Housing PoliticsGreens Rent-to-Own Scheme Just Old Hat Reheated

The Greens “Big Reveal” that a rent-to-own scheme will solve our housing shortage suits the party of recycling & global warming. It’s just old hat reheated.

Co-leader Marama Davidson announced yesterday that the Green Party is ready to negotiate its rent-to-own policy as part of the Government’s Kiwibuild reset.

I would have liked to see some original thinking, but the Greens rent-to-own scheme is just old news that’s been around for decades, if not longer.

Rent-to-own, or rent-to-buy, came in a dozen different versions and in a previous life I used them all.

They had other names as well, such as option-to-buy, long-term agreement for sale and purchase, lease-to-buy, wraps, or even leases with options-to-buy.

In the 60s and 70s I put literally thousands of struggling people into homes for as little as $5 deposit in one case, and monthly payments the same as market rent.

Over the 5-year term a portion of their market rent was credited towards the agreed fixed price. By the end of the term enough money had been accumulated for people to refinance with a regular bank.

On the rare occasion they could not refinance, I would refund the “deposit” they had accumulated. Why not? It was easy to resell the house and start a new deal.

The only important stipulation I made was that the buyer must pay the rates and insurance and maintenance on the property. In my mind this was vital because how else would a buyer under the scheme really know how much it cost to own their own home?

To this day I still get Christmas cards from people I assisted so long ago and frequent greetings from people in the street, and sometimes even their grandchildren, thanking me for the assistance I gave.

Only a month or two ago I was in a shop when a staff member fell all over me in gratitude for helping him into a house in Herne Bay. I was very pleased – sort of – when he reminded me that I had sold him the property under a rent-to-own arrangement for $11,500 and today it’s worth $2.5 million.

Davidson says, “Being in secure housing allows you to put down roots, join a community and give back. New Zealand has been relying on a market approach to provide things a market cannot and never will provide.”

I have news for Ms Davidson: The people I put into homes in the 60s and 70s under a rent-to-own agreement were all done of my own free volition under a free market approach. Categorical proof that a market approach can work and has worked to provide a roof over your head.

So good luck to the Greens, whose policy sounds very much like the NZ First housing policy.

But remember folks, rent-to-own is a very old technique that’s been well and truly done before.

If the Greens – or any party for that matter – want some advice on the finer points from one who’s ‘been there, done that’, I would be only too happy to oblige. The need is greater that my political preferences.

[Photo by Jeffrey Czum from Pexels]

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