4 Jan 2017

Home sweet rental home

A villa in Devonport, Auckland.
12:03 am on 5 January 2017

With the average price of a house in Auckland now at $1 million, more people are renting and for a longer period of time and homeownership is becoming less attainable for a larger portion of the city’s residents.

A 2013 report by Statistics New Zealand found that home ownership is lower in Auckland than elsewhere in New Zealand. Between 2006 and 2013, the number of Auckland households who rented their home increased by 18.5 percent.

Elinor Chisholm

Housing research fellow Elinor Chisholm Photo: Supplied

To keep up with the shift in living situations, an update to the Residential Tenancies Act was introduced in August 2015 to improve housing conditions for the rising number of renters around the country. Landlords are now required to install smoke alarms and to insulate their houses in the next three years.

Elinor Chisholm, a Research Fellow at Otago University with a focus on renting, says the demand on the rental market has resulted in overcrowding and unhealthy living conditions.

“We are having more people living in an insecure, often really low quality type of housing. So that quality and that insecurity is really bad for health.

“The rental market has not worked for many people for a really long time, but the fact is that we have seen more and more people in the rental market for longer. It’s just another reason to fix it,” Dr Chisholm says.

‘What happens with our generation?’

Hannah Rogers

Grey Lynn resident Hannah Rogers has been renting for 15 years and does not expect to be able to own property anytime soon. Photo: RNZ / Ellen Falconer

Hannah Rogers has been renting for 15 years and lives in a tidy three-bedroom villa in Grey Lynn with two friends.

She has the largest bedroom because she shares it with her five-year-old daughter, Ophelia, who spends every second week with her father who lives a few streets away. Every fortnight, $720 from Rogers’ salary working at a bank is spent on rent and bills.

That doesn’t leave much to put into savings.

Rogers has been living in her house for a year, and recently signed on for another to maintain a sense of stability for Ophelia, who goes to school nearby.

“We’ve got quite a good landlord, so that helps. My last place was cold, but the thing is with Ophelia I have to be in quite a warm place. I can’t really scrimp on that. So that’s lucky, but we were really lucky with this place, because there are some shitters around.”

Rogers already has one degree, and is studying for another part time. She says putting money into her KiwiSaver from the start of her working life has helped her to build a little bit of savings, but it still won’t be enough.

“I don’t know how else I can make more money to put towards a house. I am looking for new jobs that will pay me more. But I also don’t want to miss out on things. I know that sounds bad, but … my dad didn’t buy a house until he was 50 with his wife now.

“So do I want to struggle forever and not do anything and live frugally which is fine, but do I really want to do that until I am 50? Just to buy a house? And then what?”

But she is concerned that not owning property would mean that she does not have anything to pass on to Ophelia.

“As we get further away from the baby boomer generation, people who maybe set themselves up well enough to be able to help their kids, that’s fine now, but then as we go further and further along the generations have less and less.

“What happens with our generation who hasn’t bought houses but we’re not in positions to help our kids? What’s going to happen there? As a parent that is concerning.”

Rogers has settled into to the idea of living communally for the foreseeable future. Family units are changing, and as the price of housing continues to rise against the average income, so is the number of names on the sale and purchase agreement.

“[My flatmate] Rachel and I have talked about that before, the only way we can realistically buy a property is to buy as a group. Probably not even as a couple. For so long everything has been geared towards pairs, a family - whatever the definition of that is – to buy a property, but now it is friends, families, groups of people… which is far more realistic, but also more exciting in terms of human nature.”

As Rogers gets caught up in sharing her thoughts about the future of housing, Ophelia takes the opportunity to sneak closer to the television to watch Dora the Explorer. Their flatmate Rachel comes into the room and asks her to sit away from the screen, which Ophelia does without protest.

With Ophelia back on the couch, Rogers looks over at her daughter, who remains transfixed by the animated characters on the screen.

“If I think about the way Ophelia is being raised, by so many different people, it’s actually better for her. Maybe that is the answer to it all. We won’t have a choice.”

Making a rented house a home

Economist Shamubeel Eaqub

Economist Shamubeel Eaqub Photo: RNZ / Claire Eastham-Farrelly

Economist and co-author of Generation Rent, Shamubeel Eaqub, would like to see more security for tenants as people like Hannah and Ophelia rent for a longer period of their lives.

“Ultimately, the big change that I want to make is to make sure that a rented home is in fact a home, not just temporary shelter, because that is kind of what it is now and so we want to see a lot more security of tenure.”

He says this security is especially important for people with children, because school zones and social connections are difficult to maintain when moving frequently.

But he is not hopeful that significant changes to better protect tenants will happen in the near future.

“I think it is also true, if you are not being naïve, that politicians respond to those who vote and right now there is this massive exclusion of young people, renters and poor people away from voting. As a result, their concerns and fears are not reflected in policies and it is not going to be until the politicians are forced to respond to a group of different people who vote.”

Chisholm, whose PhD looked at the possibilities for tenants to take individual and collective action to improve their housing, agrees.

“It has been a society that for many decades has prioritised the interests of homeowners, so renters have been seen as “would-be homeowners”, so when the government tried to support renters, they’ve really been trying to support them to leave the rental market and I think that is a real problem,” she says.

And there are no straightforward, short-term fixes for problems that have been going on for decades, Euqab says.

“I think we have to take this much more grown up approach to solving problems and that involves all of us talking about things in a slightly more mature way. There is no easy, one solution approach. It is complex, it’s multi-layered, and it is multi-generational. The problems have accrued over that timeframe and are increasing in complexity.”

Access to a decent home is a ‘birthright’ – Green Party

Green Party co-leader Metiria Turei has a bill before parliament that hopes to improve living conditions for tenants.

Security of tenure and reform of the Residential Securities Act has been a part of the Greens’ policy for years, Turei says.

Metiria Turei

Green Party co-leader Metiria Turei Photo: RNZ / Demelza Leslie

“Renting is now becoming a dominant tenancy in this country. So if that is the case, we need to modernise our laws, to give tenants the same benefits of securing your tenure that homeowners have.

“We know that homeowners tend to have better health, they tend to have better employment prospects because they have more stability, they have better community connections because they can put down roots in their community and community services over a longer period of time.”

Some of the proposed changes in the bill include removing the obligation on tenants to pay leasing fees, setting the minimum term for fixed-term tenancies at three years, limiting rent increases to no more than once a year and requiring transparency around rent increase calculations.

The bill was introduced in August, and is yet to have its first reading in Parliament.

As the average price of housing continues to rise and more people are left out of the property market, Turei would like laws protecting long-term renters put into place sooner rather than later.

“Incomes are not rising anywhere near the rates of either rents or house prices, so that is why we are seeing more and more people living in overcrowded situations and in their cars and garages, because they just literally cannot afford to rent an ordinary home.”

If no action is taken to better protect tenants, more people will be forced into this situation.

“The homelessness situation will worsen, even beyond what it is now, which is the worst that it has been in a number of decades. Homelessness is all about people not having a secure home to call their own. People living in overcrowded situations are homeless, Turei says.

“That should be the birthright of every New Zealand child, it should be expected that every New Zealand family has access to a decent home that they can call their own.”

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