Residential Property Managers Bill

I present a legislative statement on the Residential Property Managers Bill.

ASSISTANT SPEAKER (Hon Poto Williams): The legislative statement is published under the authority of the House and can be found on the Parliament website.

I move, That the Residential Property Managers Bill be now read a first time. I nominate the Social Services and Community Committee to consider the bill.

Madam Speaker, kia orana. As a Government, we’ve worked hard to ensure everyone has access to secure, healthy, and affordable housing. Across New Zealand, nearly one in three households rent, with the residential property management sector responsible for around half of the rental market. Over the past few years, we’ve seen an increase in the use of residential property managers by property owners. Usually, services might include advising owners on compliance with tenancy law, advertising for tenants, lodging bonds, collecting rent, organising repair work, and completing routine inspections. Their role is becoming increasingly important in the function of the overall rental market. As part of that role, residential property managers ensure tenants are treated fairly and have access to secure and safe rental housing. But while many residential property managers abide by professional standards, there’s no current legal requirement for them to do so. I want to acknowledge that several existing industry bodies have implemented voluntary standards for residential property managers in recognition of how vital their service is, but we need to be clear that the sector as a whole isn’t regulated. Therefore, good service and professional conduct isn’t guaranteed.

The Residential Property Managers Bill will protect the interests of property owners and tenants by creating a comprehensive regulatory regime for residential property managers and their businesses. Tenant advocacy groups, real estate and property management companies, and property management industry bodies have all expressed concern about the risk to tenants and property owners from not having a regulated market. While there are a mix of views in some areas of the regime, I acknowledge and welcome the broad stakeholder support for putting a regulatory framework in place for residential property managers. I want to ensure that residential property managers operate in a manner that supports public confidence and the integrity of the residential tenancies market. I want to safeguard the interests of property owners and tenants as well.

What this bill will deliver is an occupational licensing regime that will achieve these outcomes by establishing compulsory licensing of residential property managers and their businesses, setting minimum entry and qualification requirements for residential property managers, ensuring residential property managers meet professional standards of practice, and providing accountability through an effective complaints and disciplinary process that includes complaints assessment committees and a disciplinary tribunal. The bill has been designed as a distinct occupational licensing regime for residential property managers with parallel processes to those established in the Real Estate Agents Act. This is a deliberate choice. With the Real Estate Authority as the regulator, there are significant administrative efficiencies from having similar processes supporting licensing and the complaints and disputes functions.

One matter that I want to raise today is that this bill does not regulate landlords. This also means Kāinga Ora and registered community housing providers are not regulated by this bill. The relationship between landlords and tenants is currently addressed under the Residential Tenancies Act and is the relationship that we’ve worked hard to improve on during our term of Government. We’ve increased enforcement powers and penalties for large-scale landlords in 2021, and we’ve introduced name suppression for parties who are wholly or substantially successful in their case in the tribunal. It is my view and the view of this Government that these changes should have an opportunity to bed in first before we consider further legislation of landlords. These changes to the enforcement powers under the Residential Tenancies Act are in addition to other changes that the Government has made to protect tenants, such as improving security of tenure by removing no-cause terminations and implementing the healthy home standard.

What the bill will do is further amend the Residential Tenancies Act to better empower the Tenancy Tribunal in limited ranges of circumstances—such as, where a private landlord is serially non-compliant, the tribunal will be able to order them to employ the services of a residential property manager. This power for the Tenancy Tribunal will not apply to Kāinga Ora or to registered community housing providers.

The final specific area I want to record today is that the bill amends the Real Estate Agents Act to make changes to the real estate authority board. The authority board will be required to have experience in the residential property management sector. Board members are also to have collective knowledge and experience of Māori perspectives and of the Treaty of Waitangi. I’m confident that this new regulatory regime will improve residential property management services in New Zealand, and, in doing so, improve the renting experience for many. The regulation of residential property managers continues the momentum we’ve built over the last six years to fundamentally improve the wellbeing of New Zealanders through better housing outcomes. It will help provide assurance to property owners and their tenants that all residential property managers are abiding by professional standards, know the law, and manage rental properties well.

As this bill progresses to the select committee stage, I’m also interested in hearing from members of the sector and the public about how this regulatory regime will improve the residential property market and quality of residential property management services. I also look forward to receiving feedback on any improvements that this could be made to the bill as currently drafted, in particular, given several stakeholders have raised the coverage of landlords, I will be interested in the select committee’s views on this issue.

It is a privilege to be able to guide this bill through the House. I thank my colleagues for their support. I’d also like to thank my officials at the Ministry of Housing and Urban Development for their advice in drafting this bill. I commend this bill to the House.

The question is that the motion be agreed to.

Thank you very much, Madam Speaker. Here we are at the tail end of this Parliament considering something that the Government promised in the 2020 election manifesto, and I think we are on the second to last parliamentary sitting day and the Government’s finally got around to this very important change to our housing laws.

💬 Angie Warren-Clark: Nothing like a pandemic.

What’s that?

💬 Angie Warren-Clark: Pandemic.

Oh, OK yeah, the pandemic is blamed for literally everything—rents are up 175 bucks a week, child poverty’s up, inflation’s up, the economy’s in recession, but it’s all the pandemic! The pandemic is responsible for literally everything. We’re sort of 18 months post the pandemic but there’s nothing Labour won’t blame on either (a) the pandemic or (b) the last National Government. That’s basically what they say—it’s all the response to the pandemic, which was three years ago, or the last National Government.

ASSISTANT SPEAKER (Hon Poto Williams): Back to the bill, please, Mr Bishop.

Well, I was just responding to the interjection from my colleague and my good friend whose bill is going to be read this afternoon—we’re looking forward to supporting that bill, Angie Warren-Clark.

Anyway, back to the Residential Property Managers Bill. We will be supporting this bill to first reading. But we do so with a degree of scepticism about the necessity of it and whether or not it will actually work in the way the Government intends. But, in the spirit of good faith, and bonhomie at the final two days of Parliament, we will support it to first reading to have a look at it. The Associate Minister of Housing, the Hon Barbara Edmonds, was pretty optimistic about being able to guide it through its parliamentary passage; I’m not sure she will be the Minister of Housing, or the Associate Minister of Housing after the next election.

So this bill will go off to, no doubt, the Social Services Committee where it will be—well, I’m not even sure the committee will have time to call for submissions by the time the House rises because we’re going to lift tomorrow. So we’ll wait and see if the committee calls for submissions but I’m sure the next Parliament—assuming the bill makes its way back on to the Order Paper, of course, which is not a guaranteed either. The new Parliament has to vote, after the election, to reinstate items of business on to the Order Paper. So we’ll just have to wait and see, but assuming the bill makes its way back on to the Order Paper and goes before the committee, then we will have to have a look at that, and we’ll look forward to the submissions.

Let me just canvass a couple of thoughts in supporting this. The first is that we do want to improve life for renters in New Zealand. As the legislative statement notes and the various Government background documents note, about 40 percent of New Zealanders rent—actually, those numbers we would like to see decline over time. We want to see more people owning their own homes. We want to see more first-home buyers. We want to see more property owners, and we want to see more people be able to afford to buy their own home. But we are where we are, and many New Zealanders rent, and renting will always be an option for many people: for young people, for people leaving home for university—going off to university and just for student accommodation—and for people who can’t afford their own home, and also people who move around a lot, and people who do not wish to own property. At the end of the day, we live in a market-based economy and people make their own choices about that. So it is important that renting and renters are looked after.

That said, we have to consider the costs and the benefits of this. I worry that the extra costs of mandatory regulation of property managers will end up flowing through to higher rents. This regulatory regime—this bill—does create quite a complex regulatory regime which the Minister has usefully outlined for the House. The inevitable consequence of that will be to raise costs, and that’s accepted by the Government, and that’s in the departmental disclosure statement, the regulatory impact material. So the real issue, the real danger, is that those costs get passed on, ultimately, to the property owners that the residential property managers are acting on behalf of, and, of course, where will those costs be passed on to? Well, they will potentially be passed on to tenants.

We have a rental housing crisis in New Zealand. Rents are up $175 a week in New Zealand in the last six years. In my own area of Lower Hutt, rents have increased by $257 in the last six years. In many parts of the country, they have increased by similar amounts and so we do need to be cognisant of those costs.

Now, to be fair to the Government, the departmental disclosure statement freely admits there will be costs. So I’m just quoting from the departmental disclosure statement, “The most significant cost components are the costs of becoming licensed … and then ongoing sector compliance costs. Some of these costs will be borne directly by residential property managers. Other costs will be recovered,”—but recovering cost doesn’t mean that no one pays, it just means they’re recovered. It just means that they get passed on to somebody. And “gaining a qualification to be licensed, the requirement to have a Trust account, appropriate insurance … audit requirements,” etc., etc., and some of these will be phased in over time, which, again, you know, is fine. Phasing something in, again, doesn’t mean the cost goes away, it just means it gets phased in over a slower period of time.

Here’s the issue. So they’ve done a cost-benefit and, again, kudos to the Government because so often in this House we impose new regulatory requirements but we never bother to do a benefit-cost analysis. But they’ve done one—well, they didn’t do one, they got MartinJenkins to do one. So one of those consultancies—MartinJenkins has done pretty well under this Government.

So the cost-benefit carried out by MartinJenkins indicates the net present value is $10.9 million over the forecast period of 10 years. Core costs are $159.9 million, and core benefits of $170.8 million. So the benefit-cost ratio is 1.07.

So it’s hardly a slam dunk. I mean, it’s positive, but it’s not really positive; it’s 1.07. So, in other words, for every dollar in cost that this regulatory regime imposes, there is a benefit according to the officials of an extra 7c on top. So it’s positive but it’s hardly a kind of, you know, “for every dollar we spend, we get $5 in benefit down the line”—it’s a very thin benefit-cost ratio.

Here’s the other thing. The officials say in the regulatory impact statement, there is a higher degree of certainty around the estimated costs than there is over the benefits. So, in other words, in plain English, “We’re pretty confident this is going to impose a lot of cost, but we’re not really sure the benefits will flow”. And when the starting point is a benefit-cost ratio of 1.07 and you’re uncertain about the benefits, it doesn’t take much for the benefits to not accrue, and then the costs outweigh the benefits. Then you’re literally vaporising money. You are not creating net benefits. This is why we ask officials to do benefit-cost ratios.

So we’ll vote for the bill to send it to select committee, but we are sceptical, deeply sceptical, that the benefits outweigh the costs. It’s not just me saying that; it’s the Government’s own official analysis that’s sceptical about that. So, as I say, the starting point is a thin degree of benefits, and, as the officials themselves note, real uncertainty over the benefits but quite a degree of certainty over the cost. So, in other words, “We’re up for this conversation and there may well be some benefits to what the Government’s proposing here, but we’re sceptical that it will work”.

The other issue, in my final couple of minutes, is a real risk, and again, the Government’s own material says this. There is a real risk that landlords will shift away from licensed residential property managers and just choose to manage their own properties. So, in other words, it could backfire. So if you’re if you’re a landlord and you currently have a licensed property manager, you may well just say “Well, actually, bugger that, I’ll just do it myself.”, and then that is a real issue, because as the Minister herself just said in her own speech, the bill doesn’t regulate landlords; it regulates licensed property managers. So that’s the issue.

Look, as with many debates in this House around regulatory regimes, the question is: is selfregulation better than mandatory regulation? Actually, we have self-regulation on licensed property managers now. And, again, the Government documents note that there is quite a degree of extensive self-regulation in the system already. The question is: is the Government coming in over the top and, essentially, creating a much more elaborate and comprehensive regulatory regime over the top of the industry’s self-regulation going to be beneficial or not?

So we’re up for the conversation and the debate around it. I’ve said publicly that we’re open to the discussion, but we’re sceptical of the benefits. It’ll go to the committee. We look forward to the submissions and we will consider the matter in due course. Thank you, Madam Speaker.

Thank you, Madam Speaker—pleasure to speak on the Residential Property Managers Bill. Just to advise the member who’s just resumed his seat, Chris Bishop, I notified using my powers today to open for submissions, so this bill, once referred, is open for submissions.

Secondly, I’d just like to say this is a fabulous bill. It’s introducing the compulsory licence training, a code of conduct, and a complaints and disciplinary process for residential property managers. The reason I love this bill is because, as the manager of Tauranga Women’s Refuge, I had to work quite closely with a number of these people doing these services, and the difficulty—they basically said to me, to my face, “We will not have your people in our houses.” So, to Quinovic in Tauranga, this bill is for you. I really look forward to some rights for our renters and some rights for our landlords. So I commend this bill to the House.

Kia ora, Mr Speaker. Thank you for allowing me the great privilege to speak in support of the Residential Property Managers Bill. But I want to start with a little story about Hamilton West—a great place to grow up and grow old in New Zealand. When you land at the Pak ’N Save on the corner of Mill Street and Ulster Street, you have a wonderful gateway to our city, and in that gateway are a number of homes and motels—some of those homes will be subject to rental accommodation and some of them are, essentially, the hotbed of the housing disaster and catastrophe that’s facing our great country. You go along Ulster Street and you see the nearly 750 kids and 750 adults that are housed in emergency accommodation in Hamilton right now, the $25 million that’s used every quarter to pay the motel owners of Hamilton West, every single quarter—

💬 Angela Roberts: We’re building more houses.

You’re building more houses, but for a billion-dollar commitment under Whai Kāinga Whai Oranga, 70 houses is not enough to me. You take a right, shoot down to Beerescourt Road and you go along to Galbraith Avenue. And out Galbraith Avenue, I want to start my kōrero today with reference to a colleague of mine, a fellow Hamiltonian named Everest, who lives down on Galbraith Avenue. On the other side of the road is an owned property and there are some beautiful blue signs with my furry face on them—no moustache. But in that transitional housing, that State housing, on the fence is a Labour election sign. In that transitional housing, my friend Everest lives, and she’s got three kids. She’s got another one on the way. She’s got very high and complex needs and she’s been bounced and she’s been hurt by having to go through eight motels in two years to get to a transitional house. It’s an absolute catastrophe that her kids have had to change schools. They’re not even going to school half the time because they don’t know what school they’re going to after being bounced around in the housing disaster that’s been curated by this Labour Government—curated.

The 3,500 adults, 3,500 kids, and another 1,000 in Rotorua who live in undermined housing can’t even access this rental accommodation that we are dealing with in this bill, and Kāinga Ora is not going to be subject to the same sorts of expectations that the residential property managers in this bill will be.

One thing that concerns me is that the majority of those people in that housing are actually Māori. This is very distressing for a Māori member of Parliament who represents an electorate where 45 percent of all the kids are Māori. Builders can’t build to a price point that works. Councils are challenged with algorithms and development contributions models and rates models. There are more people and not enough suitable homes, rental or otherwise.

Not everyone wants to own their own home, as my learned colleague Chris Bishop mentioned. Some people want to live in rental accommodation. In fact, a third of Kiwi households live in rental accommodation today, and of that third, 42 percent of that cohort are managed by residential property managers. Some are good, like David and Simon and Simon’s sister Claire Lugton of Lugtons in Hamilton West; David Kneebone, who runs Lodge City Rentals in Hamilton West. They are managing to the best of their abilities.

So landlords and property owners, they contract these residential property managers—good ones, I hope—to look after landlords’ property or properties. That includes a lot of things: turning on the lights; making sure the lawns are mowed; making sure the heat pump is working; following the money and collecting rents, because rent still needs to be paid, and these managers need to ensure that happens; liaising with the tenants around any concerns of the tenant, the landlord, the manager, maybe prospective tenants, if that property is vacant; and resolving concerns that might emerge. I remember a few termite concerns in a rental accommodation that I had when I was a young student down here at Victoria University, Te Herenga Waka.

So this bill, in seeking and desiring to establish a regulatory regime to improve the provision of residential property management services is applaudable. It protects both property owners, tenants, and prospective tenants. To do this, establishing minimum entry requirements for residential property managers—tick. Ensuring professional standards of practice—tick. And providing accountability through an independent, transparent, and effective complaints and disciplinary process that applies to the managers in the delivery of their services—tick.

For some reason, though, I don’t understand why KO—Kāinga Ora—will not have to follow the same sort of standards, even if it is through different legislation. It’s a worry—a real worry—given that Kāinga Ora is actually the biggest property manager in the country.

But back to the bill. The authority, in being the new regulator for this regime—I don’t know how many consultants and bureaucrats will be engaged by the authority, but it will appoint a registrar for licence registration. It will issue licences for residential property managers. And if the legislation goes through, a complaints assessment committee and real estate agents disciplinary tribunal will consider the unsatisfactory conduct or misconduct of managers, and, hopefully, we can also see, through a bolstering of the Tenancy Tribunal processes, the same sort of diligence and professionalism and reciprocity for tenants.

An interesting provision is that the authority will also be enabled to get documents around the management of properties. It’s sort of like a Mareva injunction or Anton Piller order—I think the DHB in the North Shore went through a few of those in their days, Mr Watts. And, finally, the offenses and penalties—there are no offences and penalties in the North Shore DHB—being established to discover the provision of unlicensed property management services.

One provision that I did not see was the Treaty compliance provision. That was a real surprise, especially given the feverish approach of the current Government to put a Te Tiriti o Waitangi provision in every single piece of legislation that comes through this House. I thought we must have a Treaty provision and I was denied, but maybe that’s something that can be raised in the select committee process, if it makes it there this afternoon. I felt for sure that residential property managers would have to implement or at least take into account or have regards to or ensure the consistency of implementation with the principles, but, alas, denied by the drafting goalie, Mr Simpson.

What are our concerns? Yeah, we’ve got a couple of concerns, and Mr Bishop has parleyed those concerns to the Parliament today, but I’ll just amplify them a little bit more. This bill and the regulatory regime will raise costs for residential property managers and, ultimately, tenants, because what we’ve seen before is when you load more and more costs onto the provision or the deployment of property, housing, those costs just get shifted along the chain through the residential property managers to the property owners and then, ultimately, to the tenants. Rents are already up 150 bucks in the last five years in Hamilton. If you need a place, let me know; I’ll introduce you to David Lugton—this is not a standing advertisement for Lugtons, either.

But we’ve seen this before with compliance regimes. It actually might cost more than it’s worth. The analysis showing the benefit-cost ratio of 1.07—sounds like my 1993 statistics grade, actually; university entrance. However, the departmental disclosure statement that master Bishop has kindly read out shows that there is greater certainty around costs than the benefits. I don’t know what the rental situation is like out on the Chatham Islands, but I want to refer to the Chatham Islands, because that rental situation and the property managers out there, that’s something that he will need to do in a future role. It doesn’t matter, because all the properties out there are owned by the Croon whānau.

Another potential concern is that landlords move away from using good, licensed residential property managers, and inhale this themselves. They may say, “Right, I’m going to take that 7.5 percent”—or 8 percent if it’s in the Coromandel—“and inhale that myself and look after this property.” That can have both upsides and downsides, but there definitely is a potential incentive issue to avoid compliance with this regime. When you exempt landlords and Kāinga Ora and others, that pathway becomes lit up in a bright pink light—not the ACT pink or rinky-dink pink.

Finally, the most important concern that I have is the distraction that this provides after six years of waiting, $3 million—sorry, $3 billion, Dr Evil; $3 billion equity. Three billion dollars in debt handed to Kāinga Ora to improve their housing, and still we have 25,000 applicants on the social housing wait-list, 5,000 whānau in transitional housing, and 9,000 people in emergency housing. Whānau, we need change. I acknowledge everyone in the House is trying to do the right thing, but we live under a blue sky, and that’s the way things are going. Kia ora tātou.

Thank you, Mr Speaker. Almost one-third of New Zealand households live in rental accommodation. Once people move in, a rental house quickly becomes their home. So a lot of tenants are relying on a property manager for some really basic day-to-day things, like if something breaks down, requesting repairs, requesting maintenance, routine property inspections—but also for managing their rent and bonds. What they need to know is, given that significant a relationship, that their property manager will have agreed professional standards and also there’s a complaint process in place should any issues arise.

From the other perspective, if you’re a property owner, if you choose to use a property manager, what you need to know is that they’ve got basic entry requirements and that they will understand and comply with a code of professional conduct and with client care. So this is an important bill and it will go a long way towards making sure that these things can occur. I commend this bill to the House.

I rise on behalf of the ACT Party this morning in opposition to the Residential Property Managers Bill at the first reading. The ACT Party is opposing this bill because further regulation of housing is not going to solve the structural issues that we have with housing in this country. This bill is going to make it more costly for people who are struggling already to afford affordable homes than the status quo. That’s because this bill—it says it seeks to create “a [new] regulatory regime designed to improve the provision of residential property management services in New Zealand … by establishing minimum entry requirements for residential property managers, ensuring that residential property managers meet professional standards of practice, and providing accountability by establishing independent, transparent, and effective complaints and disciplinary process” etc., etc.

But the Government has, I think, acknowledged the real problem at the start of the explanatory note of the bill, and it says that “Almost one third of New Zealand households live in rental accommodation, and housing affordability challenges mean that an increasing proportion of households are expected to need to rent long-term.” But this isn’t going to help people who are needing to rent. They have addressed that more people are needing to rent because housing affordability is a real issue, so let’s address that problem rather than looking at the homes that we already have to rent and try and make them more expensive by regulating them further. So I like the goal overall, but regulating the property managers is not going to have a good outcome for people who are renting.

So how would we actually make it better for people who do want secure, affordable homes? Well, you’ve got to allow more people to be able to build more homes, because if there’s more competition, that drives out bad practice. Now, you take an example of someone currently going along to view a home—maybe it is being managed by a property manager and there are 40 or 50 people queuing up to have a look at this home. Now, that’s a lot of people needing a secure, affordable place to live. But imagine a scenario where you’re turning up and it’s one or two people looking for a place to live; not 40 or 50. That’s because if you have more homes for people to live in, the options are so much wider for people and it drives out bad practice, because if you do get a bad landlord, you can choose not to live in that home anymore and go somewhere else. At the moment, I know a lot of people struggle because there isn’t enough housing supply. So we’ve got to fix the fundamental issue that’s holding us back—and that’s because we’re not actually building enough homes.

Now, the ACT Party has solutions to address this, and we’ve addressed the issue that the housing crisis is an infrastructure crisis. We’re not going to see capacity built at the rate that we need it to be built unless we address infrastructure, and that’s what my Housing Infrastructure (GST-sharing) Bill was supposed to enable—unfortunately, it was shot down by this Labour Government, but I’m hopeful that we can bring it back with National in the next Government. That will help to address the fundamental underlying issue of why we don’t have enough homes; give more people more options. Give students more options for places to live, and give families more homes for them to choose to live in. If landlords are then competing, tenants will be able to move and our standards overall will increase.

But let’s look at the effect of this policy—and it is that you’ll end up with more regulation, which will mean more cost on to a landlord and more cost then on to a tenant. And we know from the regulatory impact disclosure statements that it says that there will be significant cost components, the most significant being the cost of becoming licensed in the first instance, and then ongoing sector compliance costs. Now, we know from a variety of regulation that this Government’s passed through that costs then have flow-on effects, and it’s not borne by just the property manager. The property manager will then increase rents through the landlord, needing to find another way of trying to pass on that cost. We know it from the interest deductibility rules that this means that it will have a flow-on effect: hundreds of dollars every fortnight to a couple who is already struggling with a cost of living crisis. But we’ve got to make sure that we have more access to homes, rather than making it more affordable for the homes that we already have, so let’s address the supply problem.

The other issue that I note—that a range of people that I’ve spoken to in the sector are concerned by—is the ability for this to be extended, not just for property managers but for private landlords in general. I noted from the Cabinet paper from the Minister, it said that in her view, “The increased enforcement powers and penalties for large-scale landlords for those with six or more properties that came into force through the RTA Amendment Act in February last year should be allowed to bed in before further regulation of private landlords is considered.” So they’re not ruling it out completely; they’re just saying “Let’s wait a few years and maybe more people will end up being regulated”—but then we end up with an additional problem. But the Government always seems to think they’re exempt—there’s another standard for property managers than there is for the Government, which has nearly 70,000 homes themselves, and this law has an explicit carve-out and it says that, you know, “If they’re bad property managers that are setting a bad standard, well, it’s different for us”, and it’s because Kāinga Ora, we know, is actually the biggest slumlord around and they want an exemption for themselves.

And I’ll just give you one basic statistic. I found this out through written parliamentary questions—in the last year, 243 of 257 of the Kāinga Ora homes that were tested for meth contamination tested positive. That’s a very, very large percentage of homes that are positive for meth contamination. Now, would you not consider that Kāinga Ora is the largest slumlord? And they know that they could possibly never meet the same standards that they’re expecting of somebody else—so it’s constantly one rule for Kāinga Ora and another for other agencies. We also know that so many people are really struggling, and they can’t even get into one of the Kāinga Ora homes so they’re in emergency housing and they’re in transitional housing. Neither of those even need to meet the healthy home standards. So we have people who will be forced out of a home that they could have afforded with a private rental—maybe into something that’s even worse for them. We’ve got to address the underlying issue of why we don’t have enough homes and why we can’t build to the capacity that we need to allow more competition and more homes for people to live in—whether they’re a student, a family, or just a single woman living in Wellington, or somebody who’s retired but can’t actually afford their own home. Let’s allow for more choice for people at all stages of their lives rather than thinking another ban, another tax, another regulation is going to solve the problem; it’s just a cheap band-aid over a problem. We’ve actually got to look at those structural issues, and that’s what we do in ACT, rather than looking at more regulation.

With the last few moments that I have, I just wanted to point to clause 142, because I know a large number of real estate agents have raised this with me in concern—that we are, once again, seeing the Treaty and the Treaty principles creep into every form of legislation possible. And it says in here that “The joint Ministers must appoint members to [a] board who collectively have knowledge and experience of, and capability and perspectives of, Māori and Te Tiriti o Waitangi / the Treaty of Waitangi.”—when it’s about real estate agents and about the administration of the Residential Property Managers Act. Is it not more important that people on this board have knowledge of residential property and real estate agents; not the Treaty at the heart of everything? We have to be practical, and this is what people up and down New Zealand are telling us they are so concerned about.

💬 DEPUTY SPEAKER: Order. The member’s time is completed.

E te Māngai, tēnā koe. Tēnā koutou e te Whare. Stoked to hear members of the ACT Party talking about contracts and about the likes of Te Tiriti o Waitangi, because I would have thought that the ostensible libertarian party in this House would be in favour of consistently honouring the founding contract of this country.

But today is a good day, although unfortunately it comes far too little, far too late. So what we have here with the proposals for this register and these regulations around property managers is a really important start.

💬 Hon Gerry Brownlee: Epitaph for the Government.

CHLÖE SWARBRICK: But it could have come 15 years ago—and I will come to you, Gerry Brownlee—because what we had 15 years ago—

💬 Hon Gerry Brownlee: Oh, please don’t. I’m leaving.

CHLÖE SWARBRICK: Just wait for it—what we had 15 years ago in the debates around the Real Estate Agents Bill, now Act, was actually some really fascinating propositions from members in the House at that time. So I just want to quote from the committee of the whole House during that debate and I quote here: “This bill is not worth much if it does not address the real issues being faced particularly by young people who have to deal with property managers. The submitters to this bill did not consider that the provisions for property management in the Residential Tenancies Act 1986 (RTA)—which, of course, relate primarily to relationships between parties as tenants, owners, and property managers—are sufficient to ensure that consumers are protected in property management transactions. So what does the Minister propose to do about it? He proposes to conduct a review. Well, that does not provide much comfort to those people who deal on a day-to-day basis with property managers. National’s view is that this bill should include property managers within it, and without doing that the Minister’s fine words about cowboys and land sharks remain very pertinent.” That is a quote from the Hon Jacqui Dean, and, in that same debate, we had exactly the same propositions backed up by none other than the Hon Gerry Brownlee, who was in favour of regulating property managers within the residential or the Real Estate Agents Act. That was 15 years ago.

We had members of the Opposition who then were proposing that we needed to regulate property managers within a regime that we were proposing to regulate real estate agents. Well, guess what! They then got into Government and they put Associate Minister the Hon Nathan Guy, Associate Minister of Justice, in charge of doing that review which they had critiqued at that point in time. And guess what! That review found—and there’s a press release from the Beehive which those who are interested in crawling back through the archives can find—well, the Hon Nathan Guy said, “Don’t worry, nothing to see here because the majority of complaints for property managers tend to be lesser than $15,000. So don’t worry. Nothing to see here, nothing to regulate.” And if that is not a shining example of how we in this country continue to kick the can further and further down the road for those who continue to be the most structurally marginalised and disempowered, then I do not know what is. Because what we’re talking about here is a residential property market in the rental space that caters for 1.5 million New Zealanders: one-third of New Zealanders rent. And we know that those New Zealanders spend more of their income disproportionately on older, colder, and mouldier properties. And in my patch in Auckland Central, it’s more than half of my constituents.

We also know, based on written questions to the Minister, that the average tenancy in this country is approximately 16 months. If you want to talk about people’s capacity to build their community, their physical and their mental health, a sense of hope and security and planning into the future, you need a stable home. This bill goes somewhat of the way to ensuring that we address that imbalance and that power dynamic—that was identified even by the National Party 15 years ago—but it doesn’t go far enough. The reason that it doesn’t go far enough is that in the Government’s own initial consultation documents, they couldn’t identify whether we had 2,000 or 7,000 property managers in this country. It’s quite a big problem when we don’t have meaningful data because we can’t create meaningful evidence-based policy to respond to those issues as outlined in that data and in that evidence.

But we also know that property managers directly manage approximately 40 percent of rentals in this country. That means that the Government knows full well that in excluding private landlords, they are excluding approximately 60 percent of the rental market in this country from those regulations which they themselves identify are critical for ensuring that, for example, there is awareness about the likes of the healthy home standards and other rights and responsibilities under the Residential Tenancies Act.

So it will come as no surprise here that throughout the select committee stage, the Greens will be working incredibly hard in organising with renters across this country to ensure that their voices are heard and that this bill is extended to include those private landlords who operate in the market. Because what we know full well—and, actually, to allude to some of the conversations that I’ve had with property managers, because many in this House already have, including the member of the ACT Party. What I hear time and again is that, actually, those engaged in property management tend to also be associated to real estate agencies and they have a professional standard to uphold. And it’s not always the case that those who are engaged in being private landlords are aware of those legislative responsibilities and liabilities that they may have, and therefore that in practice there potentially tends to be the case that property managers, even while being unregulated, may operate from a more professional starting point than those private landlords. Because the only barrier to entry to being a landlord in this country at present is the capital outlay necessary to do it. There is no necessary expertise, there is no necessary qualification or otherwise. And if we are to impose that on property managers, so too we should impose it on private landlords.

That, again, should come as no surprise to anybody who has been following the campaigning that we have been doing to uphold the rights of renters in this country. We have these forms of registers for property managers and landlords in many countries, including in the UK. I believe that Northern Ireland explains their register for property managers and landlords as “A central repository for landlords and for tenants to know what their rights and responsibilities are and to prevent issues cropping up further down the track.” Imagine the efficiency gains that we could get out of preventing things from escalating to the Tenancy Tribunal by ensuring that everybody knows their rights and responsibilities and what the law actually is.

I just also need to comment on the point that was made by the member of the ACT Party with regards to students. And here I would remind them that section 5B of the Residential Tenancies Act currently excludes student accommodation from meeting any of the standards or responsibilities within the RTA and that is a big problem. We have the student accommodation inquiry which I spearheaded back in 2020, in which the Greens were the minority view, saying that we needed to revoke that section 5B exemption.

But there is so much more to do for those renters, for low-income New Zealanders, for students, and the solutions are really, really clear. This is an important starting point and I want to commend the Minister for bringing the bill to the House. But I say it should come as no surprise to her that the Greens will be pushing for this to go a whole lot further and faster. Because, if this House kicked the can down the road 15 years ago, well now it’s time to grab that can and it’s time to get on with it. We’ve got work to do and we know what those solutions are, we know what the evidence says. And those 1.5 million renters in this country deserve better.

Thank you, Mr Speaker. This is a really good bill—one that I’ve been looking forward to for a really long time. The Real Estate Institute of New Zealand has asked for this bill. They’ve identified examples of harmful behaviour that damaged their industry and those that we’re all part of and our communities are part of: discrimination against tenants, not complying with the Residential Tenancies Act (RTA), renting out spaces that do not comply with the RTA, and stealing bond and rental money from tenants and property owners. This is a bill that will help to address of that, so I look forward to passing this bill eventually in this House. I commend it to the House.

Five-minute split call—Melissa Lee.

Thank you, Mr Speaker. I’m not quite sure what the rush is in terms of the way that my colleague Naisi Chen actually spoke. I don’t think I’ve ever spoken so fast. I was trying to actually understand what she was saying, but I guess the Government’s very keen to get this done as soon as possible.

This bill, the Residential Property Managers Bill, is one that, as spokesperson Chris Bishop said, the National Party will support to select committee, and in the second to last day of Parliament we are debating this. I understand the passion from different parties in the way that they have actually debated, but I just wanted to bring some of my thoughts to this debate.

I have also been a tenant as well as a landlord, and having a great property manager who actually facilitates that process is, I think, very, very important. In Mount Albert, we have great property managers from both Anne Duncan real estate and Catherine Goodwin real estate, who do amazing jobs and they have very passionate people who want to help tenants as well as landlords manage the process in a very cordial way.

One of the things that the Real Estate Institute of New Zealand - issued paper, “A Call for Change: Better Property Management” gave examples of is some of the issues that are actually faced by property managers in terms of discriminating against tenants and asking for inappropriate personal information. I know for a fact that a lot of people in the migrant community who’ve potentially never actually rented in this country face discrimination if their surnames and their names are not the typical names that New Zealanders are actually used to—if their names are not Smith but potentially Lee, let’s say: Lee and Smith, fairly common in Asia and in European cultures. But, you know, if New Zealand is so used to having Smiths, they’re not very used to Lees, I guess.

I know for a fact that a lot of the migrant community face terrible delays and trouble trying to find tenancy, to actually rent properties, when they’re in in dire need of accommodation. They couldn’t explain, apart from racism, to me—and they come to the office, some of them, crying, and I think that’s really heart-breaking to watch.

Also, when you talk to some of the tenants who are in terrible renting spaces where landlords—I know there are actually a huge shortage of rental properties, but to have 30 people, for example, living in really dire situations, some of them living in garages and made-up spaces that should not be tenanted out, I think we do have a major problem in terms of housing in this country. We do all, I think, in this House, know that we need to build more homes, not just for ownership but also for rentals. Because everybody needs to have a house, whether it’s actually to own or to live or to rent or whatever it is. But we have more people than houses available, and that is something that we all need to actually work towards.

I’ve heard the speech that Chris Bishop gave and he actually gave the cost-benefit analysis in terms of how this bill actually gains 7c, and that sort of made me smile a little bit: that it is really not a huge gain when you spend $1 and only gain 7c as a benefit. But in terms of the cost to the property managers, it will effectively go to the landlords and ultimately will end up in in the tenants’ costs. I hope that we can look, at select committee, as to how we can actually reduce that burden on the tenants. But to actually have responsible tenancy managers, property managers, is something that I support and hence I commend the bill to the House.

Thank you. I join my comrades from across the House. I’ve heard some very interesting points by Chlöe Swarbrick and from Melissa Lee. We’re both in Mount Albert, and there’s a really high degree of migrants and there’s also a high degree of renters, and more as time goes on. It’s one of those areas which has been neglected because we’ve come from a culture that has not really had the same degree of rental culture. Rentals are actually really good for the economy. If you have high rental, then the money that would’ve been spent on 25-year mortgages goes into the productive economy. That’s been pointed out by Elizabeth Warren—she’s very keen on moving into much more stable rentals as a result; it allows a lot more flexibility. I’ve got parents at the moment living with me, and I’m looking at rentals for them. This idea that property managers are a problem is an issue, because those people are the nice conduit. They make the relationship professional. They provide stability. I commend the Residential Property Managers Bill to the House.

Mālō ‘aupito, Mr Speaker. It’s a good opportunity to take a brief call on the Residential Property Managers Bill. I just want to a say fa‘afetai tele lava, lau afioga, to the Associate Minister of Housing, the Hon Barbara Edmonds for bringing this to the House. In our electorate of Takanini, we have 40 percent of our community who rent, and seeing this bill come through to the House definitely helps protect our whānau that live there, especially our Māori and Pacific peoples, who are overly represented in the rental market, as well.

My colleague Naisi Chen has already mentioned some of those things that are happening—that the Real Estate Institute of New Zealand have already said about the claims against tenants. Discrimination is a huge thing, and that’s something I do not want to see in our whānau. We have a large migrant community, as well, in Takanini. Again, when you see these property managers not complying and also doing other things that do not lift up people, that is not good to see. So I commend this bill to the House.

Well thank you, Mr Speaker. Here we are, for those people who are listening on the wireless or watching on television, in urgency in the dying, gasping last days of this Labour administration and they’re bringing to the House, under urgency, a piece of legislation called the Residential Property Managers Bill, and we’re debating the first reading.

So what does all this mean? Well, it means that finally, after six long years of having promised this piece of legislation, finally, in the very last minutes of this administration, they’ve decided to bring it to the Parliament, to pass it at first reading, and we’re going to be supporting it at first reading—and I’ll come to that in just a moment; about why we’re supporting it—and they’re going to send it off to a select committee. Possibly the select committee will be able to meet to open a submission process between now and when the House rises tomorrow afternoon, and then people will be able to make submissions on the bill between now and when the new Parliament is formed and a new select committee is formed at some stage after the October elections.

So this is one of a number of pieces of legislation that the current Labour Government has been using urgency to bring to first reading stages. Well, the Residential Property Managers Bill: the concept is relatively simple; it’s been talked about for a long period of time, and what the bill essentially seeks to do is to provide a regime that would set some minimum criteria around professional activities, about the way business is conducted with residential property managers, how they manage their affairs, how they best represent the interests of both landlords and tenants, and how that might be regulated.

Now, what we do know is that for many New Zealanders, renting is a prospect that they either choose or is thrust upon them for a variety of reasons. About a third of New Zealand households live in rental accommodation, we are told as a result of data and statistics. Like my colleague Melissa Lee, over the years I have been both a tenant and a landlord, and I’ve had an opportunity to engage with a number of residential property managers in both those roles over a period of time. It’s been my experience that some are certainly better than others, and that there are a range of skill sets—as there are with pretty much any part of the sectors of the economy. There are good and poor operators and a range in between.

So we need to, I think, understand from submitters, and that’s why we are supporting this piece of legislation, because we want to hear from submitters. We want to understand what people in the sector, what renters, what landlords, and what property managers themselves think about it. We also want to hear from various agencies that might have an interest and be concerned as well. So we are interested in hearing what submitters will have to say, and so we’re endorsing the legislation at first reading for that reason. It’s an opportunity to let people have a say, to let their opinions be heard, and for a future select committee to go through that process. That’s part of the democratic institution that is our Parliament and we support that.

But there are a couple of interesting things about this piece of legislation that’s been introduced in the dying days of this current administration. One is that there is a carveout that specifically creates an exemption for Kāinga Ora (KO)—essentially an exception carve-out for the Government itself. One would have to wonder quite what the rationale for that is and why it is that property managers, residential property managers in the private sector, are going to be within the purview of this piece of legislation but people who act on behalf of Government agencies such as KO are going to have a carve-out exemption that precludes them from falling within the bounds of this legislation.

The legislation itself is designed to create a regime that will improve provisions of residential property management services in New Zealand, and that is a laudable objective. It’s a laudable goal. It’s something that I think that most people would agree is sound, reasonable, and rational. It’s kind of motherhood and apple pie, but there are potentials for perverse outcomes and perverse impacts. I listened very carefully to my colleague Tama Potaka, the very good member of Parliament for Hamilton West, describing some of the issues that relate to his electorate. Many of those, even though his electorate in Hamilton West is an urban electorate—mine in the Coromandel is largely rural and provincial, but rental accommodation, or the lack of residential accommodation, is a significant issue in my electorate just as it is in Hamilton West and in other parts of the country.

Part of the reason that rental accommodation is not as prevalent or as obvious is because this Government has put in place many, many hurdles for landlords. In fact, there are a large number of people that I know in the Coromandel electorate who had previously been landlords—typically they are mum and dad - type investors; they might have one investment property, maybe two. They see that as being part of their superannuation investment package for many of them, and the hurdles that have been put in place by the current Government has actually dissuaded them from being a player in that residential rental market place at all.

Many of them have actually just given up. They’ve actually just sold the property—they’ve said it’s too hard, too much regulation, too much red tape, too much cost, too much ability for poor tenants not to be held accountable for poor tenancy behaviour, and so they’ve just decided to exit the market place. That has, in turn, resulted in fewer rental accommodation properties being available to rent, and in places like Whangamatā, I’m told that sometimes because of the dire shortage of rental accommodation in that particular community, people who are being interviewed for prospective jobs in Whangamatā are sometimes asked as a first question by the potential employer not anything about the job or their experience, whatever—the first question their potential employer will ask is, “Have you got permanent accommodation?”, and in many cases, if they don’t have permanent accommodation, then there’s little point in having a further conversation about the relevant merits of that person being an appropriate candidate for employment within that business. So that’s the kind of issue that is concerning to people in my electorate and, of course, other parts of the country as well.

Now, a regime of the sort that is anticipated by this piece of legislation will create additional costs. There will be additional costs in terms of training, in terms of materiality, in terms of administration, and in terms of the work, paperwork, and time required by the residential property managers. Ultimately, that cost, sooner or later, gets passed on to the tenant. I listened to the very animated contribution by the Green Party member Chlöe Swarbrick, who seemed not to, I think, completely understand the implications of cost and where the costs eventually fall—where they eventually fall. She represents an electorate where there are a high number of residential tenants and it has been very difficult for me to understand why the connection between cost and where the costs fall could not be made.

But, look, I’m aware, as I say, from my personal experience as both a tenant and a landlord, that typically a residential property manager will charge a percentage fee. That percentage fee, almost inevitably, is something that will go up under this piece of legislation, and sooner or later it will be tenants that pay for it. So this is a bill that is well intended but has the potential for perverse outcomes. At a time of a cost of living crisis, there will be extra costs already on tenants who are facing higher rental rates, and those costs will ultimately be passed on to them.

So we support the legislation in terms of it going to a select committee. We want to hear from submitters, we want to hear from advisers, we want to hear from officials, but we do understand the potential implications of the legislation. Thank you.

It’s my pleasure to rise and take a call on the Residential Property Managers Bill. We’ve heard a lot about the supply issue that has exacerbated the power imbalance between landlords and tenants. As somebody who has often been a reference for young people entering the workforce, going off to university, and entering the rental market for the first time, they are incredibly vulnerable, and they’re going to become more vulnerable. The minimum wage, secure work, and all the other things that these young workers need is under threat if we do not return a Labour Government.

It’s interesting hearing the other side talking about providing a profit and costs being passed on to tenants. We are talking about providing homes, and that is the fundamental difference. We urge submitters to come and speak. Young workers need to turn up, our migrant population, and young families—people who need us to have warm, affordable homes.