Landlord's call to scare tenants into not voting for Labour

Renters are horrified at a landlord's call for higher rents to punish tenants for voting Labour.

But officials say the landlord isn't doing anything illegal.

A Hamilton-based landlord took to Facebook earlier this week to encourage fellow property investors to tell their tenants 10 percent rent increases were on the way if Labour wins the next election and introduces a capital gains tax (CGT).

"What if we all said to our tenants across the whole of New Zealand, 'Look, I need to apologise in advance, but unfortunately you're looking at a 10 percent increase in rent if Labour gets in and introduces CGT on rentals," the property owner wrote on the Property Investors Chat Group NZ Facebook page, which has nearly 20,000 members.

"Why should we all do this scaremongering tactic? If 35 percent of houses are rentals in New Zealand and we can get say half of the tenants NOT to give Labour their vote, we might as a collective help change the outcome of the next election and in doing so send the Labour Party a clear message."

The original Facebook post.
The original Facebook post. Photo credit: Facebook

Renters United spokesperson Kate Day told Newshub landlords shouldn't be using "intimidation tactics" against their own tenants.

"It shows what a farce it is that landlords raise the rent because their costs increase - what this clearly shows is landlords raise rents because they can. The market conditions and political conditions allow it."

The CGT recommended by the Tax Working Group (TWG) would only apply to gains made on investment properties after April 2021 - so would not apply to any increase in value over the past 10 years, for example, and wouldn't affect the day-to-day running costs.

"You've got a landlord encouraging others to raise rents 10 percent regardless of what happens to their costs, and also threatening the increase in order to influence their vote, which is obviously unethical," said Ms Day.

"It's also bordering on unlawful, in respect of price-fixing or influencing votes like that. It certainly shows why we need the Government to intervene and stop rents rising."

But the Electoral Commission told Newshub landlords - like anyone else - are "allowed to use social media to express political views", and the landlord's post was "insufficient to reach the threshold required to be considered a breach of the Electoral Act".

And the Ministry of Business, Innovation and Employment said landlords are allowed to increase rents for any reason they like.

"The Residential Tenancies Act does not specify how much landlords can increase rent by, or whether there needs to be a cost-related reason behind a rent increase," said Jennifer Sykes, Housing and Tenancy Services manager of information and education.

Tenants can fight back against rent rises if their landlord is "charging substantially more than is being charged for similar properties in the area", but they'd have to provide proof of this to the Tenancy Tribunal.

Andrew King of the NZ Property Investors' Federation (NZPIF) told Newshub said there is a "real depth of feeling by rental property providers and it isn't surprising that some of them will hold views like this".

But he said the landlord was right to say a CGT would see rents rise - and the TWG even said this in its report.

"The NZPIF would add that the CGT and other planned measures will provide a disincentive for people to provide rental property which will reduce supply for tenants."

Ms Day said that was scaremongering.

"Obviously if they sell a rental property someone else could buy it and continue rent it out, or alternatively it could be bought by an occupier. Houses don't disappear when someone sells them."

She said thankfully, most landlords would ignore the call-to-arms.

"I think it's extremely unlikely that landlords are going to act like this en masse because it's highly unethical and borderline unlawful."

Renters United wants limits on the amount landlords can raise rents, tied to inflation or wages.

Labour is expected to announce which of the TWG's recommendations it will take into the 2020 election in April.

Newshub's attempts to reach the landlord who made the post were unsuccessful. Housing Minister Phil Twyford and Finance Minister Grant Robertson were contacted, but didn't respond in time for publication.