Jacinda Ardern was called an enemy of landlords and a threat to tenants after a series of changes to New Zealand’s rental law. Justin Giovannetti contrasts the law for renters here with that of his native Canada.
“Our national sport is real estate.” I’ve heard some version of that phrase over a dozen times since my arrival in New Zealand three months ago. If property is the sport, we learned this week that landlords are the reigning champions. And they are aggrieved.
Property commentator Ashley Church called Jacinda Ardern “the most anti-landlord government probably in the history of our nation.” National leader Judith Collins said the prime minister had turned landlords into the country’s “whipping boys”. Their fury was prompted by a number of small law changes this week, that fundamentally make little difference to the relationship between tenants and renters in New Zealand.
As a recent arrival to New Zealand’s shores, let me take a step back to assess what seems like hyperbole from the landlord lobby. Because while I can’t reliably compare Ardern’s treatment of landlords to that of her predecessors, I can compare it to the situation for renters in North America.
My first exposure to regular life in New Zealand, outside the confines of managed-isolation in Auckland, was my tenancy agreement in Wellington. This was one of the first clues that life here would be very different. A rental agreement is a contract. It’s a set of promises by a tenant and by a landlord. You pay your rent on time and I promise to fix things quickly. Around the world, there’s give and take in the document. The most extreme form of this is in the province of Quebec, where a lease is a standard government form that you pick up from any magazine rack at a corner store. There’s no openness to creative demands from landlords. Both sides can only follow the rules as strictly set out by the government.
In New Zealand, I found something very different. My tenancy agreement is seven pages long and accompanied by a further six pages of rules. Every single line is a demand on the tenant. The only thing in the document that is a commitment from the landlord is a promise to install insulation and heating by the end of April. It’s August and neither has been done yet.
Let’s contrast that with what is typical in Canada. In Quebec you can’t be asked for any form of deposit. There’s no moving inspection report. The landlord can ask for your first and last name, along with your current address, but little more personal information. In the neighbouring province of Ontario a landlord can’t stop you from bringing a pet to your new home.
Canada is by no means extreme in this regard. It’s New Zealand that is the global outlier. The relationship between a tenant and landlord in New Zealand is set by the residential tenancies act. That’s the law that was changed this week. One of the government’s tweaks is that a landlord can now only increase rent annually. The current norm in New Zealand is a volatility of rent, which can increase as frequently as every six months.
The majority of Canadian renters live under some form of rent control. Many Americans do as well. The government sets a maximum amount each year that rents can increase. In Ontario this year it’s 2.2%. In Quebec it’s around 1.3%. In the latter jurisdiction, renters need to agree to an increase. Over a decade in the province I only faced two rental increases. One I happily agreed to, the other I didn’t.
There is no rent control in New Zealand and the government isn’t proposing to introduce it. I can’t begin to imagine the reaction if the government proposed rent control and required landlords to get the consent of tenants before increasing rent. In my North American experience, rent only goes up when landlords earn it by improving the property in a meaningful way.
The websites of various property management firms in New Zealand preach a different idea about rent increase: that landlords should do it every year without fail. Increase the rent, even by $5 these property managers suggested. Why? “The tenant will just come to expect an increase around that time every year.”
Another unexpected element of New Zealand’s renting culture is inspections. A landlord can inspect a property every month. Two months after we moved into our Wellington-area flat, we were hit with an inspection notice. We were given a long list of things to do before the inspection: clean the oven, the cupboards, the walls, the fan blades and more.
This has never happened to me before. It felt like an intrusion. We left notes where the carpet had been poorly installed and on the black mould around the windows. If they were coming over, we figured they’d like to see the small repairs they need to do. The landlord came when we weren’t home. A month later we still haven’t heard back from them about the inspection, or our notes. I’m still not sure what it was all about.
Property management websites are explicit that these snap inspections should be carried out frequently, to ensure that family members haven’t moved in and all the rules are being followed closely. This just doesn’t happen in Canada.
Speaking in Lower Hutt this week, National’s Collins said the Labour-led government has “a very anti-landlord agenda”. Changes to the residential tenancies act would drive landlords out of the market, she said. They’d want to protect their investments from the possibility of misbehaving tenants by just leaving houses empty.
The message from Collins and other commentators this week is that in New Zealand a rental property isn’t a tenant’s home, but a landlord’s investment. The residential tenancies act is the law which makes that explicit. And even after these changes, this country remains a long way from achieving balancing in the relationship between and landlord and tenant.