Labour calls for Muldoon rent freeze in Christchurch
April 14th, 2012 at 8:58 am by David FarrarThe Press reports:
Dalziel said the housing shortage had hit breaking point and was rapidly snowballing into an “extreme crisis”.
“The Government has to intervene. It has the most extensive powers that any government has had since wartime,” she said.
“Gerry Brownlee is like Pontius Pilate by just washing his hands of all this.”
She said there needed to be a cap on rent increases to stop landlords taking advantage of quake-hit residents.
Oh yes a rent freeze. That worked so well last time. Let’s look at the problem:
Recently disclosed Trade Me figures show demand for rental properties in Christchurch has increased 42 per cent, supply has dived 40 per cent and rent has climbed 15 per cent on last year.
Okay so supply has dived 40%, and Labour’s solution is a rent freeze. Now can anyone who has studied economics beyond primary school tell Lianne what the problem with her proposed rent freeze is?
The Government would not intervene in the issue, he [Brownlee] said.
“A rent freeze doesn’t increase supply and will never encourage new stock to come in. We won’t be moving to regulate rents but we most certainly are actively providing new housing.”
He “recognised there was a problem a couple of weeks ago”, but criticism that the Government had ignored the city’s housing crisis was “unfair”.
“Political opponents have raised issues, not solutions. The Government is taking action and we have outlined our plan of attack many times.”
Land on the outskirts of the city had been freed for potential subdivisions, more rapid consenting processes were being discussed, temporary accommodation services and assistance packages were available, housing villages were expanding and he had asked Housing New Zealand and the Christchurch City Council to accelerate repairs on quake-damaged homes, he said.
I await Labour also announcing a price freeze as their new inflation policy.
Related posts:
- NZ First wanting Muldoon rent freeze
- Christchurch Rent Hikes
- Free up the land
- A Christchurch housing idea
April 14th, 2012 at 9:23 am
National is just as culpable for keeping up Government’s iron grip control on new development. But you wouldn’t dare criticise them would you?
[DPF: If you think I never criticise the Govt, then you're bonkers]
Vote:April 14th, 2012 at 9:29 am
What iron grip on new development? Permission for new buildings is in the responsibility of the CCC not the government.
Vote:April 14th, 2012 at 9:46 am
Noted…Dalziel starting her chch mayoralty bid early…
Vote:April 14th, 2012 at 10:02 am Vote:
April 14th, 2012 at 10:09 am
Labour understands that Mugabe economics worked very well for Mugabe himself.
Vote:April 14th, 2012 at 10:42 am
A rent freeze! Excellent idea! worked wonderfully well in ’82…Ah I remember it well…tenancies terminated because “the house is being sold” or “I need it for family” then re-rented a few days later for 20% higher rent…and those were just the obvious rorts…
Vote:April 14th, 2012 at 10:51 am
@labours a joke
“Noted…Dalziel starting her chch mayoralty bid early…”
And what a choice so far, ‘no fracking’ Bob and ‘back to the future’ Lianne.
Vote:April 14th, 2012 at 10:54 am
The most significant cause of rent increases nationwide is the government’s action in removing the ability of mum and dad landlords to offset losses from rental properties against their wages. For a typical rental house this increases the effective after tax loss (and most do make losses) by around $100 weekly. Add in rates increases way above inflation, and this amounts to a very significant rise in costs that has to be recovered somehow.
And before someone parrots back the scornful “New Zealanders’ love affair with domestic property” line, let me ask you this. Given the shameful recent history of poor leadership in the financial services sector (ranging from breathtaking negligence a la Sir Douglas through to serious fraud) and the detrimental tinkering with the basics of Kiwi Saver, why would you blame mums and dads for using rental property as a relatively safe place to invest their meagre retirement savings?
Vote:April 14th, 2012 at 10:54 am
surely a rent freeze is/would be about stopping greedy/unscrupulous landlords from exploiting the disaster..?
phillip ure@whoar.co.nz
Vote:April 14th, 2012 at 11:00 am
I think sometime between Muldoon (1994) and now the paradine changed from ‘An Economy is to help improve people’s standard of living’ to ‘People are here to serve the Free Market and people are less imporant than the economy’
For some reason some of us still think that people are more important
Vote:April 14th, 2012 at 11:16 am
Liannegrad – the new Christchurch.
Vote:April 14th, 2012 at 11:22 am
‘surely a rent freeze is/would be about stopping greedy/unscrupulous landlords from exploiting the disaster..?’ – a predictable knee jerk solution from an avowed lefty having no regard to unintended consequences. NZ is rife with ‘solutions’ that only magnify the problem because we generally act before we think.
Vote:April 14th, 2012 at 11:23 am
Inky: How did you learn the secret chant we used to recite before every ACT caucus meeting? Did Heather Roy leak that too?
The woman’s perfidy has no bounds….That “the free market” was ACT’s version of “Gaia” was as secret as the most secret of handshakes, and only ever be divulged on pain of death…
Vote:April 14th, 2012 at 11:35 am
I overheard the chant in the Backbencher on Wednesday at the table next to a balding gentleman named David
Vote:April 14th, 2012 at 11:44 am
Well no, that must have been an interloper…there were no “balding” members of our caucus, only “bald” already (Rodney and John) or “full head of hair for the age” Roger and Me (geddit?)
We did have lots of people passing themselves off as us though…that was all part of the Alpha Plan…unfortunately the late Roger Kerr took some of the codes with him to the grave…
Vote:April 14th, 2012 at 11:48 am
Look at what the National Socialist are DOING: Land on the outskirts of the city had been freed for potential subdivisions, more rapid consenting processes were being discussed.
It’s the joke party. They are the ones who don’t understand economics and have run the entire Christchurch rebuild as one gigantic socialist project.
On our way to $30 billion in debt guys?
Vote:April 14th, 2012 at 11:51 am
orewa1: The most significant cause of rent increases nationwide is the government’s action in removing the ability of mum and dad landlords to offset losses from rental properties against their wages. For a typical rental house this increases the effective after tax loss (and most do make losses) by around $100 weekly. Add in rates increases way above inflation, and this amounts to a very significant rise in costs that has to be recovered somehow.
+1, that’s what the National Socialist are doing.
Always playing the we can’t help it our capitalist solutions are not working. Never ever responsible for anything. What a shame Labour is still worse and we have to wait for the current crop of Clarkites to die out.
Vote:April 14th, 2012 at 11:53 am
philu: surely a rent freeze is/would be about stopping greedy/unscrupulous landlords from exploiting the disaster..?
Philu, if I hated the renters in Christchurch I would love to try this out as a demonstration to people like you. On the other hand, no demonstration would ever have any conceivable effect on your apriori notions.
Vote:April 14th, 2012 at 11:53 am
No the balding (bald) David was a Nat blogger.
The chant was coming from a Nat table too with a former Nat MP. I think that former MP was looking to see if two current Nat MPs might resign so he could again be one.
Vote:April 14th, 2012 at 11:57 am
Tax changes have nothing to do with this shortage of rental properties – that should be pretty obvious to anyone except orewa1 and berend. Like I’ve said before your typical mum and dad landlord bought existing old dumps to rent to unfortunate tenants – that increased the total supply of property not one ioata! It just pushed up prices as mum and dad waited for their tax free capital gains!
Vote:April 14th, 2012 at 12:09 pm
“..your apriori notions…”
how so..?..that is not theoretical..it is practical..
..freeze rents…greedy landlords can’t exploit the disaster…
..how could that be a more practical (temporary) part-solution…?
..wot..?..will landlords strike..?..and refuse to rent..?
..don’t think so..eh..?
phillip ure@whoar.co.nz
Vote:April 14th, 2012 at 12:12 pm
“..a predictable knee jerk solution from an avowed lefty having no regard to unintended consequences. ..”
what would those ‘unintended-consequences’ be..?
phillip ure@whoar.co.nz
Vote:April 14th, 2012 at 12:15 pm
There is some rationale in a rent freeze if housing supply is inelastic in the short term – if the rent freeze was for 6 months only then in theory nobody would exit the market. The question is what it’d do to those who were thinking about building new houses for rental. Presumably many of them would decide not to, which is the opposite of what we want.
As usual, this is a solution of the left that claims to be helping “the poor” but is actually helping nobody. It’s a simplistic answer that ignores human nature, and is rooted in class warfare.
If there is an adequate supply of land and if the government doesn’t get in the way of people building houses, then (in the absence of a monopoly situation) rentals will reflect supply and demand. The only way to reduce the price of rentals is to increase supply (reduce government controls) or reduce the cost of building houses (reduce government added costs).
To argue that the rental market is full of people who are charging exhorbitant prices is rather absurd when basically any NZer can buy a house and rent it out – if the returns to rentals are so high then everybody should rush out and buy one.
Vote:April 14th, 2012 at 12:27 pm
Most of the problem isn’t landlords hiking prices, it’s tenants who tell landlords that they’ll pay $10 a week more than their best offer, so they don’t have to wait in a queue.
Vote:April 14th, 2012 at 12:41 pm
I find it astonishing that anybody with a brain could think that a rent freeze would FIX the problem,anybody that believes that either is very young or has been on drugs since 1984.We all need to realise that govts dont fix problems they are the cause of them.The reason there is a shortage of rentals is because of govt (both local and national)policies and taxes.I didnt disagree with the clawback on depreciation adjustments to help place more funds in productive sectors but always knew that increased rents would be an outcome.Like David Garett said,i was renting back in 84 and got kicked out as it was being sold only to find out a freind rented it for $20 more a week,many many stories like this.Humans are cleaver sods and will always find out ways to overcome policies and regulations.
Vote:April 14th, 2012 at 12:41 pm
..freeze rents…greedy landlords can’t exploit the disaster…
Or, freeze rents and struggling (not greedy, many are middle class investors with a mortgage on the property you know…) landlords end up having to sell the rental property. If there’s a rent freeze no investor would touch it, therefore the house will most likely sell to a purchaser who wants to live in it – end result: renter looking for new rental property…
..wot..?..will landlords strike..?..and refuse to rent..?
No, landlords would just sell and I doubt another investor would touch the property. Most likely the investor would look to invest elsewhere, say Auckland.
Vote:April 14th, 2012 at 12:58 pm
“There is some rationale in a rent freeze if housing supply is inelastic in the short term – if the rent freeze was for 6 months only then in theory nobody would exit the market.”
Even if supply is inelastic, demand is elastic. If you have a rent freeze you will get actual shortages. If the price rises, the market clears. Young 20 somethings move back in with their parents. 30 year olds get a flatmate into the spare room. Contractors only there for 5 days a week bunk up 2 to a room.
Vote:April 14th, 2012 at 2:44 pm
Mayor Lianne with Jim as Tooth Fairy – can’t wait.
Vote:April 14th, 2012 at 3:27 pm
Must have nothing to do with a good portion of the housing stock being destroyed on 22 Feb 2011 then.
Vote:April 14th, 2012 at 4:15 pm
Gerry has the answer don’t worry about house some get someone in from outside to build an inner city
Vote:http://www.stuff.co.nz/the-press/news/6743907/Super-city-architect-tipped-for-CBD-rebuild
April 14th, 2012 at 5:05 pm
Remind me again, just how many Christchurch seats Labour lost election? Wasn’t it two of the four they held.
Playing politics with the earthquake aftermath has not worked for Labour for the last year, why are they thinking it will work for them now?
Vote:April 14th, 2012 at 7:19 pm
[DPF: If you think I never criticise the Govt, then you're bonkers]
Yes, from time to time I see you express ‘disappointment’ with a minister’s decision, or mourn the resignation of a dear friend. But seldom do I see you critically analyse the actions (or inactions) of the blue team as thoroughly as you do for the red.
Let’s be honest, the red team are very easy targets currently. As the main opposition party (apparently) that’s bad for all.
Vote:April 14th, 2012 at 8:08 pm
I will be renting my 3 bedroom home shortly, and I can reasonably expect $380 or $390 per week.
Vote:This is maybe a 6% return on capital value
Getting a good tenant is priority, and this means not overcharging.
Reports have it that rent increases have been about 15% since the earthquakes, so that is quite a lot, but not the crisis that is being called.
It is worth remembering that average income in Christchurch is much lower than Wellington or Auckland, and that the East side of Christchurch has lower income than average Christchurch even .
The problem is mainly the rent affordability for people of limited means.
There are two houses within a stone’s throw of me waiting now for occupation.
I do not know the prices being asked. Wild talk in the Press breeds speculation and invites us to be greedy, but not me,
a bad tenant can cost you thousands.
April 14th, 2012 at 8:14 pm
Any land freed up on the out skirts won’t necessarily be cheap as we have an internationalised property market and are a “pro immigration country” and (of course) developers are business men and will be going for the top dollar.
http://vimeo.com/38500767
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