Overseas Investment (Build-to-rent and Similar Rental Developments) Amendment Bill

Members, the House is in committee on the Overseas Investment (Build-to-rent and Similar Rental Developments) Amendment Bill. Members, we come first to Part 1 debate on clauses 4 to 7, “Amendments to principal Act”. The question is that Part 1 stand part.

Thank you, Mr Chair. Just some brief questions for the Minister. I’m sure he’s aware of the views that have been expressed by the New Zealand Labour Party—that would have been touched on, obviously, at second reading—but given that the proposed changes in the amendments are relatively minor in terms of quantum, but the impact will be quite different, I’m just wondering whether the Minister was seeking to introduce any additional Amendment Papers to address some of the concerns that had been identified in the Labour Party’s differing view; in particular, the inability of the bill, as we see it at the moment, to explore alternative options around what are minimum unit settings. Perhaps we’ll start there for the Minister.

Thank you, Mr Chair. I’m happy to engage on this. Just as a prefatory remark, the bill, as I think members will acknowledge, is a relatively small and narrow change to make it easier to introduce liquidity into the build-to-rent market, which in and of itself is a small part of the housing market in New Zealand. As I said, I think, in the first reading and publicly, no one pretends that this is the sole answer to New Zealand’s housing woes—I think everyone would acknowledge that—but it’s one of those things you can chip away at to make a difference. Build-to-rent has got a role to play, there’s quite a bit of active interest in the sector, and so we are advancing this bill to do that.

In response to Mr Utikere’s points and also the Hon Kieran McAnulty, who raised some issues in the second reading debate—and I welcome the engagement on this issue—I undertook to go away, a couple of weeks ago now, and seek some advice in relation to those issues. I did that, and I’m happy to make that available to the member. If someone sends me an Official Information Act (OIA) request, I’m sure we can—

Tangi Utikere: Come on—be proactive.

Hon CHRIS BISHOP: Well, OK, if you send me an email, it’s technically an OIA request anyway. I can make it available to you.

I sought some advice on it. In relation to the “20 dwellings” issue, which is the threshold for defining build-to-rent—that is, I’m advised, the threshold used in the Act and the definition of build-to-rent land in the Income Tax Act 2007. Reasonable people can disagree about whether 20 is the right number or not, but, at the time that was set, the Government sought to balance competing aims. A higher limit restricts access to capital for large housing developments, which discourages investment, but a lower limits exempts small overseas property developers from the on-sale requirements, which, people would argue, is inconsistent with the foreign-buyers ban. A core element of the changes we’re making in this bill are not to alter the fundamentals of the so-called foreign-buyers ban. We’re not proposing to amend that.

Mr McAnulty has previously been interested in a two-tier approach for the regions, and the advice I have had, which I agree with, is that that would introduce complexity into the Act. You’d have to define the geographic boundaries; you’d have to figure out the dwelling thresholds. It would increase the complexity of—let’s face it, the Overseas Investment Act is an already extremely complex Act. In fact, one of the Government’s key aims is to simplify the complexity of the Overseas Investment Act. The aim of this bill is to better support large-scale, professionally run housing. I’m also advised that build-to-rent is less likely to be viable in smaller regions, given the market conditions, to make it profitable and that smaller developments are also more likely to find finance in the domestic market. For example, it would be relatively easy to find finance for a four-bedroom unit development in, I don’t know, Waipukurau or Napier—pick a medium size town or city. The Overseas Investment Act is less of a barrier.

I’ve gone away, I’ve taken some advice on it, I appreciate that members are raising these issues in good faith, I’m happy to make it available, but, in answer to Mr Utikere’s question, I’m not proposing to advance any amendments.

Thank you, Mr Chair. I thank the Minister for his response. I know he’d indicated that he had sought and received advice. It would be helpful if the Minister was prepared to perhaps make that available, rather than have us rely on the Official Information Act for it, given that it was raised by members opposite—the Hon Kieran McAnulty, in particular. I invite the Minister to maybe think about proactively releasing that information.

I thank him for his comments around the 20-unit setting being the appropriate setting or not, and the indication from the Minister is that there’s no intention to perhaps change that. One final point from me for him will be whether in smaller areas—and I know he has identified and touched on Waipukurau, for example, and I know that Mr McAnulty is very familiar with that part of the country, indeed.

Hon Chris Bishop: That was accidental—

TANGI UTIKERE: Oh, but welcome.

Hon Chris Bishop: —but, yes, you’re right.

TANGI UTIKERE: But welcome—but welcome. I wonder whether there are other opportunities to address some of what I guess is applicable or more appropriate in rural and regional settings. Whilst the 20 units might be an appropriate threshold, as such, or trigger point for urban areas or cities or larger towns, just some understanding of how this might be approached in those regional—I take the Minister’s point that these numbers might not be at a huge level of scale, but having a bill that makes some fundamental change to thresholds is, obviously, important, and making sure that it’s like for like is not always necessarily the right thing in terms of it turning out in that particular way.

I appreciate that the Minister has responded alongside the Overseas Investment Act, but this is also about what could be constrained or otherwise permitted within regional centres and perhaps those places that are cities but that are outside of the sort of urban/metro areas.

I mean, I don’t have a lot more to add to what I’ve already said, which is that smaller-scale build-to-rent is likely to be able to attract domestic capital in the regions—to the extent that it’s economically viable in the regions, too. I mean, what is more likely to happen, let’s face it, with rental properties in the regions is someone just builds a smaller-scale development. It’s not necessarily going to be a kind of professionally run corporate-type structure. I’m not disparaging the regions in any sense, but I’m reflecting on the fundamental economics of where this stuff makes sense. If you look at where it’s happening, it’s Mount Wellington by Sylvia Park; there’ll be a bit of stuff in Wellington and Christchurch. We’re talking about the major metros here. It’s not to say that we discourage it in the regions. It’s just a fact about the economics of this sort of development.

As I was saying to your colleague Mr McAnulty, we’ve taken advice on it—happy to make it available—but we’re not proposing to amend it. We think we’ve got the balance about right and, as I said before, the 20-dwelling threshold reflects the Income Tax Act, which reflects policy decisions made by successive Governments, actually, around the right threshold for build-to-rent.

Thank you, Mr Chair, and thank you, Minister, for the explanation previously on the two points that my colleague Tangi Utikere raised.

I kind of wanted to check in terms of some of the broader context around this in relation to the regulatory impact statement, and I think particularly when we’re looking at some of the limitations to this bill. I think the first question is, if the Minister wouldn’t mind elaborating on: because of the scope of this particular bill, it says that the changes that would require first-principles review or substantial reform were not considered. Part of that is, you know, including some of the changes around the impact to other legislations, and particularly around investment of the build-to-rent sector, and also in terms of some of the residential land restrictions—i.e., the foreign-buyers ban. I guess I want some clarifications from the Minister on what the rationale is behind limiting the scope of the bill in the first place to consider some of these, and particularly when we’re looking at the first-principles review.

I also do have quite a specific question, and this is in reference to new clause 11A of Schedule 2, inserted by clause 6, and subclauses (1)(a) and (1)(b). I just want to check in terms of the reading, because in *new clause 11A(1)(a) it says, “with 1 or more buildings that, taken together, consist of 20 or more dwellings”, but then in subclause (1)(b) it says, “at least 20…dwellings”. With subclause (1)(a), 20 is included as part of “20 or more”, but in subclause (1)(b), 20 is not, because “at least 20” would imply 21. If we’re taking the two of them together, with subclauses (1)(a) and (1)(b) using the conjunction “and”, it means that both must be met in order for the large rental developer test to be met. I want to ask the Minister for clarification: if subclause (1)(a) is 20, but subclause (1)(b) requires 21, how should that be read? Thank you.

Two points there from the member. In relation to the first, I think the question was: why did the Government not do a first-principles review of the Overseas Investment Act in relation to housing? There’s a couple of answers. The first is that we do have an intention to reform the Overseas Investment Act, which is being advanced by the Hon David Seymour, who’s the Associate Minister of Finance in charge of that.

We’ve been working our way through that over the last 15 or so months of the Government’s time in office. I think all members will appreciate the Act is extremely complex. It has been amended—I don’t know the exact number off the top of my head, but it’s 2005, so I don’t know, roughly probably 20 times. This is partly contributed by court cases which have had somewhat unusual interpretations of various parts of the Act over the years, but Parliament has now created a real monster when it comes to overseas investment law. There are reasons for that, but I think everyone should agree it can be simpler. Mr Seymour is advancing some of that work.

The second point in response to that is: why was the analysis constrained at the start? It’s because we campaigned on this very specific extension of the law around overseas investment into build-to-rent because it was manageable, digestible, relatively simple. Members will see the bill is quite technical, but it’s a relatively simple—on its face—change. That’s why the analysis was constrained: because the Government sought a mandate for it and then put it as part of the 100-day plan, and here we are 15 months later, finally working its way through the committee stage. But good things take time. That’ll be why the regulatory impact statement is constrained, but I don’t necessarily think that’s a bad thing. Not every piece of legislation has to be a fundamental rewrite of every Act under the sun, otherwise we won’t make a lot of progress. That answers that.

In relation to Part 1 clause 6, “Schedule 2 amended”—new clause 11A—which I think the member was referring to, I mean it is relatively self-explanatory. As the member says, it’s a conjunctive test, if that’s a legal term of art. It has to be “the residential land is a single site, … adjacent sites separated by infrastructure”, etc., etc., which “consist of 20 or more dwellings suitable for use as, or conversion to, residential dwellings; and (b) at least 20 … [have to be] or are likely to be, available for use, within a time frame” acceptable, which, essentially, the Residential Tenancy Act applies. I mean it’s written there relatively clearly. Both limbs of the legal test must be met, and, obviously, Ministers will take advice or the Overseas Investment Office would take advice about that, whether or not that test had been met.

Thank you, Mr Chair. Thank you, Minister, for that response. I guess I just want to be perfectly clear in terms of the new clause 11A.

Let’s say, hypothetically speaking, we have residential land—let’s say it’s a single site—and it consists of 20 dwellings suitable for use or conversion to residential dwellings, that’s 20, which means it meets the test under subclause (1)(a), but then, because there are only 20, it wouldn’t meet the test for subclause (1)(b), but both tests must be met.

The reason for that is because, for you to meet the test of subclause (1)(b), you need at least 20, which means that you need a minimum of 21—so it’s “21 or more” is how you would read “at least”. If the context is that there are only 20 dwellings, it will meet test (1)(a) but not (1)(b). Am I correct, or is there an alternative reading of “at least”? Thank you.

Well, maybe I’m missing something. I mean, I did pretty well at School C English, so I don’t quite understand what the member’s saying. It’s “20 or more”, which is the same as “at least 20”. So, yeah, I think that deals with that, right?

Thank you very much. Now, while the Minister of Housing’s cracking himself up at his own jokes, I’ll ask a few more questions. The fact of the matter is we support this bill and actually don’t intend to take too much time up in this committee stage, but the point that was raised by Tangi Utikere, my friend and colleague, is one that we do wish to explore, and I hope the Chair allows us to do so in detail because it’s unlikely we will touch on many issues outside of that.

I heard the Minister’s response to Mr Utikere’s questions and his brief summary subsequent to that, but I’m not sure that that actually touches on the core issue there. We were given two explanations there; we were told that there’s been advice. It’d be useful to have that here so that we could actually understand it—this is the stage at which Parliament actually gets the opportunity to dive into something. Given the Minister indicated that he would go and look at this issue—he indicated that it was a fair point that we raised at the second reading—if we really want to understand the reasons why it’s not being explored by the Government, it would be useful to actually have that advice available now rather than seek it out through an Official Information Act request, which I think was the response.

The key thing here is that we don’t want to have a missed opportunity and we don’t want to have to come back and amend this later because we find out that in the areas outside the large centres, they can’t take advantage of the provisions in this bill because they struggle to meet the minimum criteria. Now, what was disappointing through the Finance and Expenditure Committee stage was that the officials didn’t seem all that willing to actually explore this. They’d found a solution as per the instructions from the Government, and actually, to be honest, they weren’t that keen to look into it, despite the fact that members of the committee on both sides could see what it was that we were trying to explore.

Here it is in a nutshell: meeting the 20-unit minimum in the cities is probably not going to be an option—in fact, in places like Auckland, 20 units will probably be a proportion of the total number of units, so that just won’t be a problem—but where I live, any developer that comes along and proposes 12 units is a big developer, but they don’t meet this. If the logic behind this change is that—through feedback from the sector—they will struggle to on-sell their development unless overseas investment is utilised, and therefore without doing so, they would be less keen to put money and invest in the development or indeed build these units in the first place, surely that logic would apply in the cities as much as elsewhere. Is this Government really telling Parliament that it wants build-to-rents to become a significant part of our housing portfolio in this country, but only in Auckland, Hamilton, Tauranga, Wellington, and Christchurch?

Now, I just don’t accept that, because if build-to-rent is going to be a part of this country’s attempt to solve the housing crisis, surely that’s as relevant elsewhere. At the moment, I am not convinced that areas outside the large cities would benefit from what the Government is proposing in this bill. Frankly, I thought the response from the Minister—although good on him for addressing it—was a little bit dismissive: “We don’t get into details. We should understand this.” Like, I get it—this is consistent with what previous Governments have done. But the reason we’ve got an amendment bill is because what previous Governments have done in trying to establish build-to-rent as a separately recognised asset class—it wasn’t there before; it was brought in. Now we’re amending it because it didn’t quite touch the mark. Why are we saying that, because it’s done previously, therefore we’re content? I just struggle to understand the logic.

I mean, we’ve canvassed this before, and I don’t have a huge amount more to add. I mean, I suppose the point I’d make is this, which is that I think everyone in the House agrees—well, it at least is an accepted premise of the law that the foreign-buyers ban should stay in place, which provides a pathway for foreign investment into new housing. The Labour Party’s been particularly vociferous about this in the past. People dislike overseas investment into existing housing. Now, this bill preserves that but makes it clear that investment into existing housing like build-to-rent or large rental developments akin to build-to-rent over 20 or more units is acceptable in order to provide greater liquidity and make sure that domestic investors can invest in build-to-rent, knowing that they could potentially sell it later. The outcome sought is to increase liquidity in the sector and, essentially, incentivise investment on the margins.

Now, it’s interesting: I mean, the member is, essentially, arguing for something that brings it closer to running into problems with the foreign-buyers ban, because if you have a lower threshold in the regions—which is, as I understand it, what the member is arguing for—the closer you get to kind of one, by definition the closer you get to allowing overseas investment into existing homes. So we’ve made a policy call to keep it at 20. There are other reasons. As I said before, there’d be increased complexity for, the official’s advice is, relatively limited benefit. You’d have to do geographic boundaries, sort all that out. I’m essentially recapping the advice. I’m happy to make it available to the member as well, but I’m not saying anything that’s not written down.

The other point I make in response to Mr Utikere is that for smaller-scale developments—and the example I used before you arrived, Mr McAnulty, was one of Waipukurau, which I’m sure you’re very familiar with. It was actually chosen at random, but I realise now you’d be very familiar with it. The developments there, to the extent they are sort of large, are highly likely to be able to attract domestic capital for investment, such that lessening the build-to-rent strictures are not necessary.

So, look, I’ve not got a closed mind to it. In three or four years’ time, if we wake up and it turns out there’s a proliferation of foreign money that wants to enter into the regions and buy 10- or 12-bedroom units, OK, let’s have a look at it, but the advice is that that’s not necessary.

Hon Phil Twyford: You’ll be the Opposition spokesperson then.

Hon CHRIS BISHOP: What’s that?

Hon Phil Twyford: You’ll be the Opposition spokesperson then.

Hon CHRIS BISHOP: Oh, ha, ha! Ah well, we’ll see, Phil. We’ll see. I’m trying to be congenial and engaged on this.

Hon Willie Jackson: Oh, we want to help you too, Bish.

Hon CHRIS BISHOP: Oh, OK—OK. You could be the Opposition leader by then! Mr Twyford could be the Opposition leader by then. Who knows. Helen White could be the—oh, Helen White’s not here.

CHAIRPERSON (Greg O’Connor): I’m looking closely, but I’m not sure I can see this in Part 1, Minister.

Hon CHRIS BISHOP: OK. Well, we’ve now well canvassed the particular issue. I’ll sit down.

Thank you very much. At no point have we advocated for the threshold to be one, and at no point have we advocated for the rules to be loosened. What we have advocated for is a recognition that the minimum threshold that’s outlined in this bill would be hard to meet for many areas of the country.

During the second reading, what I asked you to explore and what you agreed to do was to look at a two-tier system where the current threshold, as proposed, remains in designated large urban centres—cities, basically—and outside of that, you have a requirement that’s a very high percentage of a development, probably 100 percent. Essentially, Minister, the question I have for you is: if someone wants to invest in build-to-rent outside of the cities, in order to benefit from what’s proposed in this bill, they will need to build 20, and realistically that won’t happen. What I’m suggesting is that, if they wanted to build a development of 10 or 12 and they are all build-to-rents, why would this Parliament overlook that opportunity?

The fact is—and we’ve tried to be constructive throughout this—that the housing crisis in many areas of this country is getting worse. Surely we need to look at—you’ve mentioned Waipukurau, places like Wairarapa, but in any regional areas, homelessness is growing and people are struggling to find affordable rents. Both sides of the House recognise that this is one part of the solution, and yet we’re not willing to entertain a change in the threshold to recognise that in areas that are struggling with housing affordability and availability, the threshold would be difficult to meet.

Actually, in fairness, Minister, you did say you would look into it. I’m not convinced that it actually has been, because the answers that you’ve given to our questions haven’t actually addressed the original proposal: keep the threshold as it is for the cities and look at the requirement that if, say, 100 percent of the development—let’s say it’s above eight. So you’ve got eight to 20—nine, 10, 11, 12, etc.; all of those options. If all of them were build-to-rent—a recognised asset class now—I guarantee that there would be more build-to-rent developments built because they would benefit from this.

We accept the rationale. We accept that it doesn’t extend or loosen the ban on foreign investment and that this is a specific, niche change, if you like, to encourage this particular asset class to be built, and yet we’re not willing to go the whole way. We were dismissed at select committee stage by the officials. I genuinely expected to come here and be able to thrash that out, and I’m a bit disappointed that it isn’t.

I could have just turned up here and ignored your second reading speech, not sought any advice, not turned up here willing to engage on the issue. I’ve done that in good faith. Most Ministers don’t actually go away and listen to the Opposition and seek further advice on something, by the way.

Hon Kieran McAnulty: Don’t be rude to your colleagues. They do their best.

Hon CHRIS BISHOP: That’s true, and you know it. I’m happy to table the advice, which has now become available—so that deals with the Official Information Act. At the end of my remarks, I will seek leave to table it, so the member can have a copy of it, but as I say, it largely reflects all the stuff I’ve already said in the last 20 minutes or so.

The member makes a not unreasonable point, but the advice I’ve had, which I agree with, is that the additional complexity that the member’s proposed amendment would introduce into the Act would outweigh the benefits gained from it. People are entitled to disagree with advice. Reasonable people can disagree. The Government’s not proposing to make the change. As I say, I haven’t got a closed mind to it. As I said before, in a few years’ time, if it looks like it’s a sensible change to make, I’m very happy to make it, but that’s not our position at the moment.

Mr Chair, I seek leave to table the Treasury report dated 5 February 2025 titled Overseas Investment (Build-to-rent and Similar Rental Developments) Amendment Bill Minimum Dwelling Threshold.

Leave is sought for that purpose. Is there any objection? There is none.

Document, by leave, laid on the Table of the House.

Thank you, Mr Chair. I want to first thank the Minister of Housing for entertaining me with my previous question—that was my mistake, thank you. I fully acknowledge that.

I actually have a question regarding some of the risks, and I would really like to hear of this proposal and exemption, and I really want to hear the Minister’s, I guess, clarifications on how to mitigate some of that risk. I’m looking at the regulatory impact statement, starting with paragraph 58. I guess the first risk that we’re seeing is the exemption must be provided prior to, for example, if the investment’s likely to meet the criteria before it goes ahead. I guess, in the case of being able to monitor and being able to track when the exemption was placed and that the investor is using the exemption or the investor is truly investing what they said they would invest, how is the Minister planning on monitoring that? Again, presumably, once you give an exemption, you can’t really take it back.

The second part of the question is, again, in terms of some of our international obligations with the exemption, and particularly when we’re looking at some of the obligations under our free-trade agreements and when we’re looking at the context of a ratchet clause within our existing free-trade agreements, where, basically, you can’t reinstate a requirement after you have provided an exemption, because once you’ve provided the exemption, it becomes locked in. How, then, would the Minister mitigate the risk that we cannot remove the exemption in the future without breaching the ratchet clause in our free-trade agreements?

I think the member is confusing what was recommended by the Treasury, or at least considered by the Treasury, as part of the policy development process with what actually is in the amendment bill. All of the things the member is talking about were discussed as part of the policy development process, but they were rejected by Cabinet, and we ended up going for a very narrow extension, or a very narrow change, to the overseas investment regime when it comes to build-to-rent housing. All of the existing things that the Overseas Investment Office does around checking apply, but the things around ratchet clauses and stuff like that were ruled out and are not part of this consideration.

The question is—

Hon Julie Anne Genter: Mr Chair?

CHAIRPERSON (Greg O'Connor): Oh, just in time. The Hon Julie Anne Genter.

Thank you, Mr Chair. I actually had a couple of questions for the Minister of Housing, and, hopefully, he’ll indulge me.

I wondered if he could tell us how many applications there have been under the “benefit to New Zealand test” for the sale of large-scale rental developments to overseas investors, and how many of those, if any, were declined. The question is: have there been any applications under the “benefit to New Zealand test” for the sale of large-scale rental developments to overseas investors, and if so how many were declined?

I guess, following on from that question, it would just be good to understand why the illiquidity of assets in the criteria for the “benefit to New Zealand test” is not enough. That is my question. I can keep going.

In relation to the first question, we’re doing some digging, but I don’t have the numbers to hand. “I don’t know right now” is the short answer.

In relation to the second point, there are reasonable disagreements about this, but there is enough feedback from the market that the test is too constrained at the moment—hence why we’re proposing to change it. Essentially, the amendment we are putting through has been narrowly scoped and actually put forward. There was consultation with the sector around this in order to try and get the right outcome. I’m no legal expert when it comes to the Overseas Investment Act. I don’t think many New Zealanders are, other than highly paid lawyers. The Act is extremely complex, and the advice we’ve received is that this simplifies the Act when it comes to large-scale overseas investment into existing build-to-rent such that it increases liquidity.

Thank you very much for that. Following on from that, was any modelling undertaken or do you have any expectation of what this change might result in, in terms of additional supply of build-to-rent dwellings and what sort of impact that might have on the overall housing supply? Like, what percentage of the unmet housing supply need could be met by making this change? Do we have any reason to believe that making this change will result in a sudden increase in the number of build-to-rent dwellings?

I mean, it’s a reasonable point. The answer is we don’t have any—[Interruption] Yeah, we don’t have any Treasury modelling, but I’m advised that there is some Property Council modelling which shows—this is back in 2021, under the previous Government when they were also pushing for this change—if there were favourable policy settings, the number of build-to-rent dwellings could expand to 25,000 within a decade. By way of comparison, I think we have around 2,000 build-to-rent units at present in the country. That’s a sizeable increase.

As I said at the start of my remarks, is it going to solve the housing crisis in New Zealand? No. Will it put downward pressure on rents on the margins? Yes. I don’t pretend this is a silver bullet, but it’s a useful change. There are some people out there quite bullish about build-to-rent and you’ll also find people who are pretty downbeat about it—as you would in any market. Ultimately, people will take a punt. If it works, they’ll make a quid; and if it doesn’t, then they bear the consequences of that. This is about freeing it up and making it easier to do that. I don’t have anything more to add to it.

Thank you, Mr Chair. Obviously the policy intent of this is to ensure that the exemption for foreign investment into new housing for build-to-rent purposes is sufficient, but is there a possibility that—and did officials consider whether—domestic build-to-rent developers might end up just selling existing supply to overseas investors and that, ultimately, it doesn’t really have a big impact on new housing, I guess? How will that be monitored? Will these changes be monitored? Is there an ability to look at it and make sure that it’s having the intended outcomes after the change has been made and make amendments in the future?

Yeah, I mean that is one of the aims of the bill, is making it clear that domestic developers can sell later to overseas buyers, but it doesn’t affect—as I engaged with Mr McAnulty about it—and it doesn’t engage with the foreign buyers bank which are dealing with large-scale housing developments. That is one of the aims: to bring greater liquidity into the sector.

There’s nothing to stop overseas investment into new housing now, for example. There’s the increased housing test, which—you can’t come along and buy a house, but you can come along and buy land to build some new houses, and everyone sort of seems OK with that. What this does is, essentially, allow buying existing housing as long as it’s build-to-rent, such that it increases liquidity and it will incentivise domestic investment into build-to-rent on the margins. That’s sort of the aim of it.