Image: Gabi Lardies

PoliticsMarch 3, 2025

For and against build-to-rent housing

Staff writer

Image: Gabi Lardies

Last week, it became easier for overseas investors to buy build-to-rent housing developments. With the housing model set to expand, what does it have to offer?

Last year in June, Christopher Luxon took a pair of scissors to a huge white ribbon in front of a crowd of people and cameras. He was opening the country’s biggest yet build-to-rent development, and had just announced legislation was coming to allow easier pathways for foreign investment into build-to-rent schemes. Last week the bill passed with support from all coalition parties and Labour. The Green Party and Te Pati Māori opposed. This week the Overseas Investment (Build-to-Rent and Similar Rental Developments) Amendment Bill came into force. It removes barriers so that foreign investors can more easily buy established build-to-rent properties.

Build-to-rent housing is a new-ish concept which is rapidly spreading here and overseas. Not to be confused with rent-to-buy or buy-to-rent, build-to-rent refers to medium or high-density housing developments of at least 20 units which are constructed exclusively for the private rental sector. Units are not for sale to individual buyers, instead, entire developments are owned by a single owner, typically institutional investors like sovereign wealth funds or iwi, and managed professionally. In New Zealand, they were defined as a separate asset class in 2022, so different laws and regulations to other rentals and developments can apply. For example, build-to-rent landlords can claim interest costs from their tax in perpetuity, and have to offer tenants the option of 10-year leases.

Some are calling build-to-rent a part of a solution to the housing crisis in New Zealand, while others argue that it further perpetuates a system of housing for profit and expands corporate landlordism. In either case, build-to-rent is a growing part of our housing market, with 1,841 homes already in the market and at least another 3,500 on the way. It’s likely to be accelerated by foreign investment. So what does it have to offer us?

Arguments for build-to-rent housing

Increasing the supply of homes

Unlike many smaller-scale landlords, build-to-rent investors tend to build new developments rather than buying existing homes. In a pervasive housing crisis, more homes are more homes. When property expert David White spoke to RNZ about build-to-rent in 2019, he said “the more rental units you have available and the better quality of those units I think the better for all of the market.” Increasing supply typically puts downwards pressure on rents and house prices. This latest bill however, means foreign investors can more easily buy existing build-to-rent properties.

Longer-term tenancies with more certainty

A build-to-rent landlord is unlikely to sell or replace tenants with family or friends. “Often what you see with build-to-rents is longer leases to tenants, making them a popular choice for renters looking for secure long-term housing,” said housing minister Chris Bishop at the bill’s third reading last week. Under current laws, build-to-rent developments have to offer long-term leases of up to 10 years, and property management firms are counting long tenure and stability as positives for both tenants and landlords of build-to-rent developments. Tenants can put down roots, and investors don’t have to deal with the hassle of finding new tenants and managing new leases.

Simplicity Living’s proposed Hinaki Street development in Glen Innes, Auckland (Photo: Simplicity Living/Supplied)

Better-quality homes for renters

Often, new housing stock is bought by owner-occupiers and then works its way down to the rental market, meaning that rental properties tend to be old and lower quality. Build-to-rent developments are new and built specifically for renters. They tend to be high quality, warm and secure. The Property Council of New Zealand, the leading advocate for the industry, says that in build-to-rent housing, “residents get high-quality, convenient living without the costs associated with buying”.

At the third reading of the bill, last week Julie Anne Genter said that while they didn’t support the bill to facilitate foreign investment, the Green Party does support build-to-rent as a model. This is because “we don’t believe that owning a home has to be the pathway for people to get access to safe, secure, affordable housing.”

Lifestyle and convenience for renters

New and shiny build-to-rent developments often have on-site amenities such as gyms, pools and other communal spaces. They’re built in convenient locations close to transport corridors and because many people live there, amenities crop up around them quickly.

There are worse landlords out there

Renters United president Geordie Rogers says that it’s best to avoid small-time landlords who are over-leveraged and desperately rely on tenants to pay their mortgage, because it’s more likely they will raise the rent if they need extra cash. Presumably, big corporations will be on top of their finances and more structured and predictable with rent increases.

Arguments against build-to-rent housing

Investors focus on profit maximisation

It’s safe to say institutions will be investing in build-to-rent housing in order to make a profit. This a problem for housing advocates who believe housing should be treated as a human right rather than a market commodity. Reporting out of the US found that tenants felt their corporate landlords focused on short-term profits at the expense of tenant happiness and even safety.

Corporate landlords could be less accountable to tenants

More research from the US found that corporate landlords were constantly cutting costs, with one money-saving innovation being to show tenants how to fix leaking toilets and clogged garbage disposals with videos and chat software so they wouldn’t request repairs. Other companies did not employ enough maintenance staff to deal with problems quickly, even if sewage was overflowing. Some passed maintenance responsibilities onto tenants. Tenants who were interviewed felt they were “pleading with faraway companies to complete much-needed repairs”. They said that rather than taking advantage of economies of scale, the companies were pumping them for fines and fees at every turn.

land with temporary fencing up around it — A proposed site for the Millwater Kāinga Ora development on pause in 2022. (Photo: RNZ)

Risk of losing public housing

Last week during the bill’s reading, Genter criticised the government for “cancelling all the planned builds from Kāinga Ora”, saying that this has worsened the shortage in housing supply. The Green Party position was that more public housing would make the biggest difference to the housing crisis.

Vanessa Cole, researcher and campaigner for Public Housing Futures and ActionStation, told The Spinoff she was concerned there’s a risk that land tagged for public housing will instead be sold off to international investors. She said that while social housing creates permanently affordable and stable housing, selling the land to build-to-rent developments would create more rentals “for the profit of few”. For her, this is not a solution to the housing crisis as it could widen the gap between those who can afford housing and those who cannot.

The possibility of more evictions

While property management and build-to-rent development companies claim that build-to-rent gives stability and longer tenures, there’s some evidence to the contrary. Studies from overseas show that corporate landlords are more likely to evict tenants. One study in the US found that corporate firms with more than 15 single-family rental homes in Fulton County, Georgia were 8% more likely than small landlords to file eviction notices – this held true even when considering neighbourhood characteristics like education levels, change in employment levels and racial composition. This could be particularly problematic considering that no-cause evictions were re-instated in January.

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Build-to-rent landlords pay less tax

In 2022, a new bill set out an exemption from the interest deductibility rules. If developments were held as long-term rental, offered tenants leases of at least 10 years and were made up of at least 20 dwellings, their owners could claim back interest from their debts on their tax bill. These exemptions were aimed at build-to-rent developments, and advocates for “mum and dad” landlords said that was unfair. Though interest deductibility is now being reinstated for all landlords, different tax rules could be applied to build-to-rent developments in the future. In Scotland, foreign companies own £4.4 billion worth of property, and 60% are based in tax havens, so they avoid paying tax.

Foreign-owned build-to-rent developments will mean profits go overseas

“When people from other countries who have money come and invest in infrastructure in our country, whether that’s roads or whether that’s housing, they expect a return for it,” said Genter in parliament last week. She suggested that the government’s “real agenda” was making it easier for foreign investors to “make a buck off New Zealand”. Mariameno Kapa-Kingi of Te Pati Māori described the bill as “a golden ticket for foreign entities to farm us for money, land and prosperity”. She said that allowing more overseas competitors would make it more difficult for whānau to buy their own homes.

Lawrence Xu-nan, also of the Greens, said “the concern that we have is not only will it not increase the housing stock but it will send the revenue overseas, and at the same time, it will be what this government will do as a pat on the back for a job well done when there are better ways for us to address the crisis”.

photo of stand-along homes with mountain in the background — The Queenstown Community Housing Trust’s Shotover Country subdivision (Photo: Supplied)

There are other solutions to the housing crisis

A quartet of politically left-leaning housing advocates, Jacqueline Paul, Jenny McArthur, Jordan King and Max Harris, have proposed 10 other solutions to the housing crisis including: a ministry of public works, a green investment bank, a state lending agency, transferring regulation of mortgage lending to parliament, enabling public sector leadership for housing policy, supporting tino rangatiratanga in housing policy, fair taxation of housing, expanding state and community housing, enhancing the rights of renters and tackling homelessness.

While Labour supported the bill and build-to-rent in general, this support came with caveats. Former housing minister Megan Woods put a “plea” out that the government reinstate funds so that community organisations can “provide another part of our housing puzzle” – affordable community rentals that sit in between private and public housing.

Build-to-rent developments exclude homes suitable for families

In the UK, a report has found that the build-to-rent market is focused on providing homes for couples and singles rather than families. The report said that almost 90% of build-to-rent properties were occupied by couples, flatshares or single individuals rather than families. In the private renting sector as a whole, one in four households are families.

Build-to-rent is aimed at higher-earning households

The same report found that build-to-rent housing skewed toward households on above-average incomes, following on from findings in 2018 that London’s build-to-rent developments were on average 11% more expensive than nearby rentals. Researcher and writer Tim White concluded that “despite suggestions that build-to-rent will empower Generation Rent, these high-spec products only really seem to be an answer for affluent young professionals”.

Keep going!

Tāme Iti was one of the submitters heard on the final day of the Treaty principles bill hearings.

PoliticsFebruary 28, 2025

Treaty principles bill hearings, day 12: The end of the road – or is it?

Lyric Waiwiri-Smith

Politics reporter

Tāme Iti was one of the submitters heard on the final day of the Treaty principles bill hearings.

Everything you missed from day 12 of the Treaty principles bill hearings, when the Justice Committee heard five hours of submissions.

Read our recaps of the previous hearings here.

It’s the final day of the Justice Committee’s hearings of oral submissions on the Treaty principles bill. The road has been long – 80 hours of hearings, 12 days of hearings, two days when 14 hours of submissions were heard, and two former prime ministers submitting, to throw out a few key numbers.

From here, the Justice Committee will reconvene to consider the submissions heard, with a report on the process due on May 14, which may include recommendations for the bill. Then, the bill will head to its second reading, where – as we have been promised many times – it will be voted down. And so, one of Aotearoa’s most controversial pieces of draft legislation will meet its end (if Christopher Luxon and Winston Peters keep their promises).

Former Act Party MP Donna Awatere Huata was originally due to speak first this morning, but cancelled her submission (you can read it here). Instead, Tauranga Māori Business Association chair Leone Farquhar was the first, and told the committee her opposition to the bill was informed by the ways Treaty breaches of the past were still affecting Māori business owners. Its in the way “almost every” business owner she works with sees their identity as impacted by their inability to speak te reo Māori, she said, and the financial burdens they carry, their struggle in navigating business systems and their reasons for creating a business – typically, to create a legacy for their whānau. Farquhar said the bill’s proposed principles failed to address this systemic inequality, and would only be detrimental to Māori.

Mana Moana’s Nuhisifa Seve-Williams and Tevita Ka’ili, also opposed, told the committee that passing the bill would show the rest of the Pacific that Aotearoa was unable to confront its colonial history. Seve-Williams said ancestors from the moana nui, the Pacific, had been “appended” to Māori in the eyes of many New Zealanders, whether they had migrated here to “join a war effort that our ancestors never really understood”, or to heed the call for labour.

“This is what our experiences of New Zealand has taught us, as descendants of our ancestors that came, never to return to their island homes,” she said.

Former Māori Party co-leader Marama Fox and activist Tāme Iti submitted against the “mischief-making” bill together – Iti was meant to submit yesterday, but missed his slot because he was at Te Matatini. Fox dismissed the bill’s focus on equal and individual rights and protections to New Zealanders, and the belief of the bill’s architect that this had already been afforded to Māori over Pākehā – “equal opportunity? We’d love that”.

Tāme Iti and Marama Fox made a joint opposing submission to the bill.

When Te Pāti Māori’s Tākuta Ferris asked what kind of action Māori must take now, Iti responded, “I think we’ve gone beyond that … it’s just hōhā, it’s a game of chess – they’re playing chess on us.”

“Kaupapa Māori models of practice are the models that raise us out of the statistics that we have been bound to by constant breaches of te Tiriti,” Fox added. “We need to have a government that has faith in us to be ourselves.”

Mark Steel, chair of the Legislative Design and Advisory Committee, also submitted against the bill, saying that the committee’s view, as the authority tasked with upholding legislative standards for Cabinet, is that it would be “preferable to continue with the approach we have used thus far, which is to tailor and develop law and convention about the Treaty, to the specific circumstances that we face, rather than trying to apply such a broad brush approach”.

Epilepsy Waikato Charitable Trust’s Esther Liddle and Stephen Harlow submitted against the bill as they believed it would “remove targeted action that Māori desperately need” – targets the government had promised to address by signing the World Health Organisation’s global action plan on epilepsy. Harlow said there were 10,000 Māori in Aotearoa living with epilepsy (of 50,000 New Zealanders) and drew on research from Ngaire Keenan, which found that Māori, especially tamariki, faced many systemic barriers to epilepsy treatment including longer wait times, and a higher likelihood of being sent away from emergency departments. The bill was “systemic inequity disguised as fairness”, Liddle said.

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Kindergartens Aotearoa chief executive Tara Solomon submitted against the bill as she believed it would undermine the success of Māori tamariki, as well as their tauiwi peers. Solomon told the committee that local and international research had consistently shown a link between a child’s educational success and their connection to language, culture and identity. “We see how the mana of our tamariki … inspires and grows them, and they become the kaiako of their families,” she said. “It’s the ripple effect that it has that is so important.”

Gisborne District Council chief executive Nedine Thatcher Swann submitted against the bill as it would “undo the relationships [with iwi and hapū] we have taken decades to build”. She said the council’s co-government arrangements that ensured “sustainable and fair decision making” between the council and mana whenua would be jeopardised by the bill, and changes to the legal foundations of Treaty settlement agreements would make it “harder for councils to honour their obligations to iwi”.

Individual submitter Troy Allan supported the bill, telling the committee he could only see three reasons why someone wouldn’t: “ignorance, incompetence and tyranny!” He said politicians against the bill had been leading New Zealanders towards a “Satanic podium of truth”, “class warfare” and “the globalist agenda”, he was yet to hear one opposing submission that “stacked up to historical truth, reason and logic”, and accused a previous submitter who opposed the bill of wanting “apartheid and tribalism in New Zealand”.

Submitter and bill supporter Troy Allan called on the select committee to ‘repent!’

“What of you politicians, does the Holy Spirit call you to repent in restitution for your anti-Christ spirit?” He asked. “Yes He does.”

Hone Taimona and Cheryl Turner, representing Ngāti Korokoro, Ngāti Wharara andTe Pouka, were the last submitters to be heard on the Treaty principles bill. Sitting alongside six other direct descendants of te Tiriti signatories, they submitted against the bill, and Taimona told the committee that there was a difference between Ngāpuhi whakapapa and Ngāpuhi whenua – one is blood, the other is having a relationship to the land, the birthplace of Aotearoa.

Turner drew on the decades of trade that had happened on the land between her tīpuna and the British, the signing of He Whakaputanga and the eventual signing of te Tiriti. The 93rd signatory for te Tiriti was Turner’s great-great-great grandfather Tio, who believed that “Māoridom’s future prosperity and security would be guaranteed under te Tiriti o Waitangi”.

“Why have the Crown not come to talk to us as direct descendants?” She asked. “The Crown must uphold what we already have before changing it. How can we continue our legacy as kaitiaki over our resources if this bill does not reflect te Tiriti in any way whatsoever?”