Inflation currently runs at an annual rate of 1.5%
Renters United, an advocacy group for tenants, is urging the “current and future” MPs to limit rent increases to no more than inflation.
Inflation is currently at an annual rate of 1.5%, but rents in numerous parts of New Zealand have been increasing at twice that pace.
Now, Renters United calls for replacing the worst private rental stock, which requires new rents to stay within a reasonable range compared to houses nearby and an inflation link for rent increases except where major improvements had been made.
“Unaffordable rents affect all renters. For aspiring homeowners, it diverts income away from saving for a deposit,” Renters United said, as reported by Stuff.co.nz.
“For those on low incomes, it forces impossible choices between paying the bills, feeding themselves and their family, and losing their home. With the looming recession caused by COVID-19, renters face even greater hardship.”
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Robert Whitaker, a spokesperson for Renters United, said having more demand than supply has been increasing rents.
“Because everyone needs a roof over their head, renters are being forced to accept a rent set at or beyond their ability to pay. The result is many renters borrowing, deferring saving, or forgoing other costs to pay the rent,” he said.
“The medium-term solution to rising rents is to build substantially more housing across the spectrum of housing types but particularly affordable housing, but while renters wait for that to take effect, the government should be proactive in managing rent increases by tying increases to inflation.”
