28-08-2014
Investor reaction to Green housing policies
The Green Party released its housing policy yesterday. The New Zealand Property Investors’ Federation (NZPIF) has analysed this policy and the following points must be considered if better housing is to be achieved for vulnerable families.
Rental Property Warrant of Fitness (WOF)
- The NZPIF agrees that some vulnerable families need help, but an untargeted WOF is not the answer.
- Only 7% of tenants calling the Tenancy Services Help Line are concerned about the condition of their rental properties. It is not a widespread problem.
- The cost of the WOF would be passed onto tenants through rent rises.
- Health problems in housing will not be fixed by insulation alone. Vulnerable families can't afford to turn on their heaters and higher rents will make this harder for them to do. Higher rents lead to some families moving in with other families and overcrowding is another source of housing related health problems.
- Rather than a blanket WOF applying to all tenants, funds would be better directed to those in need and cover items such as insulation, subsidised heating and tenant education on how to keep their home ventilated.
- There is a real risk that a WOF will be continually "improved" adding to costs and potentially removing some properties that are unable to comply from the rental stock.
- "A WOF is expensive, which will do nothing to help rental prices or overcrowding" says NZPIF Executive Officer Andrew King. "Insulation is one part of providing a healthy home, but heating and ventilation are also critical elements. If tenants can't afford to turn on heating now, how will a WOF help them?"
Insulating 200,000 homes, at a cost of $327 million
- The Government Insulation scheme that the Greens want to reintroduce appeared in the past to be really an insulation installers’ scheme. Installing insulation was too expensive even with the $1,300 Government Grant.
- Many Property Investor Association members insulated their rentals without using the Government scheme because it was more cost effective to do this.
- Making insulation a tax deductible expense would cost the Government less and have a lower impact on rental price increases.
Providing greater security of tenure for families
- The majority of rental property owners keep their properties for the long term and appreciate long term tenants.
- Tenants only have to give 3 weeks’ notice to vacate a rental property. This flexibility is a significant benefit of renting. Giving them the right to also stay in the property as long as they like is taking away the rights of the rental property owner.
- If a rental property owner has a financial or health problem and needs to sell their rental property, they should not be prevented from doing so by a tenant’s desire not to move.
- The NZPIF believes there are better ways to match tenants who want long term security of tenure with rental property owners who want long term tenants. But neither party should have more rights than the other.
$3 million of extra funding to help families taking action against substandard rental housing
- The Tenancy Tribunal does not allow lawyers or advocates for either party, but if a tenant needs help they can get it.
- Access to paid expert advocates for tenants would create an unbalanced system and reduce justice for rental property owners
ENDS