Renting in the Bay: realities, options and support
Housing for families can be difficult to find in Golden Bay. The combination of low overall incomes and high property values means that many people struggle to buy their own home and are obliged to rent.
Also, many houses in Golden Bay are owned by people who live elsewhere most of the time.
The classified advertising in The GB Weekly often shows plenty of houses available to rent and also plenty of people seeking this option to house themselves and their families. It may appear that market forces of supply and demand achieve equilibrium. Things are not always that simple, however.
What options exist for people who need to rent?
The Golden Bay Housing Trust owns five homes that it rents to families who come through a selection process. The rents are set at 75 per cent of the average rent across the region. The commitment to keeping rents affordable and the quality of the houses themselves guarantees demand for the trust’s houses. By offering discounted rents the trust hopes to give people the chance to eventually accumulate a deposit toward their own home. The trust is in a period of consolidation at the moment and has no immediate plans to add to its stock of houses.
There are council flats near the medical centre and some other units administered by Te Whare Mahana, but they are not available to everyone. Abbeyfield is another option for people who meet certain criteria.
Housing New Zealand (HNZ) is a significant landlord in the Bay. There is one house still owned by HNZ, but the state agency has largely moved out of property ownership, preferring to rent properties from private individuals and sublet them to people who qualify, sometimes at a subsidised rate. This means that the landlord gets the market rate, qualifying tenants get a discount and the government makes up the difference.
There is a range of financial assistance available to families. People on low incomes can apply to Work and Income for assistance. This may include help with accommodation costs (rent, board or mortgage) through an accommodation supplement. Special needs grants can cover emergency and essential needs such as power costs. Low-income households can also apply for temporary additional support if their finances have suddenly reduced and they cannot pay for essential costs. Assistance is usually income- and asset-tested. Eligibility can be tested by phoning the freephone 0800 559 009.
Working For Families assistance is also available for some people. Eligibility can be tested at <www.workingforfamilies.govt.nz>. The website explains quite clearly how you qualify and what the assistance is. This may mean extra money through in-work tax credits, family tax credits or parental tax credits and/or an accommodation supplement.
The level of assistance you get is entirely determined by your needs and your personal circumstances. Work and Income staff say that Working For Families is not always well understood by everyone. There may be people who are missing out on their entitlement because they think they don’t qualify. The scheme applies to families of one or two people as well as to adults with children.
People intending to rent a house need quite a lot of money “up front” for bonds, rent in advance and, in some cases, a letting fee paid to the landlord’s property manager. With many rents in the $250 to $300 range, the amount needed could be about $2000.
“Work and Income can offer help, by way of a loan, with the bond, but they are unlikely to cover the agent’s fee,” says Work and Income regional director, Wendy Chisnall .
Two local businesses - Golden Bay Homes and Shona’s Rentals - manage properties for landlords, most of whom do not live in the Bay. Fran O’Connell of Golden Bay Homes deals with holiday homes and long-term leases, while Shona Martin of Shona’s Rentals specialises in long-term leases. They both do background checks, contact referees, inspect properties and work as the owners’ agents. Shona charges prospective tenants a letting fee, which increases the initial cost of getting into a rental property.
“Most companies outside the Bay charge a letting fee. It’s a very common practice. I charge one week’s rent plus GST. There’s a lot of time compiling a residential tenancy agreement. Everyone’s case is different, so the contract is customised just for them. I also use a computerised property management programme that makes everything very transparent.”
Shona says that if someone owns a property and they go overseas for 21 days, they are required by law to have a property agent to look after the place and the tenant.
“Insurance companies are now requiring rental properties to be checked monthly or six-monthly to fulfil the terms of their policy. They need evidence showing that there is no problem with rodents, water damage and so on. About 70 percent of my owners live out of the Bay. I offer a total service to absentee owners.”
Shona says that the rental market here is “really hard to judge”.
“It’s very up and down. It’s all about supply and demand.”
She predicts that fewer people will be able to afford to own their homes, so overseas and local investors will become an increasingly important part of the market here.
The Golden Bay Community Workers know the challenges faced by tenants. Many of their clients are in rental accommodation and the workers are aware that anything that leads to rent and other accommodation costs going up really hurts people on fixed or low incomes.
“I’m aware of rents being up around the $300 per week mark,” says community worker Glynn Rogers. “Tenants often don’t have a lot of options. If a house is cold, poorly insulated or damp it can be unpleasant and unhealthy, especially for children. If a house only has a heat pump, for example, that can lead to really high power bills that people struggle to pay. Families need long-term leases and fair rents.”
The community workers’ manager Sheryl Nalder says that landlords must remember that tenants are entitled to feel that where they live is a home, even though they don’t own it.
“There are quite a few people on sickness benefits in the Bay,” says Sheryl. “I’d get sick too if I was faced with all the expense of getting into a rented house, and the high rent when you are in. Not all rented properties are ideal for families in terms of where they are and the condition they’re in.”
One prospective landlord spoken to said that she worried about the condition and design of some houses she had considered buying as an investment. The person, who asked not to be identified, said: “That’s one of the things that put me off. I wouldn’t be comfortable expecting children to sleep in cold, very damp bedrooms. Some of the older houses are poorly insulated and badly designed for sunshine, too. Then there were the finances. If you borrow the whole cost of a $250,000 rental property, a mortgage at 6 per cent costs $19,318 a year. Add rates and insurance of about $1800, subtract a rental of $250 a week and you’re looking at an $8,118 loss a per year.”
Another landlord, who also requested anonymity, described her experience as “not much fun”.
“I’ve moved out of the Bay and I’ve tried to sell my house without success. There are serious outgoings on the property so I have to rent it out, but I can’t ask what it owes me so I have to top up the rent out of my income to make the mortgage payments. Good tenants are just wonderful. They take care of the place, pay on time and keep to their end of the bargain. Not all my tenants have been like that. What it means for me is that I am kind of stuck with a house I don’t live in so I have to rent where I’ve shifted to. The value of my house in the Bay has dropped, so the mortgage is proportionally higher. Even with the low interest rates, I’m in a bit of a bind.”
Neil Wilson
