Renting sucks

 Leigh-Marama McLachlan notes one of the bizarre things about renting in New Zealand.

After encouraging me not to stress about inspections, my new property manager hit me w/ a breach of tenancy for a dirty mirror in my room (boys sticky hand marks) and vacuuming (small part in toy room) and wiping down kitchen cupboards. The house was bloody clean. Ridiculous.

— Leigh-Marama McLachlan (@leighmarama) October 31, 2020

Landlords here do 3-monthly inspections, and they can be rather a bit more invasive than anything you'd be used to if you've lived in North America.

It's worth thinking about why things are like this. The knee-jerk reaction is to want to ban it; I'm more interested in why this happens. Banning symptoms tends not to fix problems. 

Some potential explanations:

1. New Zealand houses are of worse quality than those overseas. Without constant vigilance, they turn to mold and rot. Owners have incentive to monitor and make those investments; renters do not.
   1. This could be part of it, but does that really require visits every three months? And while checking that vacuuming and the like is done might be a way of getting a signal on tenant type and whether less noticeable things are being done, it does seem more than a little over the top. Couldn't a landlord do better by easing back the intrusiveness as they get a better sense of tenant type?
2. Perhaps it's harder to evict a problem tenant in NZ, so running processes that are guaranteed to provide a pretext if needed can have value.
   1. Again, perhaps part of it, but still seems to be overkill.
3. Insurers require regular inspection of rental properties
   1. Sure, but nothing requires that the inspections be crazy over-the-top, right?
   2. And this just pushes the problem back a level: why do insurers require this?
4. More small-time landlords here, so each investment property is likely to be a much larger fraction of the landlord's wealth.
1. If you're a shareholder in a firm that owns hundreds of rental properties, that firm will exercise due diligence over all of them but any tenancy-gone-wrong is hardly world-ending. If you own one rental property that is a substantial part of your wealth, a tenancy-gone-wrong can be a catastrophe.
2. While I find this plausible, it doesn't explain why insurers would require it as part of landlord cover. The insurers would be diversified, and they still demand it, so there has to be something else going on as well.
5. Property management companies expect to be sued by the owner if they're not hyper-vigilant and something goes wrong, so they go over-the-top.
1. Much of this remains question-begging: why don't they then strike better contracts with the owners? Why would owners prefer contracts like this to ones that might let them charge tenants a bit more in money rent rather than in hassle-rent?

The fundamental underlying problem I think is still the massive shortage of housing. 

In a housing shortage, landlords can extract higher rents. And in a rental rationing equilibrium, that won't just be on money rents. 

Were we in a land of plenty, landlords would have to compete harder to get tenants. An insurer that didn't require 3-monthly inspections would outcompete others because landlords who wanted decent tenants would want to offer something that felt less like prison cell inspections. You could still have problems with (4), but worse landlords would be competed out, and those landlords would do better by selling their properties to those who could rent them out more efficiently.