How Can We Make Use of Neglected Houses While Caring for People?

A modest proposal for turning empty buildings into homes in the depths of a years-long housing crisis.

People can and do make a free choice to live in a falling down "fixer-upper" while paying off their own mortgage, and that’s fine. But it's naked exploitation to expect tenants to live like that while paying off someone else's mortgage, at market rents. Worse, allowing market rents to be charged on substandard buildings puts downward pressure on the condition of rental housing across the country.

Landlords who go to the effort and expense of maintaining their buildings properly can never make as much money as slumlords who don't. So a responsible landlord struggles to present a higher ROI (Return On Investment) than a slumlord, who can them borrow money more easily from banks and other extractors. To buy more houses, rent them out, and neglect these buildings and their tenants too. Rinse, repeat. After a decade or two of this, a country's housing stock can become severely degraded. With many homes so lacking in basic maintenance they become completely uninhabitable, queue the landbanking, and chronic housing shortages. Which is where we’ve found ourselves in Aotearoa.

The 2017 Healthy Homes standards that were put in place for residential rentals are a big step forward. While it's good to support as many people as possible in owning their own homes, the idea that everyone will one day own a home is a fantasy that's never been realised in a modern society. For as long as residential tenancies exist, regulations governing them must ensure that tenants can live in homes that meet minimum standards, just like those who can afford to buy.

However, like most well-intentioned policy, the Healthy Homes standards have unintended consequences. One major downside is they stop artists and other experimenters from renting big old falling down buildings, that we can decorate and modify freely. For which we can pay cheap rent - freeing up funds for creative projects - and hold community gatherings that most modern homes lack the space for. There are some exemptions to the standards but they’re very limited, and don’t address this need, resulting in a lot of long-standing residential creative spaces being untenanted, or demolished.

Here's an idea for how to fix this problem.

How about we change the implementation rules for the Healthy Homes standards, so that a building that doesn’t meeting the standards can still be rented out under the Residential Tenancies Act. But only at peppercorn rates - lower than social housing rents - in recognition of the neglected state of the building. With no bonds, rent-in-advance or letting fees, and no inspections. This could even include commercial buildings which have been untenanted for a long time, for example, more than a years.

Like all tenancies, this would come with a basic duty of care on the part of tenants. Including respect for neighbours, and preventing the intentional destruction of the building, or pollution of the surrounding property. But otherwise, tenants renting buildings in this situation would be given total freedom in how we use them. With no rules limiting decoration, modifications, having pets, etc. This freedom would come with accepting the building on an 'as is, where is' basis. Tenants could do bits and pieces of maintenance ourselves, or draw on our social networks to help us keep the building to our standards of livability. Or we could get essential maintenance done by spending some of the money we save by paying rent well below market rates.

Landlords would still have to maintain safe use of basic utilities that were connected at the start of the tenancy, like water and electricity. A working toilet would be a minimum condition, but a properly established composting loo could be enough, if it's allowed under local bylaws. Any issues with the building that might be (or become) a safety concern, need to be declared to the tenants, in writing, before the tenancy goes into effect. If undeclared issues are discovered, the tenancy is null and void, and either it must be renegotiated, or the tenants given 6 months to find a new home, or a rent reimbursement sufficient to cover their moving costs in a shorter time.

This is all pretty much off the top of my head. I'm not a policy wonk, and I'm sure there's a lot of details and variations that would need to be added to this back-of-a-napkin proposal, to address edge cases and close loopholes that might allow a slumlord to avoid the spirit of the thing. But I think there's the raw material for a solid pro-housing policy here. If only we can find some legislators and campaigners willing to get it into law.

But I'd go further. Imagine if any time a residential building was unoccupied and untenanted for more than, say, 3 months, management was passed to a SHP (Social Housing Provider), nominated by local government in the area. Akin to the way regional councils nominate transport providers to run the public transport services designed by the councils. The SHP could rent out the building at their usual rates (eg Kāinga Ora income-related rates). Rental income would be passed to the building owner, less a property management commission at standard market rates.

Building owners could keep a building untenanted if they meet a strict set of criteria for exemptions. But they’d have to apply for a publicly-notifiable resource consent to get that exemption.

Exemption criteria might relate to things like;

• safety concerns about the building that can't be quickly rectified

• cultural sensitivity, for example if someone recently died in the building

• legal concerns, for example it's a crime scene in a serious ongoing investigation, or if ownership of the building or the land it’s on is contested

But in each case, getting the exemption would require a staged to plan to get the building back into a usable state or replace it with a new one. Or if they can't afford to or don't have time to organise it, to sell it to someone who does.

Put together, the two policies I’ve sketched out here could bring a tremendous number of existing homes back into use (including many publicly-owned ones managed by Kāori Ora!), and create them out of other buildings, for those willing to take on such an adventure. The housing crisis in Aotearoa has deepened to a point where governments are proposing “move on” orders to sweep the homeless and destitute out of public view. Talk radio shock jocks are endorsing the idea of pushing them into encampments on the edge of town, which is how the slums of India, South Africa or Brazil get started. Under these conditions, it’s not extreme to propose policies that oblige property owners to allow empty buildings to become homes, it’s extreme not to.