Renters United members on 25 September 2020 protesting the end of the Covid-19 rent freeze. (Photo: Getty Images)
Renters United members on 25 September 2020 protesting the end of the Covid-19 rent freeze. (Photo: Getty Images)

BusinessSeptember 13, 2021

Under-stress renters have few levers to pull, except for landlords’ goodwill

Renters United members on 25 September 2020 protesting the end of the Covid-19 rent freeze. (Photo: Getty Images)
Renters United members on 25 September 2020 protesting the end of the Covid-19 rent freeze. (Photo: Getty Images)

Last year’s rent freeze and eviction ban have been missing this lockdown, prompting complaints that landlords are free to raise rents and kick tenants out at a time of great stress.

Do I have to pay double rent as I’m caught between tenancies? Can I move houses during delta lockdown restrictions? Can my landlord kick me out or increase my rent even though we’re in lockdown?

These are just some of the more than 500 tenancy and housing enquiries Citizens Advice Bureaus (CAB) nationwide have received since the country went into alert level four on August 18.

A temporary eviction ban and rent freeze during last year’s lockdown protected tenants in cases of termination and rent hikes, but those safeguards ended within three and six months. Today, the government, having since changed the law to better support renters, has refrained from offering the same lockdown support.

Rent increases were pushed out from once every six months to once every year when amendments to the Residential Tenancies Act were introduced in August 2020. That means landlords this lockdown could signal to tenants their rent would increase in 60 days, instead of the previous 28 days’ notice.

Further amendments, which came into force in February 2021, require landlords to have a reason to evict, with existing grounds updated and new ones introduced. Landlords have had every right this lockdown to signal to tenants they must leave within certain periods of time, whether that’s 63 days’ notice because owners are moving back into the property or 90 days because landlords want to sell the property. 

Tenancy Services has advised tenants and landlords to negotiate solutions if Covid-19 has hit renters’ pockets, saying: “We encourage tenants and landlords to continue to be kind and work together where possible to reach an agreement.”

The amount of enquiries from people CAB has helped reflects the fact they are under stress, said the organisation’s legal and strategic national adviser, Sacha Green.

“There aren’t any levers the tenant has that they can pull on to ensure a fair and reasonable way forward. They are reliant on the goodwill of their landlord, and some landlords are very reasonable in that way, but unfortunately there are also those who aren’t… The idea that it would be reasonable to give notice of a rent increase during lockdown just seems absolutely abhorrent, she said. 

“And yet that still does happen.”

In the context of an “out-of-whack” housing market and limited measures to rein in rising rents, Green says ensuring people have stable housing during this time seems a no brainer. Having a valid reason to evict tenants is something that should have always been the case, she said.

“It’s not that the law has made it impossible, it’s just made it clear that you need to have a reason. That seems pretty darn reasonable to me.”

Landlords are better off negotiating with existing tenants over rent payments, so the relationship persists, rather than taking on the added costs and stress of finding new renters, she said.

“This is in the context where we are already dealing with a broken housing system in New Zealand, so everything gets that much harder. And because of that, you know, hopefully everyone needs to act with a bit more… kindness, that’s the right word. Jacinda’s already picked it out for all of us.”

The latest lockdown has left renters under stress (Image: Tina Tiller)

Sharon Cullwick, chief executive of New Zealand Property Investors’ Federation, the umbrella body for 19 associations nationwide, said last year’s protections for tenants haven’t been necessary this time around. The law changes had embedded the temporary safeguards, making it, for example, “virtually impossible” to remove tenants.

Few tenants were struggling to pay rent and most landlords were willing to help, based on what Cullwick had heard from the industry.

“They want tenants to remain in the property so they’re quite willing to help out wherever they can, to make sure tenants can stay,” she said.

Landlords’ leniency seems to be across the board, and while mortgages must be paid, most people are reasonable, she said. “As long as there are communication lines open between tenants and landlords, most problems can be solved quite easily.”

The suggestion it is “virtually impossible” to evict tenants is rejected by Renters United spokesperson Geordie Rogers. They had seen numerous examples, including recently, of landlords increasing rents beyond a price renters could afford, he said. 

“There is no valid reason to evict someone from their property during lockdown,” Rogers said. “It is impossible to find a new home and you can’t expect someone to live on the streets just because an owner wants to move back in when they legally can’t move in because of the alert levels.”

A repeat of rental protections from last year “should have been there from day one”, he said, citing a recent story of a single mother from Waikanae who’s having to look for a home in lockdown after she was given just over two months’ notice to move out.

“The government’s gone out and said ‘we’re asking landlords to be nice’ and we see that landlords don’t always follow that advice. But people do have to follow the law.”

Tenants were still paying rent because they didn’t want to lose their homes, even in some cases skipping meals or skimping on essential items to meet their obligations. “And so, while that landlord is seeing the rent coming in, that doesn’t mean that nothing’s changed for the tenants.”

The lobby group in April 2020 surveyed nearly 2,000 renters about their experiences in lockdown. Among the findings:

  • Four in five tenants were paying unaffordable rent (defined as more than 30% of their gross income) before the first lockdown started;
  • two thirds of renters saw their income drop by more than a third;
  • fewer than one in 20 had seen their rent reduced meaningfully, and one in 10 expected to owe their landlords arrears; and
  • half reported the experience had made them feel worse about renting generally.

Those findings are still relevant to Auckland and Wellington, he said, although less widespread in the capital’s case given the city’s shorter lockdown

The government could have reintroduced last year’s protections, but renters haven’t been afforded the same support that small businesses have received. With New Zealand still enduring restrictions, better regulations are needed, Rogers said.

“We need to do it yesterday or before yesterday. It’s well past time we did it.”

Auckland Central’s MP Chlöe Swarbrick (Photo: Getty Images)

Auckland Central’s MP Chlöe Swarbrick said she struggles to understand why the government hasn’t introduced a rent freeze and eviction ban this lockdown.

All the conditions have been the same, yet the policy lever has stayed upright, she said. Notwithstanding the recent legal changes, renters still face the possibility of having to pay more to keep a roof over their heads while homeowners have certainty over the cost of repaying their banks thanks to a “frozen” official cash rate.

There could “absolutely” have been a more blanket ban on evictions, Swarbrick said, based on stories she’s heard of renters being in “dire straits” and landlords who haven’t come to the table. While she is willing to accept anecdotes of landlords having acted kindly, “that’s the kind of doctrine of self-reporting”.

The rules around renting need changing as the onus remains on renters to fight for their rights, she said. 

“Renters are consistently told they have to go to the Tenancy Tribunal, that it’s incumbent on them if they think their rents are unfair or their property is unfit for people to be living in and it might make them sick. All of these are structural problems and they are decisions that are being made by politicians, which reflect, ultimately, who has the power inside of our country and our society.”

Swarbrick on Wednesday asked the associate minister of housing, Poto Williams, whether advice on rent controls has been requested or received, when tougher rules for landlords and property managers could be expected, and whether cabinet was considering regulating property managers. Williams’ answers are due by next Thursday.

In the meantime, the government is keeping an eye on the rental market and how the amended act influences it.

Finance minister Grant Robertson, on Williams’ behalf and during parliamentary Question Time on Wednesday, said changes to the law had been made to better support renters. But the Tenancy Tribunal existed for renters to request a rent reduction if they believed their rate was too expensive, and Work and Income was available if tenants were struggling financially.

Asked if Williams agreed with officials’ advice that restricting rent hikes to once every year didn’t prevent unaffordable increases but only standardised them, Robertson said the law change’s purpose was to prevent multiple and unexpected increases, “which obviously would be very challenging for somebody when their income was reduced”.

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Mad Chapman, Editor
The Spinoff has covered the news that matters in 2021, most recently the delta outbreak. Help us continue this coverage, and so much more, by supporting The Spinoff Members.Madeleine Chapman, EditorJoin Members

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