Green co-leader Marama Davidson announced the party's housing policy in Wellington on Sunday. Photo: RNZ / Samuel Rillstone
Green Party co-leader Marama Davidson says criticisms of their new policy that it would reduce housing supply or lead to black-market deals are "rubbish".
The party has long called for things like caps to rental price controls and minimum standards, and on Sunday launched their election policy of introducing a renters' rights bill in the first 100 days of a new government.
The party sold its policy as ensuring renters could access a warm, safe home as a human right, but Infometrics principal economist Brad Olsen warned it could force some landlords out of the market, and disincentivise improvements to rental homes.
Property Investors Federation vice president Peter Lewis told Morning Report landlords were already struggling with rising costs, and such a policy would mean many selling up.
"Given that the current rate of inflation throughout the country is just over 7 percent and we have lots of other goods and services - like insurance which has gone up by 14 percent, like council rates which are going up between 10 and 20 percent, and yet statistically the average rate of rent increase over the past 12 months is just over 5 percent - why are the Green Party looking to control the cost?" he said.
"Some of our members ring me up to say that the way things are heading they're going to be losing $200, $300, $400 a week on their rental property and they simply can't afford that ... inevitably they are going to sell up.
"Sure, that then becomes a house that's owner-occupied but for people who want and need medium-term accommodation and can't afford to buy, this is going to increase the shortage."
He said the policy seemed to be "that there should be no private landlords".
Davidson defended the policy, saying criticisms of lowering housing stocks were "rubbish".
"We've looked at what works overseas, we've looked at what doesn't work and we've also included housing supply in our policy for affordable, quality homes."
She said a study done in San Francisco which found rent controls had led to reduced housing supply did not reflect the Greens' policy.
"Many of those studies are about some homes which don't qualify for rent controls and some homes which do, which of course creates an inequity. We are proposing a comprehensive plan that scoops up housing across the system."
Increases in black-market deals were what would happen if there was a lack of supply, she said, which was why the policy included incentives for more building.
"Our plan is comprehensive, we've costed thousands and thousands more quality affordable homes, and it's something that will actually have intergenerational wellbeing impacts."
She said there was no other asset class in the world where the provider could expect to avoid the ordinary costs of the business, "where you can expect that someone else will pay the entire cost of it and you get untaxed profits after it's paid for, and it may also have been crappy".
"We would never expect for example our taxi drivers to say 'hey, cough up a little couple of dollars more because I need some new tyres'," she said.
"It is not acceptable that thousands and thousands of children and families each year are admitted to hospital - that's not just sick, that's hospital admission - because of unhealthy homes."
Davidson would not commit to the policy as a bottom line in coalition negotiations, only saying it was a "high priority" and if people wanted it they should vote Green.
Renters United president Geordie Rogers acknowledged the policy could mean landlords with just one or two properties being priced out of the market.
"The [rental] properties in New Zealand, most of them are owned by people who own a lot of properties. Those people will continue to make money. Unfortunately there are some people who are overleveraged who already can't afford to do maintenance," he said.
"I don't necessarily think that's a concern where we should be saying 'we need to make it easier for them to provide a home that isn't warm'. I think it's necessary to say that perhaps you can't afford to provide a property and it should be provided by someone who can."
If landlords did sell up, it was not likely to change the overall supply of rentals, he said.
"Homes don't disappear. There are also these other landlords who do have capital who would be looking to take on those homes because they do continue to make an operating profit.
"When you look at those other situations where people have exited the market, the change in supply of housing has been very minimal - in many cases it's actually changed because of the regulation around building homes rather than the regulation around operating them."
He said situations where a renter was being asked to essentially pay for the property's mortgage, interest and maintenance suggested they could afford to own their own home - the problem then was with coming up with a deposit.
"When we talk about people not being able to come up with the deposit that's largely because there's a massive inflation in house prices by people who do have the capital to buy more and more homes which price other people out of the market."
The Greens' Renters' Rights Bill would include:
- A limit of 3 percent on annual price increases, or in years when inflation or wage growth is lower than inflation, using the rate of whichever is lower. Higher increases would be allowed if substantial changes to the property are made.
- Landlords required to tell tenants how much they charged the previous tenants, with increases limited by regulations.
- A rental warrant of fitness homes must pass before being rented, with independent compliance certification, brought forward to 1 July 2024.
- A requirement for rentals to provide a heating source in bedrooms able to heat the room to 18C.
- A national register of landlords and property managers.
- Housing affordability targets directing the government to build 35,000 more public homes; setting up dedicated prefabrication sites; and introducing bonuses for developers who meet climate and accessibility standards.
- A government-backed underwrite for community providers to supply up to 2000 additional homes a year.
- Extension of subsidies for council public housing so these tenants do not have to pay more than a quarter of income towards rent.
- Removing barriers to developing Māori land, and scale up the Whai Kāinga, Whai Oranga programme.
