Harsher penalties for bad tenants will help solve rental crisis, Property Investors Federation says

The Property Investors Federation has launched a five-point plan which it says will fix the rental property crisis.

It includes harsher penalties for bad tenants and returning the bright-line test to two years.

Other key points include returning the right for landlords to issue no-fault 90-day notices and making mortgage interest tax-deductible.

Vice president Peter Lewis said no landlord woke up in the morning and evicted their tenants for the sake of it.

"Obviously, if you get rid of a tenant, then you are losing money on that property... The problem is that if you go and say to them you have to leave because of this particular thing that you're doing, human nature makes you say, 'Oh we won't do that anymore, we'll reform, we'll do better,'" Lewis said.

"But most people revert and we have seen this publicised recently with a lot of the Housing New Zealand tenants."

A public list of tenants who owed money after their tenancy ends, damaged the property or disturbed neighbours were also proposed in the plan.

Lewis believed the cost of borrowing was putting off potential investors, too, meaning fewer rentals.

"A lot of that price increase is being caused by these taxation changes that are badly affecting a lot of residential landlords," he said.

"And thus the first reaction of course is to put the rent up as far and as fast as possible."

The proposed changes were intended to help both landlords and tenants, Lewis said.

"I'm a landlord and I have been a landlord for 31 years. My ideal is to have happy tenants [with] who I get on well with, co-operate with and it's a mutually beneficial arrangement.

"I provide quality accommodation for them, I'm responsive to their requests and their needs and in return, they pay me a reasonable market rent, just like any other business."

Lewis also believed New Zealand should trial a long-term tenancy option, like that currently available in Germany.

In this model, the landlord only supplies the bare minimum - the walls, floor, ceiling and infrastructure for water and electricity.

The tenant supplies everything else, from an oven and a fridge to light fittings and covers the maintenance of these things themselves, so they are not part of the rent.

"People have said to me when I have suggested it, 'Oh no one would accept that' well, fine, perhaps they won't. But if it's available... we can see whether or not that's true," Lewis said.

'Old school way of thinking'

Lobby group Renters United has slammed the proposal to fix the rental crisis, saying it is aimed at helping property investors line their pockets at the expense of renters.

Renters United spokesperson Geordie Rogers told Midday Report the proposal was not really a plan at all.

"It's an infographic that someone has created in a very short time frame and that's why we're seeing very little detail about how to actually move forward and fix renting in Aotearoa."

The position of the Property Investors Federation was a "very old school way of thinking", he said.

"What we're seeing here is a plan for people to continue investing in property so they can extract as much money as they want out of their renters rather than something that actually upholds the human rights that renters have and comes to a solution that's actually better for anyone that isn't just those that own thousands of properties."

Geordie Rogers.
Geordie Rogers. Photo credit: Newshub.

Rogers said people relied on landlords to have the cash flow to make repairs when needed.

"The idea that they'd be charging $7000 for the median rent on a bond is ridiculous to me, especially when they're in a position where they do have the capital to put that behind a loan to repair the property or even to pay for insurance - which a lot of us renters are already paying for on behalf of these investors," he said.  "The idea that we should have to put up even more money for them to do a job we're already paying for them to do is just ridiculous and goes to show just how little these people actually know about what their job is as a landlord."