Brian Rudman: Rental reform idea takes fear out of tenancy

Illustration / Peter Bromhead

In the multibillion-dollar pre-election lolly scramble for votes, it's a shame that the reform of the Tenancy Act proposed by Gareth Morgan's The Opportunities Party (Top) seems to have been missed.

Top wants to give the 35 per cent of households - 453,135 at the 2015 Census - that live in rental accommodation, security of tenure, as occurs in civilised countries like Germany. In Top-Town, tenants would no longer be tenants at the landlord's pleasure, too scared to complain about mouldy walls or leaky gutters or a wonky stove for fear of the consequences. Under current law, a landlord can boot tenants out with as little as six weeks notice.

What Top is proposing is that landlordism be put on a professional, business-like footing. Instead of being a way for speculators and amateurs to play the easiest money-making, tax-dodging, poker game in town, landlords would have to accept they're running a business and have obligations to both society and their tenants.

When I wrote about this a while back, I pointed to article 14 of the Basic Law of the German Federal Republic which states, "Property entail obligations. Its use should also serve the public good." At the time the annual list of MPs' pecuniary interests had just been released and I couldn't resist suggesting that within that document lay the reason our parliamentarians devoted so little effort to confronting Auckland's housing crisis.

Over the preceding year, the overall property portfolio of the country's 121 MPs had increased, with the register then showing that between them they owned 245 homes and 71 farms, vacant sections and commercial buildings - including Metiria Turei's faux castle.

It revealed that Government MPs were keeping alive National's old "Property-owning democracy" slogan by averaging three houses each. The policy had been adopted in the 1950s, along with state-subsidised long-term mortgages to help every Kiwi into home ownership. The situation exposed in the pecuniary interests list was something of a parody of that dream, and it's getting worse, with 51 per cent of New Zealanders over the age of 15 now living in rental accommodation.

Top would make it far easier for tenants to remain in premises long-term. Landlords would only be able to evict for "non-payment of rent or property damage. Sale of a property is not necessarily a legitimate reason for eviction."

Canvassing the rental situations in different European countries, Top says "the key is long-term tenancy rights. This way families can opt to be tenants forever and not be undermined by fear of losing their home."

In Germany, tenants can give 90 days notice, "otherwise the tenancy is ongoing unless the landlord is able to give a serious and legitimate reason for termination. Even then the length of notice required ... rises with the time the tenant has been in residence."

Here, the tenancy is at the whim of the landlord, subject to leases, which are usually short-term. The Government, as the biggest landlord of all, is no exception.

In Germany, around 60 per cent of people rent long-term. This dates back to the end of World War II when 20 per cent of the country's housing stock was in ruins. The Government led housing recovery, and with mortgages hard to come by, a majority of the population got used to renting. Their political power ensured tenants' rights as to quality of build, rentals, and tenure were protected, regardless of landlord.

In Germany, rental accommodation is not the second class option. Compare that with Housing Minister Nick Smith in 2015 saying "we are not prepared to give up on a generation and say renting is as good as it gets".

But in Auckland, with housing now out of the price range of most newcomers to the market, renting is just that. A majority of people of voting age are now at the mercy of landlords, most of whom would find the German obligation to serve the public good totally alien to their role.

Morgan's tenancy reforms offer a secure home environment for over half the voting population. It comes at no cost to the taxpayer. Yet all we seem fixated on is the meltdown in the Greens.