There's been a lot in the news lately about the housing crisis, the reasons for which we've looked at earlier in the month.
At the coalface though, the roar against landlords is coming through loud and clear that the rot has filtered far deeper than most of us middle class plebs suspect.
Jacky* has two kids and has recently come out of a relationship. She's looking to work, but in the meantime, she's on the benefit. Of the $700 a week she gets, $400 of that has to be paid on rent for a very basic three bedroomed home that is of 80's fibrolite, cracked tile benches, one small pantry and the whole sandwiched between housing corp homes. That $300 a week has to pay for power, the net, petrol, kids schooling, medical and clothing needs and as always, food.
She never has anything left over, and often doesn't have enough.
Mike and Belle have two kids, both work and they are paying $650 a week for a reasonable three bedroomed home in a good suburb in the same regional city as Jacky. Her entire wage pays the rent, with a little more coming from Mike to cover the shortfall.
In the past, a healthy economy was thought to be where you used 33% of your income on your necessary outgoings. In fact, banks wouldn't loan you money for a house unless you came in under that threshold. Back when I was in my 20's, that was doable. Today, it is so unattainable that the banks have quietly shelved that. But while house prices and rentals have surged ahead in triple figure percentages cost wise, wages absolutely have not, particularly in the regional areas.
How has this happened that in order to put a roof over one's head in the rental market, you absolutely have to have at least one of you working to pay your entire wage on keeping said roof over your head?
Peta and her husband Jack have four kids between them, both were working at the time and paying $500 a week. They had a standard home in one of the major regional cities that they were asked to leave from as the owner wanted it back for Christmas. When they left at the end of October, they had nowhere to go. Since then, her health has taken a turn for the worse and while waiting for surgery, she has had to give up work. They have lived since then, with their family, on friends couches, garages, tents on front lawns and in March this year, they still cannot afford a home, needing as they do to stay in the area because of a child's special needs.
Then there is May, a 75 year old pensioner who lives in a council allocated flat in a leafy, lovely Waikato town - and which the council now operates on the basis of charging market rental rates. So for her one bedroomed home, she pays $230 a week - and yet receives just under $400 a week. That leaves her just $170 with which to exist. And it is just exist - the 61% of the median wage, which is what pensions are based on, is not keeping up with living costs.
Food and electricity costs have soared in recent years and don't let any politician tell you they haven't.
Some 38 years ago, a truck driver I know was receiving $15 per hour to drive his B-train rig and paying $65 a week in rent for a three bedroomed house. At that time, I was paying $92 a month in mortgage off a $27,500 house in Levin. Our weekly budget for food was $40 a week for the four of us, which included two children and pets.
That same truck driver is receiving $22 a hour these days (and is regarded as a higher paid than usual driver). He was paying, until recently, $520 rent for a home in another regional area. Our weekly food budget, with just my husband and myself, is around $275 a week these days. Thankfully, we have paid off our mortgage. Yet, economists (a profession I think should be driven off a cliff with the amount of seriously inaccurate figures they release all the time) believe, for example, that the average annual mean wage in Auckland is just over $81,000 a year. $81,000 a year? I know a lot of people in Auckland and only two would earn more than that. Yet on that basis, they are advising, according to Interest, that in order to bring Auckland rents up to the prices-to-rent-ratio on a par with the rest of the country, landlords would have to increase rents by a third. Good luck with that.
Have a good look at those microcosmic figures though and see the differences. I'm no mathematician, but when you think about the exorbitant price of electricity and the leaps and bounds in increases it has experienced in the past five years on the basis of "Profit! Profit! Profit before all else!", it's amazing we haven't all dropped back to kerosene and candles.
For landlords, it's much harder than renters might think. Yes, there is the absolute issue of lack of houses caused by councils with their landbanking methodology as discussed earlier. But when I read the other day that Tauranga District Council, which was one of the worst offenders with that methodology and then implementing ferocious fees to develop and build, is looking to charge ratepayers a 40% increase over the next three years - my first thought went to how the heck were landlords and subsequently renters going to pay for this? Still known as the 10 dollar city for its employers unwillingness to pay much more than minimum wage, this is an untenable situation. No pun intended.
The Local Government Authority has proven itself over the years to be a complete toothless wonder in its management of councils and their willynilly expenditure which has placed most of them firmly in the red. Something needs to be done - and believe me, allowing Tauranga to become a super council by swallowing up the more affluent councils of the region would be the biggest mistake ever - and would certainly further impact on landlords and tenants.
The plans by Labour to introduce legislation to stop landlords from being able to evict without due cause is set to come up in parliament this year. I feel ambivalent about that. If I owned a home that was rented out and if circumstances should change so that I should need to move back into it, I'd want that - and why not? It's my home. But as a tenant in an era where homes are so scarce and not looking to improve any time soon, it's a stressful situation to be in and one in which I've unfortunately seen all far too many times the anguish such decisions can and do cause.
Is there an answer? I do know that tenants raging against landlords isn't going to fix the problem and in fact, will; probably exacerbate it by frightening prospective landlords into investing in other things with less hassle attached. Yes, there are those who are in it only for the profit and yields; they see it as a business, which of course is how the IRD view it and subsequent taxation from such businesses is as to be expected, not cheap. People cannot afford to buy first homes these days, no matter how many platitudes get thrown at them by various government. It is ludicrously hilarious that Judith Collins is now the National party's spokesperson on Housing - yet in an area where her party either directly caused some of what has become a massive, nation-wide problem, or at the very least totally ignored what was shoved up their left nostrils well before the last election, is hellbent on focusing on Phil Twyford, rather than on coming up with some solutions. And maybe therein lies the answer. A bipartisan approach by all parties to sort this becomes it becomes any worse; before our homeless numbers and our children living in poverty approach figures we simply cannot fix.
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