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Monday, 10 December 2018 08:32 pm

Millions for poor may be grabbed by landlords

Feb 19th, 2018 | By | Category: Front Page Layout, News, Top Picture

 

Alan Johnson after the official launch of the State of the Nation

Landlords, not tenants, may cash in on the extra $400 million the Government will pump into the accommodation supplement from April 1.

Author of the Salvation Army’s State of the Nation report, Alan Johnson, says raising incomes is not a solution to the rental crisis.

“You can top incomes up and all it does is either displaces other people or causes prices to rise,

“So I’ve got another $20 in my pocket but my rent costs me another $20. I’m no better off.”

When asked whether recent rental increases in Wellington were due to increased student allowance and student loan payments, Mr Johnson said there was not enough evidence yet to support that theory, but he believed they were related.

“I think they are related but the evidence isn’t strong to prove that.”

“I think the forthcoming adjustments to the accommodation supplement, which will see $400 million of extra money, go into the accommodation supplement and rental markets, I think that’s going to have a real opportunity to test that theory.”

Mr Johnson, a social policy analyst in the Salvation Army, says the only solution to the rental crisis is building more houses.

In a statement, Minister for Housing and Urban Development, Phil Twyford, said the Government were going to monitor the impact of increases to the accommodation supplement.

Mr Twyford says the Government wants to make life better for tenants.

“I have committed to a targeted review of the Residential Tenancies Act which will get underway this year. The review will advance a range of changes to make life better for renters and will include consideration of banning letting fees and limiting rent increases to once per year,

“This review is expected to result in legislation being introduced to Parliament by the end of the year.”

Mr Twyford said the best way to improve life for renters is to increase the housing supply, an area the Governments Kiwibuild and urban growth reforms hopes to address.

The new accommodation supplement rates will come into effect on April 1 2018.

Some people will see their accommodation supplement increase by $80 a week, depending on the area they live in and the number of people in their household.

Mr Johnson says there is no short term solution to the rental crisis many people are experiencing.

“Clearly the only thing that is going to happen is people are going to have to cope.”

While Mr Johnson predicts there will be some market responses to the current state of the rental market in New Zealand, he does not believe it will be enough.

“We just have to build more houses.”

 

 

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