The property investors’ lobby group says a change in government would hurt tenants, but they certainly don’t speak for all of us, counters Alicia Young
There are two major problems with yesterday’s New Zealand Herald story, “73.6% of landlords plan rent rises if Labour wins.” The first is the suggestion that the survey is representative of landlords. The second is the magical thinking behind the imagined rent-hikes.
Let’s start with representation. It turns out that the “73.6% of landlords” is in fact 600 of the 816 people who filled in a survey sent to members of the New Zealand Property Investors Federation (NZPIF), an organisation that sounds about as representative of the average landlord as the Taxpayers Union is of the average human.
I rang NZPIF to find out how many members they have, and was told that the number is “into the thousands”. So how many landlords do we have in New Zealand? Neither Tenancy Services, MBIE nor Statistics New Zealand hold this information. However, Statistics New Zealand were able to tell me that 355, 554 homes are rented privately, and Phil Twyford, Labour’s Spokesperson for Housing, has estimated the number of landlords at over 200,000.
In case your maths is a bit rusty, that’s significantly more than the 816 NZPIF members who filled in the survey. In fact Economist Shamubeel Eaqub went so far as to say that the respondents were “people who are really self-interested”.
Self-interested? Not NZPIF Executive Officer Andrew King. He’s a real bleeding heart. It’s not the landlords he’s paid to represent that he’s concerned about – it’s the tenants. “These [proposed Labour] policies are going to cost a lot of money,” he said. “I think tenants have a right to know what the effects of these policies are going to be on rental property prices.”
Also sparing a thought for the poor landlords, King said that Labour’s policies are “aimed at removing rental property owners from the market.” That statement is patently untrue – but do landlords have anything to fear from Labour?
The suite of policies King is referring to can be broadly summed up as removing a tax loophole and improving the lives of tenants.
Let’s begin with the tax loophole. For a start, this only applies to homes that are negatively geared (making a loss). And you could argue that if your investment is negatively geared, you’re doing it wrong.
Having said that, my rentals are negatively geared, and this year I received a tidy sum in tax back from the Government. That’s right, I got a nice little chunk of taxpayer money for doing absolutely nothing. Labour is proposing to remove this tax loophole and I think it’s about time. I have done many things in my life that I wish I had been paid for, but simply owning a property is not one of them.
Labour’s website says that removing the loophole will “save taxpayers around $150 million a year” which will be used to “help 600,000 families heat and insulate their homes.” Any landlord who would rather keep the baubles of fortune than help other New Zealanders is self-interested, anti-social and lacking in empathy. Oh wait, that’s the definition of a sociopath.
NZPIF also claims that improving living standards for tenants will saddle landlords with extra costs. According to Labour’s website, their Healthy Homes Guarantee Bill “will require all rental properties to meet proper standards in: insulation, heating, ventilation, draught stopping, and drainage.” I suggest that these measures are in the affordable range for most landlords – and Labour is proposing to offer grants of up to $2000 to help offset these costs. Many rental homes will already meet these standards anyway.
Even if the concerns about rising costs for landlords were valid, rents are set by the laws of supply and demand and not by the whims of property owners. I could decide that I want to charge $2000 a week for my two-bedroom house in West Auckland, but I’d never find a tenant who was willing to pay.
So if rents aren’t going to rise (and Eaqub demolishes that argument here), what was the motivation behind the NZPIF’s survey? Could it be that they don’t really have the best interests of tenants at heart? Perhaps they’re worried about KiwiBuild, Labour’s plan to build 100,000 homes over 10 years, and the increased competition that will ensue?
Well I say bring it on.
I ended up with property because of luck, timing and “banking magic” (for a while there it was really easy to keep accumulating more houses once you had your first one). I’ve also benefitted from “tax magic”, but I’d be happy for that magic to be converted into stardust – the kind that helps find homes for kiwis who are sleeping in cars.
Reading the comments beneath the Herald and Stuff articles, it appears that plenty of other landlords feel the same way. I’m sure there are at least 600 of us out there. We could even be “into the thousands”.
Subscribe to The Bulletin to get all the day’s key news stories in five minutes – delivered every weekday at 7.30am.