Green Party co-leaders James Shaw and Marama Davidson. Photo: RNZ / Angus Dreaver
An economist is warning the Green Party's proposal to introduce rent controls may drive landlords away and leave the rental system worse off.
The Green Party is making a play for renters' votes in the upcoming election - pledging to fight for rent controls, a warrant of fitness system and landlord register.
Its promise to cap how much landlords can increase rent every year to a maximum of 3 percent has been the focus of much of the criticism since the package was announced on Sunday.
Infometrics principal economist Brad Olsen said while well-intentioned, introducing rent controls could bring unwanted consequences to the rental market.
"The risk with rent controls is that it disincentivises people from becoming landlords or maintaining their houses to an even greater standard.
"They'll do the absolute bare minimum because changes in the market can't be reflected in price."
Infometrics principal economist Brad Olsen. Photo: Infometrics
Olsen said rent controls would not necessarily lead to an "immediate selling up of rentals" but history had shown they could backfire and lead to renters paying more.
National's housing spokesperson Chris Bishop slammed the Greens' proposal, arguing boosting housing supply was the best way to ensure everyone had a warm, dry home.
"It's economically illiterate rubbish. It should be thrown in the bin where it belongs. It will actually do the opposite of what they're trying to do.
"It will mean fewer landlords, more expensive rentals and a more dysfunctional private rental market. It won't work and they should throw it in the bin."
ACT's housing spokesperson Brooke van Velden accused the Greens of singling groups out and 'othering' them for political gain.
"If more obligations for landlords was the answer, then the last five years of Healthy Homes, making evictions harder, a 10-year bright line test, and removing mortgage interest deductibility would made New Zealand a renters' paradise.
"Instead, things have got worse, and the Greens' policy effectively tells landlords that the beatings will continue until morale improves."
Renters United president Geordie Rogers said his organisation has been lobbying changes like rent controls since 2017 - and they are long overdue.
"When you look globally, this is bringing us into line with other countries in the OECD. This is not new, this is not radical.
"This is exactly what other countries have that have a functional renting system and it's exactly what New Zealand needs."
Housing Minister Megan Woods said most of the Green Party's housing package was already in the the works and Labour would release its own housing policy before the election.
"Labour has already begun making substantial improvements for renters, with rental standards and limits on rent rises, as well as a massive public house building programme that would continue under Labour.
"Much of what the Greens are proposing is also underway, including the use of more offsite manufacturing and enabling more affordable homes."
