The current rental situation
Secure, healthy and
affordable housing is fundamental to the health and wellbeing of Aucklanders.
An adequate supply of quality, affordable housing located near jobs and transport links is a core foundation for strong communities, society and the economy.
Auckland's housing landscape has changed in the last 10 years, and more so in the past five years.
Auckland's housing challenges are escalating. Home ownership rates are decreasing and finding affordable housing is moving beyond the reach of many Aucklanders. This has resulted in lengthy travel times to employment, and increased financial stress, overcrowding and homelessness.
productivity, competitiveness, economic stability and
social cohesion in our communities are all affected by a lack of affordable housing.
With a growing pool of potential tenants, landlords can be selective about who they rent to and what price they charge. This can disadvantage some potential renters already struggling to find secure accommodation.
Renting is no longer a short-term step before home ownership. It is becoming a long-term housing solution for many, and the number of lifelong renters is likely to increase.
Long-term renters increasingly include professionals, higher income earners and families who are unable to transition into home ownership. This will have a significant, and as yet unknown, impact on social and economic outcomes.
Traditionally, financial security in New Zealand has been largely predicated on home ownership.
Lifelong renters do not have the same opportunities, through property, to create wealth for their retirement or for the next generation.
A shortage of rental properties that are suitable for people living with physical disabilities, or that can be modified to suit their needs, such as handrails, level access showers and wider doorways, and the often prohibitive cost of private rentals for people on fixed incomes, will result in higher levels of stress for many older Aucklanders. This will place greater pressure on government for support.
Compared to other countries, renters have less protection and security. Renting costs can be high, and the quality of housing is often poor.
The scope for renters to create a home of their own (by making minor alterations, redecorating, hanging pictures or even having a pet) is also usually more restricted.
The New Zealand Residential Tenancies Act 1986 (RTA) is the principal act relating to residential tenancies. It defines the rights and responsibilities of landlords and tenants of residential properties.
Tenancy disputes and mediation are considered by the Tenancy Tribunal, which has legal powers.
There are two main types of residential tenancy in New Zealand:
a periodic tenancy - this continues until either landlord or tenant gives written notice to end it
- a fixed term tenancy - this lasts for a predefined period of time.
The rental market and the associated policy settings have not caught up with the changes in Auckland's housing landscape resulting in issues of affordability, security of tenure and housing quality.
Households in Auckland spend more of their income on housing than elsewhere in New Zealand (Stats NZ, 2015, p. 19).
Rents are largely unregulated, and high demand means tenants can face regular rent increases with little recourse. The only restriction is that under the RTA rents can only be increased once every six months.
High housing costs can mean there is little left over to meet basic needs such as food and heating, particularly for lower-income renters.
The negative trade-offs can include:
- frequent moves to find cheaper accommodation
- taking lodgers or overcrowding
- substantial commute times.
Rates of overcrowding are estimated to be higher in rental accommodation than in owner-occupied housing. There are frequent reports of multiple people sharing a home that was not designed to accommodate large numbers of occupants, particularly in the southern parts of Auckland - see
The housing continuum.
Worsening housing affordability also creates pressure for government finances in the form of increased payments to support low income households meet their housing costs.
Security of tenure
By international standards, security of tenure provided by the RTA is weak, short term tenancies are the norm and tenants can be asked to leave at short notice, and for no stated reason. Under a periodic tenancy, landlords must give at least 90 days written notice, or 42 days if the property is being sold or a member of the landlord's family is going to live there. Tenants must give at least 21 days written notice.
Germany, for example, has a well-established rental sector with high levels of legislative protection for tenants, and gives tenants the ability to decorate their home. Indefinite tenancies are the norm and there are few reasons a tenancy can be terminated.
Transience is more common for Auckland renters, affecting their ability to be part of a cohesive community.
At the time of the 2013 Census, 35 per cent of renters had lived in their house for less than one year, compared with 14 per cent who owned their own home (Goodyear & Fabian, 2014).
Seniors and school age children are particularly affected by transience in the rental market. Transience increases the frequency of school moves which impacts on educational attainment.
The 2013 Census recorded 44 per cent (more than 120,000) of Auckland's children living in rental housing. Just over a quarter (28 per cent) of 5 to 9 year olds, and 25 per cent of 10 to 14 year olds in Auckland rented households had moved at least once in the past year.
By contrast, only 12 per cent of 5 to 9 year old children in owner-occupied households, and 10 per cent of 10 to 14 year olds, had moved during the previous year (Goodyear & Fabian, 2014).
For older Aucklanders, moving to new areas without connections can lead to isolation and security concerns.
Poor and deteriorating housing quality is a pandemic issue in New Zealand, particularly for private rental housing.
Tenants are more likely to experience poor quality housing than owner-occupiers.
A comprehensive study into housing quality in New Zealand undertaken in 2015 found that almost half (49 per cent) of all houses surveyed showed some visible signs of mould, and that there was a higher prevalence among the properties that were rented (56 per cent) compared to owner-occupied (44 per cent) (White, et al. 2017: see also Buckett, Jones & Marston, 2012; Chisholm, Howden-Chapman & Fougere, 2017).
Few minimum quality standards are required under the RTA. The Act introduced new obligations for landlords and tenants, including provisions to make working smoke alarms in all rental properties compulsory, and requiring minimum standards of insulation in rental properties by 2019.
There is an under-supply of good quality rental stock in Auckland, and it often comes at a premium price.
Lower-income renters, facing greater restrictions on their ability to pay, are most affected by quality issues and trade off quality for affordable accommodation.
Housing quality remains a key priority.
Research such as the BRANZ 2015 Housing Condition Survey (White, et al, 2017) articulates the link between a warm, dry home and positive health outcomes, particularly for children -
see Healthy homes for more information.
Buckett, N., Jones, M., & Marston, N. (2012) BRANZ 2010 House condition survey: Condition comparison by tenure. BRANZ Study Report SR264. Judgeford: New Zealand: BRANZ Ltd.
Chisholm, E., Howden-Chapman, P. & Fougere, G. (2017) Renting in New Zealand: perspectives from tenant advocates. Kōtuitui: New Zealand Journal of Social Sciences Online. Vol 12: 1. Available at tandfonline.com/doi/full/10.1080/1177083X.2016.1272471
Goodyear, R. & Fabian, A. (2014) Housing in Auckland: trends in housing from the census of population and dwellings 1991 to 2013. Wellington: Stats NZ. Available at archive.stats.govt.nz/browse_for_stats/people_and_communities/housing/auckland-housing-1991-2013
Tenancy Services. (2017) Mould and dampness. tenancy.govt.nz/maintenance-and-inspections/mould-and-dampness/ [accessed 31/10/2017]
Statistics New Zealand. (2015) Inside Auckland 2013 – 15: a profile of people and households in the Auckland region. Wellington: Stats NZ. Available at archive.stats.govt.nz/browse_for_stats/people_and_communities/Households/inside-auckland.aspx
White, V., Jones, M., Cowan, V. & Chun, S. (2017). BRANZ 2015 House condition survey: comparison of house condition by tenure. BRANZ Study Report SR370. Judgeford: New Zealand: BRANZ Ltd.