Rent control policy questioned
Friday 13 September 2013
Rent controls proposed by Labour party leadership hopeful Grant Robertson have been panned by Act leader John Banks.
By The Landlord
He plans to introduce a private member's bill to get "rent stabilisation" across the city.
The party’s replacement for David Shearer will be announced on Sunday but Robertson said he would push the idea whether he got the top job or not.
The proposal would keep a lid on the amount that rent could be increased per year.
New homes would be exempt and the policy would have a sunset clause of three to five years.
Robertson said people were charging crazy rents in the quake-hit city. The 12% annual rent increase meant something had to be done, he said.
Banks said rent controls would just make it harder for would-be tenants to find a home.
“When housing is limited it must be rationed. Higher prices create an incentive for people to make houses and rooms available for renting. It encourages renters to economise by taking less space …This makes rented accommodation available to more people.”
He said forced lower rents would reduce the incentive to meet market demand.
“This will make the rental housing shortage worse. It will particularly disadvantage those who are looking to rent and their desperation will make illegal under-the-table payments inevitable.
Comments from our readers
Sign In / Register to add your comment
Investors who flip properties are currently subject to the bright line test, but owner-occupiers are not. That is now set to change.
The cancellation of a capital gains tax combined with lower mortgage rates will be game changing for the housing market, believes Westpac’s chief economist.
Many investors are switching from residential to commercial property and now a new platform aims to makes access to the sector easier.
The latest Reserve Bank lending data reveals investors borrowed more than $1 billion in March, the highest figure since November, but a 10% fall on the same period last year.