Little thinks increased costs don’t get passed on

Newshub reports:

Andrew Little says it’ll only be “greedy landlords” who hike rents on the back of his proposed Bill to insulate and warm homes.

This reflects the mentality of someone who has never run a business. Like many unionists Andrew seems to think that it doesn’t matter if costs go up, as owners can wear it and won’t increase their charges.

The history of the world is against this. Economics 101 is that if costs increase, charges increase.

But Mr Little rejected suggestions the new requirements would lead to an increase in rents, saying landlords will have plenty of time to absorb the cost.

“That in my view, is a cost landlords will be able to bear over that time, given the increasing value the property will enjoy over that period.

“This does not need to lead to hikes in rents, and only greedy landlords will be seeking to hike rents for this reason.”

Again Little doesn’t understand cashflow.

Sure your property may increase in value, but that doesn’t give landlords any cash. They need income from their properties to pay the mortgage, pay rates, repairs, maintenance etc.

If you force landlords to spend $5,000 more on a property, then that cash needs to come from somewhere.