Hehir on Housing WOF

Liam Hehir writes:

I would unreservedly support a law change mandating stringent performance standards for rented properties provided that the following section is included in the legislation:

“Nothing in the Law of Supply and Demand nor the Law of Unintended Consequences shall apply to the provisions of this Act.”

This is really important because, unless Parliament can somehow prohibit those other laws from having an effect, extensive housing reform has the potential to make life much harder for many renters.

Sadly Parliament can legislate against unintended consequences about as sucessfully as it can legislate that PI=4.

By any historical measure, New Zealand is a prosperous country. We should aspire to be a society in which the basic comforts of human existence are universally available – particularly to children, who bear no responsibility for the circumstances in which they are raised.

Nevertheless, it does not follow that we should disregard the known risks of forceful government intervention. At some point, the imposition of requirements on landlords will result in rents being driven up. That could make it difficult for poor families to find any accommodation at all.

It will also lead to less houses being available.

Moreover, given that a survey of rental properties early this year had more than 90 per cent failing a warrant of fitness check, the minority of owners who already meet the standard will see their competition substantially lessened as thousands of houses are removed from the market. This will enable them to command premium rents – and you would have to be completely naive to assume that they would not look to do so.

So you’ll get fewer properties, and those remaining will have higher rents. That will help poor families a lot.