Bigger cots for rental homes?

David Farrar posts Little thinks increased cots don’t get passed on at Kiwiblog – yeah we all make typo mistakes, I don’t think he means that rental homes should have bigger cots for bigger babies.

But he has a point. He quotes from Newshub  Healthy Homes Bill won’t up rents – Little

Andrew Little says it’ll only be “greedy landlords” who hike rents on the back of his proposed Bill to insulate and warm homes.

But Mr Little rejected suggestions the new requirements would lead to an increase in rents, saying landlords will have plenty of time to absorb the cost.

“That in my view, is a cost landlords will be able to bear over that time, given the increasing value the property will enjoy over that period.

“This does not need to lead to hikes in rents, and only greedy landlords will be seeking to hike rents for this reason.”

Farrar responds:

This reflects the mentality of someone who has never run a business. Like many unionists Andrew seems to think that it doesn’t matter if costs go up, as owners can wear it and won’t increase their charges.

If you force landlords to spend $5,000 more on a property, then that cash needs to come from somewhere.

Farrar is right. I don’t know if Little is naive or ignorant of basic business economics, but in general it’s inevitable that increased costs will result in increased charges.

But both Little and Farrar miss a key point.

If a landlord pays to install insulation and better heating (usually a heat pump) then it’s likely they will put rent up to covered their increased costs.

So the renter may have to pay more for rent. It should only be a little more. But their reduced costs for heating and potentially for medical costs should easily compensate for that.

There may be some landlords who baulk at putting more money into their rental properties, or simply cannot afford to pile more money into their investment. So some landlords may sell up.

This is a different issue but also potentially an important one. Another landlord will buy the property and may charge higher rent. Or a home owner may buy the property and live in it, reducing rental stock. If a number of landlords quit property investment then reduced supply could also force rents up.

It’s a lot more complex than suggesting that only “greedy landlords” will put up rents.

Leave a comment

19 Comments

  1. Iceberg

     /  8th May 2016

    “greedy landlords”

    He might as well turn an otherwise useful conversation into a class war, that’s all he knows. You just know this is going to backfire on some of the Labour property barons.

    Reply
    • Pantsdownbrown

       /  8th May 2016

      “greedy unions”

      They too should just ‘absorb the cost’ and do all their activities for free.

      Reply
    • Corky

       /  8th May 2016

      I didn’t blink twice when I read the headlines. Such a move is entirely consistent with Labour policy. Remember shower-heads? Why not cots?

      Reply
    • Hall

       /  8th May 2016

      Andrew Little is out of touch, he gives landlords way too much credit.

      Reply
  2. Brown

     /  8th May 2016

    “I don’t know if Little is naive or ignorant of basic business economics, …”

    I do, its both. The man is continually revealing himself to be a moron. He says capital gains compensate (and they may do if they continue) but he’s against capital gain and wants to tax it. This all comes back to Little is a typical leftie – I want and someone else will pay.

    Reply
  3. David

     /  8th May 2016

    As a landlord I have no concerns about this, we put heatpumps in anyway and National is regulating for higher insulation standards and its just another cost of doing business that cant be passed on. Massive relentless rates increases and doubling of insurance premiums are far more painful but thank god interest rates are so low.
    Why would anyone need a heat pump in Kerikeri except for air con in the summer ?

    Reply
    • Alan Wilkinson

       /  8th May 2016

      “Why would anyone need a heat pump in Kerikeri except for air con in the summer ?”

      Exactly. The only time our holiday house has ever been asked for one was for cooling, not heating. And why on earth would you put one in or have double glazing when windows are permanently open?

      Know nothing morons try to apply the same rules to completely different environments simply because they can and think it sounds good. Costly lunacy.

      Reply
      • Kitty Catkin

         /  8th May 2016

        People asked you to put it in a holiday house ? What a cheek, unless you’re charging a massive rent, which I don’t suppose you are. Tell them to buy a fan like the rest of us or BYO. A fan in every room would cost about $100 unless it’s a huge house. My fans came from The Warehouse and K Mart.

        I suppose that AL would like aircon in houses in Stewart Island and Scott Base.

        Reply
        • Alan Wilkinson

           /  8th May 2016

          We have a suggestions book and mostly the suggestions are valuable. That one wasn’t. There are already fans in the house. You can imagine the electricity usage if we put in heat pumps. It is a big house and many guests struggle with any technology more advanced than a window or a door.

          Reply
  4. duperez

     /  8th May 2016

    I’ve heard it said that Andrew Little is a cot case. To be fair I’ve heard the same about David Farrar.

    Reply
  5. Gezza

     /  8th May 2016

    Oh FFS. Andy scores so many own goals with the punters he might as well be the striker for the other team. >:D

    Reply
    • Kitty Catkin

       /  8th May 2016

      Gezza, I’m sorry that I could only give that one upvote-can you give yourself another one from me ?

      I saw an own goal being scored in reality a while ago. Perhaps Labour could use that film for their election ads. Labour-We Reach Our Goals.

      He has obviously never owned a rental house. People aren’t in it to provide someone with a cheap house-why on earth would they be ? Unless they buy it outright, they have to pay the mortgage-which doesn’t stop when the house is empty or the tenant stops paying the rent-and they have to pay rates, insurance and the rest. An acquaintance was stung when his tenant simply stopped paying her rent. He sold the house as soon as he could, and tried not to think of what it had cost him in money and stress. When he went round to the house, he was told by the tenant and her friend/relation that as long as she was in it, it was her house and he had no right to be there-this was when the rent hadn’t been paid for many weeks or maybe months. A step towards her was greeted with cries that she’d charge him with sexual assault or harassment-some hope, he’s gay.

      AL is away with the fairies.

      Reply
      • Gezza

         /  8th May 2016

        The Fairy Chief has just emailed me categorically denying they have anything at all to do with AL and asking me to get in touch with you and tell you they are demanding that you publish an immediate retraction Kitty. Rude letter to follow apparently. 😮

        Reply
        • Gezza

           /  8th May 2016

          PS: In a follow up email he says it’s the Goblins Little has been talking to.

          Reply
        • Kitty Catkin

           /  8th May 2016

          To whom it may concern.

          My statement that Andrew Little was ‘away with the fairies’ was baseless and has caused undeserved stress to the Fairy Community. I apologise unreservedly for this. I carelessly assumed that ‘magic mushrooms’ meant mushrooms owned by fairies and have since discovered that this was an error.

          Kitty Catkin

          Reply
          • Gezza

             /  8th May 2016

            They have accepted your apology. Flowers are on the way. A dozen red roses. And some special mushrooms for watching the WO show on Tuesday. ❤

            Reply
  6. Don W

     /  8th May 2016

    Little and his lefty ilk believe that tenants are victims and land lords are villains that are only out to exploit their tenants. Little should purchase a rental so he can find out how it works.

    Reply
  7. John Schmidt

     /  8th May 2016

    The emphasis has been on the health of children who get health care for free so there is no cost savings as implied. This will cost tennents more in rent as the costs of compliance is an on going cost as heating and ventilation devices do not last for ever and need on going maintenance. By my reckoning compliance costs will be in the region of $20-$30 pw.

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s