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Rental 'Fix' Plan Criticised

Landlord advocates have slammed a tenant advocacy group’s manifesto – on how to ‘fix’ New Zealand’s ‘broken’ rental system – as flawed and likely to make problems worse..

By: Andrew King

1 July 2018

Renters United’s Plan to Fix Renting features a list of 36 requested legislative changes.

These include restricting rent increases to once a year and limiting them to the rate of inflation; enforcing minimum quality standards for rental housing; a major revision of the Tenancy Tribunal; and requiring all property managers to be licensed.

But it is the proposal for tenants to have the right to stay in a rental property until they choose to leave – as long as they pay the rent, don’t damage the place and don’t engage in serious illegal or antisocial behaviour on the property – that has landlords up in arms.

That’s because it means that rental properties with sitting tenants would only be saleable to other landlords willing to purchase with the existing tenant in place indefinitely.

Auckland Property Investors’ Association (APIA) president Andrew Bruce says such a move would severely limit the number of potential buyers.

“If tenants were to be given lifetime tenure and the scope to sell properties was limited, the trend of investors leaving the rental sector is likely to increase and the existing shortage of rental properties would end up exacerbated.”

For Wellington Property Investors’ Association president Richard Bacon, the proposal – along with many in Renters United’s plan – is simply out of touch with reality.

But he would be happy to grant all of Renters United’s demands if he gets a 10% to 15% return on investment, he says.

“You can imagine how much that would increase rents. But the reality is that if the rent is not good and the environment is unfriendly to landlords, no-one is going to want to buy rental properties and the shortage will get worse.”

NZ Property Investors’ Federation executive officer Andrew King, who has released a comprehensive rebuttal of Renters United’s plan, says the rental market is made up of rental providers and tenants.

“Both these parties need the other and poorly thought out policies will negatively affect everyone.”

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