Official advice shows rents could rise following Budget

Raising the Accommodation Supplement could push rents up as more than a billion dollars flows from the Government’s accounts to landlords over the next few years, according to official advice from the Treasury and DPMC, the Green Party said today.

In a report to the Prime Minister from the last time National considered raising the Accommodation Supplement, officials advised that ‘There is a risk that the increased subsidy will lead to an increase in rents.’ This is because landlords may raise rents in response to people who rent being able to afford to pay more.

“Raising the Accommodation Supplement might give people who rent a bit more cash in the short term, but in the current broken housing market I think we’ll see rents adjust to swallow that up pretty quickly,” said Green Party Co-leader Metiria Turei.

“We’ve already seen landlords telling each other that with a higher Accommodation Supplement on offer, now is a good time to raise rents.

“Rents have risen and the rental market is much tougher than it was two years ago when officials first raised the alarm.

“The Accommodation Supplement has become $360 million for papering over the cracks when the Government should be building houses.

“Unless the Government commits to building thousands more affordable houses, the Accommodation Supplement is really just a subsidy flowing straight to landlords.

“Between the Accommodation Supplement and Kiwisaver HomeStart grants, National’s answer to the housing crisis is just to throw more cash at the problem, which just causes rents and house prices to rise even more.

“In Government, the Green Party will build thousands of affordable homes through a rent-to-buy programme that gives all families a decent shot a home ownership,” Mrs Turei said.

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