Report offers solutions
New Zealand’s rental crisis is impacting Kiwis and the country’s progress post-COVID-19 by causing homelessness and poverty, dragging down wages, stifling innovation, and suppressing productivity for the whole country, according to Grant Thornton’s latest report.
According to a 2020 report by the Human Rights Commission, nearly 10% of renters are “in-work poor.” Among poor households, over 50% of earnings are spent on rent – making it harder to pay the rent and move regularly.
“These renters are working full-time, trying to get ahead, and never making any progress. This is not what life should be in a rich, egalitarian nation like New Zealand,” Grant Thornton said. “People in this situation cannot achieve their potential at work and can’t be creative, and it’s much harder for them to be the kind of parents they would like to be. This has a knock-on effect, and their children are disadvantaged, too.
“New Zealand needs to raise our productivity and our wages. The people in these households have a lot to offer – but their energy, focus, and money are being consumed by their precarious housing situation.”
Grant Thornton’s report stated that building more houses is the “first and most obvious way to fix the rental crisis.”
“We have some major mindset problems that hold back large-scale construction; changing our thinking will go a long way to accelerating home building. Having more houses to rent and buy is the single most important way to ease the pressure on our rental market. With a physical shortage of houses, it’s impossible to meet everyone’s needs,” it said.
The report also emphasised that a safe place to live is an “absolute necessity.” Therefore, regulating rentals is necessary to ensure warm, dry, and healthy homes.
“The Healthy Homes Standards are a huge step in the right direction, and there should be more where that came from. We can continue to raise the standards for rental accommodation until it becomes acceptable,” it said.
It will take significant effort to build more houses and raise the standard of rentals, according to Grant Thornton.
“By failing to commit, we’re like that small business which doesn’t want to invest in a new online system, instead throwing cheap labour at the problem and becoming less efficient and productive every year,” Grant Thornton concluded.
