The government is creating a non-problem “Ghost Houses” and the solution is of course to tax the home owners.
Everything this government has introduced around housing has caused higher rents and higher house prices, this will be no different.
John Kenel
Assured Property
Full article from Stuff below:
10% of ghost home owners intentionally keeping them empty
By Geraden Cann
Ashley Welsh has experienced a worsening rental crisis on Waiheke since he moved to the Island in 2012, and for the last five years he has watched with mounting frustration as a property in the centre of the island sat empty.
The ‘ghost home’ on Jellicoe Parade looked ready to rent when he first noticed it, carpeted rooms viewable through windows, devoid of furniture.
A contractor still cuts the lawns, but now those windows are boarded up, and Welsh said it was frustrating to see it underutilised when residents were struggling to find rentals and paying high rents.
“Driving past a property that’s right in the centre of the island, the location is amazing, that’s been empty for five years, it’s a bit frustrating,” he said.
Ghost homes have become a focus of attention as the housing crisis continues, and now a government-funded project has released a report that explores how many ghost homes there are, how long they remain empty for, why owners keep them empty, and how the Government can encourage owners to rent them out.
Key findings included about 10% of owners of ghost homes kept them empty intentionally, and a little over a quarter had been empty for at least a year.
The Government allocated $500,000 towards testing initiatives to encourage owners to fill their empty properties, and the Empty Homes Project run by community organisation Wise Group was among the first steps.
Why ghost homes are kept empty
The Empty Homes Report included the results of a survey of 772 owners of ghost homes.
As well as the roughly 10% keeping their homes empty intentionally, about 35% said their properties were empty because they were holiday homes, just over 8% kept them empty for person use (often as a second home), 23% were empty for renovations and repairs, and about 17% were vacant rentals, sometimes due to non-compliance with Healthy Homes Standards.
The remaining 6% were empty for “other reasons”, which often meant they were awaiting sale.
The survey showed most respondents considered the condition of their empty homes as “ready for occupation”.
How many ghost homes are there?
Drawing on 2018 Census data, the report suggests there were nearly 95,000 empty dwellings across Aotearoa.
Nationwide, that was just over 5% of total housing supply.
Auckland had the highest number of empty dwellings at 17,130, followed by Thames Coromandel at 8349, Christchurch 6732, Taupō 3582, and Queenstown-Lakes 3105.
Feelings of vilification
Most owners of ghost home said they were not willing be become landlords, with some saying it was not financially viable.
Others had concerns about protecting their investment and how tenants might damage the property.
The report also referenced negative perceptions and attitudes towards landlords as a barrier, saying they felt vilified and targeted by recent law changes, which included law changes to the Residential Tenancies Act that increased tenants’ rights.
Respondents also predicted there would be fewer homes available for long-term rental and more homes would sit empty, although the report noted higher costs and interest rates would probably create financial strain on some investors, incentivising them to put their properties up for rent.
Tax ‘sticks’ not explored
The report listed some tax methods used abroad to encourage owners to rent empty homes out.
Britain, France, Ireland, Scotland, the Australian state of Victoria, and the Canadian territory of British Columbia were identified as having some form of empty homes tax.
In Vancouver, owners were taxed based on the assessed value of the ghost home that was not rented out for at least 6 months of the year, with owners required to submit a declaration each year.
The tax rate started at 1% between 2017 and 2019 and rose to 3% in 2021.
In the UK, councils may charge additional tax up to double the normal rate if the home has been empty for 2 years or more, although there were many exceptions.
Wise Group did not investigate how similar policies could be rolled out in New Zealand, or how effective they might be, stating incentive-based measures were more appropriate for the study.
The carrot-based approach was criticised by one of the commenters in the report.
He Kāinga Oranga Housing and Health Research Programme co-director Nevil Pierse warned in the report that internationally it had proven hard to incentivise owners to fill their empty homes when there were “limited ‘sticks’” available.
As part of the investigation, Wise Group trialled methods of incentivising owners to add their empty properties to the rental pool on eight Hamilton empty homes.
Through interactions with the owners and tenants, four of the empty homes were tenanted, one was prevented from becoming empty, and one that was undergoing renovation was tenanted after the trial.
Work to fill the final two empty homes failed.
Recommendations to help fill homes
The trial led to a number of recommendations for how a national organisation could be formed to do the same, and how the Government should start tackling the ghost homes issue.
These included agreeing on a definition of an empty home to be any private residence has been unoccupied for at least 90 days, is not the permanent place of abode of the homeowner, and is not actively for sale.
It also recommended identifying and monitoring the number of empty homes that met the definition, which could be done by looking at utility usage data (such as water and electricity usage.
An empty homes programme was also suggested, which would monitor data to identify ghost homes, conduct outreach to the owners, build relationships with employers and organisations to establish a ready-stream of tenants and potentially screen and vet them.
Despite the report only focusing on carrots, owners still did not favour any of the proposals, which revolved around helping to source and vet potential tenants.
Renters United president Geordie Rogers said the report showed turning ghost homes into rentals would not solve the crisis, given most were used as holiday or second homes, and the Government’s main focus should be on building more state homes and ensuring new housing intensification laws were complied with by councils.
Rogers said projects to tackle the ghost home issue should also look at tax, despite it being politically difficult.
“It’s important to consider tax because at the end of the day most motivations for people are financial, and the best tool they have to direct financial investment is through taxation.”
Which was what they had done, he said, by allowing continued mortgage interest deductibility to investors who bought new homes.
Welsh has never been in the position to own a home and a second property on Waiheke, and said he cannot say for sure what he would choose to do with such a property.
But he says having experienced the rental crisis first-hand, he believes he would put any second-home he had into the rental pool.
