Government warned rental reforms could risk rent increases, lead to more homelessness

Newshub can reveal the Government has been warned its rental reforms could risk increasing rents, and even leading to more homelessness, with official advice warning those on the margins could be hit the worst.

Tenants have been telling Newshub this week how the rental crisis is pushing them to the limits - Kiwis like Upper Hutt mum Kelley-Ann Adams who said she's "drowning at the moment with lack of money" after paying $500 a week in rent.

The Government hopes its Residential Tenancies Amendment Bill will help alleviate these problems by banning rent bidding and scrapping the ability for landlords to evict tenants with 90 days' notice.

But officials have warned Associate Housing Minister Kris Faafoi it could have unintended consequences, saying: "There is potential for rents to increase if landlords seek to offset additional risk".

Officials also said the added constraints on landlords "could affect landlord willingness to rent, and the amount of rent charged".

Andrew King, chief executive of the New Zealand Property Investors Federation, told Newshub there are many reasons why rents have been going up across the county.

"It's inevitable that rents are going to go up just as they have over the last eight years, because there have been so many things that push up the costs and make it harder or riskier to provide rental properties."

The financial impacts could have social consequences too. The advice says, "There may be negative impacts on security of tenure for some tenants...." meaning "a potential increased need for more public housing."

Associate Housing Minister Kris Faafoi said he is "absolutely keen to make sure that doesn't happen" and that the Government wants to "make sure we are able to build more public housing".

ACT Party leader David Seymour is an endangered species in Parliament - a renter.

"You don't have to be an economist to see more bureaucracy means more costs for landlords and higher rents for tenants," he said.

The Residential Tenancies Amendment Bill passed and its first reading on Thursday and has been referred to the Social Services and Community Select Committee.

More information on the legislation can be read here.