Bishop ChrisRESIDENTIAL TENANCIES AMENDMENT BILLFirst ReadingHon CHRIS BISHOP (Minister of Housing): I present a legislative statement on the Residential Tenancies Amendment bill.ASSISTANT SPEAKER (Greg O'Connor): That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon CHRIS BISHOP: I move That the Residential Tenancies Amendment Bill be now read a first time. I nominate the Social Services and Community Committee to consider the bill.This is an important bill that proposes sensible much-needed changes to the Residential Tenancies Act 1986 which will remove barriers to increasing private rental housing supply as well as introducing pet bond provisions—which is part of the National-ACT coalition agreement and has generated a lot of excitement amongst many people particularly pet owners.The approach of the previous Government when it came to landlords ultimately caused worse outcomes for tenants. Rents increased rapidly under the last Government; the social housing wait-list that we've been talking about a bit in the House over the last couple of days increased by around 20000 families; and of course we have very sadly many families in New Zealand living in emergency housing motels.Not all of these problems can be put down to the residential tenancies changes that the previous Government implemented in progressive stages but some of those problems can be put down to that. For example the removal of 90-day no-cause terminations by the last Government made some landlords unwilling to take a chance on tenants who don't have perfect references or a steady nine-to-five job or had just left prison for example or for a variety of reasons landlords didn't want to take a chance on. Many landlords just decided to exit the market altogether. I've had many many people say to me The combination of interest deductibility 90-day no-cause terminations the brightline test. It's all just too hard—I'm out." Ultimately mum and dad landlords are an important part of the housing market in New Zealand so this bill reintroduces 90-day no-cause terminations for periodic tenancies.It also fixes the situation around the end of fixed-term tenancies. The last Government's changes to essentially make the roll-over of fixed-term tenancies into periodic tenancies essentially automatic has caused chaos in a variety of markets. Most notably down in Queenstown where previously there was a situation where many people would offer up properties into the market for say six to nine months when they didn't need to use the property to become available for a fixed-term tenancy. The near-automatic roll-over of those fixed-term tenancies into periodic tenancies has meant that people just think "It's all too difficult we'll just put the property on Airbnb." and then the property just is not used for much of the time.So we had the situation in Queenstown where you've got a real homelessness problem; you've got workers unable to get access to accommodation—I see my good friend and colleague Joseph Mooney here the MP for Queenstown and the wider region. So we are going to fix that problem. The chamber of commerce down there has made this point multiple times in the media. Because interestingly the former Minister of Housing Megan Woods turned up there at the height of all of this. I've forgotten was it July last year? Maybe August?Joseph Mooney: It was around then yeah.Hon CHRIS BISHOP: It was around then. We were approaching the—she said basically "I acknowledge the problem but you know we can't just fix this. You know it's very difficult to change laws." Well actually she was the Minister. I found that quite remarkable and I said to her "You could put a bill towards the Parliament right now. We'd back it. Put it through under urgency—can fix it next week." That idea seemed to go nowhere. Well we are fixing the problem. We're doing it as part of a suite of changes. I've also heard that this provision has caused problems in the Dunedin market. I've also had some anecdotal evidence that this fixed-term tenancy change from the last Government has caused problems on Waiheke Island which is a similar market in some senses to Queenstown.Joseph Mooney: Is the local MP going to support it?Hon CHRIS BISHOP: Well that'll be interesting to see whether or not the local MP for Waiheke Island—who I think is Chlöe Swarbrick—whether or not she supports this because we've got a similar problem with rental accommodation over on Waiheke Island. So let's wait and see whether or not that happens but I'll hold my breath.So ultimately when it comes to fixed-term tenancies and the 90-day notices we are incentivising landlords back into the market to put downward pressure on rents—that's a good thing.Of course in the medium term and the long term the ultimate answer to rental affordability in this country is growth of housing supply. That's why we've got a wider package of reforms coming that builds on the work of the Hon Phil Twyford who I see in the Chamber around the National Policy Statement on Urban Development and the last Government—the sole good thing the last Government did when it comes to housing. It builds on that work and tries to smash urban limits and allow for greater density inside our cities and sorting out the infrastructure funding and financing settings. So I won't dwell on that but just to say we have more work to come on that.I think the good news is that collectively across the Parliament now there is a consensus that the solutions to our housing challenges are fundamentally around supply—actually tinkering around the demand side of it tinkering around with other things extrinsic to the fundamentals of supply and demand leads you down a path that doesn't actually deal with the underlying issues. But the fundamental answer to our housing affordability challenges whether it's homeownership or of rental affordability and indeed in social housing—because Kāinga Ora and the community housing sector face the same planning and the same funding and financing constraints—Hon Phil Twyford: That's a misrepresentation of the consensus.Hon CHRIS BISHOP: What's that?Hon Phil Twyford: That's a misrepresentation of the consensus.Hon CHRIS BISHOP: Well I meant in a broad sense. I meant in a broad sense there is now a—well put it this way: compared to say 20 years ago when most of Parliament thought that the solutions to our housing crisis were not around supply we're in a much better situation now than in comparison to 20 years ago. I mean the Greens are yet to join the fun on this—the Greens sadly still propose economically insane policies like rent controls so the Greens are yet to kind of join the mainstream of the of the Parliament when it comes to housing supply. But we've got a new spokesperson. Tamatha Paul: We will always be better.Hon CHRIS BISHOP: What's that? What's that?Tamatha Paul: I said we'll always do better.Hon CHRIS BISHOP: Right well I don't think rent controls are doing better. Because as I said in a debate—I think it was last week in the House—economists don't agree on much but they agree on two things: one free trade is good and it lifts incomes and raises economic growth; and the second thing they agree on is that rent controls are nuts. In fact I can't remember the exact economist but the quote is basically "The single best way to destroy the housing stock of a city is rent controls." But we've got a new housing spokesperson for the Green Party Tamatha Paul—she's an energetic spokesperson and I'm looking forward to her seeing the light and changing the Greens. But anyway—Tamatha Paul: Never!Hon CHRIS BISHOP: —I digress. "Never" she says. OK we'll see—we'll see.The other thing this bill does is it introduces provisions related to pets. So it's too hard to find rentals that are pet-friendly and one of the reasons why that is is that many landlords are reluctant to take on pets. They worry about the damage; they worry about the costs. So what we are doing is enabling landlords to require a pet bond if they have agreed to the tenant keeping a pet up to the equivalent of two weeks' rent. They're a win-win: landlords have additional assurance they won't be out of pocket for the possible damage and tenants with pets will have more rental options.It also clarifies the consent rules. So the status quo is landlords are able to essentially say you know advertise on TradeMe "No pets; don't allow pets". So under the bill tenants will be permitted to keep a pet with the landlord's consent. Here's the critical point: landlords can only refuse a pet if they have a reasonable ground. So the bill includes a non-exhaustive list of reasonable grounds. For example the property's unsuitable due to its size or the type or the breed of the pet; or the property's unsuitable because it's too small for example. So there's a range of non-exhaustive list of reasonable grounds in the bill and I'm sure the committee will want to kick this around and I'm very open to sensible amendments around that.There's also a range of technical changes to improve the clarity and efficiency of our tenancy laws. So the bill enables online lodgment of bonds for example—and you would have thought that would be able to be done for a while but indeed it isn't. So we have to legislate for that so we are doing that. That will improve the customer experience.This is a small but good change: the bill will allow the Tenancy Tribunal to make decisions by reading the relevant papers instead of having the parties attend—Arena Williams: Which ones are the bad changes?Hon CHRIS BISHOP: What's that?Arena Williams: Which ones are the bad changes?Hon CHRIS BISHOP: Well they're all good changes—they're all good changes. You might disagree but they're all good changes. It's basically hearings on the papers rather than attending in person. Reduced costs. There's massive delays in the Tenancy Tribunal right now. This will help. It also confirms the long-held understanding that a landlord may prohibit a tenant from smoking indoors which clarifies the law after some recent Tenancy Tribunal decisions to the contrary. I commend this bill to the House.ASSISTANT SPEAKER (Greg O'Connor): The question is that the motion be agreed to."