Nickie Muir: Turn the tables on landlords

Nickie Muir.

What happens when the 40 per cent stop paying rent? What would happen if they go back to their landlords and say "hey this is what I can afford - sorry about it"?

What happens when every second backyard or local park or piece of wasteland is filled with those little cabins that have sprung up on so many busy corners advertising that for just $60 a week you can get an extra bedroom?

In 2001 - when the Argentine economy was on the brink of collapse - not due to a runaway housing market but a fictitious over-valuing of the peso and the failure to pay back IMF loans, my salary started to get paid out in pizza and coffee vouchers. A government scheme to try to stimulate the local economy.

Given that I didn't eat pizza then and couldn't consume that much coffee I had to go back to my ageing land-lady and tell her what I could afford and offer that or I would have to leave.

She accepted the offer, acknowledging that as the neighbourhood emptied around her with people moving in with relatives or becoming homeless she'd rather have someone in the house than squatters whom she would never be able to remove.

The relationship between renters and landlords is a legal one but it is also a social contract based on concepts of fairness and mutual responsibility. Once that has been broken, landlords can spend a fortune on court cases trying to get money out of people who have nothing to lose but other than debt collection there is very little else that would be done in a legitimate business that can be used to save it.

The fact that not even the pressure of needing people to rent the property in order to pay the mortgage, applies to the thousands of "ghost" houses in Auckland means there is little incentive to participate in any social contract to provide housing by those who are just interested in the capital gains or to legitimise large amounts of cash.

A suggestion by a reputable economist to rebalance the currently insane housing market in Auckland and surrounds, by effectively dropping the value of houses by about 40 per cent, begins to look far from crazy when you compare what can happen when land ownership gets way out of whack.

Bolivia, under Evo Morales, is an interesting case in point. He gained power on the back of major land reform promises in an economy where inequality was rife and land and housing owned by an elite few. Around 135 million acres have been redistributed to indigenous collectives or poor farming families.

Obviously there are a group of incensed land-owners with a very reduced asset portfolio who are crying that Evo Morales is utterly insane and that his policies are outrageous.

There are over 300,000 titles reissued, many of these to women or poor indigenous farmers who are in quiet, happy, democratically decided disagreement. "Crazy" can be both contextual and relative.