The Green Party would rewrite New Zealand’s commercial leasing rules so that a rent review can push rents down as well as up, and would hand councils the power to auction a lease on any shop that has sat empty for more than a year.
Co-leader and Auckland Central MP Chlöe Swarbrick released the policy on Sunday 20 September, seven weeks out from the 7 November general election. The party has called it a city centre vibrancy plan, but the mechanics of it are a fairly technical piece of contract law that most shoppers have never heard of.
The target is the ratchet clause. It is a standard feature of New Zealand commercial leases and it works as a one-way valve. When a lease comes up for a market rent review, the ratchet stops the new rent being set below what the tenant is already paying, no matter what the market has done in the meantime. A Hawke’s Bay law firm, Carlile Dowling, describes four common versions in its guide for tenants. A hard ratchet means the rent can never fall. A soft ratchet lets it fall to a floor. A commencement ratchet locks that floor to the rent agreed at the very start of the lease, and holds it there through every renewal. A cap and collar puts limits on movement in both directions. The firm also notes that in some standard forms a soft ratchet applies by default if nobody ticks a box in the schedule.
Swarbrick said the effect of all this is that small operators keep paying yesterday’s rent through today’s downturn.
“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,” she said.
“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.”
Under the Greens’ policy, a market rent review would be able to lower the rent as well as raise it, for new and existing leases where the tenant’s turnover is under $30 million. Any limit on how far a rent could fall would have to be matched by the same limit on how far it could rise. The party’s worked example is a 5 per cent cap on reductions meaning a 5 per cent cap on increases. It would also ban rent review triggers that only a landlord can pull, and set up a low-cost tribunal for commercial lease disputes, on the grounds that a shopkeeper in a fight with a landlord can currently go to neither the Tenancy Tribunal nor the Disputes Tribunal.
Swarbrick said Property Council New Zealand’s own standard lease, released in 2025, keeps a hard ratchet for every rent review.
The second half of the policy is the part that would be visible from the footpath. Where a shop in a central business district has been empty for more than a year, a council could give the landlord eight weeks to find a tenant. If none is found, the council could auction a lease itself. Owners would be able to object where they intend to redevelop the building or move into it themselves. The Greens point out that this is not a New Zealand invention. Councils in England have held almost exactly this power, called a high street rental auction, since 2 December 2024, when the relevant part of the Levelling-up and Regeneration Act came into force.
“We want thriving towns and cities, which means filling vacant spaces with our country’s limitless talent, creativity and entrepreneurship,” Swarbrick said.
The Auckland Central framing is deliberate. Swarbrick tied the policy directly to the City Rail Link, which carried its first passengers on 13 September after roughly a decade of tunnelling and street closures through the middle of the city.
“After years of construction and disruption in Auckland city centre, we can and must make the most of our awesome new City Rail Link by actively supporting vibrancy, which in turn makes our city safer,” she said.
The vacancy numbers give the policy something to point at. JLL’s Auckland retail market update put central city retail vacancy at 12.9 per cent in the June 2026 quarter, a fall of 20 basis points over the preceding six months and the first easing after a sharp run-up through 2025. The New Zealand Herald, citing a Bayleys report, put Auckland’s shop vacancy at about 13 per cent and said it was the highest of any New Zealand city centre. Roughly one shopfront in eight in the country’s largest downtown has nobody in it.
ACT leader David Seymour was scathing. He told RNZ the policy read like a “fourth form social studies assignment”.
“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,” Seymour said.
He argued the ratchet clause is not a landlord’s demand but a bank’s, and that stripping it out would make lending harder rather than rents cheaper.
“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.
That argument is the real fault line here. Both sides agree the shops are empty. They disagree about why. The Greens see a lease term that holds rents above the market and leaves owners with little reason to drop the price, because a vacant unit carried on the books at the old rent is worth more to a valuer than a tenanted one at a lower rent. Seymour sees a financing chain in which the ratchet is the thing that lets the money flow in the first place.
It is worth noting what the policy is not. It does not set rents, and it does not take the building off the owner. A council auction under the English model still produces a lease at whatever the market will actually bear, and the owner still collects the rent. It is a forced marketing exercise rather than a confiscation, which is a distinction the debate over the next seven weeks will probably lose somewhere along the way.
The policy also sits alongside a live argument about the same few blocks of Auckland. The Government is separately moving to scrap height limits in the Auckland CBD on the view that planning rules are what is holding the city back. The Greens’ answer is that the buildings are already there and the problem is who can afford to be in them.
Whether any of it becomes law depends on the numbers on 7 November. If you are still working out where you stand, you can take our voting tool and see which party’s policies line up with your own.
Have you watched shops empty out on your main street, or run a business through a rent review that could only go one way? Tell us what you have seen in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
Leave a Reply