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This story was originally published on RNZ.co.nz and republished with permission.
Renters are bracing for an increase in living costs when the freeze on rent increases comes to an end next week.
This is after the Commerce Commission had to warn real estate investors that they might be at risk for cartel-like behavior after discussing raising rents, en masse, the day after the freeze ends.
The government announced a freeze on rent increases for six months on March 26, it was a measure implemented to protect tenants during the Covid-19 pandemic.
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However, some tenants have received advance notices, in anticipation of the end of the freeze.
Zoe *, who rents a one-bedroom studio in Wellington, is one of them.
He recently lost his job to Covid-19 and is also visually impaired.
Your disability benefit, which is your full weekly income, is $ 500.
With the renewal of her lease in August, a notice also came that her rent would increase by $ 40 a week, effective the day the rent freeze ends, September 25.
That brings her rent to $ 370 a week, 75 percent of her total income.
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The government announced a freeze on rent increases for six months on March 26. It ends next week.
“I was devastated, obviously, because $ 330 is already a lot, and I was on the verge of not being able to afford even that.”
He responded to the notice, asking the landlord to reconsider, given his personal situation as well as the condition of the unit, that it is damp and moldy.
No work has been done on the property during the time she lived there, she said.
The property management company responded, saying that they were sorry to hear about his circumstances, but that the owner needed a better return on his property.
Then they asked him if he had tried to run a dehumidifier “constantly”.
Due to her disability, Zoe needs a home that is appropriate for her needs and can accommodate her guide dog.
He looked for other places in Wellington, but nothing suited him.
So she was forced to accept the raise.
“It’s kind of mean, honestly, and it’s very cynical that they did it as soon as possible.”
Trade Commission sends alert
Last month, the Commerce Commission issued a warning to real estate investors who were discussing plans to increase rents, en masse, in online forums.
There were discussions about increasing rents across the industry the day after the rent freeze ended, on September 26.
Commission Chair Anna Rawlings said investors were at risk of violating the Trade Act and letters of advice were sent to industry representatives.
“Owners should be aware that they may compete with each other for the supply of rental properties and may be conducting a property supply business.
“As a result, they are subject to the provisions of competition law and consumer protection laws. They must make sure they are aware of their obligations and ensure that they comply with them,” he said.
‘A general discussion’ between owners
Sharon Cullwick, executive director of the Property Investors Federation, received one of those letters.
Investors were discussing the possibilities on Facebook, he said, and he is urging them to heed the warnings.
“I think it was a general discussion that the Commerce Commission took up. I don’t think it was anything specific. But it really is a warning to us that they are seeing what real estate investors are doing.”
He also assumed that the Commission does not want rents to go up in Covid-19 weather.
Tenants could expect to see rental notices in the coming months, Cullwick said.
“What we’ve heard is that there are quite a few landlords granting rent increases, but some of it is because when the legislation came in, we couldn’t raise rents at the time, and that delayed.”
Helen O’Sullivan is the CEO of Crockers Property Management, which manages a large portfolio of properties, including many apartments in central Auckland.
You don’t see many rent increase notices and don’t expect to see them.
“Landlords are recognizing that having a quality tenant who can pay the bills right now is the best way to maximize their income stream.”
It takes several weeks of an additional $ 20 or $ 30 per week to make up the three weeks, if your spot is left empty, O’Sullivan said.
“Keeping your tenants really is the best way to maintain income for homeowners right now.”
She is urging landlords to keep good tenants if they can.
* Name has been changed for privacy reasons.
This story was originally published on RNZ.co.nz and republished with permission.
