Rental crisis: Families struggle to find homes as landlords tighten tenant criteria

Marina Kirk-Osman (right) with her husband and daughter. Photo / Supplied

A working mother of two who asked to pitch a tent at campsites while hunting for a rental. A father who has moved in with his sister in Hamilton and commutes to Tauranga after being denied rentals because of his children's ages. And a Rotorua mother who says it took two months to find a rental that wasn't "rundown," "damp," or "mouldy".

These are just some of the people affected by the rental crisis as real estate agents say changes to the Residential Tenancy Act have made landlords "more stringent than ever" when selecting tenants.

It took Marina Kirk-Osman two months to find a suitable rental in Rotorua for her family.

The South African ex-pats were asked to leave previous their rental after three and a half years because the landlord wanted to sell and in her hunt for a home, she found "rundown", "damp" and "mouldy" houses.

She said many properties they viewed were "not up to scratch", while the rent was $500 a week.

"Landlords are asking too much for rentals ... Most available now are way out of one's budget."

They began looking for a house in October and were "really desperate" by November.

They were "very lucky" to find a place in Glenholme perfect for the family of three, costing $590 a week - $160 more than their previous place.

Marina Kirk-Osman (right) with her husband and daughter. Photo / Supplied

According to Trade Me's latest rental figures, Rotorua's median weekly rent has soared while supply has plummeted.

As of January, median rent was $490, up 40 per cent from January 2018's median of $350.

Rental market supply was down 33 per cent year-on-year.

In Tauranga, the median was up 29 per cent from $480 in January 2018 to $620 in January this year while supply was down 29 per cent.

Tauranga's William Nicholson has been looking for a rental for his family, with a 1-year-old and a 3-year-old, since September when they were given a 90-day notice so the landlord could sell. He said he had applied for nearly every house on Trade Me since then.

"As soon as I've mentioned that I've got kids, some places are like, 'nah, I'm not going to deal with you'."

Unable to find anything, they moved to Hamilton to live with his sister and he commutes to Tauranga for work.

His wife quit her Tauranga job to look after the children and was looking for a job in Hamilton "to get by".

Tauranga's William Nicholson with his son. Photo / Supplied

The couple are paying $600 a fortnight in rent and $584 to commute and stay in Tauranga for work.

Tauranga's Philippa Taurima and her family have secured a rental less than three weeks before they were ready to call it quits and move back to the South Island.

She, her husband and their two children aged 3 and 5 applied for between 60 and 65 rentals since mid-December and just managed to find a home this week.

Taurima said she had been told their application looked great but they were one of 220 applicants.

"I feel like we're being spat out ... we're out of options," she said days before securing a home.

In her hunt, Taurima went to campsites to ask if she could stay in a tent or cabin with her children while she worked and house-hunted.

Tauranga's Phillipa Taurima (centre) with her husband, Hamiora and their children. Photo / Supplied

Rotorua Salvation Army corps officer and community ministries director Captain Hana Seddon said "landlords don't necessarily want bigger families or more than one or two children".

She said many applied for dozens of houses and never found out the reasons they were denied.

Seddon said educational programmes like Ready to Rent helped take people through the basics of caring for a property and maintaining positive relationships with neighbours and landlords.

Rotorua Salvation Army corps officer Hana Seddon (centre). Photo / Supplied

The other side of the crisis

Rental agents and investors have said changes to the Residential Tenancy Act have made it difficult to evict problem tenants so they are being strict.

Landlords can no longer end a periodic tenancy without cause, and fixed-term tenancy agreements automatically convert to periodic tenancy agreements - meaning landlords need to go through disputes resolution or the tenancy tribunal to get rid of a troublesome tenant.

Property investor Lindsay Richards had "a number" of properties in Rotorua and Tauranga and said he previously took on "less than perfect tenants" but had stopped.

At one point he took a risk on a bankrupted woman who was a "brilliant" tenant, developed a good rental history and ended up buying a home.

On another occasion, he accepted two mums in their 20s with a limited rental history but they did not pay rent on time and he got complaints from neighbours about parties.

Tauranga and Rotorua property investor Lindsay Richards. Photo / NZME

After they left, fixing holes in falls, cleaning floors, 1m-high lawns and disposing of two van and trailers' worth of rubbish cost him more than $1000.

He said there was usually an even split of good versus "tenants from hell" but it was no longer worth taking the risk so he only took people with an "excellent history".

He said law changes made landlords reluctant to take on any risky tenants.

"If they don't have a good history or don't have a history because they're new to the renting game, I'm not going to touch them because that could turn into tears for me.

"Why bother trying to help someone who's a potential risk when there are 100 others?

"That's sad for these genuine ones out there."

Rotorua rentals director Pauline Evans said denying rentals based on children was discrimination, and she believed it may be a case of misunderstanding.

Rotorua Rentals director Pauline Evans. Photo / NZME

She said there were properties that weren't suitable for children - like a stream down the back without a fence or the size of the house.

Evans said people were "so desperate" a recent bedsit listing received an "avalanche" of inquiries.

About 50 applicants applied for every property and there was high demand for three-bedroom homes near schools.

Evans said reliability, character and rental history were what they looked for in potential tenants.

She said they had a duty of care to house owners, neighbours and other tenants.

She said the new tenancy legislation made the selection process "more stringent than it's ever been".

"Now you look at people and think, do I want to take a chance where once upon a time you might have ... it's really sad."

Rotorua Property Investors Association president Sally Copeland said landlords would rather leave a property empty for weeks to find a perfect tenant than get someone they're "not entirely convinced will make a great tenant".

Rotorua Property Investors Association president Sally Copeland. Photo / Supplied

She said rental providers would no longer take on someone without an "impeccable" renting and credit history.

"In the past, a private rental home provider may have taken a chance on a marginal or risky tenant, knowing they could put the tenant on a short-term tenancy."

Professionals Rotorua property management team leader Aisha Okeremi said there was a supply shortage.

"There are always going to be those tenants who are in fact not good tenants, they do exist. But currently, the fact of the matter is that there are simply not enough properties."

Tenants with a bad credit history and lack of good references were finding it harder because they were up against others with great histories, she said.

"Low housing stock means it's hard out there for everyone and those who have a bad rental history are finding it the hardest."

She suggested those with past issues should be honest as false references were easily identified.

"A lot of tenants want to make you aware of the fact that they are struggling and desperate and that's hard when you have so many people in the same boat."