Accommodation boost brings praise

By ANNE GIBSON

The large Budget increase in the accommodation supplement for low-income earners has been praised by landlords and charities.

Finance Minister Michael Cullen said that of the $1.5 billion to be spent on housing, half would go to the supplement.

Changes announced in the Budget would allow more people to qualify for the grant and families with children would be able to earn more before their supplement was reduced.

A new accommodation supplement area has been created in central and north Auckland, with new, higher maximum rates in Wellington, Queenstown and Nelson.

Salvation Army national social policy director Major Campbell Roberts said increasing the supplement in specific areas would be a great relief to many. A three-person household on the North Shore and in Central Auckland which was getting $150 a week in supplement would now qualify for $225 a week.

The supplement in West and South Auckland would increase from $150 a week to $165 a week, he said.

Auckland Property Investors' Association president and property adviser Andrew King said landlords had got what they expected.

He was surprised at the scale of the increase in the accommodation supplement, and said it would enable many people in Auckland to live close to where they worked.

"Low-income people should not be shoved out into the peripheral areas. This very much helps them and keeps people living near where they are working which reduces transport costs," King said.

Some tenancy advocate groups had sought abolition of the supplement, he said, because they claimed it simply lined the pockets of residential landlords.

"They argued that if the supplement went, landlords would have to drop their prices," King said, but this was an unrealistic argument.

King said that late last year Housing Minister Steve Maharey had told the association the Government would move to amend the Residential Tenancies Act.

Craig Paddon, national president of the New Zealand Property Investors' Federation, said 14 landlord associations were meeting in the next few weeks to gather information to lobby for changes to the act.

King said it was hoped the act would achieve a better balance between the rights of landlords and tenants, particularly in the area of late rental payments by tenants.

He said 35,000 applications were made each year to the Tenancy Tribunal over non-payment of rent. Yet most landlords had to wait between seven and 10 weeks before an order for eviction could be served.

Paddon said establishing an online Tenancy Tribunal database would enable the judicial process to become more transparent and perhaps add uniformity to rulings landlords have often complained about.

Cullen said the owners of rental homes taking advantage of depreciation rules were in his sights.

A discussion paper would be issued soon, looking at whether the depreciation rate for buildings was appropriate "and at the growing practice of recharacterising rental houses into components to take advantage of high depreciation rates".

Cullen was concerned that rules relating to deductions for depreciation of assets were biased against short-term assets.

Budget provisions for property:

* A review of Residential Tenancies Act $700,000

* Setting up of online database of Tenancy Tribunal decisions $1.3 million

* Ministry of Housing gets another $3.4 million to extend the act to cover boarding houses

* A review of depreciation rules for rental property


* Auckland Property Investors' Association meets at 7.30pm, June 15, Ellerslie Convention Centre to discuss changes to the Residential Tenancies Act. Free admission to members, non-members $20.