Francesca Rudkin: Kainga Ora's crack down on rental debt is fair

Kainga Ora is taking a step in the right direction. They have announced a tougher approach to rental debt, but they’re doing it in a fair way which hopefully gives people who intend to pay their rent, but have hit a hurdle, a chance to get back on track.   The debt was kinda crazy. Between 2017 and 2023 the total debt owed to Kainga Ora by its tenants increased from $1million to $21 million.   Now, obviously this period included the Covid days and cost of living crisis, and it would be a little heartless for the government to kick people out of homes during a lockdown, or due to a job loss caused by an unprecedented event like a pandemic. But $21 million - it's a big number!  Kainga Ora has worked hard to reduce the debt. It’s now down from $21.6 million in January 2024 to $16.1 million this January.  It’s a good effort, but clearly things have got out of control, and we're never going to get on top of the numbers.   So the Board of Kainga Ora has decided to help some tenants with significant rent debt get on top of their debt faster. They will reduce the amount they owe down to 12 weeks’ worth of rent, and forgive the rest, if the tenant has been consistently paying rent and making reasonable payments to reduce what they owe.   This will wipe $8 million off the debt number. Which is a quick way to make the numbers look more appealing; but were they really going to recoup the money from the 2000 tenants owing more than 12 weeks? No. So, why not give people an incentive to pay.  This is a pragmatic decision, but it raises the question - what’s stopping tenants just clocking up the debt if they know it will be reduced back to 12 weeks?   Well, this is a one time offer, because from now on tenants won’t get to the point of owing more than 12 weeks’ rent.  Kainga Ora states they will be in touch much earlier if rent is missed, to have a chat and work out a payback plan.   If this doesn’t happen, if there is no intent to pay off debt, then eviction processes will begin – which could happen well before reaching the 12 week mark.   The clear message here is that the Sustaining Tenancies Framework is coming to an end. It is going to be easier to evict people, but they’ll be closely managed to prevent things getting to that point, if possible.  I think we’d all agree people deserve an opportunity to get back on track, and the last thing we want to see is an unnecessary increase in homelessness.    As Associate Housing Minister Tama Potaka said yesterday “While most Kāinga Ora tenants are great tenants who respect the properties, are good neighbours and pay their rent on time, some need a little more tautoko and encouragement to do the right thing.”   See omnystudio.com/listener for privacy information.