Hamilton landlord tells tenants rent increase is Labour's fault

A Hamilton family will have to stump up an extra $20 per week in rent - and their landlord says it's the Labour Party's fault.

In January the Glenview household of two adults and two children received a tenancy renewal letter notifying them that their rent would increase from $420 to $440.

It included this puzzling sentence: "The actions of the present Labour led coalition Government are raising costs for all landlords."

It seems to be a reference to the capital gains tax (CGT) recommended by the Tax Working Group (TWG), which, if implemented, wouldn't take effect until April 2021.

Hamilton landlord tells tenants rent increase is Labour's fault
Photo credit: Supplied

Last week a Hamilton-based landlord encouraged fellow property investors to threaten tenants with a 10 percent rent increase if Labour wins the next election and introduces the CGT.

The letter seems to indicate some landlords have taken that advice to heart.

The woman renting the property told Newshub she makes minimum wage as a teacher aide, and $20 a week is a lot of money for her family.

"I don't mind a rent increase when it's due, if we'd had a heat pump or insulation put in then sure, but we've had nothing new," she says under the condition of anonymity.

Renters United says her landlord has no good reason to raise the rent this far ahead of the actual introduction of the CGT.

"It's difficult to see what costs have been raised that justify rent increases," a spokesperson told Newshub. "The recent upgrade in rental standards don't come into effect for another two to seven years. A CGT won't be implemented until after the next election at the earliest.

"The only practical new cost is insulation as required by law changes passed in 2015."

The advocacy group says letters like the one received by the Hamilton family could be an attempt to influence politics for the benefit of property investors.

"If this is an attempt to influence tenants' votes, or simply take the opportunity to raise rents, it shows how broken our renting system is. Landlords feel they can increase rents when they like, for whatever reason they like.

"We need reasonable controls so renters pay fair rent, rather than suffer pressure from the improper motivations of some landlords."

The woman says she feels landlords are abusing their power to "punish normal, everyday people".

"I don't think that's an okay statement. Tenants are being punished for what Labour's doing, when the Government's actually doing something good."

However Andrew King of the NZ Property Investors' Federation (NZPIF) says landlords don't have that much influence.

"Rental property providers are not a big powerful group," he told Newshub. "In fact they are the exact opposite. There are almost as many suppliers as there are consumers in the rental market. This is unlike a monopoly, or an oligopoly like petrol companies, so not a collective and powerful group at all."

He says most landlords only have one rental property, and "are not the hard-nosed and ruthless speculator that they are made out to be".

The Hamilton woman told Newshub her landlord owns several properties.

Mr King says the Government is introducing policies that will "make it harder for rental property providers to supply accommodation for tenants". He says while some will benefit tenants, such as the new healthy homes standards, others will "do nothing" such as ringfencing losses and the CGT.

"Officials and economists have confirmed that these measures will put pressure on rental prices," he says.

"Rental providers view the Government as the reason for rental price increases. With the Government calling rental property providers speculators and creating negativity towards them, it isn't that surprising that some will want to let tenants know why their rental prices are increasing."

The CGT would apply to all gains on land and improvements (except the family home), including shares and business assets. The TWG has estimated the new tax would result in initial "small rent increases" which would eventually be offset by more people exiting the rental market as home ownership becomes more accessible.

The Hamilton woman says the rent hike is a kick in the teeth for her and her partner, who have "poured money" into fixing up the property including working on the garden and installing a new shower head.

"After all that it's like 'Oh cool, thanks for that extra charge'. There's no sign of good faith."

She says she's never had a landlord blame the Government for a rent raise before.

"I've rented all my life, and this is new for me."

The family will stay put for now, as the house they're currently renting is conveniently located near her workplace and her children's school.

"If it happens again, we'd consider moving."

Newshub.

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