Residential Tenancies (Prohibiting Letting Fees) Amendment Bill

on behalf of the Minister of Housing and Urban Development: I move, That the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill be now read a second time.

Around half of New Zealanders are renters. This Government is committed to making life better for renters, and this bill is a down payment on that commitment. Banning letting fees will save renters up to an estimated $47 million a year.

I would like to thank the Social Services and Community Committee for its consideration of the bill. They’ve worked hard on the bill and have listened carefully to many submissions in their thorough consideration. I would also like to thank the 187 submitters, whose feedback and insight helped the committee in shaping the bill. These came from a variety of interested parties, including property managers, landlords, tenants, student associations, and community groups. Letting fees are unfair. They have no economic rationale. That may be why 60 percent of submitters supported the general intent of the bill to prohibit the charging of letting fees to tenants.

The fee is supposed to cover the costs of advertising a property, conducting open homes, and vetting potential tenants. These are services that are provided to the landlord. The contractual relationship is between the landlord and the letting agency, but somehow the existing law allows the fee for those services to be charged to a third party: the tenant. Now, in what other area of law are two parties contracting with each other for an exchange of services allowed to then charge a third party? It is an anomaly in the law.

There is no relationship between the fee and the cost of the services provided. It’s pretty standard for letting fees to be set at the equivalent of a week’s rent plus GST. Now, rent varies from city to city, and from suburb to suburb, and for different kinds of houses the rent varies, but the letting fees are set regardless of the cost of the services that the letting agency is providing for the benefit of the landlord. There is no market competition on the amount payable. This ban will mean that the costs of letting a property will be borne by the party who chooses the property manager.

The costs of letting a property should lie with the person who benefits from the service. The bill means landlords can shop around for the cheapest manager and finally brings competition to the property management sector. No area of law allows people to contract for services and charge a third party for those services.

I understand from the submissions that there is a concern that the bill will result in rent increases across Aotearoa. We do not expect there to be an impact on rents. Scotland banned letting fees, and there was no evidence that it led to a huge increase in rent. In fact, the UK housing advocacy group Shelter found that only 2 percent of landlords in Scotland increased their rents after letting fees were banned there.

The Reserve Bank notes, “Rents are driven primarily by supply and demand, not landlord costs.” Treasury has also concluded that “Experience in other countries shows no clear evidence that banning letting fees will lead to increasing rents.”—this is from the regulatory impact statement. The UK Conservative Government has also introduced a bill to ban letting fees, and their reports agreed that there was no evidence that it led to an increase in rent. Other supply, demand, and financing factors contribute more to the amount of rent than the costs associated with tenanting a property. We’ve got to plan to deal with those.

If we accept, for argument’s sake, that landlords will try to pass on the cost that is currently being sheeted home to tenants through these letting fees and if landlords do try to recoup those costs, then rents will go up by a few dollars a week. Now, even if that were the case—and we don’t expect that it will be—that would surely be better than tenants being whacked with a letting fee that’s the equivalent of an entire week’s rent all at once, up front, at the very moment when they can least afford it, when they’re having to fork out for removal fees, for bond, and for rent in advance. Landlords, or letting agencies on landlords’ behalf, will retain the ability under the Residential Tenancies Act to seek reimbursement from tenants for expenses reasonably incurred as a result of a tenant assigning, subletting, or parting with possession of the tenant’s interests in the tenancy.

The Social Services and Community Committee recommended two changes be made to the bill. The first change is to separate the bill into two parts. This will allow the bill to be considered part by part under Standing Order 303(2). The change reorders the bill so that the substantive provisions—clauses 4 to 8—are under Part 1, and further amendments in clauses 9 and 10 are under Part 2.

The second change is to the commencement provision in clause 2 of the bill. The bill will now come into force on 12 December 2018. This is because tenancy turnover is highest between November and February of each year. Tenants are more likely to move house in summer. It is the start of the new university year, and the fact is that the new year often accompanies a change in circumstances. Implementing the bill during this period will maximise the reduction in costs for tenants that are signing up for new tenancies over this peak time.

The Government has committed to a review of the Residential Tenancies Act. Submissions on this close on Sunday. This review will advance a range of changes to make life better for renters and will include a consideration of limiting rent increases to once per year. It will also contain other initiatives to improve security of tenure and better allow tenants to make their house a home. This review is expected to result in legislation being introduced to Parliament next year.

Ultimately, the best way to put tenants in a better position—in a better situation—is to increase the supply of housing and to end the shortage that is driving rents up. Our Government’s KiwiBuild policy and urban growth reforms are designed to increase supply. Homeownership rates have declined from around 74 percent in 1991 to around 63 percent in 2017. Approximately 576,000 households currently rent in Aotearoa New Zealand, 500,000 of which rent from the private market. Based on 2013 census data, 60 percent of renters moved within three years, while only 30 percent of owner-occupied homes moved within five years.

Māori and Pacific populations are overrepresented in renting statistics. Since 1986, the proportion of Māori living in private rentals has increased by 88.3 percent, whereas, across the total population, renting increased by 42.7 percent. Over the same period, the proportion of Pacific and Māori children living in a rental property increased from around 50 percent to around 61 percent for Māori and 71 percent for Pacific children.

In closing, I reiterate my thanks to the members of the committee, submitters, officials, and the Ministry of Housing and Urban Development for their contribution to the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill. I urge members to vote for this bill so that we can start reducing the costs that many families face, support a more consistent experience for New Zealanders, and make some meaningful changes to the lives of renters in Aotearoa New Zealand. I commend this bill to the House as reported back by the Social Services and Community Committee. Thank you, Madam Assistant Speaker.

Thank you, Madam Assistant Speaker. Now, not everything that the Hon Jenny Salesa said was wrong. I thought she said a few very good things. She just seemed to take a very long time to say not much, and very fast too, and very loud—the microphones do work.

Anyway, what I wanted to say about some of the things that the Minister said—she acknowledged that one of the biggest determinants of rent increases and rent prices is actually demand and supply. I thought that was excellent, because I think she is the first Minister in the current Government to understand that, so well done. She obviously should be the Minister for housing instead of the current one.

💬 Chris Bishop: This bodes well. She should have a chat to the PM.

She should have a chat to the PM—yes, absolutely.

So one of the things that I’d like to say to her is: since Labour came in to office, how come rents have already increased $25 a week?

💬 Chris Bishop: How much?

It’s $25 a week. So why is that, under a Labour Government? Clearly there’s something wrong. When she has talked tonight about trying to get people into rental houses, she’s talked an awful lot about building houses for people to live in. Well, they’re actually not quite the same thing. Yes, they’re houses. Yes, people can do either, but they can’t do both at once.

So one of the things that I think she’s missed is the point that landlords are already feeling under assault by this Government, and particularly by the current Minister of Housing and Urban Development. Almost every word that comes from that man’s mouth is an insult, an attack on private landlords. He’s the biggest landlord in the country, he’s the one with the worst reputation as a landlord—the Housing New Zealand landlord—and, strangely enough, he’s the one who wants to make life very difficult for private, individual mum and dad landlords.

We’ve heard a lot tonight about prohibiting letting fees and why we should be doing that. Well, the National Party will not be supporting this. We’re not going to be supporting this because we agree with another comment from Jenny Salesa, and that comment was that these costs are paid—they’re paid all right—by the consumer. So if, in fact, the rental letting fees are not paid at the start of a tenancy, they will be paid through the course of a tenancy. She has acknowledged that tonight. She said it’s better for people to pay a little bit extra every week rather than all up front. Well, that might be right if they’re people who chop and change their tenancies, but it’s certainly not right if they’re people who are very stable tenants who stay in tenancies for years. All of those people she seems to be quite happy to allow to have more rent that has to be paid, because they’re paying for the cost of the other people who chop and change their tenancies every five minutes.

So, actually, I think there are a few things, as I said, that I thought she recognised really well tonight, and that’s because she seems to recognise the area—know the area—much better than the current Minister, Phil Twyford. But what this does do is it’s just another discouragement on people who are constantly being bagged by this Government, whether it’s in terms of—[Interruption]

💬 DEPUTY SPEAKER: Excuse me. Can we not have conversations in the aisles, thank you.

Oh, thank you, Madam Deputy Speaker.

💬 DEPUTY SPEAKER: Take it outside.

💬 Kieran McAnulty: Carry on.

Thank you, Madam Deputy Speaker. Oh, thank you so much, Mr “what your name is”, over there. Thank you very much. Thank you for your permission to speak!

💬 Hon Members: Kieran McAnulty.

McAnulty—I knew there was a name there somewhere. Now, anyway, I should come back.

I’ve met with the landlords association of New Zealand, and I met with the ones in Wellington, and most of the people there are people who, on average, own 1½ rental properties—on average, so one, two, or maybe three. Their message to me was that every single time Governments, including ours and this current one—this short-term, one-term Government—put more onus and more regulations on landlords, the more they want to leave. They want to leave the market. People who say, “Oh well, they shouldn’t have two houses.”—well, they’re providing a rental home for another family or for, in some cases, four younger people living together, just hanging out together and being flatmates.

Those are the sorts of things where people forget that they’re just humans. They’re not “landlords”; they’re humans. They’re people. They’re people who have, in many cases, saved their money. This is their retirement income. They don’t have confidence in the sharemarket, in many cases, because they’ve been burnt over the years. They want to be able to look at their retirement income and say, “That’s my retirement income.”—that they have something else other than the house that they live in. They’re also sometimes people who have sold their family home and have bought two smaller places instead—one to live in and one to rent out.

I know people like this. These are just ordinary, decent New Zealanders, and every single time the current Minister of Housing and Urban Development opens his mouth about landlords, it’s to bag them, and that’s unfortunate. It’s also really unfair, and this is just another piece of legislation about that. So when he says—and Minister Salesa has said—“Well, these costs shouldn’t be—we should stop this cost now.”, it’s because they often get managers in or they get someone to do the letting for them because they don’t feel, in many ways, able to deal with all the issues around letting out the property, because they are, mostly, mum and dad investors.

There are some people who say, “Well, they shouldn’t be in the market. They should get out of the market and be professionalised.” They’re also the people, by the way, who say to a tenant when they can’t pay their rent, “Oh, take another week.”, or “Here’s something off.”, or even “Take clothes for kids.”, or “Take furniture for them.” These are the sorts of things that mum and dad investors tend to do. They tend to care. When we have legislation like this that doesn’t discriminate against good and bad landlords, that just discriminates against all landlords and is yet another—and you see all the language around it. All the language around the publicity on it, the press releases, and the language in the speeches on it—it’s all about—

💬 Priyanca Radhakrishnan: I want to get back to the bill.

—these nasty, horrible landlords. I heard somebody up there. Was it Clare Curran calling out? Somebody on that side—one of those people—is calling out and saying, “Oh, but they pay the bill.” [Interruption] Oh no, it’s somebody else, somebody coming up and saying, “Well, they have to pay the bill.” Well, actually, Jenny Salesa understands who pays the bills: it’s the consumer who ends up paying the bill.

One of the things that I think is really interesting for people who have never understood about this is that every time we put on regulations, every time we put on rules, every time we impose costs, understand we may be doing it for all the right reasons, but understand it’s the end consumer who ends up paying every single time. They always do. And when we have fewer people now willing to be landlords, we have the situation we have now where rents go up. Rents have gone up $25 a week on average under this Government—only one year and they’ve managed to do that. At the same time, we are having landlords exiting the rental market because their view is that this Government is going to do them over and is making it too hard to rent out properties.

💬 Priyanca Radhakrishnan: Fake news.

I think it is really important to understand that there are consequences for the constant attacks of Phil Twyford on mum and dad investors. Those mum and dad investors don’t have to be there. They can take their money out, and that’s what he’s told them to do. He’s told them to take their money out and go and put it somewhere else. That’s what he said to them. Unfortunately, I don’t think it’s fair for his own colleague to call him fake news like that, but I do think it is important that people understand that telling mum and dad investors “We don’t want your money; if you don’t like it, get out of the market.”—that’s the sort of language, that’s the sort of sentiment, which is going to mean that there are going to be even more people waiting for State houses on the State waiting list. It’s already gone up 1,000 under their watch. What a disgrace.

Well, Madam Deputy Speaker, as one of those people, as Judith Collins referred to me—and I must say she’s looking very pleased with herself tonight—I find it deeply ironic that she spent a lot of her speech talking about humanising landlords while from the other side of her mouth, or out of her keyboard, this afternoon came the demonising of people who live in State housing, because, apparently, they’re people that regular people don’t want to live next to.

If there’s around half of New Zealand who live in rental housing, then that’s a lot of people who are affected, and a big percentage of those people really struggle when they need to move house, when they’re looking for a house, and they are being penalised by letting fees. This is one small step—one small step to try to make it easier for people to be able to afford a home, to be able to afford a home that they can afford, and it’s about fairness.

This is a bill which is small. It fits into a much bigger strategy, which National clearly opposes on principle, around affordable homes for everyone in New Zealand. Landlords are a really important part of our ecosystem. There are a lot of landlords in New Zealand and many and most of them are doing a good job. But not all of them, and there are intermediaries that charge very high letting fees. This bill attempts to address that. It’s fair, it’s about ensuring that people can afford to rent, and we support it.

Thank you, Madam Deputy Speaker. I’m pleased to rise and take a call in this second reading of the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill. I do want to start by saying I don’t think there’d be a member in this House that wouldn’t agree that we want people, particularly on lower and middle incomes, to be able to afford to rent a home. The difficulty is that this is yet another piece of legislation that has a good intent, but actually in terms of the policy and the ability to deliver that intent, there is a massive gap in between. So I want to take the House through some of the submissions that we did hear in the select committee, because what the Minister outlined in her second reading speech actually doesn’t line up with the reality of what we heard in the select committee.

I do want to put on record that from some of the submitters we heard, there were absolutely some horror stories, and the one thing I will agree with the previous speaker, Clare Curran, about is that there are some landlords—and I would say they are a small minority of landlords—who don’t do a good job. The unfortunate reality with this legislation, though, is that for those who want professional assistance to assist them in the letting process—guess what? That will be less available than before, and for those that continue to use that service, someone has to pay. And guess who will pay? It’ll still be the tenant. It’ll still be the tenant and, unfortunately, what it will mean, instead of an upfront cost, is that that cost, if you look at the regulatory impact statement, could be $10 a week—each week, every week—for the remaining term of the tenancy. And when we had submitters in front of us, they agreed that that would be the impact of this legislation, and so I want to come back and use some of the international examples, because I believe they were incorrectly applied by the Minister in her opening speech.

But I just want to come back to the point that Judith Collins made, which is the fact that rents have already gone up under this Government by $25 a week. That’s 6 percent. So it’s no mistake that if we look at the most recent benefit statistics, the area where we see hardship assistance massively spiking up is accommodation. So there’s already a challenge. The Government is blatantly passing another piece of legislation that will most likely increase rents even further. So the very people—the very people—that the Government purports to want to support, they’re not. They are absolutely not supporting low and middle income families and they’re definitely not supporting those on benefits, as these figures show.

We’ve already seen a $25 a week rent increase. The costs will be passed on; that’s exactly what happens. So whether it’s a mum and dad investor with one property or someone who’s got 10, if a business or an investor has costs—guess what?—they pass it on to their customer, and the reality is that is the tenant. So, unfortunately, not only has the Government whacked those households—the very households that that side of the House purports to support—with massive petrol price increases but it is also willing to increase rents willy-nilly without any regard for the very families it so often gives lip-service to.

I want to turn to the regulatory impact statement, because it’s very telling. It’s very telling in a couple of ways. One is it’s yet another example of very poor process by a Minister putting legislation into this House. So this is a regulatory impact statement, which is actually a requirement if you’re making good law, and what this regulatory impact statement says is there’s been no consultation on the proposal. Surprise, surprise—no consultation on the proposal. What it does state, though—and the Minister didn’t raise this when she referred to the regulatory impact statement—I want to quote: “There is a risk that landlords will pass the letting fees on to tenants through increased rent over the term of the tenancy.”

It goes on to say, “the current national average weekly rent [is a] $452 for tenancies managed by property managers, [which equates to] $9.99 per week [which] would be added to rents over a one year tenancy.” The example that was quoted was Scotland. So I want to bring House’s attention to what has happened overseas.

Minister Salesa quite easily quoted the fact that rents hadn’t increased. Actually, the evidence was inconclusive. Ireland and Wales looked at following Scotland’s lead, both in 2013 and 2014, but they both rejected the move. They made some other changes around transparency, which could have been something that this Government considered, but, as I say, Ireland and Wales rejected the move that Scotland made. The Minister referred to the UK, but I’m not quite sure what country she was referring to. England said that they would introduce a ban in 2015 but haven’t done so.

In Germany, letting fees were banned in 2015. The significant difference between New Zealand and Germany is the average length of a tenancy in Germany is 11 years. So they actually haven’t been able to fully measure the impact. So to have a Minister stand in this House and use one example when there are multiple, I think, is actually very misleading in terms of the reality of the impact of this legislation.

The other thing I want to say is that one of the hundreds of reviews, or working groups, that the Government is undertaking is on the Residential Tenancies Act, which is due to report back early next year. Why on earth this particular issue wasn’t wrapped into a broader piece of work around residential tenancies is absolutely staggering. So, no, it’s a piecemeal approach, and not only that: this is going to come into effect on 12 December this year. It is absolutely rushed and is poor process in terms of the regulatory impact statement, which is really interesting because when we were in Government, any time there was a regulatory impact statement that hadn’t been given the proper process and the proper scrutiny, there’d be squeals of protest from every member in the then Opposition. Oh, but they’re very quiet today. They don’t worry about regulatory impact statements now that they are in Government because it might tell them something that they don’t want to hear.

Well, what it told the Government was that there was a likelihood this will increase rents for the very households that they purport to be working for. Well, I’ve got news for you. I had an email just this afternoon to say that Labour had promised to look after those at the bottom and guess what—they’re not. Whether it’s increases in rent, whether it’s increases in petrol prices, whether it’s increases in food prices, the Labour Government and their policies, because they are piecemeal rather than integrated, are hurting hard-working, low and middle income families. This is another example of a jammed-through, poor process that is going to increase rents, and I haven’t even touched on the subject of supply that Judith Collins raised.

So I do want to say it’s a significant concern that this is coming into effect on 12 December. Again, it’s a rushed process, a poor process, and one that will have an impact on rents. As I said, it could have been included in the wider reform of the Residential Tenancies Act, which is a discussion document out at the moment.

The speaker before me, Clare Curran, from that side of the House, said it will have zero impact on people choosing to continue to have an investment property or not. Well, I can tell that side of the House that on Friday alone I was attending a meeting in a very working-class suburb of Christchurch, and there were a couple of people there who had scrimped and saved to purchase an investment property, which would supplement their retirement savings, and all three of them said, “We’re getting out. It’s too hard. It’s too expensive. There are far too many risks in being a landlord these days, and we’re sick to death of being criticised publicly by the Government, who treat us all as if we are fat cats when we have scrimped and saved to provide more in our retirement—and we look after our tenants is if they were our family.”, and that side of the House thinks it’s a joke. Well, I’m sorry, but we want to make sure that tenants on low and middle incomes don’t have their rents increased by legislation introduced from that side of the House.

Thank you very much, Madam Deputy Speaker. I rise, obviously, on behalf of New Zealand First to signal our support for the passing of this legislation. It is interesting, it’s always interesting, listening to Opposition speeches opposing legislation that has gone through the select committee process, and I would like to start by congratulating the Social Services and Community Committee on the work that they did, and congratulating them on their two-page report. Actually, the bulk of page one was taken up by the heading. Half of the first page is actually the heading, then the recommendations.

💬 Chris Bishop: The report’s twice as long as the RIS.

But I guess the real—Mr, Mr—what’s his name? Lives out in the Hutt—sorry, Mr Bishop. Mr Bishop’s got a lot to say over there and no doubt he’s going to take a call and he’ll have another full 10 minutes to make his call. So just to answer his, sort of, chatter across the House, there is the minority view filed by the National Party contained in this report on the bottom of page two. And it’s a huge report. It’s massive. It’s all of two paragraphs—three if we consider the words “National opposes this bill” because that’s the entire content of the third paragraph.

So I’m finding it a little bit hard to take seriously anything that I’m hearing from the Opposition benches, or anything that we’re likely to hear from Mr Bishop in, no doubt, what will be a full-blown 10-minute blast. Try as I might if I wrote out their total objections contained in this bill, it would only take me one minute, maximum. And what do they talk about? Well, some of the things that they talk about in these two paragraphs stating their opposition to this legislation—which, let’s be clear, this Government thinks is dealing with a bit of a rort. That’s what it’s doing. It’s dealing with a rort that allows landlords or their agents to arbitrarily charge prospective tenants a fee, not based on the actual cost of the transaction.

We often hear from that side of the House about market forces; and how supply and demand will dictate what’s available; and how much one pays; and how one should just let the market forces determine; that business people are clear, analytical. They study their business models and their business cases and they come to sound, logical reasons as to how they’re going to charge, what their margins will be, and what those expenses consist of that accumulate to a total fee—known in this case as a letting fee.

Well, if that’s true, why from one end of the country to the other are landlords using such a blunt tool as charging people one week’s rent regardless of the house; regardless of its location; regardless of which city we’re talking about; and regardless of the conditions that apply in each of those provinces, districts, towns, and communities in which various rental properties are located? It’s a ridiculous argument coming from the Opposition, who touts itself as being fiscally competent, astute in business, and friends of the business community.

You know a cynic might say that there are alternate reasons for their supporting or opposing legislation like this. A cynic might say—

💬 DEPUTY SPEAKER: Well, actually, the Standing Orders would stop the cynic.

Well, the Standing Orders would stop the cynic, so a cynic wouldn’t actually say it. But a cynic would certainly think about some of the things one sees recently in the media. But, anyway, we’ll move on from that. I’m simply saying a cynic might ponder those things and wonder why the National Party is so determined to support landlords on this stupid fee.

💬 Chris Bishop: I raise a point of order, Madam Speaker.

💬 DEPUTY SPEAKER: Yeah, I did try to warn the member that Standing Orders are quite clear—which I’m anticipating your point of order.

💬 Chris Bishop: That is indeed my point. The Standing Orders are very clear that it is not to be implied that members are acting on outside influences in this House.

💬 DEPUTY SPEAKER: That’s right.

That’s true. And I withdraw and apologise if I gave any such insinuation, Mr Bishop. I know that the National Party members themselves number quite a few landlords, and I understand their concerns, and I understand that they would be concerned that they might have to bear this cost and therefore they would be sympathetic to the arguments that were put across the select committee table in that respect, in that regard. Of course I do.

I heard arguments here saying that landlords are exiting the housing rental market because of this bill. I heard a comment say there are far too many risks to being a landlord these days; that people have scrimped and saved to save the money to buy a house. Now most of the landlords that I know—and I’ve got some good mates, and I actually used to have a couple of rental properties myself down in Christchurch. Smart business people actually leverage against the equity that they currently have in real estate. They don’t actually scrimp and save. They don’t actually save up money in the little jam jar, as was being suggested here tonight. They actually go to their bank manager—and on the rising escalating house prices that happened under that last Government, nine years of sky-rocketing house prices on the back of a shortage of supply, many landlords made themselves extremely wealthy and were able to leverage against massive equity gains.

And why do some of the landlords exit the housing rental market right now? Well, let’s talk about it. Mr Kieran McAnulty knows, because he’s from the Wairarapa like I am. We are seeing people exiting the housing rental market right now because they have decided, from a business perspective, that their equity is at a point where it’s smart to cash up. They have decided that because so many Wellingtonians and people from Auckland—the Auckland refugees getting out of there, escaping that rather bizarre economic environment—are cashing up their houses, cleaning up their $1.5 million, coming down to the Wairarapa, and buying up houses hand over fist. Houses are appearing on the market in Masterton, Carterton, and South Wairarapa one week and are gone the next. Landlords are making a conscious business decision to capitalise on exactly that.

Let me tell the Opposition, who clearly don’t seem to understand a lot about business these days—it’s been a sad thing to see the deterioration in the National Party’s understanding of commerce, but it’s there in this debate tonight—that these people are making clear commercial decisions. They have realised some spectacular capital gain, so they are cashing out of the market and they are doing other things with their money—some because they’re retired and they’re putting that into their retirement fund; some because they’re entering into other markets. It’s a commercial decision. It’s not about this bill. It’s got nothing to do with this bill.

In fact, here’s the irony: as the Hon Judith Collins said, there are some good landlords out there. There are some good business people out there. There are some philanthropic business people out there. And these are the people who are recognising that this piece of legislation is good, and that it’s going to clean some people out of the market who shouldn’t be making these charges. These are the people who are also staying in the housing rental market, because they see a greater public good. And I applaud them. Many of them are actually National Party voters. I applaud them for their strong sense of social conscience and for their understanding that this fee is a blight, actually, on the reputation of good quality landlords, and it needs to be done away with. And it shall be, tonight.

Madam Deputy Speaker, I’m delighted to stand and take a call in the second reading of the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill. I haven’t sat on the committee, but I hold two portfolios within National for associate social development and associate social housing. So I’m pleased to talk to this, but naturally not pleased about the bill.

I’m concerned at the last speaker’s claims, if you will, around our knowledge of the economy on this side. And there were three things I thought were rather odd. First and foremost, the member who resumed his seat was talking about letting fees as being arbitrary. Letting fees are not arbitrary. They are applied to the person who takes over the tenancy. “Arbitrary” implies that they’re just being, sort of, thrown around; that, you know, someone walking through, I don’t know, Carterton, all of a sudden finds himself with a coffee, a doughnut, and a letting fee. It doesn’t quite work that way. They’re not arbitrary. They’re quite specific.

Secondly, there was a lot of talk about, well, what is that letting fee covering? It seems exorbitant, I suppose, was the suggestion from the member. What was odd is that he was, first and foremost, mocking, perhaps, the process—that it’s only a page-and-a-bit from the select committee. Yep, that’s true. Granted, the select committee is a majority of Government members, so if there’s any lack in terms of the documentation, it’s the lack of those members there.

The second element is that he was mocking that National only had two paragraphs. Granted, that’s about a quarter of the entire commentary, but he was questioning and even suggesting that hey, maybe it’s a good thing if we had a better understanding of what letting fees were about. And what is really interesting, had he not actually mocked but read the National Party commentary, is that it says in the last paragraph, “an alternative is to make letting fees more transparent so that an actual fee for service could be charged”. I, for one, support that, strangely enough—it’s the National Party minority report. But if the concern is why people are being charged so much, well, then let’s look at opening it up and some transparency.

The third part, and it just shows that the other side—the Labour-led Government—don’t really understand what they’re talking about, is that they were saying in the previous speeches that there’s no basis for the amount that’s being charged in letting fees; it doesn’t matter if the house is urban or rural, or if it’s run-down, in poor condition, or in a bad neighbourhood. Well, actually, there is a mechanism. It’s called the market. And if your house that you’re trying to rent out is better than the house next door, strangely enough, you’ll be charging more for it, and consequently your letting fee, which is based on one week’s rent, will be more. So it’s attached to the market. It’s just a small example, if you will, that the other side’s bluster doesn’t have much substance. And that’s unfortunate.

Look, fundamentally, this is about costs. There is a cost to let one’s house, apartment, or rental in the broader sense. There are costs. [Interruption] Sorry, I’d better hear what that interjection was?

💬 Hon Clare Curran: Spell out the costs.

Spell out the costs? Spell? Well, the first contradiction here—it’s very hard to spell out numbers. But actually, we can spell out some of the costs. There are actually advertising costs when you’re looking for people. You have to interview people, make phone calls, and ask them to provide references. Actually, you’ve got to spend time—because those of us who work, you know, you have to take some time off work to take people through. And if you’re in, I don’t know, probably the most popular electorate in the country—I don’t know, Tāmaki? People are really keen to want to—[Interruption] Who was laughing behind me there? But people want to come through. There are costs, but, actually, the very fact that the other side are going “What are the costs?”—their heads completely in the sand. There is a cost, and that cost will not go away. That cost will go from the letting fees and that will go into the weekly rent.

One of the facts is that New Zealanders, by and large, do rent for a long time. Yep, we’ve got the horror stories that different groups put out. They are terrible. Most people, most Kiwis who rent, in fact, like myself up to years back, you rent for two, three, five years. What’s going to happen is that these costs—and the Labour Party’s already admitted to it in its early speeches. They just want to take that initial one week’s letting fee and just say, well, it will just be spread out. If it’s going to happen, it’s just going to be spread out. Well, that’s fine if you may be there for a year or two, but what about those people who are there for five, 10, 15 years, where the landlord will, quite reasonably, add more costs? They will end up paying a lot, lot more.

Fundamentally, it’s something that the left, in particular, and certainly the progressive left, have never understood: that people cannot magic away costs. If that were the case, I would love to magic away my tax bill, if the Labour Party could sort that next week. I’d love to magic away all the problems with, I don’t know, transport in Auckland. Just pass a bill, Labour; just magic it all away. That’s not the way that it operates. In fact, though, we could suggest—I mean, we have seen today that the Prime Minister can, on the hoof, just come up with a whole new policy. Maybe tomorrow the Prime Minister will come to this House and just magic away this problem that’s about to hit tenants.

💬 Hon Member: Fuel taxes gone.

I live in hope. Policy on the hoof doesn’t work well. We’d only just have to look at Australian Prime Ministers to see how that works out for them, and there I think they call them “captain’s calls”.

But, fundamentally, what we’ve got here is increased costs, and it’s going to be on the back of two other issues. We have a whole lot of work being done by—“work” is probably generous—ideology being run by the Labour-led Government to change the residential requirements around rentals. The long and the short, they’re looking at everything from the drainage to ventilation and so forth. Actually, in concept it’s good. In fact, National, before we lost the Treasury benches, passed a lot of changes in that regard, making sure there is adequate insulation. In fact, we worked with the Green Party of all things, about nine years ago, on that ventilation and so forth. But where Minister Twyford is taking this now with some of the suggestions about heat pumps in every room, extractors and so forth, we should be under no illusion. That will increase costs.

Landlords will not act altruistically, OK? Some will try to weather the costs but that’s just not going to be feasible, so they’re going to be hit by all these extra costs to upgrade and maintain their properties. They’re going to be hit by letting fees and/or the cost of having to let the properties themselves. The real kicker I think is also that there are suggestions of legislation coming to secure tenure beyond what is potentially reasonable. It’s a discussion worth having, but some of the suggestions are almost that a person will not be able to leave their rental. That’s not a matter then of whether they are good or bad tenants, but how do you as a landlord set the rate if someone arguably is going to be there for 10, 20 years.

If the left is not sure about how this looks, go to San Francisco. Go to San Francisco where actually they had set rents and locked them in from years and years ago. So some people living around the likes of Union Square are paying basically peanuts, because they started renting 20 or 30 years ago, and can never be moved on. But what happens now is when those people move on or pass on, the rentals go absolutely through the roof. These are the perversities which get entered into the system and extra costs that will be passed on. I repeat again: you cannot magic away the costs.

We’ve already seen in the last quarter—sorry, rather, since Labour came into office we’ve gone through four quarters. That’s almost depressing to think about. But through a whole year, rents have gone up an average of $25. We’re seeing across the country, and I’ve certainly seen it in Auckland, that actually landlords are leaving the market. They’re not leaving as in selling up, because I could imagine or anticipate one of the counter-arguments is, “That’s fine. Landlords, get out, sell up. That provides an opportunity for homebuyers.” That’s not what they’re doing. Landlords are just exiting the market. They are either handing the property over to their family or they’re just shutting it up. So now we have a house sitting idle and empty, picking up the capital gains, which has been lauded and derided at the same time—a little bit confusing if not schizophrenic from the other side. Very, very strange.

Well, it’s evidenced, if you will, Madam Deputy Speaker, in the fact that the social housing list has gone through the roof—9,300 now. It’s over 9,300 people. I’ve always said, as the social housing spokesperson, that we were seeing the growth, but it has gone almost exponential under this Government. We’re seeing some crazy times and crazy activities. Yes, they’ll point to Scotland and they’ll talk about Shelter, I think it is, who lobbied very strongly—a lobby group—for the removal of these letting fees. But the Labour Government here will point to the evidence that it’s working. I’m always a great believer in tracking down the evidence. The evidence that the rental income, sorry; the rental costs—I’d better be clear—in Scotland have not increased since Shelter, the organisation that is, lobbied for the change, came from Shelter itself. Now, I don’t know the quality or otherwise of that organisation, but you have to dig much, much deeper.

It is very clear from other studies that actually costs do go up. So, fundamentally, Madam Deputy Speaker, this is a poor bill, poorly thought-out and we cannot support it.

So what we’ve got at the moment, and have had for far too long, are unjust structures. What this Government is trying to do is rebalance that and bring more justice into these structures which have been hammering particular groups of people for far too long. So that’s essentially what this bill is picking up on tonight, where it’s going to make it illegal to charge a letting fee, so that people who are looking for a home to rent will not have to meet that sometimes incredibly harrowing upfront and often unjustified cost borne by people looking to rent or trying to find a home.

We’ve had recent studies talking about as many as 150,000 Kiwis as vulnerable transients. This is an example of what we are trying to correct with a series of legislation and bills going through this House, talking about renting in particular. Around 5.6 percent of the population, or 212,000 of us, are transient, of which a population the size of Tauranga are vulnerable. An Auckland University of Technology study revealed this recently. If we’re having a think about transience, it’s defined as moving at least three times in three years. How many letting fees—how much money is that for those letting fees? So 150,000 Kiwis classified as vulnerable transients moved three or more times to or within an already highly deprived area. This is a small glimpse of part of the unjust structure that we are trying to correct.

I want to pause for a minute and have a think about how much faith New Zealanders should actually have in a political system which is, in reality, stacked against people who are vulnerable or have restricted choices around living choices. Out of 120-odd MPs in this House at the moment, I believe there are probably six or seven—literally a handful—of us who do not yet own our own home, but just as worrying for me is that collectively 120-odd MPs own around over 300 homes. It’s about two and a bit—2½ each in this House. So it’s actually stacked, and has been for a very long time, against groups who really are the ones being harmed, the groups who have little and less choice.

So I am proud therefore that at least this Government can actually put movements in train and actually reject that we are, in this House, politically stacked, in theory, against people who don’t own a home. So that’s something that I think needs to be noted. It’s all well and good if we are going to have MPs and an overrepresentation of investment properties in this House—that’s as it may be—but let’s at least then proactively acknowledge the stacking and proactively put justice back into the structures which have continued to harm people actually for generations.

So of course the Greens are going to be supporting this. Removing letting fees in particular was part of a suite of changes that we have long proposed when it comes to rebalancing the power. We’ve had a bit of discussion and a bit of to and fro tonight about who are really going to lose out from this, and I do quite regret the fact that whenever the discussion is raised and focuses on “Oh, those poor homeowners and landlords which are having to sell.”, I really regret that we are just brushing over the generations of people who have really been harmed through this unjust structure, who have really had detrimental, accumulative, lifelong, and often generational struggles and challenges because of the unjust structures that are happening. So this is one part.

Now, we’ve heard a lot about how it is going to have unintended consequences by raising rents, and that is actually why the Greens will continue to be wanting to have discussions about rent controls, and I’m glad that the Minister is actually undertaking a review on the entire residential tenancy. Sorry, I’ll bring it back, yes, but I only raise that as part of how we can address this false trade-off argument that we will actually increase rents and that we will need to have complementary solutions alongside this bill. Actually, Minister Salesa clearly outlined, as well, addressing the supply problem—absolutely, and we’re on that. So using the rent increase as an excuse to vote against this rebalance of power and re-correcting this unjust structure is, simply, by the wayside. So I wanted to put that very clearly.

I think, you know, this is part of us understanding that people who rent and are in that hardship and facing those lesser choices need to be seen as equal citizens, because what has been happening for far too long is dehumanising. We have had ongoing dehumanising and smearing of people who need to rent a home, and we have set up, in a sense, a two-tier citizenship system for people who own a home against people who rent a home. This is where we are starting again with this bill, removing letting fees to try and correct not just the structure but also the narrative around Kiwis who also have less choice. So, again, I wanted to bring that into the debate tonight.

I wanted to pick up on—I think it’s worth hammering, actually—those groups who we’re talking about who haven’t fared well in the current structure. I’m going to have a look—just bear with me; there’s a few of the submissions. This is the Anglican Diocese of Auckland, the social justice group, who spoke particularly about seeing this bill as a fair and just one that reduces the significant cost borne by tenants, and given our insecure tenure rental arrangements, the costs of moving home are borne by the most vulnerable in our society. Of New Zealanders, 53.55 percent rent their properties, but for Pasifika and Māori it’s far more, and also people with a disability are more likely to rent, mums and children are more likely to rent, women and children are more likely to rent, people on low incomes, of course, are more likely to rent. Those are some of the groups who continue to be harangued by this unjust structure and, absolutely, by arbitrary and unjust letting fees, so I’m really glad that we are taking this step.

It’s a relatively straightforward and simple bill in and of itself. It speaks quite directly, quite briefly and clearly, to the letting fee part of the process and making it unlawful, and that’s why I appreciate that the Social Services and Community Committee report was also quite brief and to the point. I did want to pick up that the select committee report urged the Government to consider introducing a regulatory regime for this industry, and the Greens absolutely support that sentiment: looking at tighter enforcement controls for really, really upholding these principles of correcting the unjust structure.

So there are ways around this, I think, to finish off saying. This is part of the journey to re-correct the unjust structures. There are ways around the concerns that have been raised by some submitters and some here in the House, particularly in terms of increasing rental costs. I really commend Minister Hon Ron Mark’s comments about identifying that those landlords and homeowners with rental properties who are doing well can continue to do that and will, as we’ve seen around the world. But what we will actually start to see, as we implement all these changes, are more and more people being able to live lives with dignity, including those who rent. Thank you, Madam Deputy Speaker.

Thank you, Madam Deputy Speaker. I stand tonight to speak against the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill in its second reading. I call this the bill of unintended consequences.

Now, the problem that the Government has set out to fix is the upfront fees that tenants are required to pay when they are moving into a new tenancy agreement, and they are, presumably, too high, and are—and we concede—a real barrier to some people. So, for the record, the upfront fees are usually four weeks’ rent as bond, two weeks’ rent in advance, and one week, all including GST, as a letting fee. Given the average rent across New Zealand, those fees actually do come to just under $4,000 if you are a new tenant seeking a new tenancy.

Now, remember this is an average across New Zealand, and in the great electorate of West Coast - Tasman those letting fees would be so much less because the weekly rents are lower. So, in some cases, they’ll be lower by half, but there’s no argument across this House that one week’s rent for a letting fee is a lot of money for some people to have to find, especially those first-time renters. But with those tenants that are actually moving house, moving into a new tenancy, then they already have their bond in place, they already have their two weeks’ rent paid in advance, and we actually heard from one submitter in Auckland—the very canny tenant—who, as he moves around, says that as he’s paid his two weeks’ rent in advance, when he gets towards the end of this tenancy, he doesn’t pay the two weeks’ rent that’s owing at the end; he banks that money and he’s got it ready for his next tenancy, and the only fee that he does pay is the letting fee.

Now, in the select committee process, we heard 187 submissions, and we heard 41 oral submissions, both here in Wellington and in Auckland, and I think it is very fair to say that those submissions were quite polarised. So those people who would be paying a letting fee were, of course, supporting the bill, and those who were landlords or property managers were, in general, opposing this bill.

Taking up the Hon Ron Mark’s point earlier on about the blunt tool that the letting fee is, it is fair. We did ask some of the property managers how they came by this fee, and it has just evolved. There was no logic behind it. So, in some cases, we had in one street the example that was used—that you could have a million-dollar house and a $500,000 house but because they attract quite a variance in rents, the letting fee would be quite different and it could be the same amount of work involved. And so the simple solution is to have a fee for service.

The actual cost that is involved by the letting agent for the work that is undertaken, and we know that there’s a huge amount of work undertaken, as Simon O’Connor mentioned earlier: there is the advertising of the property, there is the showing of the property—open homes etc.—the vetting of potential tenants, the credit checks, the paperwork that goes into the tenancy agreement and lodging of the bond, responding to the unsuccessful applicants, and also the viewing outside of hours, and we did hear from some property managers who said they can arrange for it to suit people’s schedules. They can go after hours or on weekends. But one of the challenges they have is that some people may be looking at multiple properties, find one, don’t let the agent know, and they’re left with a no show. There is a real cost to letting a property.

So the select committee did deal with that issue about the transparency of the letting fees. It was a blunt tool, it has evolved over time, and I do think that a fee for service is probably the fairest way to resolve it. However, this bill prevents fees of any kind now being applied, by any agent of any sort. So there is no ability now, if this bill is passed, for any fees to be incurred, and that is the cause and effect.

Now, we’ve heard talk tonight from some of my colleagues on this side of the House about the impact of increased rent. There is no way that a landlord is going to be able to absorb that cost. It’s like comparing it to the cost of increased transportation. A truck has to fill up its tank of gas, and it may be costing $50 or $100 more per tank, so everything that goes on that truck now goes up in price because we have to recover the cost. It’s the law of cause and effect. So the rents will go up, and we have heard from submitters that approximately—now, we’ve got 34 percent of New Zealand households are now in rental properties. That’s about 589,000 of them. Ninety percent of them are owned by mum and dad investors—90 percent. Fifty percent of them are managed by property managers, and only 50 percent of them actually charge a letting fee.

So this bill does set out to reduce the upfront costs. But let’s say those costs are passed on to the tenant. We’ve heard it tonight that the increase in rent is inevitable, but the ones it penalises the worst are those people who are stable in long-term rentals. Now, one of the consequences—these unintended consequences—is that if landlords are expected to absorb this cost, what’s going to happen to a tenant who leaves their tenancy early, wants to pull out of their lease agreement, their tenancy agreement? Well, if a landlord has to keep absorbing that cost of letting the property, he’s going to say “No. You’re going to pay me out the term of your lease or you’re going to stay there, because I’m not going to keep absorbing the cost of letting this property.” It’s the law of unintended consequences.

I would just also like to point out to the House that landlords don’t kick out good tenants. They want good tenants in their properties, because these, for 90 percent of the rentals in this country, are owned by mum and dad investors. They want their properties looked after, and they want good tenants.

Now, one of the other issues that we dealt with as a select committee was around the cumulative effects of legislation. For some of the landlords that we’re hearing about who are now exiting the rental market, it’s because of the cumulative effect of these legislative changes. So we are hearing about the Residential Tenancies Act, and that’s going to bring in some major change for the market. The Healthy Homes Guarantee Act—that’s a real cost to landlords, and rightly so. There is the risk of the capital gains tax and the recent court decision around the unintentional damage and the consequences of that.

One of the other unintended consequences of this bill—and I know this because I have spoken to people in my electorate just recently, when I took the Hon Chris Finlayson on a trip through Tasman—is that people are finding it is much more lucrative to turn to Airbnb and quit the rental market altogether. This is getting too tough. The regulation is too tight, and they are now finding Airbnb is a very lucrative solution for them, and they are out of it. Even TradeMe—TradeMe is even saying there are 3 percent less rentals year on year that are being marketed on their website. The property investors say it’s too much too soon, and their members have even told them that they are now willing to sell out of their rental properties. Thirty percent have said they would sell out.

One of the other issues that we did deal with on the select committee was around the time frame of enacting this legislation, and we had some concerns. Originally in the bill, it was three months after the date on which it gains Royal assent, which was quite standard. The Government members on the select committee have shortened that to 12 December. We do have some concerns that there will be landlords out there who self-manage their properties who will not be aware of this and may inadvertently fall into the risk of having to pay the $1,000 penalty for charging fees.

In summary, the alternative is to make the letting fees a fee for service. Re-letting—it does take time and it does cost. National does not support this bill.

Thank you, Madam Deputy Speaker. I rise with absolute delight to speak to this bill that will ban a practice that is both unfair and arbitrary. This is a bill about fairness. It’s about not allowing two parties that contract to then charge a third party. I mean, how anyone can stand in this House and say that’s fair is beyond belief.

Judith Collins stood up previously and talked about private landlords: “They’re being penalised; they’re being demonised”—she said—“by this Government. It’s too difficult for landlords.” What about renters? Do they not count; or do they have less human rights somehow? This bill actually doesn’t affect private landlords—newsflash. It’s about letting agents and not allowing them to charge a letting fee, even if they then say that costs are passed on to landlords.

There are two points I want to make. Landlords can still seek reimbursement for actual costs, which are not reflected by letting fees as it stands; secondly, even if rents rise, we had submitters who were renters who came to the Social Services and Community Committee and told us that they would prefer that as opposed to an upfront cost. So there you go.

Two quick points: students told us that they are being charged $1,400 just to have two people replaced on a tenancy. How is that fair? Final point: the commencement date that has been changed as a result of the select committee process, Louise Upston says that’s poor process. It’s because tenancy turnover is the highest between November and February. It’s about fairness. More people move into tenancies at that period of time, and so we want to ensure that we maximise the reduction in costs for them. This is a bill about fairness, and I commend it to the House.

This is a split call, but I just remind the member to use the full name of other members—so it is the Hon Judith Collins. I call Dan Bidois.

It’s a pleasure this evening to take a brief call on the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill. I was quite surprised, actually, by the member, Priyanca Radhakrishnan, who has just resumed her seat. She talked about fairness but she sat down with a few minutes to go. We gave her five minutes of fairness, and she only had three minutes of fairness to say.

I must say, it is a sad evening in this House when we move to prohibit something rather than improve the regulations and improve the market behind it. It’s a sad evening for all of those tenants, property managers, and owners who are being punished for the sake of a few rogue property managers. This bill is a bad bill. It’s not going to make life financially easier for tenants. It’s not going to add any more properties on to the market, which is what we actually need, and it’s going to have a lot of unintended consequences, which we all heard in the Social Services and Community Committee hearings.

I want to talk about some of the submissions I heard, and about what this Government could have done to improve the regulations and the transparency of letting fees. One story we heard from the Real Estate Institute of New Zealand said that all property managers should be licensed, they should all have a code of conduct—there currently is none—and there should be a database of those rogue property managers so that they can be banned from charging letting fees.

What about another submission, I hear you say, Madam Deputy Speaker. Well, the Independent Property Managers Association said that we should focus on raising standards in the sector rather than banning letting fees. There’s another one: IQ Property Management, in their submission, said that both tenants and landlords benefit from letting fees. So when they hear the members opposite in the House saying that only landlords benefits, well, that is a shame, because these submissions that we’ve had clearly state a different matter.

So the consequences of this bill are, to be clear, that landlords will start to look for long-term tenants, because that is going to be much more financially viable for them. We know that rents under this Government have already gone up by $25 a week, and we have told this Government—and they’ve heard it loud and clear—that by banning letting fees, you’re simply going to pass those costs on to tenants through increased rents.

And tenants are going to be worse off. Let’s just say that the fees are going to be passed on to tenants through an increase of, say, $2 a week, which is pretty minimal. But that’s $700, on average, a year. And if you’re there for two years or three years, then that’s $1,400 or $2,100 that you’re paying extra, in the pocket, just because there is no letting fee. So the result of this is that the rents will go up. It’s going to get harder for people to go into rental properties. There are going to be more properties taken off the market, which is exactly the opposite of what we need to be doing.

So what we need to be doing is focusing on building houses. We need to focus on things like improving the transparency of the rental market, and we need to regulate these rogue operators—of which there are few—so that we can have overall transparency in the letting fee market.

I also want to say this has been rushed through the House, both from a select committee perspective but also the date at which it commences, 12 December—that was despicable. I want to express my dissatisfaction at the members opposite for wanting to rush this through the House just so they can go away and make sure that this process has been done before Christmas-time. So I will oppose this bill rigorously in the House, as will my National colleagues.

This will be a very short call, and I hope my voice does actually last long enough. This is simply a no-brainer. Take this situation: you’ve got two houses for rent. As a result of neglect—

💬 DEPUTY SPEAKER: I don’t.

—and, I have to say, an admission by those opposite that we do now have a housing shortage, you are likely to get up to a hundred people on each house. Now, one of the houses is privately owned by one of those mum and dad investors—that you seem to be so keen on over there—who isn’t using an agent—

💬 DEPUTY SPEAKER: Don’t bring me into it.

—and the other is using an agent. So the best of the tenants are actually going to win the race to get the tenancy. One of them is going to be punished and the other one won’t, and that just shows how ridiculous this is.

There is only one person who should be paying this fee. It’s the one who’s going to benefit from it, and that is going to be the landlord. It is a no-brainer, and I commend this bill to the House.

Thank you very much, Madam Deputy Speaker. I just want to say that I’m really pleased that the Prime Minister has given that member permission to speak in the House after his little—a few weeks ago. Anyway, I’m pleased to stand and give a contribution on the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill. I must say, this is the dumbest, most ill-thought-out bill I have ever seen come to this House. It’s the dumbest because it’s getting rushed through really quickly.

I mean, the letting fees that people have to pay—yeah, for some it is prohibitive. But, as my colleague Maureen Pugh said in her contribution, it is mainly the bond—the upfront three-week or four-week plus GST rental that people have to pay in the bond. That is actually more prohibitive than a letting fee, to be honest. I know. I’ve had to pay it several times when I’ve been renting, and it is very prohibitive to actually pay all that money up front.

I want to say that this bill targets all landlords. It assumes that all landlords are rogues, that they are crooks, and I can tell you that they are not. My mother has been renting for many years in Masterton, and she has the loveliest landlord. I can tell you right now, he has said to me that he is getting out of his rental because of this particular bill and the things that this Government is doing. That’s actually prohibiting his business from flourishing, and he is a very, very good landlord. Even the landlords that I had in Christchurch were very good. Even though, yes, there was that letting fee, I was happy to pay for it because I was getting a very good deal from them in being able to rent their properties.

I just want to talk a little bit about some of the contributions that have been in this House tonight. The Hon Clare Curran said that this bill attempts to address—to address what? To address what exactly? I sat there, and I thought, no, what it’s trying to do is trying to address landlords as if all landlords are rogues. It doesn’t do that—it doesn’t do that. There are so many loopholes in this particular bill. By taking away that letting fee, by prohibiting letting fees, there will be people that will find a way around it, and tenants will pay and they will pay. There will be no restriction on how much they will pay, for however long they pay.

This is why I say it’s one of the dumbest bills I’ve seen, because all of those things that I’ve just said, around landlords finding ways to get around this—they will find it. It’s a business. They’re running a business, an investment business, and that’s what people do when they’re running their business. I heard the Hon Ron Mark talk about that, about the way that landlords divest their business, they sell it off, and they reinvest. Well, some of them may not. Some of them may keep their rentals and may look at another way of recouping some of the letting fee. I’ve heard the letting agents actually talk to me about that. They said “What can we do?’, and I said, “Well, wait for the bill to come out and then have a good look at it.”

Tonight, as I sat here, I listened to the contributions, and I can tell you that I was really disappointed in the ones from the Government because the Government has not looked at all the possibilities that will actually penalise the brand new tenants that are going into these rentals. People are going to pay and pay and pay, and it’s the people that can least afford it who will do that. They will be the least able to afford it, and this coalition Government will sit there and pat themselves on the backs and go, “Gee, we did a good job tonight. We wiped out that letting fee. Gee, we did a good job. Our people are going to suffer, but, hey, we did a good job. We’re doing our thing.” For those that are downtrodden, though, it’s not really. What’s happened in this bill is that you’ve actually added more penalty to them.

When I look at the work that the previous Government had done in the heat up New Zealand programme in agreement with the Green Party—that’s where the landlords and everybody had access to some funding to actually put in heating models into their house, and they were given some funding to help them do that—that heat up New Zealand programme was a smart idea. It was a smart idea, and, whilst it added value to the landlord’s property—it added value—what it also did was it gave the tenants inside those homes another form of heating. I don’t know of very many—other than the normal increases that go along with the rental—rental properties that have had these heat pumps, etc., installed into them, where their rents went up astronomically high. But I think that with the wiping out of this letting fee, there will be ways and ways that a landlord will be able to find to add more to the actual weekly rent, and it’s not fair.

This is not a fair bill. I don’t agree with what the previous speaker has said around fairness. It is something that will penalise, with all the other costs of living that are going on with the policies and the legislation that this Government is actually handing out willy-nilly. We are having those that are the hardest people to get work, they suffer health issues—these are the people that are actually going to suffer from this particular bill.

The letting fee actually gives some protection around the types of houses, etc., and, yeah, as I’ve said, I agree that there are some rogue landlords out there. But, at the end of the day, you can do other things to actually track them, rather than put a blanket piece of legislation in there that gets everybody. It gets absolutely everybody, and I do feel for them.

I am actually pleased that I’m moving my mum out of her rental and into a nice place where she will be able to be looked after and cared for. I’m pleased, because the concerns that her landlord has around this particular piece of legislation do concern me. They concern me a lot. He is a good man, and he is going to go out of the market. He is going to sell his house. And, yes, some nice person is going to end up having their own home, but his house—his mother was in it, his sister was in it, and, now, my mother’s in it—it was all around family.

Yes, some of the landlords, as I’ve said, are rogues, but there are also family people—mums and dads—who have had those rentals. They’ve had them as a family business to help with their superannuation, or even to actually help set their children up so that their children can actually buy homes. With this letting fee getting prohibited right throughout all of this piece of legislation, what’s going to happen with those? They’re going to sell up.

I had a great landlord in Christchurch—this American guy. I remember that when he realised who the new Government was going to be, he came to me. He rang me up and he said, “Who did your lawns? I want them to come in. I also want to know who is the cleaner of the house”—it was me, so I said, “Oh well, you don’t need to get the cleaner, because I did that”—“because I’m getting rid of all of my properties.” He owned 10 properties in Christchurch, and he put them all on the market.

💬 Marama Davidson: Oh, the poor dude—10 properties!

He did them all up and he put them on the market, and I can tell you now—well, actually, why does that member sit on the side and yell out horrible things about people who have worked hard, who have worked very hard, to get where they are? Why do we penalise those hard workers? Why do we stand in here and penalise—

I’m sorry to interrupt the member, but the time has come for this debate to be interrupted.

Debate interrupted.

The House adjourned at 10 p.m.