Most renters in New Zealand are facing financial hardship during the COVID-19 pandemic, according to a new survey.
Renters United surveyed 1983 people between April 10 and 20 and found more than half of all renting households were worse off despite government support.
The survey also found two out of every three renting households have seen their income drop by more than a third. While most renters said they have been forced to reduce their spending where they can, stop saving and debt payments, and use savings to pay rent.
Renters United said the survey shows rents were already too high before the lockdown, with 83 percent of respondents spending more than 30 percent of their household income on rent and 33 percent spending more than 50 percent.
Despite the Government introducing a six-month rental increase freeze and banning evictions, Renters United says more action is needed to protect tenants.
"The short term freeze on rent increases and ban on evictions have given some immediate certainty and security to renters during the lockdown," it said in a statement.
"However, without further action from the Government, many renters will exhaust savings, fall into debt to their landlords or private lenders, and will remain stuck in unaffordable tenancies where they will struggle to take part in the recovery to come."
The report is calling on the Government to introduce a special subsidy for people with unaffordable rents, which is where more than 30 percent of the household income is spent on rent.
"The subsidy would be the difference between the rent they are paying and the affordable rent. The renter would receive the payment weekly for a period of 12 weeks."
"For example a renter whose income has dropped to $600 per week and who pays rent of $300 per week would receive $120 per week for 12 weeks. This is the difference between an affordable rent for an income of $600 per week (which is $180 per week) and the rent they are paying."
Renters United also said the Government should give renters whose circumstances have changed, for example their income has decreased, flexibility around ending their leases.
"Tenants should be able to end or alter any tenancy with 21 days notice and without penalty, simply by declaring to their landlord, in writing, that their circumstances have changed significantly due to Covid-19."
The report said appropriate circumstances for changing the tenancy agreement should include:
- A drop in household income of more than 30 percent
- A change in the total number of adults in the household
- A need to relocate for employment
- A change in family arrangements.
The report also showed nearly two in three renters feel worried or scared for their financial future.
One respondent said they would soon have only $50 a week after rent and power to pay all their bills and feed their family.
"We ae a family of six - my husband and I, our three children (16, 10 and 8 years old), we also have my elderly mother living with us who I care for.
"My husband was doing 60-70 hour weeks before lockdown. I bring in $200 a week from looking after my mother. My husband's work says that they can not afford to top him up to 80 percent so he has to use his annual leave.
"We have enough left to last another couple of weeks. After that we will have $50 a week after rent and power to pay all our bills and feed six people."
Another said even before lockdown they spent 80 percent of their income on rent.
"I do feel that my landlord can certainly afford to still offer me a drop in the rent, but felt obligated to make the full payment through to them.
"Even before lockdown, my rent takes 80 percent of my income after tax and I never have the ability to build up any kind of slush fund."
The Government has introduced a number of measures to help people during the COVID-19 lockdown including a 12-week wage subsidy.
