Editorial: Rising rents just as toxic to Kiwi dream

Home ownership remains the goal. It is a shock to read that our home ownership rate has been below Britain's since 2001. Photo / Doug Sherring

Editorial

Early in the housing crisis, a professor of economics wrote an article for this paper questioning whether there was a problem. "The last time I looked," he wrote, "everybody had a house."

It did not really matter, he argued, whether they owned the house or rented it, they met the cost. That was some years ago and he might not say that now.

As our "Home Truths" series reports today, almost one in seven Aucklanders no longer "have a house" they can occupy as a couple or as parents and children. They have moved in with relatives or other families. If they are a couple still living with parents or sharing a household with other people, they are putting off having children.

Retirement Commissioner Diane Maxwell believes the cost of housing is reducing the birth rate just as an ageing population is pushing up pension and healthcare costs. That is one of the long-term and less obvious consequences of housing costs in Auckland, and now other cities, that keep racing further out of reach of average incomes.

Until recently, the crisis was confined to home ownership. Rents in Auckland had not been rising at the same rate, in fact rentals had been a perverse beneficiary of a tax system that favours property investment. Investors usually buy a house for its expected capital gain and since they can write off operating losses on the property against their taxable income, rent did not need to cover all its costs. But more recently rent has been rising too, perhaps as consequence of the Government's tightening of tax rules.

When families have to share houses to afford rent, overcrowding results, with all the problems Simon Collins describes in his report today. Overcrowding increases children's exposure to infectious diseases. It makes it harder to give a child a quiet space for homework.

Overcrowded houses are less stable, families in them have to move house more often, which is disruptive for a child's education.

Perhaps just as important, people lacking secure housing do not have the same sense of control of their lives, the ability to trust the community around them and a willingness to take part in its activities.

Perhaps just as important, people lacking secure housing do not have the same sense of control of their lives, the ability to trust the community around them and a willingness to take part in its activities.

Renting is never as secure as owning a house, even renting a state house now that tenancies are reviewed periodically, as they should be. Nobody ought to have a state house for life if families in more urgent need are waiting for one.

But the Government ought to ensure that tenants can find more security in the private sector than they can at present.

Tenancy laws are slowly putting more requirements on landlords for insulation and other standards. It might be time to provide more certainty of tenure and rent, especially when ownership changes hands.

Laws that increase the obligations of landlords and the security of tenants could make residential investment property less attractive, which could stabilise house prices and let incomes begin to catch up a little.

Home ownership remains the goal. It is a shock to read that our home ownership rate has been below Britain's since 2001.

Our forebears came to this country to escape perpetual tenancy and have property of their own. That has always been the Kiwi dream and there is no reason to give it up now.

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