Why the extra rental property standards?

7 October, 2018
, , , Uncategorized

Few could argue against the value of warm and dry housing but many could criticise the way the Peters-Ardern Government is imposing extra standards on rental property.

Housing and Urban Development Minister Phil Twyford, pictured, is about to require owners of rental property to install expensive heaters, add an extra layer of insulation, require extractor fans in kitchens and bathrooms, a polythene sheet under the floor to stop rising damp, and draught-stopping tape around windows and doors.

Touted as a “healthy homes guarantee”, only occupants of New Zealand’s 588,700 rental properties appear to need healthy homes because the work is not required for our 1.1-million owner-occupied dwellings.

These requirements were sneaked past MPs by way of shell legislation named Healthy Homes Guarantee Act, which became law on December 4, 2017, which said there would be standards covering the six areas but didn’t say what the standards were.[1]

That meant MPs and the public had no means of assessing the legislation. Although feedback is sought, regulations will be imposed and without a champion for rental property owners in Parliament there is little anyone can do about it.

Standards have existed for housing in New Zealand, at least since the Housing Improvement Regulations 1947, and probably for longer.[2] As well as requiring a kitchen, living room, bedroom, bathroom, toilet and laundry, and for heating, every living room must be fitted with a fireplace and chimney or other approved form of heating.

Bathrooms and toilet rooms were required to have a window opening to the exterior for ventilation.

The heating requirements were uncontroversial until 2004, when new National Standards for Air Quality banned open fires in urban areas in a quest to rid the atmosphere of tiny particles called PM10, and urban dwellings were forced to get an approved wood-burner or switch to electric or gas heaters.[3]

Insulation didn’t become a requirement until April 1, 1978, when the Local Government Amendment Act came into force.

That remained uncontroversial until pressure from the Green Party prompted the National-led Government to launch on July 1, 2009, a $340-million-dollar multi–year programme that provided funding for insulation retrofits and heating grants.[4]

That turned into compulsion via the Residential Tenancies (Smoke Alarms and Insulation) Regulations of 2016 which for timber-framed homes in most of the North Island required R1.5-rated insulation in the ceilings and R 0.9 under floor, to be compliant by July 1, 2019, with exemplary damages of $4000 payable to the tenant for failure to comply.[5]

So, you can see that there are substantial requirements and penalties already for rental properties without additional standards.

There is a perception that an insulated property is a warm property. However, insulation does not warm, it reduces heat loss by about 30-35 percent through the ceiling and roof, and about 12-14 percent through the floor.

Energy savings are minimal. In New Zealand, heating is generally only required during the winter, which means that insulation can reduce an annual power bill by five percent.

So, the current drive to get owners to install heaters to enable occupants to heat dwellings to the World Health Organisation “healthy” standard of 18C or 20C, with the presumption that this may only be achieved by installing a $1500 heat-pump air-conditioner in every rental property living room and possibly a further heater in every bedroom.

Aside from the question of whether human beings are at peril if the temperature indoors is less than 18C, a simple test with a $20 electric fan heater and a thermometer shows that such temperatures are readily achieved without spending megabucks.

But the main issue is that the reason why any property remains cold in the winter is because the heater has not been turned on.

And the reason why the heater has not been turned on is because the person in the cold property is quite likely terrified of a hefty power bill. This is because the price of electricity roughly doubled in the 10 years following 2004.

Fans costing around $500 installed that extract moisture-laden air from kitchens and bathrooms ventilate a dwelling in much the same way that opening windows and doors do. Why have some people apparently lost the ability to open windows and doors, and will these people use extractors if they are installed?

A couple of years ago, when I asked a tenant why a shower room remained damp despite an extractor fan that was wired to the light switch, I was told that she preferred to shower in the dark to reduce her power bill.

Mandatory requirements to install polythene sheeting under floors to stop rising damp irrespective of whether the property is damp or not is expensive overkill, especially when it costs $397.30 for 50 metres installed.

That particular installer initially quoted on polythene if required and explained that it was only required for concrete-rim foundations where there was inadequate airflow. Six months later it became a mandatory requirement.

The requirement for draught-stopping tape around windows and doors where there is a gap of 3mm is ridiculous. That would mean all wooden joinery would need the tape that would have to be removed for painting and replaced.

In 28 years of renting property I have only had one request for draught-stopping and have seen a handful of places in which tenants have installed tape.

If the additional standards are necessary to avert health issues, as the justification goes, why has the Peters-Ardern Government not included owner-occupied dwellings? This is probably because there would be an outcry if they did, in much the same way that there would be an outcry if a capital gains tax included owner-occupied homes.

Successive governments appear to view rental property owners as a soft target because we will pay for heating and insulation, we can be used as scapegoats, and generally we don’t fight back.

The standards are presented as if they are based on evidence but this is questionable. The Minister says in the foreword of the Healthy Homes Discussion Document that “cold and damp rental homes affect a large proportion of New Zealanders”.

But data on the condition of New Zealand housing is limited to a Building Research Association of New Zealand survey of just 491 properties, when New Zealand has 588,700 rental properties and 1.1-million owner-occupied dwellings. The Minister’s assertion is speculation.

The standards discussion document includes six pages of academic references which includes a claim that insulation retrofitting is expected to cost $600 million, with benefits of $2.10 for each dollar of this cost.[6]

However, examination of that claim showed a calculation error in the cost-benefit analysis and the actual benefit for each $1 spent on insulation was just 28c.[7]

Of course, owners are expected to pay the costs and the benefits accrue to the Government in terms of reduced hospitalisation costs.

Government MP Tamati Coffey told a meeting on tenancy law changes in Rotorua last week that it was essential to get landlord “buy in” for any changes.[8] He must have rocks in his head. “Buy-in” is difficult to imagine considering the extent to changes that include, as well as the six additional standards already discussed:

  • Current insulation requirements with a compliance deadline of July1 next year and $4000 fines,
  • Tenancy law changes that would remove an owner’s right to end a tenancy agreement and ban fixed-term tenancies,
  • A ban on letting fees as of December 12 this year.
  • A looming capital gains tax.

On top of this is the never-ending stream of damaged rental properties with no one willing to answer the question that if wilful damage is listed in the Crimes Act with a penalty of up to seven years in jail, why don’t those who trash tenancies face jail time.

Most rental properties in New Zealand are owned by people who have one or two properties. There is not a lot in it for them. They have no one in Parliament speaking up for them. They can either pay for the new requirements, ignore the Government, or sell up and take their capital gain while it is still tax-free.

Perhaps the Peters-Ardern Government has not yet worked out that if owners sell up, if there is a crisis now, what sort of a crisis will there be then?

Have your say on the extra standards by going to http://tenancieswar.nz/healthy-homes-legislation/ 

Submissions must be in by October 22, 2018.

[1] Healthy Homes Guarantee Act,  http://www.legislation.govt.nz/act/public/2017/0046/25.0/DLM6627702.html

[2] Housing Improvement Regulations 1947. http://www.legislation.govt.nz/regulation/public/1947/0200/latest/DLM3505.html

[3] National Standards for Air Quality. https://www.mfe.govt.nz/air/regulations/national-environmental-standards-air-quality/about-nes

[4] Government cuts Warm-Up programme that saves lives. http://www.scoop.co.nz/stories/PA1605/S00567/government-cuts-warm-up-programme-that-saves-lives.htm

[5] Insulation regulations. https://www.tenancy.govt.nz/maintenance-and-inspections/insulation/compulsory-insulation/

[6] See https://www.beehive.govt.nz/release/tenancy-law-changes-include-insulation-and-smoke-alarm-requirements

[7] See https://breakingviewsnz.blogspot.com/2016/02/mike-butler-insulation-benefit-grossly.html

[8] Tamati Coffey hears horrow stories from landlords. https://i.stuff.co.nz/national/politics/107583794/The-meth-got-to-her-Tamati-Coffey-hears-horror-stories-from-landlords

Why don’t trashed tenancies lead to jail time?

3 October, 2018
, , , Property Damage

 

A series of high-profile cases of trashed rental properties raises the question of why the perpetrators manage to avoid jail time for wilful damage, Tenancies War spokesman Mike Butler said today.

The Crimes Act is clear that a person who intentionally or recklessly destroys or damages any property is liable to be jailed for up to seven years.

“The Minister of Police and Police Commissioner should make a statement on why those who trash rental property are exempt from wilful damage charges,” Mr Butler said.

“Any government that was serious about applying the law in an even-handed manner would regard damage to rental property as offence under the Crimes Act warranting jail for up to seven years”, Mr Butler said

“There would be little difficulty in proving the case because the damage is visible for everyone to see and the person responsible has his or her name on the tenancy agreement”, Mr Butler said.

“In my experience, police have never done anything about complaints I have made about damage to rental property, and instead have said it was a matter for the Tenancy Tribunal,” Mr Butler said.

“And the Tenancy Tribunal questions the legitimacy of proof of the photographic evidence and starts to quibble as to whether the owner has insurance, whether damage is a single event or multiple events, and whether it is accidental or deliberate,” he said.

“If the persons named on any tenancy agreement faced charges and jail time after damage to property, we would have fewer instances of damage to rental property”, Mr Butler said.

The group Stop the War on Tenancies aims to empower both owners and tenants in the face of ongoing Government ineptitude with housing.

See: Landlord left with $42,000 repair bill from tenant says law doesn’t protect investors

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12134894

Meth, evidence, govt. failure

1 October, 2018
, , , Meth Contamination

Originally posted on Breaking Views

Posted on June 10, 2018
By Mike Butler

The big methamphetamine clean-up scam that was spectacularly busted last week is a story of a government’s failure to use evidence to create policy. It is also a story of politics.

The bust came from the Prime Minister’s chief science adviser, Sir Peter Gluckman, who reported that there’s never been a documented case of someone getting sick from third-hand exposure to meth.

National Housing spokeswoman Judith Collins rather lamely told The AM Show that when in government they had no idea the meth-testing industry was bogus.[1]

Reasoning by Collins appears disingenuous when considering a simple question, which is this: How could a substance, if smoked in a property, be so toxic to warrant evicting tenants, tearing out gib linings, dumping carpets, stoves, electrical fittings, and placing warnings on property titles?

I asked the question four years ago because as a rental property owner I was exposed to a new risk of having to spend tens of thousands of dollars to refurbish a property after an allegation that meth had been smoked there. The question was under the Official Information Act and the reply took 20 days.

If Judith Collins and Paula Bennett, who was the Minister in charge of evicting state tenants on suspicion of smoking meth, had asked the question, they would have got the answer in a matter of hours.

In 2014, someone claimed that the police were finding a new clandestine meth-manufacturing lab every 45 hours. I wanted to see the evidence so I asked the Minister of Health, Tony Ryall:

  1. The numbers illnesses, hospitalizations, and deaths resulting from methamphetamine contamination from P labs throughout NZ from 2003 to 2013 inclusive, and;
  2. The numbers of fires and injuries resulting from P lab explosions during that period.

The reply: The P-lab claim turned out to be rubbish. Police dismantled just 77 of such labs in 2013, or one every five days, and 94 in 2012, and 211 in 2005, when most were found.

The police revealed that there had been 66 clan lab fires since 2004, with 10 each year occurring in 2004, 2006, and 2011.

As to illnesses, hospitalizations and deaths resulting from methamphetamine contamination or fires from P labs during that year – there were none!

The results were published at NZCPR under the headline “P-lab risk vastly exaggerated” at https://breakingviewsnz.blogspot.com/2014/05/mike-butler-p-lab-risk-vastly.html

Since then I saw a single report of hospitalisation as a result of third-hand contact with meth — a couple of loons who cooked a boil-up in a pot used for meth manufacture got sick and had to spend a night in hospital.

The decontamination industry was going strong at that time. In 2013, 28 state homes were decontaminated, which rocketed to 174 homes in the first quarter of the 2015 financial year.

The cost of “remediation” or decontamination could range from $5000 to $35,000.[2] Local councils could take steps under the Building Act 2004 and the Health Act 1956.

There was still no standard of what level of residual meth could be deemed hazardous. Decontaminators were making it up as they went along. In 2016, the Ministry of Health contracted ESR to undertake a review which resulted in a benchmark for remediation of 0.5 micrograms per 100 square centimetres.

Toxicologist Dr Nick Kim criticised this benchmark as being 24 times lower than “the lowest level that could you could plausibly have a health risk”. See “Scientist says P risk over hyped” at https://breakingviewsnz.blogspot.com/2016/06/mike-butler-scientist-says-p-risk-over.html

New guidelines of 1.5 micrograms per 100 square centimetres were instituted. Property management consultants Real IQ NZ said:

The working group of 21 who developed the standards, nearly half of this group had a financial interest in keeping the standards as low as possible. It wasn’t until the 11th hour that REINZ came onto the committee and even this was after late petitioning. Dr Nick Kim, the person who seems to have the most knowledge on the subject, with absolutely no financial gain or conflict of interest in regards to the setting of standards was not even invited onto the committee.[3]

This was not the first time that the Government was captured by interest group. This has happened with the earthquake building saga (see Earthquake strengthening bad policy at https://breakingviewsnz.blogspot.com/2013/03/mike-butler-earthquake-strengthening.html#more), PM10 and fireplaces (Here come the wood-burner police at https://breakingviewsnz.blogspot.com/2014/03/mike-butler-here-come-woodburner-police.html),  insulation (Insulation benefit grossly overstated at https://breakingviewsnz.blogspot.com/2016/02/mike-butler-insulation-benefit-grossly.html), not to mention the Resource Management Act tinkering that made matters worse.

Those readers keeping track of the numbers would have noticed that the new standard of 1.5 micrograms remained eight times lower than “the lowest level that could you could plausibly have a health risk”. A toddler would have to lick every wall of a dwelling to get a reaction.

Then we were told that the standard was supposed to be the standard of remediation, that a decontaminated clan lab should be cleaned to a level to show residual meth no greater than 0.5 micrograms or 1.5 micrograms per 100 square centimetres. How the switcharoo occurred is yet to be explained.

These failures show the need for some regulatory responsibility legislation that requires, at least, that “experts” with vested interests should be kept far away from advisory panels.

Evidence of harm should be the basis of any policy intended to prevent harm but there was still not evidence of harm of residual meth in buildings where meth had allegedly been smoked. But there was abundant evidence of harm resulting from the moral panic stirred up by vested interests.

Hundreds of Housing NZ homes have been left empty and more than 100 tenants evicted over meth fears, and $100 million of taxpayer money spent cleaning homes.

The multi-millions spent by private property owners forced into clean-ups has not been quantified. Insurance premiums have risen to include decontamination cover. Meth safety warranties are required in the sale of rental properties. The meth tag on property titles reduces the value of properties.

The industry has opened the door to property owners getting an insurance-paid refurbishment based on a positive meth test. Neighbours at war could use the P allegation to get rid of someone or to put a landlord in deep strife.

Housing New Zealand will now use a new standard of 15 micrograms of meth detected per 100 square centimetres after cleaning, expecting to save $30m a year in remediation and testing. That’s 10 times the current limit of 1.5 micrograms. It used to be 0.5 micrograms after cleaning.[4]

The fact that continuation of cleaning is implied in the revised measure shows that Housing New Zealand still doesn’t get it because there is still no actual evidence of harm from residual methamphetamine.

I wondered what expensive and special chemicals the clean-up specialists were using and found that a good wipe-down with ammonia-based Handy Andy would remove the residue, if it was in any way harmful, which has yet to be proven. Others said sugar soap.

Methamphetamine ingestion for pleasure undoubtedly damages health and causes a raft of social problems, and I have dealt with some consequences of such use and abuse. But 28 years in rental properties I have experienced few incidents in which meth has been involved. The drug that does the most harm is alcohol.

Who is liable for the horrendous losses caused by this epic regulatory failure? Is there going to be compensation. I’m waiting for the class action.

Credit should go to the new Housing Minister Phil Twyford for recognising the problem and doing something about it, and to Sir Peter Gluckman, who used his stellar position to tell the truth.

At least that was the position before considering politics and not-so-hidden agendas.

Twyford heavily promoted a housing crisis in the run-up to last year’s election. As new Housing Minister he has to be seen as implementing a solution. Busting the meth scam both provided a solution and tarred the former government.

But Sir Peter Gluckman, the science advisor for this government also advised the former government. He should explain why he was silent when National apparently presided over a giant meth hoax and emptied out state houses.

The meth hoax is an incarnation of the big lie, which is a gross distortion or misrepresentation of the facts, especially when used as a propaganda device by a politician or official body.

Along with that we have the spectacle of a government being unable to do effectively the one thing it specialises in, that is to regulate.

We have evidence of harm caused by policy that was not based on evidence. We are still awaiting evidence of someone getting sick from third-hand exposure to meth.

[See our Meth Contamination page]

FOOTNOTES:

[1] National had no idea meth guidelines were wrong, https://www.newshub.co.nz/home/politics/2018/05/national-had-no-idea-meth-guidelines-were-wrong-judith-collins.html

[2] More than $1.1 million for Auckland state house, decontaminated for P and still affected by lead, https://i.stuff.co.nz/life-style/home-property/80641462/more-than-11-million-for-auckland-state-house-decontaminated-for-p-and-still-affected-by-lead

[3] The year the meth myth finally gets busted, https://www.realiq.nz/news/2018/1/16/is-2018-the-year-the-meth-myth-finally-gets-busted

[4] Meth tester knew, https://www.msn.com/en-nz/news/national/meth-tester-already-knew-contaminated-houses-had-little-health-impact/ar-AAxZxsu?ocid=ob-fb-ennz-313

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