Extra rental standards to cost $7000 per house

Extra rental standards to cost $7000 per house

Papers obtained last week under the Official Information Act show that up to $7000 of extra spending may be required for each of the 588,700 rental properties in New Zealand and that this will have little benefit, Tenancies War spokesman Mike Butler said today.

Extra rental property standards on insulation, heating, ventilation, moisture protection, draught-proofing and drainage, under the Healthy Homes Guarantee Act, which were sent out for public consultation last month, are being finalised now.

Advice to the Minister of Housing and Urban Development, Phil Twyford, showed benefits only from insulation and draught-proofing, with heating, extractor fans, and moisture-proofing mainly incurring costs without benefits:

  • Insulation of up to 70,000 properties to 2001 standard of R1.9 in most of the North Island expected a benefit of $64 a year per property.
  • Heat pumps in living rooms achieving a temperature of 18C in 180,000 properties showed a cost of $33 a year. No benefit was cited.
  • Extractor fans in kitchens and bathrooms incurred a cost of $48 per property. No benefit was shown.
  • A cost of $48 per property was cited for moisture-proofing and drainage work in 192,000 properties. No benefit was cited.
  • Draught-proofing tape around windows and doors was recommended with a claimed benefit of $49 per property if 30 percent of rental stock required it.

The total cost of around $7000 comprises insulation $2452 (an insulation top-up costs roughly the same as first-time insulation), a heat pump $3000, two extractor fans $1000, a ground moisture barrier $700, and draught-proofing (costs unclear).

A compliance deadline of sometime between July 1, 2019, and 2024 was recommended, as were exemplary damages of $4000 for non-compliance.

It will be over to rental property owners either to recoup the $7000 by adding around $14 a week to rent for 10 years, or pay for it without recouping it.

The Minister was warned that these costs would be added to rent for those owners who chose not to sell up. Grants to cover costs were recommended, according to the OIA release.

The Minister was advised that the biggest gain achieving 80 percent heat-loss reduction was insulating to the 1978 standard, which was R1.9. Anything over that had little extra gain.

It appears from the papers that the total number of uninsulated rental properties in New Zealand is unknown.

Looking past all the rhetoric in this debate, it appears that all that actually needs to be done, if reducing heat loss in winter is a worthy aim, is to find out what properties are uninsulated and take steps to remedy this, Mr Butler said.

An offer from the Government of free insulation subject to a visit by a Government official to confirm that the property is uninsulated could achieve that, Mr Butler said.

Advice to the Minister is that cold is an issue for the very young and the very old. Any health issues therefore could be addressed by a targeted approach ensuring that the vulnerable have and can afford adequate heating, he said.

A fixed heat pump is not the only way to lift the temperature to 18C or 20C. There is a range of options including wood-burners, flued gas heaters, and efficient portable electric heaters that we have been using for decades without difficulty, Mr Butler said.

If this extra $7000 of spending is imposed, much of which has been shown to have a cost without a benefit, in the current environment of strong demand for rental property, owners can charge extra so they most probably will, and this will go on top of current rent increases, Mr Butler said.

This is part of the Government’s policy of “making life better for renters” but the Minister may actually be making life more expensive for renters, he said.

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

Attention rental property owners

Please put in your submissions today on far-reaching proposed changes to tenancy law and extra rental property standards.

This is because these proposals will have a big impact on you.

Proposed changes to tenancy law will prevent you from ending tenancies contractually, ban fixed-term tenancies, give tenants the right to modify a property, allow tenants to keep pets as of right, and enable Government officials to enter boarding houses at any time.

Additional standards will require you to provide and maintain expensive heat pumps, install additional insulation, extractor fans for kitchens and bathrooms, install under-floor polythene sheets to stop rising damp, and place draught-proofing tape around all windows and doors.

Putting in two submissions may be a 15-minute task by going here:

http://tenancieswar.nz/tenancyreform/ on tenancy law reform,

http://tenancieswar.nz/healthy-homes-legislation/ on the extra standards.

The proposals are not evidence-based; they are to satisfy a small group of vocal supporters of the current Government.

Many owners who are disgusted with being used as scapegoats by successive governments are selling, with first-home buyers snapping up stand-alone houses.

This means there will be fewer rental properties available, rents will increase, and prospective tenants will face tougher scrutiny.

Nobody in Government appears to have thought that through.

Put in your submissions today.

Follow the links above, follow the directions, print the submission forms out, fill them in, and mail them in by Friday.

The deadline is 5pm on Sunday, October 21, for tenancy law, and 5pm on Monday, October 22, at, for standards.

One further step to take — please like this post and share it to all your Facebook friends.

Complaints show problem with heaters in rentals

Complaints that 15,000 heaters installed in Housing New Zealand properties don’t heat give the appearance of an epic blunder and show a problem with forcing private rental property owners to provide heaters, Tenancies War spokesman Mike Butler said today.

Yesterday, Radio New Zealand reported issues with the 2000-watt electric convection panel heaters that some said took too long to warm up. Tenants resorted to using either electric fan, oil-filled, or radiant heaters that they were accustomed to.

The issue surfaced during a submission period on proposals to require rental property owners to provide heaters for rental properties, install additional insulation, extractor fans for kitchens and bathrooms, under-floor polythene sheets to stop rising damp, and draught-proofing tape around windows and doors.

“There was no mention in the news item whether Housing New Zealand tested the heaters before installation”, Mr Butler said.

A test may be performed by anyone with a thermometer and may be done by closing the windows, curtains, and doors of a room and powering up the heater to raise the room temperature to 18C, which is the “healthy” standard adopted by the Government.

“Surprisingly, a 2400-watt electric fan heater costing just $30 will heat a State-house living room to the required 18C on a winter night”, Mr Butler said.

“So there should be no need to force rental property owners to install expensive heaters that may attract complaints as happened with Housing New Zealand properties”, he said.

“No evidence other than reference to a World Health Organisation standard has been provided to prove that anyone is in peril if the temperature in their environment falls below 18C”, Mr Butler said.

“Moreover, the preference by tenants for electric fan, oil-filled, or radiant heaters mentioned in the Radio NZ report shows the folly of imposing a one-heater-suits-all requirement on owners of rental property, as Housing New Zealand has already found out”, he said.

“The best way forward for the Housing Minister is to leave it to us to work out the best way to keep warm during winter. That has never been a problem up to now”, Mr Butler said.

“Most New Zealand houses haven’t changed and the climate is supposed to be warming”, he said.

“The only changes have been the ban on open fires in urban areas following the 2004 new National Standards for Air Quality, as well as meteoric increases in the price of electricity, which nearly doubled in the 10 years from 2004, he 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: Housing NZ tenants complain about ineffective heaters. https://www.radionz.co.nz/news/national/368148/housing-nz-tenants-complain-about-ineffective-heaters

Why the extra rental property standards?

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