Rent increases would be limited to once a year instead of the current six months, and the formula for increases would need to be set in tenancy agreements so tenants knew what to expect.
The policy did not find favour with the Property Investors Federation or the Property Institute.
Announcing the policy yesterday, Labour leader Jacinda Ardern said Labour was committed to restoring Kiwis’ dream of owning their own place.
But it recognised long-term renting had become a reality for more families, although the current law created instability and insecurity for many.
It was not uncommon for renters to be forced to move as often as once a year. Families were living with a level of stress and anxiety and often had little notice they had to move on and find a home in a tough rental market.
"Cold, damp homes are also a huge problem. It’s vital we improve the quality of rentals so our children no longer get sick or die from living in cold, damp and mouldy houses."
Landlords should also feel secure knowing their property was in good hands, she said.
If a tenancy agreement was breached, landlords should be able to access the tenancy tribunal and have action taken straight away.Labour would ensure the tribunal was resourced to take action quickly when it needed to, Ms Ardern said.
Many landlords and renters were looking for secure longer-term fixed tenancies. In those cases, Labour would change the law so there was the option of paying a higher bond in exchange for being allowed to make a house a home by doing minor alterations, like painting a wall or hanging a picture — as long as the tenant returned the property to the state it was in at the start of the tenancy, she said.
Andrew King, executive officer of the New Zealand Property Investors Federation, said the plan could backfire.
"It’s going to put people off being landlords. People already can’t find rentals, and this will push up prices. Why would we restrict supply when what we need is more?"
Everything Labour was doing is the opposite of what should be done, he said. Property Institute chief executive Ashley Church said Labour’s policy would scare existing landlords out of the rental market and make the current housing crisis even worse, especially in Auckland.
"If you’re an existing landlord, the deck is already stacked against you. The market has flattened, LVR restrictions mean your equity position is worse and bank credit rationing means it’s now much harder for you to borrow money to do renovations and improve your position."
It did not take much to recognise Labour was already committed to a capital gains tax and the tax working party would be made up of others who shared that view, he said.
"If you’re a property investor, the very clear message is ‘we’re out to get you’."
Private investment was the key to solving the housing crisis and providing incentives to get people building new homes was the way to overcome supply.
No-one was going to do that if they were worried they were going to be regulated and over-taxed, Mr Church said.Landlords would abandon the market and people who might otherwise have invested would stay away.
