in.

“New Zealand is already facing a severe shortage of rental housing with prospective tenants queuing up for viewings and being forced to pay ever-higher rents,” Willis said.

“There are now more than 20,000 people on the state house waiting list in urgent need of housing. That’s more than three times as many as three years ago. These people have been priced out of the private market and are in desperate need of secure, affordable housing. Meanwhile, record numbers of New Zealandersare being housed in emergency accommodation with thousands living in Government-funded motel units.

“We are concerned these numbers will grow if private landlords become more reluctant to take on new tenants.

Willis said the vast majority of renters and landlords were responsible people who treated each other and their properties with respect.

“That’s as it should be. The law should reflect this while allowing for the rare exceptions,” she said.

Willis urged the Government to act with urgency to address the underlying housing shortage.

“That means freeing up land for housing, encouraging more private sector development, reducing construction and consenting costs and working with community and private providers on affordable housing solutions, including for example build-to-rent projects,” she said.

But the Ministry of Urban Development’s Claire Leadbetter indicated the act’s reform alone would not change the market.

“There are a wide number of factors that affect rent and it would be difficult to attribute any change in market rent to the reforms alone and any impacts on rents may be muted by other factors that reduce costs for landlords, such as lower interest rates,” thetenures and housing quality manager said.

Housing demand was a broad and complex issue, driven by a range of factors from macro-economic movements to individual needs and circumstances.

The regulatory impact statement prepared when the act changes were being prepared indicated that some of the changes could result in landlords vetting potential tenants more stringently, she said.

The advice noted that at the margin, this could result in a potential increased need for public housing. But Leadbetter said CoreLogic data suggested concerns about the changes hadn’t been deterring investors from buying.

More state homes were rising too, she said.

In 2020/21, 2569 extra public housing places would be finished and by 2024, more than 18,000 new public and transitional housing places would be finished, she said.

“The Government’s housing reforms have empowered Kāinga Ora to accelerate the pace and scale of new home building and large development projects. In the three financial years to June 30, 2020, we built over 3500 new state homes to help meet the growing demand for public housing,” she said.

“Our housing pipeline continues its upward trajectory to help meet demand. We are ramping up to deliver even more state homes,” she said.

Last year, the then Associate Minister of Housing (Public Housing) Kris Faafoi said the wellbeing of 609,700 rented households would be improved by the act’s amendment, giving a balance between the rights and responsibilities of tenants and landlords.

The amendment, announced in November 2019, modernised rental law and aligned it with the present-day reality, Faafoi said last year.

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