Otago Property Investors Association Inc

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Email: otago@nzpif.org.nz

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27-02-2015

Political report for February from Thomas Chin

The following is a summary of political and regulatory news or comment affecting the residential rental property industry.

  • Public engagement on social housing

  • Ex-state houses could end up with private landlords

  • Parliamentary year commences

  • Labour's 2014 Review completed

  • WOF for boarding houses

  • Budget on 21 May

    Public engagement on social housing

    On 5 February the Government provided details for public engagement on its social housing reforms. Specifically, there will be six public meetings in February and March. At the end of March the Government will announce areas it is considering for initial housing transactions. From mid-April to the end of May, there will be regional consultation with more detailed discussions about the potential transactions in each of these areas.

    For property investors who maybe interested in acquiring or redeveloping state houses for social-housing purposes or acquiring empty, surplus state houses must be registered with the Community Housing Regulatory Authority and be subject to regulation under the Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Act 2013.

    Ex-state houses could end up with private landlords

    The rhetoric around the sale of state houses has not let up. Labour’s Housing spokesperson Phil Twyford says the Government has no way of ensuring the state houses it is selling are not sold on to private landlords and speculators. “Treasury are handling the sale process and have advised the Government that if a community housing provider ‘were to become financially distressed this could present risks to ongoing tenancies and fiscal risks to the Crown’. These houses could end up in private hands, with the taxpayer left footing the bill”.

    What is clear is that there exist potential opportunities for property investors.

    Parliamentary year commences

    At Parliament’s first session of 2015 (10 Feb) Prime Minister John Key gave a speech outlining the Government’s work agenda.

    Of key interest for property investors he repeated the Government’s plans to reform social housing - the sell up to 2000 state houses to "registered community providers".

    From the opposition political parties perspective they see the establishment of a market for social housing where registered organisations provide community housing as opportunities for property investors.

    Elsewhere, the Government's Kiwisaver Homestart grant commences 1 April. The grant basically doubles the amount of state assistance a person or couple can get on their first home which is expected to encourage the supply of affordable new housing.

    Labour's 2014 Review completed

    The Labour Party review of its 2014 election campaign and in particular its examination of its political positions closed on February 15 2015. Property investors will be keen to know if Labour’s election promise to introduce a Capital Gains Tax will be dumped. A summary of the review findings will be released in the coming weeks.

    WOF for boarding houses

    In a new area of attack on landlords, Labour’s Associate Housing spokesperson Su’a William Sio says the government needs to toughen up on boarding house operators. Sio says: “Labour believes it is time to get tough on rogue boarding house operators by introducing a licensing regime, and a set of minimum standards based on the proposed housing Warrant of Fitness, backed up by a tough compliance system”.

    Budget on 21 May

    Finance Minister Bill English will present Budget 2015 on Thursday, 21 May. Typically, the Government uses the Budget process to signal new tax or policy changes. In past years, the Minister has increased funding for the IRD to pursue property traders and speculators, provided more money to MBIE/tenancy services, given financial assistance to first home buyers and funding for home energy efficiency initiatives. It is likely there will be further detail announcements around the sale of state houses to social housing providers and changes to the Resource Management Act to assist housing affordability.

     

    ISSUES UNDER WATCH

What

(sponsoring MP)

Brief description

Status

Building (Earthquake-prone buildings) Amendment Bill

(Nat: Nick Smith)

Sets a requirement for buildings to be earthquake strengthened – also applies to multi-storey or multi-unit residential buildings

Bill has been referred to the Local Government and Environment Select Committee. Submissions closed: 17 Apr 2014. Committee report due: 30 Mar 2015

Healthy Homes Guarantee Bill (Lab: Phil Twyford)

That every rental home in NZ meets minimum standards of heating and insulation

Bill awaiting first reading (late March). The Government will not support it - unlikely to get past 1st reading stage.

Energy Efficiency and Conservation (Warm Healthy Rentals Warrant of Fitness) Amendment Bill

(Greens: Metiria Turei)

Through the introduction of a “WoF” regime require minimum energy performance standards for all residential rental accommodation

Bill awaiting first reading. The Government will not support it - unlikely to get past 1st reading stage.

State house WOF trial

Trialling a WOF system on 500 state houses

Minister of Building & Housing decision on trial pending

END

 

Tags: political report

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