Housing NZ reaches out to landlords

20:13, Apr 27 2013

Housing New Zealand is mounting a charm offensive to make up with disgruntled landlords.

Over the past couple of years, unhappy landlords have sniped at Housing NZ for not looking after their properties. That prompted the agency to rework its lease agreements, acknowledging it could have done a better job.

Now Housing NZ is launching a publicity campaign and a new lease agreement aimed at persuading more landlords to trust their properties to its care.

Sean Bignell, the state house provider's general manager asset development, said the corporation had launched a publicity campaign seeking replacements for those landlords who were taking their properties back at the end of their current leases, as well as encouraging those with properties leased to the corporation to sign new leases.

The campaign also recognises a reduction in the supply of new homes available for it to lease after the demise of developers building homes to sell to investors with the lure of long-term leases with the agency.

Bignall said the new version of its leases, which the corporation has dubbed "version six" leases, was designed to remove the sources of unhappiness that alienated some landlords. He said it was being well received.


"It is fair to say that we have had an enormous success rate with people who have moved onto version six leases," said Bignall, who has overseen the leasing programme's overhaul since his arrival at the corporation 18 months ago.

The version six differences include shorter leases starting at five years, compared with the 10 to 15 that were the standard. This also fits with Housing NZ's goal to be able to have a portfolio it can easily change.

The corporation has also committed to doing any and all repairs up to $5000, removing bickering with landlords over what constituted fair wear and tear, and who paid the bill for damage.

The new leases continue to guarantee 52-week-a-year rental income and rents that will rise in line with inflation. To calm worries over the state of properties, an independent property inspection report is sent to landlords every year.

The aim was not to introduce creeping privatisation of state housing stock. Bignall said the proportion of leased properties made up around 6 per cent of state housing stock and there were no plans to lift that.

The issue was replacing landlords whose leases were coming to an end, or those who were leasing properties which the corporation no longer needed.

Not everyone buys that, and it is easy to see why given secrecy around the corporation's plans for the "asset management" of its portfolio of properties.

Last week Labour MP Phil Twyford told the Sunday Star-Times he could not understand the quantity of material censored from the corporation's Briefing to the Incoming Minister (BIM), including material removed to bemusingly "protect the confidentiality of advice tendered by officials".

He said Labour believed the Government would like to see as much as it could of the state housing stock privatised.

Bignall acknowledged redevelopment and intensification of state housing stock would continue, which essentially means gradually replacing state housing on large sites with a mix of more intensive state and private housing.

The controversial Glen Innes redevelopment project in Auckland is an example of this, with 156 state houses on "big" sections to be replaced with 78 dwellings owned by Housing NZ, at least 39 "market-based affordable houses" with the remainder of the site used for dwellings to be privately sold.

Bignall said such projects were part of a plan to reduce the "overconcentration" of state housing in some areas. Such projects would also "unlock value" in the underutilised land, he said.

The areas of greatest demand for state housing are in Auckland, where the population and need is rising fastest, and in Christchurch, where the corporation has a tiny proportion of its stock - much of it being repaired after damage in the Christchurch earthquakes - leased from private landlords.

It would also like to see more leased properties in Wellington, and to a lesser extent the Bay of Plenty and Palmerston North.

Leasing properties offers Housing NZ the opportunity to rapidly shift to a new mix of dwellings as demand changes.

The corporation says it has too many three-bedroom dwellings when the demand is for smaller one- to two-bedroom places and for larger family homes.

Just under 5 per cent of Housing NZ's property portfolio was properties leased from private landlords at the end of June, but the picture around the country is mixed. In Auckland, 6.62 per cent of Housing NZ properties were leased at that date.

In Wellington, it was just 1.21 per cent. In the central North Island, the proportion leased was 5.26 per cent, while in the South Island it was 3.81 per cent.

Sunday Star Times