The rent is too damn high, say the Greens

They're pledging to introduce rent controls, but some economists say artificial caps do more harm than good.

Mōrena and welcome to The Bulletin for Monday, July 3, by Catherine McGregor. Presented in partnership with Z Energy.

In today’s edition: Government announces boost to nursing student numbers; School librarians warned to be on the lookout for false NZ history books; and Duncan Greive talks to the founder of a media startup for people with disabilities. But first, a new Green Party policy reignites the debate over rent controls.

Three is the magic number

The Green Party released a Pledge to Renters that would introduce rent controls limiting increases to 3% a year, including for new tenancy agreements. Rent increases larger than 3% would be allowed only if the landlord had made “substantial changes to the property that provide a material benefit to tenants”, such as major renovations, and the increase would need to be agreed by the tenants and the landlord before work began. The pledge also includes a “warrant of fitness” for rentals – a certification that every landlord would need to obtain at their own expense before letting a property. While the current Healthy Homes Standards are mandatory for new tenancies (existing private tenancies have until July 1 2025 to comply), enforcement is currently minimal, the Greens say. A WoF would take the burden off renters to enforce the law by taking their landlord to the Tenancy Tribunal. 

An unsurprising thumbs down from landlords

The reaction from landlords has not been kind. The Property Investors Federation says rent controls would worsen the rental property shortage by encouraging landlords to sell up, and mean more tenancies being negotiated on the “black market”. Vice president Peter Lewis says singling out rents for price controls doesn’t make sense, given that rents are rising at less than the rate of inflation while costs to landlords such as rates and insurance skyrocket. He argues that restoring the mortgage interest deduction would do more to help tenants, through flow-on effects on rents. National and Act have also attacked the policy, while advocacy group Renters United is welcoming the proposals as “ultimately better for renters and landlords”.

Are economists right to disparage rent controls?

National’s housing spokesperson Chris Bishop says “almost all” economists agree rent controls are counterproductive. Is he right? In 2021, Stuff’s Mikaela Wilkes spoke to ​​Council of Trade Unions economist Craig Renney and independent economist Shamubeel Eaqub about rent controls, and both said they’re generally a bad idea. “Rent controls are a disincentive to build property types that are more likely to be rented, like apartments and small dwellings, and they are a disincentive for landlords to maintain properties to a level we would like,” said Renney. “It seems like a deceptively simple thing to do: just stop rents rising and everything will be fine,” said Eaqub. “But it isn’t that simple, there are known consequences.” Renters United forcefully pushes back on claims they don’t work. “The top performing economies in the OECD successfully implement rent controls,” their website argues. “This is not a radical idea that has never been tried before.” Vox also has an in-depth explainer that makes the case for rent controls.

For property investors, it all hinges on October 14 

Labour has yet to release its election policy on housing, but it’s pointing to renter-friendly changes already introduced, such as rules limiting rent rises to once every 12 months. National is promising more help for landlords, including restoring no-cause evictions and the mortgage interest tax deduction, both removed (or phased out) under Labour’s watch. The differing approaches are encapsulated in an interview with a property investor by Stuff’s Geraden Cann. Brianna Kerridge says she and her husband will likely sell one of their four properties if Labour wins in October – but if National regains power, then they’re all set to buy a fifth.

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Government announces boost to nursing student numbers

The government has announced plans to boost the nursing workforce by adding an extra 830 nursing students over the next two years. Health minister Ayesha Verrall says 130 students who would have otherwise been deferred to 2024 will now commence their nursing studies in this year’s winter intake. There will be another 700 clinical placements nationwide next year, a response to the New Zealand Nurses Organisation’s Maranga Mai campaign for more nurses to be trained. “In the past nursing schools were turning away students because they couldn’t find an appropriate placement for them in the health system,” Verrall said. There have been widespread calls for nursing students to be paid during training, but when asked about it by the NZ Herald Verrall would only say the government was looking at a range of options to support nurses “throughout their career”.

School librarians warned to be on the lookout for false NZ history books

Here’s a fascinating and slightly scary story about misinformation on New Zealand history making its way into school libraries. Tross Publishing is the small publisher behind a 2017 leaflet drop that former MP Peter Dunne called “disgraceful, despicable racist bigotry" as well as a number of books that historian Vincent O’Malley says are “racist propaganda”. Recently two Tross books ended up on the shelves of a Northland school library after a teacher unwittingly bought them while librarian Julie Smith was away. “I shared it with the head of history and Māori teachers who were both horrified,” Smith tells reporter Gabrielle McCulloch. “There were even tears.” School Library Association president Sasha Eastwood says Tross Publishing is “preying on the possible naivety” of school staff and librarians by selling its books directly to schools. “There is no place for misinformation and disinformation in our school libraries.”

The D*List is media for – not about – people with disabilities

Red Nicholson is the founder of the D*List, a bold new media brand which just launched aiming to provide a salty, raw and exuberant platform for, by and about disabled people. On the new episode of The Fold, Nicholson and editor Olivia Shivas join Duncan Greive to explain the genesis and kaupapa behind this exciting new venture.

Click and Collect

• Wild Auckland weather has forced the Harbour Bridge down to four lanes, with warnings it’s likely to close this afternoon. 

• Also in Auckland, the Eastern train line service is cancelled and the Southern line is running with a reduced frequency. 

• Dunedin and surrounds got a decent dump of snow yesterday – the ODT has photos.

• Charlie Mitchell is back on the conspiracy theory beat with a banger about ‘Nuremberg 2.0’ trials in NZ.

• Both Ikea and Costco could be coming to Rolleston on the outskirts of Christchurch (The Press, paywalled).

• Mayor Tory Whanau denies waiter’s claim she was drunk and asked, ‘do you know who I am?’ (The Post, paywalled)

Got some feedback about The Bulletin, or anything in the news? Get in touch with me at thebulletin@thespinoff.co.nz.

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Sporting snippets

• The Black Ferns’ star winger Ayesha Leti-I'iga is out for rest of the year due to an ACL injury.

• The Marylebone Cricket Club has apologised to the Australian team after an altercation with club members during the final day of the Ashes (NZ Herald, paywalled).

• The Blues have confirmed that Vern Cotter will be their new head coach (Herald, paywalled).