A state house tenant owing $48,000 in rent arrears remains in his house, having offered $150 a week to clear his debts.
The man from Upper Hutt tops Kāinga Ora’s list of debtors as the agency’s total rent arrears have risen more than 800 per cent lately to $21 million.
Nick Maling, Kāinga Ora national services general manager, said $21m the figure was the most it had ever been owed and indicated the difficulties people faced in meeting financial obligations in a tougher economic environment.
“This figure reflects the unprecedented challenges New Zealanders have faced in recent years and ongoing pressures on the cost of living.”
Stuff reported that state tenants owed $2.32m by September 2019, so the increase to $21m amounts to 813 per cent. Debts jumped to $17m by September 2022.
The revelations come as former Prime Minister Bill English heads an inquiry into Kāinga Ora and Housing Minister Chris Bishop said that 3906 public homes, or 5 per cent of the public housing stock, were vacant as of October 31. More than 25,000 people are on the social housing waitlist.
Bishop expressed concern about the $21m debt, happening while Labour was either in power or coalition since 2019.
“This was caused by the previous Labour Government’s cost of living crisis which made things much harder for people trying to pay their rent. The previous Labour government’s reckless spending worsened inflation, prolonging the cost of living crisis and the financial pressure felt by many Kiwis including Kāinga Ora tenants. I have asked for policy advice from officials about solving the rent arrears problem,” Bishop said.
New Zealand has about 72,000 state homes and about 200,000 tenants living in those homes.
Maling said two-thirds of those owing the $21m rent arrears were actively making debt payments as well as paying weekly rent.
The Trentham man who incurred the $48,000 debt had acknowledged to the Tenancy Tribunal that he owed that amount and offered the $150 weekly repayments.
Maling said: “The largest amount a customer was behind on their rent was $48,040. This customer is being charged market rent for their home because they have not met the Ministry of Social Development [MSD] requirements to receive an income-related rent subsidy.”
The man, whose advocate says he is currently employed, remains in the house because Kāinga Ora has not sought to terminate his tenancy.
The agency forwarded a November 22 ruling in which the Tenancy Tribunal said Tama Thomas Jacobs owed Kāinga Ora $45,100 at that date. The amount has since climbed to $48,040 by the end of December.
“The tenant accepts the arrears as things stand, but he is in the process of seeking a review of his income-related rent,” the decision said. “Depending on the review’s outcome, the arrears amount could change.”
Maling said tenants received a rent subsidy, meaning many paid at most 25 per cent of their income in rent. Some were charged market rents if the agency did not receive the information it needed.
“In situations like this, where market rents are charged and payments are missed, rent arrears can quickly accumulate.”
The agency had tried talking to Jacobs, who was assisted at the tribunal by advocate Teresa Homan.
“We made multiple attempts over several months to engage with the customer about their non-payment of rent, including attempting mediation, but we could not resolve the issue,” Maling said. “We took the case to the Tenancy Tribunal late last year, which ruled that the customer must pay their rent arrears.
“If this does not happen, we will take further steps to resolve this situation – which could include ending the tenancy.”
The tribunal said Jacobs was seeking a review of his income-related rent. Homan told the tribunal both she and Jacobs had been having difficulties with Kāinga Ora.
Though full details of Jacobs’ income had been provided, the agency denied receiving it, she said.
Inland Revenue might be able to provide evidence and Homan said she and Jacobs would investigate that.
Jacobs said he had paid $100 the day before the hearing, but Kāinga Ora could find no record of that payment.
The agency also sought confirmation of his previous job at a marae, but the marae had not provided that.
Kāinga Ora was willing to work with Tama and Homan to try to get matters resolved without the need for further action against him, the tribunal said.
“The current rent is $749 per week and so the tenant will be relying on a successful MSD review if this tenancy is to be viable,” the ruling said.
Kāinga Ora said it could not provide any details to talk to Jacobs. Attempts by the Herald to contact him via Homan were unsuccessful.
Homan said she was unsure how he accumulated such a large debt and would ask him if he wanted to participate in publicity.
“I wonder if his income had been assessed correctly. If you don’t provide your income, tenants are just charged the market rate.”
Property Investors Federation vice-president Peter Lewis was unsurprised by the $21m record rent arrears.
“It’s obviously a huge figure and, as a taxpayer, it’s annoying to me. But would you have people sleeping in the gutters instead?”
New Zealand tried to support people at the bottom of society and he backed that.
“I don’t want to walk out of a hotel or restaurant and find someone dying of malnutrition,” he said, comparing this country to those that had little social service support.
On Jacobs’ situation, Lewis said: “Private landlords can accept or reject tenants. But of course, KO must house people.
“It’s a legal requirement so they have that difference. If they terminate Jacobs’ tenancy, where is he going to go? All the bleeding-heart liberals will come out and say that’s unfair. So the taxpayer has to pay to house him.”
However, Lewis called for tenants who owed arrears to pay and said it was unfair otherwise.
Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.
ANZ stopped accepting deposits into others' accounts last year.