The Tenants Protection Association says proposed changes to the Residential Tenancies Act could be used by landlords as an easy excuse to increase rents.
The Residential Tenancies Amendment Bill passed its first reading on February 20 and is currently being considered by the Social Services and Community Committee.
One of the more controversial changes would see the end of so-called 'no-reason' 90-day eviction notices, with landlords thereafter required to provide a valid reason to end a periodic tenancy.
The New Zealand Property Investors Federation (NZPIF) and the Real Estate Institute of New Zealand (REINZ) have partnered up to fight the proposed changes - especially the end of 90-day evictions, which they say is an important tool.
They said in February that the changes would make property owners feel they were no longer in control of who is living at their property, which could cause many to give up and leave the industry.
They argue that landlords only use 90-day eviction notices as a last resort because gathering enough evidence of bad behaviour to present to the Tenancy Tribunal is not always possible.
According to a survey by NZPIF last year, about 3.1 per cent of tenants are issued a 90-day eviction notice each year - which would equate to about 18,900 of New Zealand's 609,700 rental households.
NZPIF chief executive Sharon Cullwick yesterday told Stuff that one in five investors are considering exiting the industry over the changes.
Her comments follow debate in Parliament during the first reading last month , during which National MP Alastair Scott warned "this is just another cost of capital inflicted on landlords which will see rents rise".
His colleague Brett Hudson agreed, saying "previous legislative change that this Government has made in this term of office has impacted rents by an average $60-a-week increase".
NZPIF's former executive officer Andrew King also told Good Returns last month that "we believe this change will cause investors to leave the market, pushing up rental prices even further for tenants who are already struggling to pay the rent".
Penny Arthur, manager of the Tenants Protection Association, said the rhetoric around rental price rises makes her suspicious that any changes at all will be used as an excuse to increase rents.
"Every time changes are announced it seems to be a reason to put up rents," Ms Arthur said.
Ms Arthur said NZPIF and REINZ are failing to see it from both sides, and are in some cases protecting "slum" landlords.
"Many landlords refuse to comply with existing legislation, and if their tenant raises issues with them, their response is to issue them with a 90-day notice," Ms Arthur said.
"We have an extraordinary number of slum landlords in New Zealand - far more, I think, than most people would realise or want to admit.
"We have tenants living in houses with no cladding, no running water, landlords who refuse to provide any contact details to tenants, and actively avoid carrying out maintenance.
"It is time the residential tenancy industry is regulated to stop these behaviours becoming acceptable practice."
Ms Arthur also said tenants will benefit greatly from the automatic suppression of their name following a Tenancy Tribunal decision in their favour, as currently there's a view that fighting back will end up getting you "black-listed" for future tenancy applications.
Submissions on the bill at the Select Committee stage are open until March 25.