Private rental property owners do not have a moral obligation to provide houses to anyone, including vulnerable tenants, the New Zealand Property Investors Federation says.
The Government has enacted a series of measures this year designed to cool the effervescent property market, which have been criticised by investors.
They include the removal of investors’ ability to offset interest rate costs against their rental income and an extension of the bright-line test for taxing capital gains.
Stats NZ data puts the total number of rental properties in New Zealand at 527,853. Of those 440,025 were owned by private investors.
But Property Investors Federation (NZPIF) executive officer Sharon Cullwick said there was no moral requirement for investors dealing with vulnerable tenants.
“They can choose to have a vulnerable tenant. However, they cannot get insurance if they do not have good reference, character and credit checks on them. It also needs to be mentioned that the current Government has made changes in laws such as the Residential Tenancy Act which has removed the no-cause 90-day termination notice,” she said.Can you afford your first home?Using median first-home prices from CoreLogic, each month Stuff is tracking how many weeks of savings a median-income household needs for a standard deposit, and what the mortgage on that first home will cost.
“This in the past, was used as a trial period where a manager/owner could ‘give someone a go’. If it worked out, they would then roll the tenancy over to a periodic tenancy or another fixed-term agreement of a longer timeframe. With the inability to remove a tenant, the risks are too high, and owners do not want to take these risks with vulnerable tenants.”
Professor Graham Squires, at Massey University’s School of Economics and Finance, said while housing was a “consumption good” and people extracted heat, light and shelter from their homes, it was also an investment good and it was hard to separate the two.
“It makes it more complicated. If society deems everyone deserves to have a roof over their head, there’s a social imperative wrapped up in housing… investors are not necessarily under legal obligation but you get some with a social conscience.”
He said there was growing interest in large property vehicles that invested with environment, social and governance (ESG) considerations in mind.
But those were large-scale investment funds – and most of the New Zealand residential rental market is owned by “mum and dad” investors with one or two rental properties each.
“It makes it more difficult with the deregulated, fragmented market New Zealand sits in. The Residential Tenancies Act is more stick than carrot … it goes back to self-interest, is it altruistic or a more self-centred goal? Most mum and dad investors are probably not going to feel they have too much of a moral obligation.”
Jess Berentson-Shaw, a policy researcher and co-director of think tank The Workshop, said it was a question of the standards society wanted to hold itself to.
“Together we get to decide how people should be treated and taken care of, and, honestly, most people think it should be a very high standard when it comes to the places people live in,” she said.
“Then we need people in government to set and measure those standards well. Clearly that is the only consistent and reliable way to ensure people renting houses are treated with care. We shouldn’t expect people who own and rent houses to be responsible for deciding and setting something so important to people’s lives and our wider wellbeing. That is just ridiculous.
“They should have to meet the standards we agree. Self-regulation has after all led us where we are now with kids and adults being harmed by terrible housing.”