Wellington City Council votes to give its tenants much-needed rent freeze

Thursday, 3 February 2022

Debbie Port's benefit increased by $20 on July 1. Wellington City Council will increase her rent by $20 on September 6. 'If I had a choice, I would be gone,' she says.

Wellington City Council will give its rent-burdened tenants a much-needed rent freeze.

A majority of councillors voted on Thursday to freeze rents for the next 18 months, calling the temporary measure “a backstop until we agree a way forward” rather than a long-term solution for its beleaguered housing arm.

It’s an important win for those low-income tenants, some of whom say they already don’t have enough money for food after paying rent, and can’t afford another increase. A solo mother, in one instance, was paying 86 per cent of her income on rent.

Councillor Jill Day, who originally brought rent relief before the council through a notice of motion, said the measures would come as “a huge relief” to tenants who also faced rising costs elsewhere in life.

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Council housing tenant Rosalina Ngakopu says the rent freeze is 'a huge relief' for tenants, but ultimately the Government needs to extend the income-related rental subsidy to tenants in council housing.

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Councillor Jill Day, centre, at a Wellington City Council meeting. (File photo)

Council officers had recommended against a general freeze for all tenants, instead suggesting a targeted approach with a council-funded affordable rent limit (ARL) subsidy, which would offer relief to those “most in need”.

But Day said the entire model was broken, and the freeze recognised the entire tenant base needed instant relief.

“The market rental system is unaffordable to many, many, many people,” Day said. “Trying to keep in line with that is not working for our tenants. It doesn’t matter what level of rent you’re at – keeping up with market rates is really hard.”

Access to the income-related rental subsidy (IRRS) would mean council housing tenants pay no more than 25 per cent of their income on rent - an amount that would be hundreds of dollars cheaper for some.

Wellington City Council’s 3500 tenants pay 70 per cent of market rents, with the rest discounted by the council. It is estimated that 1400 tenants currently pay at least 35 per cent of their income towards rent.

Tenants have been lobbying the Government to give them access to an income-related rental subsidy (IRRS), campaigning under the banner IRRS 4 ALL and holding several public meetings.

The rental subsidy would ensure tenants paid affordable rents by setting them at 25 per cent of income, while the Government topped up the rest. The subsidy was available to tenants with Kāinga Ora, or new tenants with community housing providers (CHPs) – but not tenants in council housing.

Rosalina Ngakopu, who is a council housing tenant and part of the IRRS 4 ALL campaign, said the rent freeze was “a huge stress relief” and “a weight off the shoulders” of tenants.

The freeze was “a win” for the IRRS 4 ALL campaign, she said. But the long-term solution, she believed, was access to the IRRS, and tenants would continue to push the Government towards that aim.

Those tenants were also involved in a Mayoral Taskforce aimed at solving the problem of unaffordable rents in council housing, with a report due in March.

Councillors at the meeting agreed rent freezes were a temporary measure, and the council would continue efforts to access the IRRS, while investigating the feasibility of establishing a CHP.

If a CHP was established, only new tenants could access the subsidy – the current tenant base, who would still be ineligible, have called that option “unacceptable”.

Councillor Jenny Condie said a rent freeze was what the council could do immediately, but longer term answers required “the central Government to work with us”.

It would cost the Government $13.2 million a year to extend the IRRS to the council, which is the country’s second-biggest landlord. The council has previously said the subsidy would “change the lives of tenants overnight”, and reverse the fortunes of its ailing housing arm, by turning a $6m deficit into a $5m surplus.

Housing Minister Megan Woods previously didn’t rule out extending the subsidy to Wellington City Council’s tenants, but has said she doesn’t want to “pre-determine the outcome” of ongoing conversations with the council.

Extending the subsidy to councils would require a legislative change that would take 12 to 18 months.

The council voted to pass other interim measures at the meeting including amending criteria for the ARL – a subsidy which sets rents at no more than 35 per cent of income – to ensure “all eligible tenants benefit”.

Councillors also voted in favour of translating the welcome pack and other formal communication around tenancy changes into Te Reo Māori, Arabic, Tamil, Farsi, Mandarin/Catonese, Spanish, Samoan, Russian, Cambodian and Hindi.

It was the second attempt from the council to freeze the rents of its tenants.

An earlier attempt failed in December amid disagreement from councillors over how to fund rent relief – either through cash reserves or rates – with the discussion devolving into mudslinging.

The rent freeze would be funded through cash reserves – of which the council’s housing arm has little, forecast to become insolvent by 2023.

Councillor Tamatha Paul said “public housing was a public good” and funding the freeze through rates would’ve reflected that.

CORRECTION: An earlier version of the story said the vote passed “unanimously” ; in fact “a majority” of councillors voted in favour of the rent freeze. (Amended February 3, 2021, 2.35pm.)