COMMENT: War on tenancies should stop
Wednesday 21 November 2018
Life for rental property owners may become tougher as Labour’s newbie Housing Minister Phil Twyford tries to “make life better for renters”, Stop the War on Tenancies founder Mike Butler warns.
The current raft of proposed tenancy reforms comes on top of what is essentially a 10-year war against the owners of rental property. Concerns about this have prompted a group of us to establish a new lobby group, Stop the War on Tenancies.
I have owned rental property in Hastings since 1990. One of our tenants has been in her flat since 1990, on a periodic tenancy, which started with a weekly rent of $130 and a bond of $260. The rent has increased but the bond hasn’t.
But the world changed for rental property owners, like myself, when the Labour Party was in the political wilderness from 2008 to 2017.
That was when a series of “crises” were created for political gain. One of these developed the narrative that “cold, damp houses owned by greedy landlords were making our kids sick and something must be done”.
The blame was placed on rental property owners. But, in reality, the main reason a house stays cold in the winter is that many are scared to turn the heater on. And that’s because the price of electricity has gone up so much in recent years.
A proposed rental property warrant of fitness (WoF) in 2014 prompted me to obtain a substantial amount of information under the Official Information Act (OIA). This indicated to me that a rental WoF would be a costly mistake.
That year, also via OIA requests, I established that there was no evidence of harm from methamphetamine residue inside dwellings.
But it was not until June of this year that the Prime Minister’s chief science adviser, Sir Peter Gluckman, officially busted the meth testing nonsense. He confirmed there has never been a documented case of someone getting sick from third-hand exposure to meth.
If there is any doubt that there has been a 10-year war on rental property owners, consider that after the 2010 amendment to the Residential Tenancies Act, the campaign continued. There was:
• Holler v Osaki  NZCA 130, an Appeal Court decision which shifts responsibility for damage by tenants to owners and their insurers.
• The Residential Tenancies (Smoke Alarms and Insulation) Regulations 2016.
• The Healthy Homes Guarantee Act 2017, which requires extra standards for rental property with the standards. The proposed minimum standards were released for consultation in September.
• The Residential Tenancies (Prohibiting Letting Fees) Amendment Act 2018.
However, not all of the requirements are based on sound equipment or advice.
For example, underfloor insulation probably has no quantifiable benefit since only 10% of heat is lost through the floor and no consideration was given to the benefit of carpets in most properties. Even so, if an owner has not installed underfloor insulation by July 1 next year a tenant could dob him or her in to get $4000 in exemplary damages.
And then there are the Government’s proposed tenancy law reforms which would prevent owners from ending tenancies, ban fixed-term tenancies, allow tenants to modify a property and allow tenants to keep pets. Public consultation finished recently, but it has bought out heavy opposition from rental property owners.
Questions under the OIA show that much advice from the MBIE is based on conjecture, not facts. This is because even the Government is short of basic information on the rental property market, which is a $6-billion sector of our economy.
It’s easy to say that there is no one in Parliament sticking up for property rights but that is not true. The reason why ideologically driven anti-owner legislation currently sails through Parliament unimpeded is due to the composition of the Government.
Why haven’t rental property owners become more active politically? There are probably around 260,000 of us. That’s double the number needed to reach the 5% threshold of getting into Parliament - should all rental property owners vote for a property rights party.
But going down the political path is a long journey. It is probably too long for someone with one or two properties who has just started to lose money on an investment. They are more likely to simply sell up.
One reality that the Minister may have not considered is the likely impact of 260,000 owners selling 524,000 rental properties to first home owners. Where would renters go then?
Mike Butler is a Hastings-based owner and manager of rental properties. He is also the founder of Stop the War on Tenancies.
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