In brief

• The Green Party advocates for rent control starting right after the election.
• Opponents argue the controls will worsen the housing problem as landlords exit the market. 
• The Prime Minister says Labour isn’t backing the proposal.
• Landlords are an easy target for the media.

Green party wants rent control without delay

The Green Party is campaigning to introduce their “pledge to renters”  within the first 100 days of a new government. The objective is to address the high prices facing renters. 

They propose rent controls with limits on annual rent increases of 3%. Alternatively, the control will be tied to either the inflation rate, or the average wage increase, minus 1% -whichever number is lowest. 

They’re also calling for the creation of a national landlord register to monitor compliance once the controls are in place. They also want a rental warrant of fitness, an extended application of healthy home standards, and additional funding for housing support and construction of tens of thousands more homes. 

There’s well over one million people living in about 525,000 rented homes around the country. About 85,000 are social housing controlled by Housing New Zealand, local authorities and non-government organisations. The remainder are held in the private sector, mostly by small mom and pop landlords. 

Strong opposition to the proposed policies

Prime Minister Chris Hipkins said  the Greens’ policy proposal isn’t being considered by Labour. 

Historian Michael Bassett says rent control policies in the past have proven disastrous and the Greens have decided to make a play for “extreme left-wingers who are as ignorant and unreflective as they are themselves”.

Speaking on The Platform, Eric Crampton of The New Zealand Initiative highlighted two surveys of economists that his organisation undertook. The vast majority of those surveyed say rent controls have had a negative impact on the amount and affordability of rental housing. 

The Taxpayers’ Union representative, Connor Molloy, said that rent controls have proven ineffective worldwide. Besides encouraging landlords to sell up, which worsens the housing shortage, they encourage black market activity. Molloy called their proposals “cheap populism”. 

What might happen if rents are restricted?

New Zealand’s Property Investors Federation’s (NZPIF) Tim Horsbrugh  said rents have gone up an average of 4.3% over the past year, which sounds like a lot, but isn’t enough to keep up with rates, insurance and interest rate increases. 

Rent controls and other costly demands being proposed may benefit renters in the short run, but reducing the number of rental properties available in the long run could mean long wait lists and fewer options for would-be renters.

NZPIF president, Sue Harrison says making landlords and tenants into adversaries has been a popular narrative with the media.