The crisis the Housing Minister created

A report yesterday of a woman, 86, moving because of a 73 percent rent hike illustrates the crisis created by Housing Minister Phil Twyford, Tenancies War spokesman Mike Butler said today.

This story of a property being sold with the new owner hiking rent from $150 a week to $260 provides evidence of the consequences of Mr Twyford’s agenda that he refused to accept – that owners would sell and rents would rise.

The new owner said that the property needed work to be brought into line with the “healthy homes” standards, which was something he “supported”.

The new owner phrased his comment as if he had a choice, Mr Butler said.

In fact, rental property owners have no choice. They either comply with the standards that were imposed by regulation and include penalties of up to $200,000 for non-compliance, or sell, he said.

The out-going tenant did not say whether or not her flat was cold and damp, as the Minister alleged all rental properties were. Her only objection was the rent hike, Mr Butler said.

The property looks like a 1970s construction which may already comply with the 1978 insulation standard which achieves the greatest heat-loss prevention, he said.

The main justification for Mr Twyford’s standards was to prevent the hospitalisation each year of 6000 children for housing-sensitive illnesses.

As a one-bedroom flat, the flat under discussion would be unsuitable for children; this illustrates the short-sightedness of setting requirements for 588,700 properties for the supposed benefit of 6000, Mr Butler said.

Mr Twyford has created a new housing crisis and now both owners and tenants are paying the price, 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.

See CHB 86-year-old moves out https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12238724

Bad time for costly rental property standards

A housing shortage is the wrong time to whack rental property owners with thousands of dollars of additional compliance requirements, Tenancies War spokesman Mike Butler said today.

The new standards, announced today, will require rental properties to have a living room heater, insulation above the current requirement, extractor fans in bathrooms and rangehoods in kitchens, a ground moisture barrier to stop rising damp, adequate drainage, as well as draught-stopping tape.

The additional insulation requirement is the biggie and it looks like Housing and Urban Development Minister Phil Twyford has let the insulation industry write the rules, Mr Butler said.

Official advice to the Minister was that the optimum cost-benefit is to the 1978 standard of R 1.9 in ceilings, as currently required, and anything over that has diminishing benefit, he said.

Moreover, underfloor insulation reduces heat loss to such a small degree that it is wasted money, he said.

Yet the Minister has gone ahead and whacked rental property owners with the most extreme 2008 option of R 2.9 in ceilings, which means that all insulation will have to be redone, which must be a dream result for the insulation industry, Mr Butler said.

Today around the country there will be rental property owners who thought they were doing the right thing by installing insulation as required who now find out that they have to do it all over again, he said.

Claims by the Minister to justify his standards turned out to be wrong, Mr Butler said.

The World Health Organisation never recommended a minimum indoor temperature, as the discussion document claimed.

The Building Research Association of New Zealand found that only 2.7 percent of renters thought their dwelling was cold and damp, which is hardly a crisis, Mr Butler said. (See The proposed healthy homes regulations: an assessment http://www.tailrisk.co.nz/documentlist)

There is not a crisis in the condition of rental property. There is a crisis in the availability of rental property and Mr Twyford’s extra compliance requirements will make this worse, Mr Butler said.

“Owners have three options: Absorb the extra costs, raise rents, or sell. Ask any accountant. Owners are selling,” Mr Butler said. “Then where will renters live?”

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.

What evidence-based ‘healthy home’ standards look like

Evidence-based rental property standards would require ceiling insulation to the 1978 standard, no subfloor insulation, and nothing more, Tenancies War spokesman Mike Butler said today.

Advice to the Government obtained under the Official Information Act (See http://tenancieswar.nz/healthy-homes-legislation/)  shows no support for the claim that heat pumps, extra insulation, extractor fans, draught-proofing, and moisture-proofing, which soon may be imposed under the Healthy Homes Guarantee Act, would keep 10,800 children out of hospital each year.

The World Health Organisation never recommended a minimum indoor temperature, as the discussion document claimed, and the Building Research Association of New Zealand found that only 2.7 percent of renters thought their dwelling was cold and damp, which is hardly a crisis, Mr Butler said. (See The proposed healthy homes regulations: an assessment http://www.tailrisk.co.nz/documentlist)

We already have standards for rental property and if Housing and Urban Development Minister Phil Twyford followed advice, the standards he would confirm under regulation would be thus:

  • Heating: A tenant should be able to use whatever he or she chooses to plug in so long as it is safe. Both fixed and portable heaters can deliver sufficient warmth. Last year, Housing New Zealand found that a number of tenants would not use 15,000 fixed heaters recently installed because they were not what they were used to. (see  http://tenancieswar.nz/2018/10/09/complaints-show-problem-with-heaters-in-rentals/?fbclid=IwAR3uFj9j1V95oRmjDl1Q_TbFpWNXJxXMfpFtJO1aWezlB-JxOxipfoG2PxE ) The high price of electricity is the greatest barrier to poor people turning on the heater, not the presence or absence of a heater. Wood-burners are useful for those who prefer a fire.
  • Insulation: Ceiling insulation to the 1978 standard of R1.9 for most of the North Island should be the standard because it has the greatest impact and anything over that has diminishing cost-effectiveness. Underfloor insulation is a waste of money because it hardly reduces heat loss. Owners forced to install it should be compensated.
  • Ventilation: Windows that may be opened is a basic standard of ventilation and have been required since 1947 under Home Improvement Regulations of that year. There is no solid evidence that mould is a serious issue in rental properties.
  • Draught-proofing: Residents will protect themselves from draughts when they need to and any serious issues may be remedied through discussion with the owner. Requiring draught-stopping tape in gaps greater than 3mm in 588,700 rental properties is absurd.
  • Moisture-proofing: No evidence has been offered to prove all rental properties suffer from rising damp. The evidence is that 2.7 percent are perceived as cold and damp. Dampness problems are remedied by discussion with the owner or through the Tenancy Tribunal.

The outrageous $4000 dob-in-your landlord incentive imposed by the previous government should be dropped, he said.

The attempt to blame housing-related hospitalisations of 10,800 children annually on the condition of 588,700 rental properties while ignoring 1.1 million owner-occupied properties and not accounting for overcrowding is deceitful, he said.

Up to $7000 of extra spending per property may be required if every rental property required a heat pump, extra insulation, extractor fans, as well as the suggested draught-proofing and moisture proofing and this would have little benefit, Mr Butler said. (See http://tenancieswar.nz/2018/11/)

The money for extra compliance can only come by way of a rent increase from the tenant who is in effect being forced into buying extra appliances and building material without necessarily wanting it, he said.

A more-effective way ahead should be driven by owners and tenants in which any issues with heating, insulation, ventilation, draught and moisture proofing could be sorted out by agreement, he 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.

Subfloor insulation in rentals a costly mistake

A requirement to install subfloor insulation in rental properties should go and owners who have installed it under threat should be compensated, Tenancies War spokesman Mike Butler said today.

Insulation features in “healthy homes” regulations that Housing and Urban Development Minister Phil Twyford is expected to impose next month.

Under existing law, New Zealand’s 262,000 owners of rental property are required to install both ceiling and underfloor insulation by July 1 or face a penalty of $4000 payable to any person who reports non-compliance.[1],

The cost of installing R 1.3 subfloor insulation as required by the Residential Tenancies (Smoke Alarms and Insulation) Regulations 2016 for most of the North Island was $881.64 for a 77 square metre dwelling.[2]

The requirement for subfloor insulation is ridiculous because at best it reduces heat loss by only 9 percent which means the cost of installing it substantially outweighs any benefits, [3] Mr Butler said.

Ceiling insulation reduces heat loss by 35 percent but the difference between ceiling and subfloor insulation was not considered in the cost benefit analysis done by the New Zealand Institute of Economic Research for the Government, he said.

When asked why, an NZIER spokesman said that the Ministry of Business Innovation and Employment asked them to leave it out of the analysis, Mr Butler said.[4]

Requiring subfloor insulation in rental properties was a policy blunder perpetrated by the former National-led Government that should be remedied, he said.

The Minister has rectified another costly failure by the former Government by amending a methamphetamine contamination threshold that was 24 times lower than the lowest level that anyone could plausibly have a health risk, Mr Butler said.

Mr Twyford could include in the “healthy homes” standards a similar correction by dropping the requirement for subfloor insulation, he said.[5]

Owners who have installed subfloor insulation under threat based on faulty advice require compensation, Mr Butler said.

A repeal of the subfloor insulation regulation could save the Government millions of dollars in work not required for any state houses that may not have subfloor insulation, he 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.

[1] Schedule 1A Amounts for unlawful acts, Residential Tenancies Act 1986, at http://www.legislation.govt.nz/act/public/1986/0120/latest/whole.html?search=qs_act%40bill%40regulation%40deemedreg_residential+tenancies+act_resel_25_h&p=1#DLM3285790

 

[2] Qualifying ceiling insulation. See http://www.legislation.govt.nz/regulation/public/2016/0128/16.0/DLM6856254.html

[3] How Insulation Works, Level. http://www.level.org.nz/passive-design/insulation/how-insulation-works/

[4] The proposed Healthy Homes Regulations: An assessment, Ian Harrison, p17. http://www.tailrisk.co.nz/documentlist

[5] Meth, evidence, govt failure. https://www.nzcpr.com/meth-evidence-govt-failure/

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