In 1936 New Zealand faced a similar housing crisis to what we face today. Houses were in short supply, wages were low, slum living was common, unemployment was rife, rents were high and increasing rapidly. Life was a desperate struggle for low-income tenants and families.
(Note unemployment then was measured accurately unlike now when anyone working just one hour per week is not counted as unemployed!)
The first Labour government did two critical things:
- It began an industrial scale state housing building programme and by 1938 it was building 3,500 state rental houses per year (The equivalent for today’s population would be 10,000 per year – however the current Labour government has set the limit of increase to 1600 per year for a waiting list of almost 25,000!)
- It implemented rent controls through the 1936 Fair Rents Act which froze rents to what they were on 27 November 1935. Rents could only increase with the approval of a magistrate.
We desperately need that rent freeze now. And we need an appeal process whereby rents can be reviewed on appeal from a tenant. That way we can cap and manage down rents to liveable levels.
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Capped rents in Auckland could result in some serious downfalls.
1. Residents living in other regions would feel inspired to move to Auckland since the rents are capped. Moreover, as New Zealand is reopening its borders to the world at the present time, citizens of many other countries would consider Auckland as a place to live. The influx of people would result in traffic accidents, general congestion, problems with litter and rodents, etc.
2. Studies have shown that when rent prices are capped on properties, they tend to increase quicker, faster, after the rent freeze. This is the last thing we want to happen for Auckland. We want our largest City to have a stable, happy population.
3. New Zealand governments have tried for decades now to spread out citizens out and to not have so many people living in Auckland. There has been many attempts by both Labour and National governments to achieve this aim, by funding bicycle tracks, allocating funds to new state owned enterprises in the regions, etc, so a rent freeze in Auckland could very well stall the progress which has been made in other regions.
4. The rich in Auckland typically do not solely own residential real estate. Many own shares, commercial real estate, businesses, or a significant stake in a company, so specifically targeting Auckland residential real estate with a rent freeze could encourage these investors to raise the price of their merchandise if they own a business, or to sell the properties they own in favour of purchasing more shares, or increasing the rent on the commercial property that they own.
5. The impact on aspects of our financial markets such as our official cash rate could very well be adverse. The rent freeze would produce some nervous investors, particularly at this time globally speaking with the coronavirus pandemic. Our official cash rate, along with the value of the New Zealand dollar, could potentially be negatively affected as a result of the rent freeze.
“Residents living in other regions would feel inspired to move to Auckland”.. And what are they going to live in? You do know that Auckland already has the majority of NZ’s homeless within its borders, don’t you? Trite and specious assumption is what has already assisted overseas interests to munt this countries ability to look after itself, and now we are content to debate non existent crisis? This place really has gone to the dogs since I’ve been away.. The reality, as in the real world actuality is that a cap on rents in Auckland will have a “ripple” effect everywhere else, as it will slow, or stop the flow out of the city, and make getting workers problematical for employers engaged in the necessary infrastructure programs, made urgent by nine years of neglect, and abuse while the population was rapidly being enlarged at an unnatural pace… That is just the start of why your assumptions lack depth.. I can detail the many more aspects of this proposal, and it’s likely outcomes for you, if you think you’re up to absorbing that much information…
I love you guys: Your naivete is just so charming!
OK so you apply rent controls. The immediate response would be for landlords to sell their properties to owner occupiers, thus diminishing the supply of renters.
Sell their properties to renters. Therefore less renters. All landlords are scum. Anyone on here defending them are one and should feel ashamed. You are destroying NZ through greeeed!!!
Some landlords are scum some tenants are scum most are just people getting on with life . It was in Helen Clark reign that the idea pensions would not keep up with inflation was first spoken about and those able to invest where told to do so to maintain a good life for them and the government would have more in their pot to look after the needy.
You seem to forget not all people want to own a property. Students young people old people workers who’s company shifts them around all need places to rent and so landlords are a part of the economy always have been . In UK and Europe you rent an empty shell and fit it out and it is yours for life if you want it to be .
I was a baby in 1936-1938 when the state got building but my family moved into a modest house in Orakei where there was a big building program of state houses. My father was able to build a private home based on his income as a tradesman, he was a Linotype operator at the Auckland Star. Those State houses have been sold off to the benefit of residents and the rich. With the waterfront drive not built, Orakei was thought to be so far away from the city. A newly built school was ready in Orakei in 1939 when I went to school. A good modest life was made possible then why not now?
Why not now? Because of neoliberalism ,driven by our masters, the USA.
We live in a society the demographics of which are equivalent to the ratio of landed gentry to landless serfs of 19th century Britain, the driving force behind our forebears decision to emigrate here, whereupon they set about recreating the self-same system. And nothing short of radical land reform, as envisaged by Henry George in his 1879 book “Progress and Poverty” will ever change it
Of all the mad ideas!
Aside from the fact that rent freezes never work as intended; with general inflation around 7% and LA rates and insurance and interest rates rising by significantly more than that they would be grossly unfair. Why not just freeze the price of everything by government order.
I thought the idea was to build more houses – lack of which is the primary driver of rising house and rent prices. What happened to that cunning plan to deal with the actual problem? While the building of new rentals remains pretty marginal it’s hard to see the private sector doing a lot more, more state housing would help but this lot seem incapable of doing much of anything useful. Useless, virtue signalling wets mostly.
We desperately need that rent freeze now.
Absolutely. It’s long overdue.
I don’t understand the govt’s slowness to act, regarding this.
If there is any intention at all to begin to address the humungous inequality gap and poverty problem in AO/NZ now, then begin the process of ending exorbitant rent profiteering, once and for all.
It is a bitter irony for the govt that the opposition hones in on poverty problems, again and again, to discredit the govt as ineffective etc. And with rents not being addressed, who can argue with that.
Yet the opposition, with references to “bottom feeding” etc, will make life even worse for those already living on the edge. So, many are trapped between present desperation and a worse future.
I was in business when Muldoon (the last real socialist PM ) tried a price freeze and it was a disaster for all parties.
A freeze means you need to stop rents going up or down so this helps no one. The best way to control rents is by building state houses in such numbers that the private market is forced to drop,rents to get tenants. The alternative is that the state buys all rentals and has no private market .
I am in favour of no private market. Sponging of the poor is what private rentals are about.
I was in business when Muldoon (the last real socialist PM ) tried a price freeze and it was a disaster for all parties.
A freeze means you need to stop rents going up or down so this helps no one. The best way to control rents is by building state houses in such numbers that the private market is forced to drop,rents to get tenants. The alternative is that the state buys all rentals and has no private market . If the rent is frozen how can you get money back you pay to upgrades as usual with simple solutions they are not usually so simple
Did the chart published with the opinion piece control for inflation?
Yep, rent freeze now and rent control in future!
NZ as a whole has got itself well and truly in the crap with housing following the set up of the neo liberal state in 1984. Capital was given unprecedented access to state/public infrastructure and largely freed from oversight and accountability. As we now know Roger’n’Ruth’s vaunted “trickle down” did not happen–OECD and IMF now acknowledge that fact.
Housing became a cash cow and largely tax free speculative venture for many home owners, flippers & developers rather than mere accommodation and a family resource as previously.
Generations rent and student loan, and “elder poverty” hit boomers need to make their presence felt in the 2023 and 2026 Elections, and need to get active in the community now. Support John Minto’s Alternative Aotearoa housing campaign for a state house mega build.
Personally I would like to see occupations of empty residential and commercial property on a hit and run basis until politicians of all stripes get the message.
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