KATRINA SHANKS (National) Link to this
It is a pleasure to continue my call on the Residential Tenancies Amendment Bill tonight. The bill is long overdue to be modernised in order to meet the needs of our current environment. The original Act came in 23 years ago, and the residential tenancies market has undergone significant change in that period. Both landlords and tenants have been keenly awaiting reform to the tenancy laws since the previous Labour Government commenced a drawn-out, long-winded review in 2004. This bill is important because it will affect one-third of New Zealand households. One-third of New Zealanders live in rented accommodation. Private rental housing has a significant impact on housing in New Zealand and social and economic outcomes much more than it did when the original legislation came before the House in 1986.
A review of the Act commenced in 2004 and identified five primary issues with the current Act: insufficient compliance enforcement and dispute resolution; lack of knowledge about landlord and tenant rights and obligations; mixed capacity to manage properties and tenants; variable standards of rental housing; and lack of stable tenure for longer-term tenants. Those were the five primary issues identified by a review of the original legislation.
Changes to the Residential Tenancies Act were proposed by the previous Government as early as 2004, but no tangible progress was ever made. In fact, the sector has been left in limbo for a very long time. This Government is focused on progressing modifications to the legislation in order to make a difference, to make a change, and to deliver on our promises. We want to give certainty to a sector that has been waiting for years for amendments to be made to the Residential Tenancies Act. The changes will make a difference to many people. Those people are generally our most vulnerable people; many of our most vulnerable are renting houses or flats, and trying to get ahead week by week.
This Government wants to see landlords able to manage their investment portfolios in a way that optimises their return, and enables them to be responsive to demands, responsive to the environment that they are in, and responsive to the changes in our economy. But the Government also wants to see tenants have access to suitable rental accommodation, and able to make informed choices about where they live, how long they live there, and what they are paying for. This legislation has to work for both our tenants and our landlords so that both parties can come together to form a renting environment that is healthy for all. We want to see a rental market that is efficient, responsive, and well informed. This bill goes a long way to delivering that vision.
One of the main initiatives in the bill is to provide protections for vulnerable tenants who live in boarding houses. They are currently not covered by the tenancy legislation. The most vulnerable tenants had fallen into a void. This bill brings boarding-house tenancies under the umbrella so that the minimum rights and obligations of people living in boarding-house accommodation are clear, adequate, and readily enforceable.
I thank the officials and the submitters who came forward during the select committee process. We had many, many submissions from many groups, individuals, and non-governmental organisations, and from landlords in the sector as well. They all added considerable depth and knowledge to what we learnt in the Social Services Committee, and because of that, many changes were made to the initial legislation to make it a much better bill for all—landlords and tenants alike. This has been a short call. Thank you very much.
MOANA MACKEY (Labour) Link to this
I am happy to stand and finally take a call on the second reading of the Residential Tenancies Amendment Bill. The chair of the Social Services Committee, Katrina Shanks, did a very good job of chairing the committee, and this is very interesting legislation. I think all members of the committee worked particularly well together.
But this was another bill that had to pass very quickly through the select committee. We reported back in September last year, and it is now nearing the end of March. So Katrina Shanks can talk about delays in getting this bill passed, but the fact is that we have sat here and passed ridiculously useless legislation while this very, very important legislation has languished on the Order Paper. I particularly took offence that boarding-house tenants, who were finally being given tenancy protection under this legislation, had to wait over the Christmas break for that protection to be extended to them. I also mention the fact that during the Rugby Sevens tournament that was held here in Wellington in February, boarding-house tenants were evicted so that landlords could put people who had come to the sevens in those boarding houses. Had we passed this legislation before Christmas, that may not have happened. It is hard to say; the protections we put in place for the boarding-house tenants are not as extensive as they are for other rental tenants.
I was not going to say this, until the member Katrina Shanks got up and extensively criticised Labour for not passing this legislation fast enough: it should have been passed last year. Labour started the work on this legislation. It is important legislation.
Labour does not work with shoddy legislation, I say to Ms Shanks. When we redraft a major piece of legislation that affects some of our most vulnerable families, we want to do it properly—and we did. That is why this legislation will pass today in the House with 100 percent support. The time was taken to do it properly, and I make absolutely no apologies for that.
This bill was introduced by Labour. The Government took it and made changes to it that, in Labour’s view, have worsened the legislation. But overall, there is no doubt that it is a major improvement on the status quo. That is why Labour will be supporting it, and why we will be moving Supplementary Order Papers in the Committee stage in an attempt to bring it back to where it was when we introduced it, in terms of fairness.
I will touch on a few areas that were probably the most contentious at the Social Services Committee. The first was the issue of representation at the Tenancy Tribunal. The original Labour bill allowed for advocates to be used in the Tenancy Tribunal, particularly with tenants who do not understand the process, are uncomfortable with it, may have English as a second language, or may simply be terrified of the process and not understand their rights. It may actually speed the process up to have someone there with them who can explain the rules, what can and cannot be litigated in the Tenancy Tribunal, and to be there as a support person, particularly where people are up against a professional tenancy manager or Housing New Zealand. During the submissions we heard cases from people who had to go up against Housing New Zealand who could hardly be considered to be laypersons in respect of the Tenancy Tribunal.
What this bill does is make it even worse. Not only does it remove the right for those tenants’ advocates to be in the tribunal, but also it raises the monetary threshold so the automatic right to be represented kicks in from $3,000 to $6,000. Although that might not seem like a lot of money to some people, to many of our most vulnerable people, particularly in boarding houses, most of their issues will be less than $3,000 or $6,000 worth, because often they own nothing. They want to be represented at the Tenancy Tribunal by someone who has the ability to help them ensure that the process is fair. Although we certainly appreciate that the tribunal was established to provide low costs and expeditious resolution of disputes, the desire for speedy results should not overrule the right of a tenant to have a fair hearing. We also understand that there is a concern that if a professional or even a lay advocate is brought in on one side, the other side might reciprocate, and it starts building up. That ignores the reality that professional tenancy managers and Housing New Zealand tenancy managers are already involved in this area. They are professionals and they know what they are doing. It is an unfair balance. We simply think that the playing field should be level.
The second issue is letting fees. Currently, real estate agents have an unfair advantage over property management companies, because real estate agents can charge tenants a letting fee but property managers cannot. We certainly agree that that is unfair. This bill balances that out by stating that both can charge a letting fee. Labour believes that we should balance it out by saying neither of them can charge a letting fee to tenants. Certainly, the property managers we spoke to just wanted a level playing field. They did not want to charge tenants for the letting fee. It was not about income; it was just about getting equality. The reality is that a letting fee on top of a bond is a huge barrier for people who are trying to get into a tenancy. We do not believe that tenants should be charged a letting fee where a landlord has engaged a tenancy service in order to help them fill a tenancy. We were told that they are acting for the tenant, because the tenant is the one who is getting the help. We made the comparison to real estate fees where the person who is selling the house is always the one who pays the fee, regardless of whether there is a strong housing market or a weak housing market. They are the ones putting their property out there. They will always get charged the fee no matter what the demand is from buyers. We disagree with that measure very, very strongly, given the huge financial barrier that it provides.
We see it even more at the moment. If we look at studies of homeless families who have gone into a housing crisis, we see that one of the hardest things about getting back into housing is all the upfront costs—moving all their things, payment of bonds, and letting fees. If we can remove that letting fee, that is one small barrier that we are taking away for tenants who are trying to get into a tenancy.
This bill removes the proposed requirement for a landlord to reveal that a cleansing order had been held on, for example, a P house. I have received correspondence from people who are actually really concerned about that. I have asked for some information from local government experts. The Social Services Committee was told that cleansing orders are automatically done by the council, they have to meet certain requirements, and then the order is given showing that there is no more danger. The landlords are asking why they should have to tell people about that if there is no more danger. I have been told that there are no standards for them. They are done on an ad hoc basis, and people are genuinely concerned that there may be cleanups that have not been done up to standard. Certainly, that is something that I think we need to look at in the Committee stage. Maybe the select committee was not given the full information about that particular clause in the legislation.
Finally, I will come to the issue of boarding houses. That is probably the most important part of the legislation. I think it is such a shame that it has taken so long for us to debate this in the House at the second reading. I sincerely hope that we will have the Committee stage and third reading next week so we can finally get this legislation passed, because we need to bring boarding-house tenants under the protection of this law. I read the Minister’s first reading speech, and I was concerned that he was under the impression this would solve all the issues for boarding-house tenants. That is not true. This will provide tenancy protection for boarding-house tenants. It does nothing about the state of the boarding houses and the standards that boarding-house owners are required to keep their properties up to.
During the select committee we had a submission from the New Zealand Coalition to End Homelessness. I congratulate the coalition on its inaugural AGM, which I went to in Auckland this morning. Coalition members put an offer out to select committee members to come with them and have a look at boarding houses in Wellington. My colleague Grant Robertson and I took them up on that offer. I certainly hope that other members did, as well. It really opened my eyes to some of the absolutely disgusting properties that are out there on the boarding-house market at the moment. Frankly, it kept me awake at night. It is truly appalling. We saw some of that in an exposé about boarding houses in Auckland. I reiterate to members that this bill deals only with tenancy protections. I think there will be some who argue that we did not go far enough in this legislation. Maybe we will need to come back and address that down the track. Maybe we need to provide longer times, because boarding-house tenants tend to be more transient and the tenancies are shorter. Therefore, the protections under this law are not the same for them as for those who have a regular tenancy. We may need to revisit that in the future. I certainly would not rule that out, but I hope we managed to address it well enough here. The fact is that this is only part of the problem; there is a whole lot more that needs to be done in the areas of boarding houses and homelessness generally.
Again, I urge members of the Social Services Committee to see that we need a select committee inquiry into the pathways into homelessness in New Zealand. Every single sector group out there is calling for it. It is not something that should be done by Housing New Zealand, because of the huge amount of distrust that exists between Housing New Zealand and some of those people who have had negative experiences. A select committee inquiry would do an awful lot of good in that area. The sector is crying out for it, and I do not understand why members of the Government, which holds the majority on that committee, keep blocking a select committee inquiry. I urge them to support it and to rapidly move this legislation through the House.
SU’A WILLIAM SIO (Labour—Māngere) Link to this
First, I take this opportunity to join with the rest of the House in acknowledging the passing away of Lady Raihā Māhuta. Lady Raihā was well known in Māngere and was deeply respected for her advocacy for Māori and for Tainui. She was also known particularly to the kaumātua and kuia of Te Puea Marae. On behalf of the people of Māngere, I pass on my sympathies and condolences to the people of Tainui. As we say in Samoa, “ Ia manuia lau malaga”, which is to say “Farewell, and may you have a safe journey beyond the veil.” I do that because in Te Puea Marae there is housing for the elderly. That is organised by one of the local community organisations that work very closely with the marae, in recognition that there is a growing population of Māori as well as Pacific people who need good-quality, warm housing, particularly in winter. There is a group of Māori and Pacific people who will be affected by the changes that the Residential Tenancies Amendment Bill brings about.
Labour is supporting this bill, and we are doing so because our past Ministers of housing have done significant work on the bill, with the intention that the rights and obligations of both the landlord and tenants are clarified, and that there is some balance in this process. The intention is also to enable landlords to manage their properties more effectively and take responsibility for them.
However, I have to say that I agree wholeheartedly with my colleague Moana Mackey, Labour’s spokesperson on housing, when she highlights the significant changes that this Government has introduced into this bill—changes, we would argue, that the Government needs to reconsider. Appropriately, Moana will be making recommendations during the Committee stage that will highlight the need for the Government to listen to ordinary tenants who will be affected by those changes.
Some of the background that I want to highlight will give an indication to the House of the hardship that certain clauses will cause for vulnerable tenants. For example, the Government recently announced its welfare reform policy, which stereotypes beneficiaries as not wanting to work. In reality, many of those beneficiaries are looking for work. I know that in Māngere people consistently come into the office and line up in order to try to find appropriate housing. The fact of the matter is that housing in the private sector is generally unaffordable, particularly if someone is on a low income. Also, Housing New Zealand Corporation is probably one of the biggest landlords in Māngere and other parts of Manukau City, so the letting fee that the Government has now decided to put back into the legislation will have a detrimental impact on many of those vulnerable communities.
The Government says the issue of letting fees is complex and difficult. Instead of focusing on how the legislation will impact on vulnerable communities, the Government says: “Let’s allow all property managers and real estate agents to charge a fee.” It argues that this will encourage competition, but we do not accept that argument. In fact, the members of the select committee who heard submissions on this issue believe that “… allowing all letting agents to charge letting fees …” would “… result in reduced choice of housing for people unable or unwilling to pay a letting fee,”.
Our position is that we support removing the unfair advantage that real estate agents have over property management companies whereby real estate agents can charge tenants a letting fee but property managers cannot. We believe that removing that letting fee would fairly allow an equal economic environment, and it would probably remove the barriers to some tenants finding appropriate accommodation. Prohibiting that letting fee would reduce the need for benefit advances to cover letting fees for some families, especially in light of recent Government reforms to the welfare system, which may disadvantage sole parents. It will also reduce pressures on social housing from tenants who can afford private sector tenancy costs but not the costs of bond and letting fees, as my colleague Moana Mackey has mentioned.
I emphasise that removing the letting fee ensures that all property managers can compete on an even playing field with real estate agents. As the property management companies submitted, they were primarily motivated by the concerns about anti-competition in the market. So their view was that it should be removed or put in place for all. I would have thought that a Government that talks about wanting to look after the vulnerable and wanting to support those in need would look at removing it, but, instead, it put it back in.
The further issue I raise concerns boarding houses and vulnerable tenants. In my electorate there are several boarding houses. We understand from those who made submissions that one of the ongoing issues that proprietors of boarding houses have to cope with is boarders with mental health issues. Those people also suffer disproportionately if evicted. So it is our desire that every effort be made to resolve a situation first, with eviction being used only as a last resort. We heard from social organisations that said it was probably preferable for proprietors to be able to make connections with them, as they can help to deal with situations where people with mental health disabilities may pose a risk to others. But the point is that the eviction of people with mental health disabilities should be the last resort. We want to be able to provide some support for that group in our community.
Moana Mackey has raised the other issue I want to emphasise, and it has to do with representation at the Tenancy Tribunal. Clause 63 amends section 93 of the Residential Tenancies Act, which sets out the circumstances in which a party may be represented by counsel or by the Tenancy Tribunal. With clause 63, the Government seeks to raise the monetary threshold from $3,000 to $6,000, in terms of the amount involved in a dispute, before one has the right to be represented by a lay representative or counsel. Most of the people who will take up grievances with the Tenancy Tribunal are dealing with matters where less than $3,000 is in dispute. We want to see this threshold removed altogether or lowered for the sake of vulnerable tenants. We appreciate the fact that the tribunal was established to provide a low-cost and expedient resolution of disputes, but we do not believe that that should override the right for many vulnerable tenants to have a fair hearing. Some of those tenants will not be comfortable, unlike you, Mr Assistant Speaker, and others, to sit in a tribunal situation. Many of them have never experienced that.
So again I emphasise that if this Government is genuine about helping vulnerable people, then it needs to look seriously at making the appropriate amendments to the bill rather than putting more pressure on vulnerable workers, as it has done with the more recent reforms to the welfare system.
GARETH HUGHES (Green) Link to this
Ngā mihi nui ki a koutou. Kia ora. As a member who is a tenant and a renter, I am happy to take a call on the Residential Tenancies Amendment Bill. The bill updates the Residential Tenancies Act 1986, and the Greens will be voting in support of it, but we lament the missed opportunity to increase rights for the more than 1 million tenants who reside in New Zealand.
We support many of the minor changes in this bill to clarify existing law: for example, clarifying provisions relating to address for service of documents relating to the tenancy, clarifying that landlords must give a reason for terminating a periodic tenancy with less than 90 days’ notice, clarifying that an agreement for sale and purchase must be unconditional before a landlord can give 42 days’ notice, and requiring a landlord who is overseas for more than 21 days to appoint an agent.
As the youngest member in this House, born only 5 years before the Residential Tenancies Act came into effect, I acknowledge that New Zealand’s housing situation has changed substantially since that time. Since 1986 the proportion of New Zealanders renting their homes has gone up. Fewer young people are flatting away from home, and more older people with families and children are renting. Homeownership rates have declined to 67 percent, from a high of 74 percent in 1991, and they are predicted to drop further still to 62 percent by 2016.
New Zealand has about 450,000 rental properties housing a third of our population. According to the 2006 census one in three households—that is, 33 percent—do not own the house they live in. That figure was up from 32 percent in 2001 and 29 percent in 1996. More and more Kiwis are renting because, for many, purchasing a house is a distant and impossible dream. Housing affordability is a major issue in New Zealand, with close to one in three New Zealanders now spending 30 percent or more of their disposable income on housing.
Demographia’s 2009 international housing affordability survey found that the median house price in New Zealand is 5.7 times the median household income, ranking New Zealand in the category of “severely unaffordable”, with only Australia worse, at 6.0. The bright side, of course, is that at least we are catching up with Australia in one respect! As I pointed out to the House last night during the debate on the Infrastructure Bill, this is an especially pertinent issue for people of my generation. People of my generation see homeownership as an almost impossible dream. It is a struggle for people who come out of university or other tertiary education encumbered by debt. They are conscious they are entering a housing market that has grown rapidly over the last decade, mostly to the benefit of baby boomers or those already on the property ladder, and it has not been slowed by sensible moves, such as a capital gains tax—not on the family home—or reviewing the tax rules around loss attributing qualifying companies.
Loss attributing qualifying companies allow people to offset their losses on their investment properties against personal income tax. This means that young people trying to get into the housing market are effectively subsidising the tax offsets of those buying investment properties using loss attributing qualifying companies. This is both wrong and pernicious. We cannot rely on the recession, as Moana pointed out, to make housing more affordable. We need to be more proactive as legislators and regulators. The trend towards less affordable housing will see the number of tenants increase, and that makes the changes discussed here today in this House as relevant and as important as ever.
This bill is an important amendment bill to update the original 1986 legislation. It is important that we strike the right balance between the rights of landlords and the rights of tenants. I would like to take a few minutes to look at a few issues that the Greens have with this bill. I would like to look at the termination of tenancy for boarding-house tenants, the issue of letting fees, the unfortunate oversight of not addressing the termination of a residential tenancy following the death of the tenant, legal representation issues, and exemptions for people who reside in camping grounds, backpackers hostels, and other such places.
I look first at the termination of tenancies in boarding houses. The security of tenure issues for boarding-house residents that we had concerns about in the earlier stages have been improved somewhat by the select committee, but not to the extent that we would have liked to see. It is still better, however, than the current situation where boarding-house residents have no security of tenure whatsoever.
New section 66U, inserted by clause 47, sets out when landlords of boarding houses may terminate a tenancy: immediately, on 48 hours’ notice, on 14 days’ notice, or on 28 days’ notice. It is good that the select committee recommended amending the criteria to allow 10 days’ consecutive notice that rent is in arrears before giving a tenant 48 hours’ notice of termination, where the tenant’s rent is more than 7 days in arrears. Tenants can face legitimate reasons for being in arrears, often through no fault of their own. Many boarding-house tenants receive benefits from the State and, as Sue Bradford recorded in the first reading debate, often this is because of problems caused by Work and Income rather than by the beneficiary himself or herself, and such issues take time to work out. In the case of boarding-house tenants who are also mental health clients, we concur with Labour’s call for an expectation that proprietors will take the opportunity to refer such individuals to the appropriate mental health services if an eviction is being contemplated. We support the provision of a list of services in each area, which should be made available to the proprietors of boarding houses so that they may refer such people to those services before the eviction is effected.
I turn to letting fees. This bill proposes to remedy the anomaly of real estate agents being able to charge letting fees although property management companies cannot, by allowing both to do so. Letting fees on top of a bond, rent in advance, and other moving costs can be a significant barrier to beneficiaries, students, and other people on low incomes needing accommodation. The Green Party supports prohibiting letting fees—full stop.
Provisions in the bill regarding the termination of a residential tenancy following the death of the tenant do nothing to improve the current situation when a caregiver relative is suddenly evicted from his or her home following the death of the family member for whom the caregiver has been caring. Relatives of the tenant living with the tenant should at least have some protection of tenure when the tenant dies. This was one of our original concerns about the bill, and it is unfortunate that it has not been addressed properly by the select committee.
The bill raises from $3,000 to $6,000 the monetary threshold for the right to legal representation in the Tenancy Tribunal. This continues the current unfair provision that permits a corporate landlord to be otherwise represented by an experienced tenancy manager while the tenant, who often knows little about tenancy law and may well have English as a second language, is forced to represent himself or herself. This places many tenants at an unfair disadvantage at Tenancy Tribunal proceedings and is an example of where the bill could strike a fair balance, but fails to. There is a provision in section 93(3)(b) that permits representation where there is significant disparity between the parties affecting their ability to represent their respective cases. But the problem is that the disparity and the ability of the parties to represent their cases may not become apparent until a case has been partly heard. The Green Party was advised by the Tenants Protection Association about this a while ago and we were told that adjudicators almost never invite a tenant who is disadvantaged in that regard to obtain representation. This was one of our concerns with the original bill and is also noted in Labour’s minority report. This is probably also a good time to raise the excellent, and also lacking, provision in this bill. The Citizens Advice Bureau recommended that plain-English statements of tenant rights be adopted as part of all tenancy agreements and displayed prominently in boarding houses.
My last point is that the homelessness survey is due to come out in June and I predict, based on Australian similarities, that between 20,000 and 30,000 Kiwis will be officially classed as homeless. Many of these people reside in non-traditional housing forms, such as caravan grounds and backpackers’ hostels. This bill fails to address the fact of life in 21st century New Zealand that many Kiwis do not live under stable tenancy criteria. The Citizens Advice Bureau gave some terrible examples whereby non-formal tenants have been abused by the system. I concur with Moana Mackey that we need a select committee inquiry into homelessness. This already occurs in countries such as England and Wales, and many states of Australia. It is a good example of where a much-needed updating of this 1980s Act does not go far enough to reflect the facts on the ground, in the real world.
In summary, the main criticisms that we raised in the first reading debate were over issues that this bill does not address adequately. However, following the changes made by the Social Services Committee—some positive, some negative—we still think it remains the case for the Green Party, on the balance of evidence, to support this bill. Kia ora.
CHESTER BORROWS (National—Whanganui) Link to this
I congratulate Katrina Shanks on her chairmanship of the Social Services Committee. I also congratulate the other members of the committee, who interacted well with each other. In particular, I would like to congratulate Moana Mackey on the research she has done and the contribution she has made to this debate.
The Residential Tenancies Amendment Bill adequately addresses a number of issues that have been raised over the last few years about deficiencies in the Act, and tackles some new problems, too. An example is the contamination of premises though the manufacturer of methamphetamine. The bill requires landlords to declare that contamination has been detected in a house, and to have it cleaned prior to a tenant taking up residency. I recently had a situation in my electorate of a family becoming quite ill as a result of living in a house that had not been cleaned because the contamination had not been discovered.
The bill provides the ability to take matters before the Tenancy Tribunal to argue strongly for it to extend provisions and entitlements to tenants that had not previously been available to them, and to hold landlords to account on behalf of tenants who are vulnerable. That is a good measure.
I commend the bill to the House.
CAROL BEAUMONT (Labour) Link to this
I rise to support the Residential Tenancies Amendment Bill, and, like my colleague Moana Mackey and the speaker from the Greens, Gareth Hughes, I want to talk about some of the concerns.
Labour clearly agreed that there was a need to update the Residential Tenancies Act, because significant changes have been made to the structure and dynamics of the residential rental market since that Act came into force.
Before I talk about the number of people living in rental housing, I will note the aims of the legislation: firstly, to encourage the development of a rental market that provides stable, quality housing to those who rent their homes; secondly, to enable landlords to manage their properties more effectively; and, thirdly, to clarify and appropriately balance the rights and obligations of tenants and landlords.
All those aims are very worthy. The question is whether we have the balance right and whether the bill provides the level of stability and quality we would like. I think it is fair to say, from Labour’s point of view, that although this bill is an improvement, it does not quite get all the way there. Housing is a matter of fundamental importance to people. The right to shelter is one of our most fundamental rights—the right to be out of the weather, to have a roof over our heads. They are very important things, so it is important to try to get housing legislation right.
There is a range of broader health, social, and educational implications in having the sort of stable rental market that this legislation is meant to promote. Clearly, these rental properties become people’s homes. They may not own them but they are their homes. They live there with their families, and they are part of the community where they are living. We want people to be stable in terms of their children’s education. There are all those factors, so it is fundamentally important to get this legislation right.
The bill explicitly talks about balance, and it is fair to say that in terms of the various provisions it is debatable as to whether the balance is quite right. Like other members, I agree that landlords’ investments in their property are important. It is important that the money they have put in is secured, that the property they own is well looked after and maintained, and that they retain important rights to that.
It is fair to say that a significant number of the people who own rental properties are small investors. They quite often are people who are slightly older than me, and they have often invested their superannuation savings into a rental property. So for them it is significantly important that that balance is right and that their investment is protected. But for tenants, as I have already said, those rental properties are where they live. They are their homes, where they raise their families and go about their business.
Those two things are not a level playing field. The consequences of people losing the right to be in their homes is very, very significant if they do not have somewhere else to go, or even if they do, because there is a big upheaval in having to move from one property to another. As I said, Labour supports this bill, although we do have a number of concerns, and at a later point we will put forward a number of amendments.
As I said, the purpose of the bill is to update the 1986 Act, as there have been a significant number of changes in the rental market since 1986. The number of people living in rental accommodation is significantly higher. The number of people who can afford to buy their own home has diminished. We now have the reality that the rate of homeownership has declined to 67 percent, from a high of 74 percent in 1991. There are about 450,000 rental properties, which house about a third of our population. So renting is now a significant form of accommodation for New Zealanders, and we need to ensure that the legislation is updated to meet that.
The bill itself, as others who were on the Social Services Committee have identified, has a great number of provisions. There is a significant number of changes, including provisions relating to fixed-term tenancies, refunded bonds, landlord responsibilities, the right of entry to premises, termination of tenancy, renewal or extension of tenancy, and, as others have talked about in some detail, provisions relating to boarding houses. So a wide range of areas have been covered in this bill.
As Moana Mackey mentioned, there was quite a short time frame in which to consider fundamentally important legislation that contains a range of significant provisions. I think that is of concern. We should not be rushing through provisions in tight time frames when we need to seriously contemplate what they mean for people and for their standard of living. There were 59 submissions on the bill, and 35 of them were heard by the Social Services Committee. It is positive to hear that the members of the committee worked hard together to try to get the bill in as good a form as they could.
I want to mention housing shortages in New Zealand, particularly in the area where I live in Auckland. Recently I was privileged to attend the launch of A Road to Recovery: A State of the Nation Report from the Salvation Army. The report talked about new housing building activity having plunged to a 20-year low. It looked at the consequences of this in Auckland, with the combined effect of population growth from within our own population and from migration, and it talked about the burgeoning housing shortage in Auckland. I think it is important to note that as part of this discussion.
As I mentioned earlier, the issue of housing affordability is also particularly important when we talk about the housing market. It seems somewhat ironic to be standing here now talking about this bill in view of the fact that yesterday we talked about the Infrastructure Bill, which, of course, is about repealing legislation that the previous Government put in place. I am referring to the Affordable Housing: Enabling Territorial Authorities Act. That Act tried to ensure that local authorities had the ability—they were not required, but they had the ability—to put in place more affordable housing.
Chris TremainA member across the House mentions that it did nothing. Actually, there was virtually no time for that to be identified. A far better response would have been to analyse it. Certainly the Human Rights Commission indicated that there was an absence of compelling evidence that the Affordable Housing: Enabling Territorial Authorities Act was counter-productive. The commission noted that the Act’s repeal would have the effect of reducing the supply of affordable housing. It regretted the Act being repealed without anything else being put in its place, and I think that is a sad indictment on this Government.