Why you should pay attention to New Zealand’s rental crisis, even if you’re not renting

OPINION New Zealand has a long history of being slow to deal with the plight of its tenants.

The tipping point normally occurs when the population of tenants in a city center increases to exceed the number of homeowners: as it did in the 1920s, 1930s, late 1960s, and early 1970s .

Pass that threshold, and you start to see articles like these from the 1974 edition of Salient (Victoria University student newspaper) where the author says “it is difficult to describe how bad living conditions are unpleasant”, she then goes on to do a pretty good job of describing them:

“The carpet in the bedroom rotted with mold. Woodlice crawl around the house. The ceilings are moldy. The mother is Indian, so it is more difficult for the family to find a decent apartment at an affordable rent.

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Elinor Chisholm, a public health researcher at the University of Otago, filled a newspaper article with examples like these under the headline The Way to End Housing Problems: New Zealand Tenant Protest in the 1970s, although when I read it, I wasn’t sure what protests she was talking about. That’s partly the point. These protests have happened before and have been largely forgotten.

But it could happen again, especially in an interconnected world where a rental protest in Spain or Germany is just a TikTok swipe away.

We see anger all over the world, much of it related to various housing shortages. Dublin, for example, has the distinction of being one of the lowest cities in Europe. Surprise, surprise, it also appears to have the continent’s worst housing crisis.

Auckland's post-unitary plan building boom is helping to contain rent inflation.

Ricky Wilson / Stuff

Auckland’s post-unitary plan building boom is helping to contain rent inflation.

Many landlords, or would-be landlords, might not see why they should want the rental situation in New Zealand to improve.

But if you can create improvements, you’ll often see the benefits trickle down to other areas, if only because it’s easier for people to rent if the housing market gets hot.

It doesn’t quite work the other way around, and you only have to look at the housing situation in Spain to see why.

For several decades, the Spanish government has put in place many financial incentives to allow people to access home ownership or encourage the construction of more owner-occupied housing. Unfortunately, there were no accompanying policies to encourage people to build more rental housing.

Higher density housing closer to city centers is in high demand.

UNSPLASH

Higher density housing closer to city centers is in high demand.

It has almost completely reversed a situation from the turn of the last century where there was an equal supply of public and private rental accommodation in Spain. As the number of tenants in Spain increased, partly because landlord subsidies were cut, but also because more people wanted to live in city centres, rental supply was not sufficient to absorb demand additional.

There is a tendency in New Zealand to think that we are different and that a similar cultural shift from owning to renting could not happen here – particularly because home ownership is an instilled desire in everyone from birth.

Breakfast

The bedroom is considered the fifth bedroom in the house.

Yet one need only look across Tasmania to see a similar picture emerging, where one in two households in Australia’s inner capital belt are now tenants.

The good news is that New Zealand seems to have stumbled on part of the solution: more apartments, townhouses and townhouses, as these are more likely to be rented.

In Auckland, where these housing types are the main building types and where planning regulations have been relaxed thanks to the unit plan, increases in the rental price index have been below inflation.

The same is true in Canterbury, where Christchurch has become a textbook case for what happens when you remove some resource management rules and build more houses.

Unfortunately, this is not the situation in the Wellington area, where building permits in the City of Wellington are lagging behind the rest of the country, and rent inflation has exceeded general inflation for a much of the pandemic.

Building new housing is an important part of giving tenants choice, which benefits everyone.

KEVIN STENT / Stuff

Building new housing is an important part of giving tenants choice, which benefits everyone.

And to be fair, that’s not the whole situation in Auckland either. The greatest amount of construction in Auckland seems to take place either right in the city center or more than 10 kilometers beyond, thanks to character overlays and other rules that make it more difficult to construct buildings from high quality apartments and townhouses. in city centers.

A report by PriceWaterhouseCoopers notes that the new National Policy Statement on Urban Development – ​​which will remove these protections – will redistribute wealth from landlords to tenants and first-time buyers, reducing the cycle of reverse redistribution of wealth where young tenants and first owners pay higher rents and housing prices. than they need and line the pockets of existing owners.

It’s not hard to see why current neighbors wouldn’t be fans of this role reversal, but given the crisis we’re in, and the possibility of it getting even worse, perhaps it’s time for everyone to look beyond what they fear. could ride next.

About Opal Jones

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