Rent control should remain an option – Swarbrick
The Green Party urges the government to keep rent controls on the table as many tenants run out of financial limits.
Recently released documents show that Housing Minister Megan Woods sought advice from officials late last year on the potential effects of temporary rent controls alongside her vast housing complex.
But earlier this month, Deputy Housing Minister Poto Williams poured cold water on the prospect of such measures, saying she had “no other plans” in the area.
Green MP Chloe Swarbrick said ministers must not rule out rent controls before the public has a chance to debate the issue.
“We shouldn’t take this off the table,” she told RNZ. “We really keep this conversation alive.”
Swarbrick said the Greens have long championed tenants’ rights and would have “more to say” about any checks in the near future.
“For too long, a very small number of people have been able to control the dialogue about what is politically possible in the country.
“And that has resulted in results that don’t work well for the third of this renting country.”
Chapters in documents, released yesterday, show ministry officials warned the government that its series of housing policies, announced last month, could hurt vulnerable tenants.
In a Department of Housing and Urban Development document prepared for Woods in December, officials said they believed “most landlords” might consider raising the rent.
Officials noted that investors were unlikely to pass all the increased costs on to tenants, but only because “stressed tenants” couldn’t afford to pay much more.
Tenants, in turn, could end up sharing the cost of housing and cramming into smaller homes. If landlords choose to sell, low-income tenants could be excluded and face moving costs, the newspaper warned.
“There is a risk that for some tenants in the cheaper parts of the rental market, they will not be able to find a new rental property at an affordable price.
“This could lead to either additional pressure on emergency grants for special needs, transitional housing and social housing, or overcrowding to make rent affordable.”
A Cabinet document drafted by the finance minister in February noted that the likely impact on rents was “complex and uncertain,” but any upward pressure would disproportionately harm the Maori and the Pacific, as they are less likely to own their homes than other ethnic groups.
“Major reforms to the structural foundations of the housing system can have negative short-term consequences for certain vulnerable groups.
“Following these reforms, the Ministry of Housing and Urban Development will closely monitor the impacts on the market, including the rental market, to assess whether further interventions may be necessary.”
The document noted that ministers would ask officials to consult on a proposal to limit rent increases to once every 12 months per property, instead of per rental.
Swarbrick said homeowners have benefited massively from falling interest rates and staggering capital gains over the past year.
“The owners had a really good management of it … and still found excuses to raise the rent.”
The New Zealand Initiative think tank yesterday released a paper claiming rent controls would worsen the crisis.
Principal investigator Dr David Law said Morning report these measures invariably reduced the supply of rental housing when investors sold their properties or left them vacant.
“There are issues of inequality. Higher income people tend to benefit the most from rent controls. It reduces mobility, people don’t move for jobs when they should.”
Swarbrick said it was bizarre to characterize the reduction in transience as a negative when most people enjoyed a greater “sense of security and stability.”
“There are a number of different variables and ways of building a system around what rent control might look like.”