There is a space between renting woes and property sales that is often unseen. On the one hand, we read stories of students renting places with black mould and being taken to the tenancy tribunal for supposedly causing damage to their under-maintained properties. On the other hand are the first home buyers being priced out of the property market, and the novelty articles about people in their 20s beating the odds and buying properties ‘all by themselves’. In 2022, after over a decade of renting and being inundated with stories of how millennials (especially single women) could not afford a property without significant parental support, I was compelled to explore the matter further.
Independence?
At the time, due to the absence of international students leading to a significant decrease in city apartment rentals, I managed to move into an apartment to live on my own after years of flatting with others. It felt amazing to be so independent! But it was small, and I was constantly sticking up for myself to get any meagre maintenance covered by the landlord rather than it being billed to me. At this point I had a thought- with years of contributions to Kiwisaver and a full time salary, why not try buying a tiny apartment like this? Using Trademe’s calculator and latest listings, it seemed that with a fairly manageable deposit (especially under the new low deposit home loans being offered by some banks) I could buy the same apartment and pay a similar weekly amount off a mortgage.
Apartments can be much cheaper than the average house, and I was unable to find a comprehensive guide of exactly why I couldn’t buy one. This seemed like an appealing option to be able to have security in where I’m living and agency around the state of my own space. I decided to wade into the thick of it, even if just to find out why not. Now, for the last 2 years I have been attempting (unsuccessfully) to buy my own apartment, which has led me to learn about what goes on ‘behind the scenes’ of the renting stage.
Spoiler: it is pretty ugly!
Bank Rules
The first reason why I could not buy an apartment like the 20 square metre one I was living in is due to the size restrictions banks put on low deposit home loans. Every bank has different rules around this size which can only be revealed by calling them up individually. It can be anywhere from 38 square metres to 50 (excluding balcony), and usually there are other rules as well, such as having a bedroom separate from the living space (so no studios). To complicate this, Kainga Ora offers a low-deposit first home loan grant which puts its own size on apartment purchases as 45 square metres. And even when banks have a blanket rule about apartment size, it is their discretion to accept or reject a loan request on a case-by-case basis, as happened to me at the point where I nearly purchased a 41 square metre apartment in 2022 (despite having pre approval). But it was only after the bank rejected this purchase that several other issues were revealed to me with the building, which had previously been unseen during a stringent process of perusing some expensive documents with help from a mortgage broker and lawyer.
Most buildings (if not all) in the lower price range at the right size require significant fixing, meaning the bank won’t lend to low deposit home buyers. This issue is huge! Yet, it is not always obvious when buildings are defective, and so the best case scenario may be that the bank rejects the mortgage. Many of the prospective properties are advertised by real estate agents as ‘bank friendly’ and with no ongoing remedial issues, so it is only by delving through the body corporate minutes that the truth can be found. Even then, real estate agents tend to brush it off and tell you it is fine.
Apartment Disasters
Recently, season 2 of a documentary series ‘A Living Hell- Apartment Disasters’ has been released. This series has so far been important for making public some issues with defective apartment buildings in New Zealand, and exploring them from a systematic level. It shows how significant building defects continue to eventuate in new developments even to the present day. The mental and emotional toll on apartment owners interviewed is significant, such as the first home buyer of a new build who described himself getting to the point of being suicidal as a result of the stress around the defective unit he was living in, and an owner occupier of a luxury apartment having to leave the building wide open to be completely gutted, living somewhere else for several years. According to the experts consulted in this documentary, many New Zealanders do not do sufficient due diligence before purchasing. Beyond this, though, councils have signed off buildings that have turned out to be built incorrectly; for example, Queenstown Council is currently being taken to court. The documentary also alludes to loopholes that all parties involved can employ to distort the reality and dodge liability, similar to what I have suspected when dealing with real estate agents myself. While they are legally required to disclose information, there is always the route of ignorance.
But ‘A Living Hell’ mostly focuses on housing from an investment perspective, as noted after season 1 was released, with no exploration into the experience of tenants and murky ground between who lives in their property and who owns it as an investment. It is at times mentioned in passing that some of the stressed people being interviewed are not actually living in the building; yet for others it is their only home. And the tenants of owners fighting through issues with the body corporate are not interviewed or discussed, although there is mention of the dynamics which play out in the body corporate (the governing body of an apartment block made up of its owners). There are often competing interests between investors and owner occupiers. One only needs to look at the investor-focused ads for apartments on Trademe to see that there is little attention amongst investors to their responsibility to provide safe and healthy homes, with common references to making easy money while doing nothing.
For me, this was the beginning of several previously unnoticed revelations around the extent of building issues in this country. And to be honest, when you are renting a room in a flat, it is enough to find a place in the right price range, location and with people you can be around. It is only when things start to significantly affect our existence, such as earthquakes, leaks leading to mould, floods and fires that we may realise how little attention is given to designing, building and maintaining our home. As a renter, we are not privy to the specific details and reports on past weather tightness claims, or the exact tests and decisions that have been made around fire and earthquake safety; we are certainly not involved in these decisions which could significantly affect our lives. Disclosure and enforcement around minimal standards of ventilation, heating and insulation have been covered by the new Healthy Homes standards implemented from 2019, but the scope of this is limited. A lot of trust is placed on the landlord’s good will to keep us safe.
Grenfell
An event which made global news in 2017 was a stark reminder of the result of poorly constructed buildings on the most vulnerable low income renters. Grenfell Tower in the United Kingdom burnt down, leading to a large loss of life, and a significant factor in the tragedy was the inadequate fire safety features in the building. It is clear that this is leading to changes both in the UK and abroad. It has been found that the tenants tried to notify authorities several times about concerns related to their building. This is going to be the focus of a soon to be released TV series called Grenfell, a 3 episode reenactment of the Grenfell Towers inquiry.
Aluminum Composite Panel (ACP) cladding is what was used in recent renovations of the Grenfell Tower, and manufacturers of this product are currently being taken to court by some apartment owners in New Zealand due to it now being widely recognised as combustible. As a result of the Grenfell Tower tragedy, work was undertaken to investigate the fire safety of some apartment buildings in New Zealand with ACP cladding, and many were deemed safe due to other fire safety measures in the building. Other buildings around the world have also had this cladding cause bad apartment fires, such as several in Australia, where this has at a state level led to various mechanisms to oversee the recladding of unsafe buildings.
In 2023, New Zealand had a fire at Loafer’s Lodge, a building of low cost rentals, leading to loss of life and a questioning of the fire safety of many buildings. While not exacerbated by ACP cladding, this again draws attention to whether enough has been done to protect renters in this country from landlord investors.
A Living Hell focuses only on weather tightness issues, with a few mentions of earthquake and structural safety. The documentary explores how the leaky homes crisis occurred. Building design laws were loosened by the neoliberal government of the 1990s, with decreasing regulation. There was removal of regulations and training schemes targeted at builders; also, the transferal of ‘innovative’ design ideas from Mediterranean countries to a different climate. The same thing happened in British Columbia, Canada several years earlier. Both the story of combustible cladding and the weather tightness issues draw attention to the lack of focus on houses as places to keep us safe at a very fundamental level. This is before we even get started on the recent climate change events, which have exposed poorly thought out decisions on building locations.
A Renter’s Life
Perhaps it is good that I am prevented from owing so much to the bank, buying an investment which is risky for on selling and of course one that has issues which I am liable to pay for fixing. It is for this reason that some of the apartment dwellers interviewed in ‘A Living Hell’ say that ‘never again’ will they buy an apartment. But Chlöe Swarbrick, who has been a leading spokesperson for the issues affecting the large rental population in New Zealand, highlights the effect on mental health for the New Zealand renter who on average has to move every 16 months, alongside other measures which make renting in this country precarious and unhealthy.
So here many of us are in 2024, renters and single-dwelling owner occupiers alike, in a developed country with high GDP, but with little guarantee of a safe, healthy and stable place to call home. Meanwhile, there are a group of people out there playing the housing market like a game of Poker.
There is a kiwi culture of a right of passage to live in shitty flats as a temporary and wild time of student years before getting a job and buying a house. This coloured my perspective as I left home at 18, until I realised I was still renting in my 30s; it goes alongside my privilege of growing up in a stable, healthy home owned by my parents. I cannot speak to the lived experience of the increasingly common case in New Zealand of people growing up in emergency housing or rentals, or to the numbers over 65 who are renting. Alongside the aspects of precarity, children living in substandard housing in New Zealand have significant health issues which can lead to lifelong disadvantages.
Due to the fortunate situation of being in a unionised profession which recently managed to win a pay settlement case, I have been able to move into a bigger apartment. After a year, the rent increased by 25%, despite the kitchen bench continuing to disintegrate from old age and the grouting between the tiles flaking off to leave space for dirt. This gives me a sense of my savings continuing to whittle away as home ownership becomes a more distant pipe dream.
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