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Wairarapa rents soar to ‘unaffordable’ levels

Short supply is resulting in rising rents across Wairarapa. PHOTO/STOCK.ADOBE.COM

All three Wairarapa districts have unaffordable rents, adding extra stress to families already feeling the crunch of rising inflation.

Masterton had the most expensive mean rent in the region at 40 per cent of median household income, the second-highest in the whole Greater Wellington region, according to a housing report published by Wellington Regional Leadership Committee [WRLC].

Carterton had the most affordable rents in Wairarapa, but it was still considered unaffordable.

Affordable rent is generally considered to be 30 per cent or less of household income before tax, a figure all three districts sit well above.

Unaffordable rents are just more bad news for renters. Wairarapa is having fewer rentals coming to market as the housing crisis is leading property investors to sell, and competition for few rentals is high.

Anna Bykova, a spokeswoman for Renters United, said that an unfair balance was leading to rental costs taking up more and more of a household’s budget.

“One of the main things increasingly unaffordable housing means for renters is housing instability. The power imbalance between renters and landlords means that a person’s living situation from year to year is highly dependent on whether their rent inflates to an unaffordable level.”

“Being forced to move house each year – as many tenants are – makes it difficult to make any dwelling into a proper home.

“The thing to note here is that demand in the rental market is relatively inelastic, meaning that there isn’t a point where people decide they don’t need a home. People are more likely to take up extra jobs or cut spending on other essentials in order to make ends meet.

“This prioritisation means it is easy for accommodation costs to gradually take up a larger and larger portion of a household’s income.”

Bykova said the only way to bring rents under control and make them affordable would be the introduction of rental controls.

“To stop the runaway market, we would like to see the implementation of meaningful rent controls.

“We believe in rent indexation, under which rent increases would be limited to no more than inflation except for situations where significant improvements have been made to the quality of facilities of the home. We would also like to see stricter regulation around informal rent bidding and landlord accountability.

“Without rent controls, we would expect rental unaffordability to continue indefinitely.”

Wairarapa MP Kieren McAnulty said that whereas he could understand why people were calling for rental controls, he did not think they would be effective because they could prevent the development of new houses, which would tackle the shortage problem that is causing rents to rise.

“The issue with rent controls is we don’t want to discourage those who bring private rentals.

“It’s all part of the big picture, high rents are due to the housing shortage. The key is to provide more houses and rent controls could potentially hamper that development.”

McAnulty said he was an advocate for state housing, and that he was working on bringing Kainga Ora back to Wairarapa to bring more state housing to the area, including Tararua, which were the only two regions in New Zealand without it after the National government sold off 530 homes for $10 million in 1999.

“This is exactly why I’m pushing so hard for Kainga Ora to come back to Wairarapa,” he said.

“They would be able to house a large number of people which would make a huge difference.

“At the end of the day we do still need private rentals. But bringing state houses back to Wairarapa is the key issue.”

He said that changes that were made by the Government to housing rules were designed to make it easier for first home buyers and encouraged property speculators to build new houses, rather than buy up existing housing stock.

“We are now seeing record consents across the board and sadly there are covid-related shortages to essential supplies, which is unfortunate as it may mean things are not being built.”

South Wairarapa District Council had consented the most new dwellings of any Wellington regional council, at 17 consents per 1000 people in the year ending December 2021.

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