Traction on plans to fix rental crisis

The Property Investors Federation (NZPIF) has gained some political traction on its proposals to fix the rental crisis.

Earlier this year it sent seven proposals, which included a long-term tenancy option, the return of mortgage interest costs as a tax-deductible expense  the return of the Brightline test to two years, the right for landlords to issue 90-day notices to unruly tenants and the reform of the Tenancy Tribunal.

NZPIF vice president Peter Lewis says the reaction from political parties to the proposals has been quite surprising. “As expected the Labour Government has not responded, ACT is in favour, National is receptive but made no commitment, however much to my surprise Greens Auckland Central MP Chloe Swarbrick was willing to consider it.”

Lewis also had discussions with MBIE on the proposals but says it “has to toe the Government line”. “A recent 65-page Government paper on rentals was focused on Kainga Ora and not once were private landlords mentioned. It gives a clear picture of the Government’s attitude to private landlords – they are not wanted,” he says.

While the Human Rights Commissioner Paul Hunt has acknowledged tenants are moving homes less often than the past one to two years, the federation there is still not enough stability for renters.

As part of its plan to fix the rental crisis and actually improve the living standards of tenants, it proposed new long-term tenancy option will be in addition to the existing periodic and fixed terms tenancy agreements available under the Residential Tenancies Act.

Within the option a landlord would agree not to sell their rental or, if they did sell, to only do so with the tenant remaining in the property. Tenants could still end the tenancy if they need to, could decorate the interior to their taste and  be allowed to keep pets.

In return, owners would be compensated for the higher risks and giving up some of their rights. For example, in Germany tenants have to provide up to 12 weeks bond for a new tenancy and have to give 12 weeks’ notice.

Under the new option the federation says tenants should be responsible for the direct payment of property outgoings, such as council rates and insurance premiums.

Lewis says the overall plan is based on five core principles of providing stable and better homes, lower costs to enable lower rents, more rental properties to meet existing and future demand, providing improved access to justice for both tenants and landlords and creating closer communities.

The federation says the majority of members invest in rental property for the long term and invariably seek stable long-term tenants.

“Despite the popular image, landlords do not remove tenants because they can,” says Lewis. “They are aware a good tenant is valuable and any vacancy in their rental is a loss of income that can never be recovered.”

He says the Government tried to provide more secure tenancies by removing the ability of landlords to issue a 90-day termination notice with no stated reason. “However, this only made it harder to remove anti-social tenants causing problems for neighbours and communities and has become a major problem for Kainga Ora, that has been repeatedly highlighted over the past year.”

Lewis says the ideas are intended to provide a more flexible rental system that will match the increasingly varied and differing requirements of various tenant groups.

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