The gravy train is over: Why my tiniest violin is out for landlords

Emily Writes is a Wellington-based writer and activist. OPINION: I couldn’t help but wonder, as I read a reader report by a landlord, that as a country we just might need to roll out some nationwide landlord budgeting advice. Time and time again, we see landlords complaining that they cannot afford their investments. They seem to have a strong belief that this is the fault of the government, or anyone who believes landlords should pay tax like everyone else does. Landlord David Lane recently wrote in to Stuff to say that he is “actively downsizing [his] portfolio” after collecting houses as investments for 40 years. The reason for this, Lane says – is a combination of things – he can no longer claim a deduction on his taxes (neither can I and I don’t even own a house!), and the rental he bought does not meet the Healthy Homes standards so he cannot rent it.David Lane/SuppliedDavid Lane’s rental property in Palmerston North. He has chosen to renovate the house he wants to live in, rather than the rental he owns. This is a choice he made, but he suggests it is also the fault of government policy somehow. Let’s consider this another way: If I wanted to open a restaurant, and I couldn’t afford a fridge to keep the food cold and stop people getting sick – we wouldn’t hesitate to say that it’s my fault. We would never blame food safety standards. Likewise, if you cannot afford to make a home safe for tenants, you can’t afford to be a landlord. Lane says: “I think the economics no longer favour investments of this type. You can argue all you like about the policy settings, but fundamentally if the numbers don’t stack up, then people will not invest in property. It is the reason why property prices have fallen so far, investors are simply not buying.” There is simply no other form of investment where we expect someone else to pay for it. Someone else is paying Lane’s mortgage and he’s complaining that he might have to chip in as well. Make this make sense. Let’s also be clear that house prices are still hugely higher than they were in say, 2017, when this same Government was elected to power.Rebecca McMillanEmily Write is incensed by landlords complaining they cannot afford their investments. This is why I think we need to consider an education campaign for landlords like Lane (not all landlords, put down the pitchfork, folks!). Lane has literally just over-leveraged himself. That’s all that has happened here. So why does he want to make it our problem? The purpose of these policies that landlords like Lane can’t stand are to stop landlords like Lane investing in houses, so property prices fall, so people can buy a first home, so we don’t have a housing crisis. It’s literally the point. It’s the whole point, nothing but the point, so help me God. We don’t want investors who own 20 homes to buy more homes. We don’t want people who think renting is passive income for them, that renters should subsidise their lifestyles, that renters should absorb every cost the landlord has. I get that it’s a shock for landlords, I do, and I have my tiniest violin out for them. For a very long time, they were on a gravy train. Buy a house, because you own a house, the bank will lend you another house, raise rent, raise rent, buy another house. I have heard people proudly say they bought a house sight unseen, and had it approved by the bank without having to spend a single cent – and then they’ve written an e-book about it and encouraged others to do the same. But that time has ended. You had a good run: If you were smart and not greedy, you made money. The difficulty is that these landlords don’t see that they’re not victims here. This is proven by Lane’s missive. If I were Lane, you simply could not waterboard that information out of me because it’s so woefully out of touch. He is telling a country where there are more than 25,500 households waiting for a home, with 89% of those in significant and urgent need, that he will board up his rental – because he’s upset he can’t make as much money off it. Landlords believe their investment is a business, until they’re asked to pay tax. Then it’s a service. And it’s a service until they want to board up a home during a housing crisis, then it’s a business. Landlords provide housing the same way scalpers provide tickets. You can’t have it both ways. And yet, many landlords cannot face this. They want an investment that they don’t have to invest in. They want passive income and will tell everyone how easy it is to do, how the money just flows in. But then they’ll say, actually they’re so poor they have only one Tesla. They have never made a cent renting! In fact, they’ve lost money! It’s awful! They just wanted to make enough for retirement, but they had to downsize by selling two of their four properties. And they’re mum-and-dad landlords. It’s strange they never consider mum-and-dad renters then. National leader Christopher Luxon, who owns seven properties worth more than $16 million, wants to push through a lot of new laws that will financially benefit him and other landlords, to the detriment of renters. There’s a lot of them, from the repeal of the Medium Density Residential Standards (MDRS) which impacts five of his properties, to reversing the Government’s move to stop landlords being able to deduct mortgage interest from rental earnings for tax purposes, and reducing the bright-line test from between five and 10 years to two years, making it easier for investors to avoid paying capital gains tax. But worst of all, National will scrap Labour’s ban on evictions without reasonable cause and other rental regulations if it wins the election. This change would pull the rug out from under all other renter’s rights. If you can get chucked in the too hard basket and turfed out for asking your landlord to fix a hole in the roof, we’re back to the dark ages. So, we have a choice. Subsidise Lane’s renovations and retirement plans and buy the sob stories of landlords who for decades have benefited from tax free gains and passive income – or consider that the Government has made a few policy changes that we now have proof are working. Right from the horse’s mouth, in fact. We should also remember that these changes haven’t gone far enough when so many New Zealanders still live in damp, unhealthy homes, while rent prices continue to skyrocket without restriction, and landlords continue to profit from our ongoing housing shortage. It’s bad enough that landlords are profiting from you and your neighbours’ suffering, we shouldn’t have to read their sob stories too.

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