Labour Housing Spokeswoman Annette King's attack on landlords in today's Dominion Post shows a lack of understanding about the real problem behind housing affordability, the number of houses available for rent, or the quality of houses available, ACT Leader John Banks said today.

Ms King was today reported as saying that the rental subsidy being given to low income tenants was simply being 'pocketed' by landlords and hadn't resulted in better housing, more access to housing, or the ability for people to buy housing.

"The real problem is not the subsidy, it is a result of a lack of land supply for residential housing which is pushing up house prices and therefore pushing up rents for all tenants," Mr Banks said.

"Increases in the cost of housing means that home owners have less money to invest in doing up their properties once mortgage payments, insurance and rates have been taken care of.

"Rather than beating up on landlords, Labour would be better to focus on improving the overall supply of housing. ACT has long argued that the biggest roadblock to increasing housing supply is the regulations that control the supply of land.

"In its report on Housing Affordability, the Productivity Commission found that over the past 20 years, the cost of a section has grown far more quickly than house prices, which indicates that 'appreciating land prices have been a key driver of house price inflation in New Zealand.'

"This problem has been exacerbated in Auckland, with the price of land now accounting for 60 per cent of the total house price as compared to 40 per cent for the rest of the country.

"It is the policy and planning practices of local and central government through legislation like the RMA that has created artificial barriers restricting the supply of land. ACT would undertake a dramatic reform of the RMA to ensure this problem is addressed.

"If New Zealand is going to house another generation, whether in owner-occupied property or rental accommodation, the key is not to beat up on landlords but to get the regulatory environment right so that more land is made available for homes to be built," Mr Banks said.