Why the new standards are not the answer

The final version of the Government’s new Healthy Homes minimum standards came out last week. Stop the War on Tenancies spokesman Mike Butler tells us what he thinks about them…

Standards for rental property are necessary. The Residential Tenancies Act includes standards that have existed since the Home Improvement Regulations of 1947.

Since we are now in 2019, and since the open fireplaces that were OK in 1947 have been banned, there is a case for an update. But any update should be evidence-based.

Unfortunately, the standards created by Housing Minister Phil Twyford are dominated by woolly, nanny state thinking.

For example, let’s take the new 2008 insulation standard of R 2.9 in ceilings, or a thickness of 120mm, that has to be met in two years.

Ceiling insulation makes sense because as hot air rises, 35% of heat may be lost through an uninsulated ceiling.

The evidence that the Ministry of Business Innovation and Employment has is that the optimum for ceilings is the 1978 standard of R 1.9.

But anything over that has diminishing effectiveness which amounts to a waste of money.

The former government stuck to the 1978 standard of R 1.9 in ceilings in standards that must be met by July 1 this year.

The minister’s new requirement to top-up insulation to meet the 2008 standard of R 2.9 even though there is diminishing effectiveness ignores the evidence and is a waste of money.

This requirement is a kick in the guts for owners who have been insulating for years to the R1.9 standard.

Subfloor insulation also makes little sense because only 10% of heat is lost through the floors and many floors are already insulated by carpet. For this we can blame the former government.

The requirement to provide a “fixed heater” (which is taken as code for a heat pump) makes little sense when all sorts of heaters are readily available from less than $20 and people have been able to keep themselves warm since time immemorial.

Whether a heater is fixed or portable makes no difference to heat output.

A large heater is not necessary because many dwellings are not large, and the area to heat is a living room that may be less than 10 square metres. A big heat pump would be overkill.

The presence of an electric heater does not mean it will be used because electricity is expensive and doubled in price from 2004 to 2014.

The Government, which is a major electricity supplier and of which the minister is a part, says nothing about the high cost of electricity.

Heaters must be able to raise the temperature to 18C, which is described as healthy according to a World Health Organisation recommendation.

But a closer look at WHO documents reveals that “no conclusions could be reached on the average indoor ambient temperature below which the health of the general population may be considered endangered”.

The Minister justified the standards when they were announced in February by saying “6000 children are admitted each year for ‘housing-sensitive hospitalisations”. This is not backed by evidence.

Answers to questions under the Official Information Act revealed that just one of 244,152 children had a condition exacerbated by housing in the 2015/16 year. See https://www.health.govt.nz/nz-health-statistics/health-statistics-and-data-sets/hospital-event-data-and-stats?page=2.

The Minister’s full claim was that “6000 children are admitted each year for ‘housing-sensitive hospitalisations’, and that these children have been found to be nearly four times more likely to be re-hospitalised and 10 times more likely to die in the following 10 years”.

This was lifted from page 41 of A stocktake on New Zealand Housing (2018). Since this is a Government publication commissioned by the Minister who wrote the foreword it gives the appearance that the Minister was quoting himself.

That assertion was made with no supporting data other than a footnote titled “Risk of rehospitalisation and death for vulnerable New Zealand children”. That paper identifies crowding as the housing factor and said that death was rare. (See https://www.ncbi.nlm.nih.gov/pubmed/28735258).

The standards we now have are designed to combat a claimed prevalence of cold, damp housing in New Zealand.

But only 2.7% of tenants surveyed complained about cold, damp housing, according to a Building Research Association of New Zealand report. See https://www.branz.co.nz/cms_show_download.php?id=606738ff7cb47451e094ad80f39cc912fa18f7a8.

The standards will have limited effectiveness. Insulation top-ups merely ensure that the costs of heating are marginally reduced. A fixed heater does not ensure that it is used. Ventilation by turning on extractors to remove steam from kitchens and bathroom could be achieved by opening a window.

The standards will have no effect on hospitalisations resulting from disease-transmission in crowded houses, respiratory diseases resulting from indoor smoking and unflued portable gas heaters, or infections resulting from poor hygiene.

This means that a fully compliant but crowded dwelling would continue to drive high rates of close-contact infectious diseases such as pneumonia, meningococcal disease and tuberculosis.

This evaluation of the new standards is likely to go down like a cup of cold sick for rental property owners.

A rule of thumb for home improvements comes down to costs and benefits and whether an owner-occupier would freely choose to spend the amount required.

For instance, with solar heating, homeowners who know the cost of panels and installation and can calculate how long it would take to get the money back and therefore can make a rational decision on whether to proceed.

Instead, in nanny state fashion, the Minister has set aside rational decision-making for rental property, and taken it upon himself to decide what he thinks is best for tenants and forced owners to comply.

The “healthy homes” requirements all cost money. For rental property owners, this money will have to either come from savings or a loan and be recouped by way of rent increases. Owners have a choice – do the work or sell.

A number of owners I know have had a gutsful and have sold, reducing the supply of rentals at a time that New Zealand is facing a housing crisis.

By driving rental property owners out of the market, the Minister is doing precisely the opposite of what is required to encourage an increase in rental property supply.

The Minister appears to be living in denial that the costs incurred by his standards will increase rents and reduce the supply of rental property without making any difference to the health of those living in crowded dwellings.

*Mike Butler has owned and managed rental properties for 27 years and currently has 60 tenants in 12 buildings.

This article was first published in Landlords magazine at https://www.landlords.co.nz/article/976514916/comment-why-the-new-standards-are-not-the-answer

$200m spend on ‘homelessness’ no solution to rental shortage

The $200 million allocated to Housing First today has no plan for extra housing and is welfare dressed up as solving the housing crisis, Tenancies War spokesman Mike Butler said today.

The $200-million is for 1000 people over four years, or $961 per person per week. It is unclear whether this is on top of or includes any payments from Work and Income that recipients may receive.

“We have a housing shortage. A check on the Housing First website reveals that all they do is place their clients in dwellings leased from private rental property owners,” Mr Butler said.

“Housing homeless without building more housing means that current renters would be displaced and this is no solution to a housing crisis, he said.

Housing First includes the Auckland City Mission, Link People, Comcare Trust, Te Taumata O Ngāti Whakaue Iho Ake Trust, and Lifewise.

Since it was formed in March 2017, Housing First says it has housed 922 people, including 436 children.

“During that time, I’ve housed more than 100 people without a government grant of $961 per person per week”, Mr Butler said. “So have hundreds of other private rental property owners.”

“We are still waiting for a meaningful response from this government to the housing crisis,” Mr Butler said.

Rental property child hospitalisation claim contradicted

Housing Minister Phil Twyford justified the launch of costly new rental property standards in February by saying “6000 children are admitted each year for ‘housing-sensitive hospitalisations’” but, when questioned, two Ministries provided contradictory data that undermined the Minister’s claim.

Tenancies War spokesman Mike Butler sent a series of questions to the Minister’s office, to the Ministry of Business, Innovation and Employment, and to the Ministry of Health, all seeking evidence to support a rather specific claim made by the Minister in February.

The full quote was that “6000 children are admitted each year for ‘housing-sensitive hospitalisations’, and that these children have been found to be nearly four times more likely to be re-hospitalised and 10 times more likely to die in the following 10 years.”

Answers to questions asked under the Official Information Act revealed:

  1. The Ministry of Health does not list “housing-related hospitalisation” as a condition that people are hospitalised for, but does list it as “circumstances that may cause diseases (or exacerbate existing conditions)”.
  2. That category in a table titled Publicly funded hospital discharges 2015/16, at https://www.health.govt.nz/nz-health-statistics/health-statistics-and-data-sets/hospital-event-data-and-stats?page=2 showed that of the 244,152 discharges of children and young persons to age 19 that year there was a single entry recording a hospitalisation for a condition exacerbated by housing.
  3. MBIE said that the claim that “6000 children are admitted each year for ‘housing-sensitive hospitalisations’, and that these children have been found to be nearly four times more likely to be re-hospitalised and 10 times more likely to die in the following 10 years” appears as an assertion on page 41 of A stocktake on New Zealand Housing, published last year. That assertion was made with no supporting data other than a footnote.
  4. That footnote, titled Risk of rehospitalisation and death for vulnerable New Zealand children, identified crowding as the housing factor and said that death was rare. (See https://www.ncbi.nlm.nih.gov/pubmed/28735258)

In Stocktake, there was another assertion about children and asthma on p43, and diseases resulting from crowding in p44, again without supporting data other than unhelpful footnotes. If that was the only support for the Minister’s claim, it would appear that his “we are doing it for the children” utterances were exaggerated.

The Minister has made various “hospitalisation” claims while pushing for so-called “healthy homes guarantee standards”.

During the first reading of the Healthy Homes Guarantee Bill on May 4, 2016, Mr Twyford said: “It is no longer good enough in this country of ours that there are 42,000—in fact, the latest figures indicate 50,000—preventable hospitalisations of children with respiratory and infectious diseases”.

The foreword of the Healthy Homes Standards discussion document, signed by the Minister, says that Ministry of Health data (2018) shows that there are “approximately 10,800 children or 13,000 events with potentially housing related conditions presented to the hospitals in New Zealand each year.”

The Healthy Homes Guarantee Act was passed in 2017. Standards had not been created when MPs considered the legislation. The standards would be created later, outside of parliamentary scrutiny, and were to be imposed as a regulation.

The standards that eventuated concerned heating, insulation, ventilation, moisture control and drafts, presumably to combat what the Minister thought was a prevalence of cold, damp housing.

These standards, of course, would have no effect on hospitalisations resulting from disease-transmission in crowded houses, respiratory diseases resulting from indoor smoking and unflued portable gas heaters, or infections resulting from poor hygiene.

This means that a fully compliant but crowded dwelling would continue to drive high rates of close-contact infectious diseases such as pneumonia, meningococcal disease and tuberculosis.

Insulation top-ups merely ensure that the costs of heating are marginally reduced, a fixed heater does not ensure that it is used, and ventilation would remove some steam from kitchens and bathroom, which could be achieved by opening a window.

The news that one Ministry contradicted data from another Ministry and undermined the  Minister’s emotional “for the children” claim, and that the rental property standards would have no effect on crowding-related diseases, will go down like a cup of cold sick for rental property owners forced to spend up to $7000 per dwelling on largely unnecessary modifications.

Stop the War on Tenancies is a group that since last October has been highlighting the evidence that successive governments have ignored while creating rental property policy.

No capital gains tax a relief for owners and tenants

Rental property owners and tenants will be relieved that pressure from hundreds of thousands of voters and taxpayers forced the ideologically-driven Prime Minister to drop the ideologically-driven capital gains tax, Tenancies War spokesman Mike Butler said today.

Prime Minister Jacinda Ardern virtually told the media she wanted Michael Cullen’s capital gains tax but the myriads of opponents to the tax wouldn’t let her have it, Mr Butler said.

The arguments used to promote the tax, that a capital gains tax would help reduce inequality and that all New Zealanders would “pay their fair share”, assumed that those to be hit by such a tax were not paying their share, he said.

In fact, those who would be hit hardest are probably paying more than their share, he said.

The only people who appeared to support the proposed tax were those who thought they wouldn’t be caught by it, Mr Butler said, as was shown by responses of 90 percent who told one poll that they objected to having to pay a capital gains tax on their KiwiSaver investment.

However, a capital gains tax is just one silly idea from the current Government that those in the rental property sector won’t have to deal with, he said.

We still have to deal with the costly rental property standards that appear to have little to do with the claimed hospitalisation of children, possible changes to tenancy law that make it impossible to move on disruptive tenants, and the ring-fencing of rental property losses that may cause up to 116,000 rental property owners leave the sector, Mr Butler said.

Stop the War on Tenancies is a group that since last October has been highlighting the evidence that successive governments have ignored while creating rental property policy.

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