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.
Regulation
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 Residential Tenancies Amendment Act 2020 came into force in August 2020 and introduced some broad changes affecting both tenants and landlords including, for example, a 12-month limit on rent increases, enabling tenants to make minor changes to a property, and removing "no cause" 90-day termination notices.
The rental market and the associated policy settings are starting to catch up with changes in Auckland's housing landscape but issues of affordability, security of tenure and housing quality remain.
Affordability
Households in Auckland spend more of their income on housing than elsewhere in New Zealand (Stats NZ, 2022).
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 12 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 and short term tenancies are the norm.
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.
Aucklanders who rent, move house more often than those who own their own home. At the time of the 2018 Census, renters were consistently much less likely than homeowners to be living in the same place as the previous year, regardless of age.
Moving house frequently can have a number of negative consequences. Among other things, it erodes people’s community connections and means they are less likely to be enrolled with a primary health provider.
For children, repeated house moves can have a negative effect on their health and wellbeing. It often results in school changes which can lead to poorer long-term educational outcomes.
The 2013 Census recorded 44 per cent of Auckland's children (more than 120,000) 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 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.
Housing quality
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.
Data from the 2018 Census showed that more than one in five homes were damp some or all of the time, and for renters, dampness was more than twice as common than for home owners. About one in four homes in Auckland was damp, and more than one in five was affected by mould. Rates of dampness and mould were highest in Mangere, Otahuhu and Otara-Papatoetoe.
New Healthy Home Standards, which aim to make a significant change to the quality of rental homes in New Zealand, became law in 2019. These standards introduce specific and minimum standards for heating, insulation, ventilation, moisture ingress and drainage, and draught stopping in rental properties.
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.)
References
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.
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 .
Tenancy Services. (2017) Mould and dampness. tenancy.govt.nz [accessed 31/10/2017].
Statistics New Zealand. (2022) Household income and housing-cost statistics: Year ended June 2021. Table 11. Available at www.stats.govt.nz.
Statistics New Zealand (2020). Housing in Aotearoa 2020. Available at www.stats.govt.nz.
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.
