The Green Party is pledging to restore city centre vibrancy by ensuring market rent reviews for small businesses can lower rents, and letting councils run rental auctions for spaces that have been empty for longer than 12 months.<\/p>\n
The party is targeting what are known as “ratchet clauses”, which prevent the rent going below what a tenant already pays when the rent comes up for review.<\/p>\n
Green Party co-leader Chl\u00f6e Swarbrick said the Greens would change the law so market rent reviews could lower the rent as well as raise it, for new and existing leases for businesses with turnover under $30 million.<\/p>\n
“On most main streets in New Zealand you can find empty shops next door to small businesses paying high rents that were set when the market was stronger,” Swarbrick said.<\/p>\n
“Current commercial leasing rules let rents rise when the market goes up and hold them up when it goes down. Small businesses end up paying more than the market rate when consumer spending slows down.”<\/p>\n
Any limit on how far rent can fall after a review would match the limit on how far it could rise. The Greens gave the example of a 5 percent cap on reductions meaning a 5 percent cap on increases.<\/p>\n
The Greens would also empower councils to auction leases on empty shops in central business districts.<\/p>\n
If a shop has been empty for longer than a year, councils would be able to give the landlord eight weeks to find a tenant. If the landlord is unable to fine one, then the council could auction a lease.<\/p>\n
“When local businesses fill our main streets, more people come into town, there’s more to do, and everyone has a better, safer time,” Swarbrick said.<\/p>\n
“These common-sense changes will help small businesses stay open and help new ones fill empty spaces, supporting job creation, the local economy, and cities and towns that work better for all of us.”<\/p>\n
ACT leader David Seymour said the policy was like a “fourth form social studies assignment”.<\/p>\n
“There’s an empty shop, maybe the government could take over? They have no idea about the complex ecosystem of investors, builders, tenants, and developers that make up an urban landscape.”<\/p>\n
Seymour said it was the banks that required a “ratchet clause”, not landlords.<\/p>\n
“If you want landlords to have no money from the banks and then nothing to rent out, then this sounds like a sensible policy from the Greens. But most people don’t want that, they want banks to loan so people can build, so tenants can rent, so that shops can open,” he said.<\/p>\n