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Apartment buildings at Gleisdreieck Park, Berlin (Photo by Sean Gallup/Getty Images).
Apartment buildings at Gleisdreieck Park, Berlin (Photo by Sean Gallup/Getty Images).

PoliticsAugust 9, 2017

A hard look at Gareth Morgan’s plan to save New Zealand’s renters

Apartment buildings at Gleisdreieck Park, Berlin (Photo by Sean Gallup/Getty Images).
Apartment buildings at Gleisdreieck Park, Berlin (Photo by Sean Gallup/Getty Images).

The Opportunities Party wants to bring German-style renter protection laws to New Zealand – and that’s great, says Berlin-based New Zealander Maddie Holden. But how exactly does that policy fit with Gareth Morgan’s devotion to neoliberal economics?

Gareth Morgan’s The Opportunities Party (TOP) unveiled an interesting new policy about rental housing this week, proposing to replicate the German model of long-term tenancy rights in New Zealand. Specifically, the policy would prevent landlords from evicting tenants unless they fail to pay rent or damage the property, and, as in Germany, sale of a property would no longer necessarily be a legitimate reason for eviction.

Germany’s rental price brake – a regime that slows the pace of rent increases so that tenants have time to adjust – would be also replicated, and a warrant of fitness to increase the standard of rental housing would be introduced. TOP would also gift the government’s state housing stock to the not-for-profit sector and delegate to it the day-to-day operation of social housing (more on that particular limb of the proposal later).

TOP says it wants a complete cultural shift in how we think about housing in New Zealand. The policy document states that “in Germany, housing is seen as part of the country’s social infrastructure; it is not just a commodity to be made, rented, bought and sold like any other consumer good.” According to Morgan, this is the direction in which New Zealand needs to move. “What we are trying to do is turn these rental houses into homes,” he says. “The biggest problem we have here is the huge instability caused by kicking low-income families pillar to post as they change rentals, and have to change their kids’ schools.”

So far, so laudable. It’s true that the position in New Zealand is nowhere near as secure for tenants as it is in Germany. In New Zealand, rents can be increased so long as the landlord gives 60 days’ notice and they aren’t raised again within 180 days, with only a general, discretionary control in place: if a landlord is charging significantly more rent than similar properties, the Tenancy Tribunal can reduce it. Landlords can boot tenants out with 42 days’ notice when properties are sold. (An accessible explanation of the law in New Zealand can be found here, and if you’re a tenant or landlord who doesn’t know this stuff like the back of your hand, you should read it.)

TOP leader Gareth Morgan outside Parliament.

TOP’s proposal has already ruffled the feathers of the Property Investors Federation; a sign that it’s on the right track in terms of renters’ rights. Its president, Andrew King, purported to speak on behalf of tenants when he told RNZ that most “prefer flexibility over security of tenure”. Of course, when you consider what the Property Investors Federation does – lobby government on behalf of property investors – it becomes apparent that this benevolent concern for renters’ interests is more than a little disingenuous.

The real concern is that the proposed TOP policy would interfere with the profits and freedom of property investors (and speculators), which it clearly – and deliberately – would do. The policy is part of TOP’s wider initiative to clip the wings of property investors by instituting a fairer tax policy, and, given the country’s housing crisis, poverty and inequality levels, this is commendable.

I am a New Zealander currently living in Berlin, so the policy is especially interesting to me. Berlin is, comparatively speaking, a renter’s paradise. Prices are significantly lower than in similar European cities, and major New Zealand cities (adjusted for cost of living and currency); tenancies are reassuringly secure; and properties are, in general, warmer and more liveable than they are back home. This is thanks to proactive regulation by authorities, which prohibit unfair rent hiking, erratic evictions and even Airbnb’s chokehold on the rental market.

As a result, there is a real sense that a rental property is a tenant’s home, just as TOP wants for New Zealand. King is right that tenants often have to install their own lights and kitchen appliances in Germany, but wrong that tenants consider this a significant downside. All the people I know who rent apartments in Berlin, many of whom come from NZ or the UK, find that the inconvenient quirks of the German system are significantly outweighed by the security of tenure, fair pricing and quality of the housing.

People ride bicycles past newly-completed apartment buildings at Gleisdreieck park in Berlin’s city centre May, 2016. (Photo by Sean Gallup/Getty Images)

But there is still reason to pause before ticking the box next to TOP come September. The party is an unknown quantity, and the story about what it represents keeps shifting. Despite initial noises about being anti-establishment, deputy leader Geoff Simmons described the party as “radically centrist” – an anticlimactic, meaningless mashup of words – and Morgan, who initially likened himself to a “non-racist, non-sexist Trump”, has now positioned himself as a Winston Peters-esque middleman, claiming his party is “not left, not right – [it’s about] doing the right thing”. Save for a near-nauseating insistence on “evidence-based” policy – evidence for what? In whose interests? To what end? – it’s difficult to grok what the party, or its leader, stands for.

This frustrating inability to pin down his ideology, political philosophy or system of values is becoming Morgan’s achilles heel. “If I had to pick a party I was closest to in terms of social justice and the environment, absolutely, it’s the Greens,” he said. “But if I had to pick a party I was closest to in matters of economics, it would be the Nats.” In other words, he is the embodiment of a much-cited and beloved @crushingbort tweet from 2014:

In short, no one is entirely sure of the guiding motivation behind Morgan’s policies, but he has affirmed his faith in neoliberal economics – and, like John Key and many other Nats, has done very well personally out of the current market structure. When it comes to transformative housing policy, voters may be wary of a man who vows to curb property speculation at the same time as he admits to hoarding empty houses for profit. “Look at me, I own six houses,” he stated on The Nation. “I don’t have tenants; they just make carpets dirty. I do it because I know you [other investors] want to get in on this as well, and so you’re going to bid the price of those houses up.”

For the sake of argument, let’s say that Morgan’s personal behaviour and wealth is irrelevant to his ability to institute strong social policy in the greater interest of struggling New Zealanders. You would still be left to contend with his overwhelming focus on the country’s “economic potential” and affinity for market-driven solutions to social problems, as evident in TOP policy – the party talks about migrants in terms of added value, for example, and climate change in terms of profiting from our leadership. (This preoccupation with economic growth is nothing new in New Zealand’s political arena, and many people find it praiseworthy, but there are good reasons not to.)

When it comes to housing, the party has pledged to gift the nation’s state housing stock to community providers and task them with the ongoing provision of social housing; i.e. to privatise it. In other words, Morgan has conceded the neoliberal logic that public housing no longer has a role in New Zealand, and that the (not-for-profit) private sector is best placed to manage it. For anyone who still believes in state housing as a worthwhile social good and is disillusioned with our ongoing national experiment with privatisation, that’s a concession worth resisting, and one that has received surprisingly little critical media attention.

Morgan’s proposed rental policy has sparked much-needed debate and the shift in attitude being proposed, in which we reconceive housing as social infrastructure and rental properties as homes, is laudable. I agree that there is much worth emulating in the German model: I’ve lived under both systems, and Germany’s is better than New Zealand’s for tenants, hands down.

However, I’m not convinced that hauling the country’s state-owned housing over to the not-for-profit sector is a prudent move, and I’m concerned that this aspect of the policy is being treated as a footnote (by the media) or self-evidently good idea (by TOP). I’m also not sure the values and assumptions underpinning TOP policy are the same as mine, because the party won’t elucidate them clearly. Gareth Morgan has my attention, but he’s a long way from having my vote.

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