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.

116,000 loss-making rental property owners may sell

Confirmation from Inland Revenue last week that 116,000 owners declared a loss on earnings in the 2016/17 tax year shows that ring-fencing of tax losses for rental properties could soon result in 116,000 fewer rentals, Tenancies War spokesman Mike Butler said today.

“The response to my request under the Official Information Act also said that the average loss declared by each owner was $7138, and that includes both individual and non-individual (trusts, partnerships and companies) taxpayers”, Mr Butler said.

Owners who run a rental property at a loss do so to claim the losses against tax paid on their day job to get a refund.

“Advice to the Government (see http://tenancieswar.nz/other/loss-ring-fencing/)  about the impact of loss ring-fencing has proceeded without knowing how many private rental property owners are negatively geared”, he said.

“A figure of 40 percent was given in that advice without stating the total number of private rental property owners. The 116,000 number is much higher than I expected”, he said.

“Once an owner has to top-up his or her rental with $138 every week from the day job with a greatly reduced chance of ever getting it back, it won’t be long before that owner decides to sell,” he said.

“Inland Revenue and MBIE advised the Government early last year that ring-fencing losses would result in the sale of an unknown number of properties to owner occupiers, reducing availability of rentals and increasing rents by around 10 percent”, Mr Butler said.

MBIE thought the housing shortage would increase by 16,600 over the two years from 2018, accounting for 6000 Kiwibuild homes over that period.

“The briefing papers were done under the expectation that KiwiBuild would deliver 6000 dwellings in two years”, he said.

But just three weeks ago, Housing and Urban Development Minister Phil Twyford said he could not guarantee that the Government will meet its target of having 1000 KiwiBuild houses built by July so the 6000-extra-dwelling figure is off the table, he said.

“If every negatively-geared owner sold to an owner-occupier, and if each owner sold one property, the shortfall would be more like 116,000 properties, not 16,600”, he said.

It’s decision time for negatively-geared owners, but it is also decision time for the Government that may unwittingly create a further massive shortfall of rental properties by not listening to advice, 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.

Submissions on the bill close on February 28. To make a submission, go to https://www.parliament.nz/en/pb/sc/make-a-submission/document/52SCFE_SCF_BILL_82431/taxation-annual-rates-for-2019-20-gst-offshore-supplier

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/

Evidence undermines insulation standards, $4000 penalty

Evidence undermines insulation standards, $4000 penalty

Evidence provided to the Government undermines both current rental property insulation requirements and makes a mockery of a $4000 penalty for non-compliance, Tenancies War spokesman Mike Butler said today.

Owners are required to install both ceiling and underfloor insulation by July 1 or face a penalty of $4000 payable to the person who reports it[1], Mr Butler said.

The penalty applies to subfloor insulation which has little quantifiable benefit to tenants or owners, he said.

This is because the floor and air leakage account for only 9 percent heat loss in an uninsulated timber-framed house in which 30–35 percent of heat is lost through the roof, 21–31 percent through the windows, and 18–25 percent through the walls.[2]

The Residential Tenancies (Smoke Alarms and Insulation) Regulations 2016 currently requires R 2.9 insulation for ceilings and R 1.3 for underfloor in most of the North Island.[3]

These specs exceed advice to the Government that a 1978 requirement of R 1.9 in ceilings brought the biggest energy savings, Mr Butler said.[4]

Additional insulation over 1978 requirements is of decreasing benefit to tenants and a waste of money for owners, he said.

In fact, every dollar spent on topping up insulation in 190,000 buildings to the standards proposed would only bring a 39-cent benefit according to a report by economist Ian Harrison, of Tailrisk Economics, released just before Christmas.[5]

Besides the waste of a poorly focussed policy, the $4000 penalty payable to a complainant has created an incentive for the unscrupulous few to remove insulation for financial gain, Mr Butler said.

This means that owners will gave to carry out regular checks to ensure that their insulation is still there, Mr Butler said.

At least there should be a $3000 penalty for tampering with or removing insulation since there is a $3000 penalty for tampering with or removing smoke sensors, he said.

The Government has lost sight of the fact that insulation merely improves energy efficiency. Insulation in itself does not save lives. It is the increase in temperature achieved by turning on a heater that generates health benefits, Mr Butler said.

Stop the War on Tenancies aims to fill an information gap in the face of blunders by successive governments on 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] How Insulation Works, Level. http://www.level.org.nz/passive-design/insulation/how-insulation-works/

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

[4] Healthy Homes Standards: Options for the discussion, May 18, 2018. P8

[5] The proposed healthy homes regulations, Tailrisk Economics, December 2018, p18. See http://www.tailrisk.co.nz/documentlist

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