Labour's Healthy Homes Guarantee Bill passes first reading with Dunne's support; would force landlords to improve insulation and pay for heat pumps; Landlords and Govt opposed, saying it would increase rents

Labour's Healthy Homes Guarantee Bill passes first reading with Dunne's support; would force landlords to improve insulation and pay for heat pumps; Landlords and Govt opposed, saying it would increase rents

By Bernard Hickey

Labour's Healthy Homes Guarantee Bill passed its first hurdle towards becoming legislation in Parliament last night, winning the support of Peter Dunne to pass the first reading and be sent for consideration by a select committee.

The private member's bill sponsored by Labour Leader Andrew Little would set minimum standards for insulation and heating of rental properties within six years, which would force many landlords to invest in extra insulation, heat pumps and heaters. Little has said the insulation standards, which would be set in detail by the Ministry of Business, Innovation and Employment, would be at least as good as the 2008 standards for new homes and apply to all rental properties.

Little's private member's bill, the Healthy Homes Guarantee Bill (No 2), passed its first reading in Parliament by 61 votes to 60 last night with the qualified support of United Future Leader Peter Dunne.

The bill is a re-run of Phil Twyford's Healthy Homes Guarantee Bill last year, which stalled at 60-60 and did not progress past the first reading.. Last night's result was different given the extra vote for New Zealand First, which voted for the bill, in the wake of the Northland by-election. Dunne also voted at the first reading in favour of Twyford's bill. National MPs and ACT's David Seymour voted against Little's bill.

The bill aims to set minimum standards for heating and insulation for rental properties, although it does not set the exact standards. Landlords and the Government opposed it on the grounds it would force landlords to install expensive heating systems and insulate all rentals to 2008 standards, which they said would be passed on as a cost to tenants in the form of higher rents.

"When the Children’s Commissioner Russell Wills was making his submission on the Government’s legislation that merely requires rental housing to have the 1978 insulation standard complied with within 4 years’ time, he said that right now 42,000 New Zealand children a year are going to hospital for respiratory infections, bronchial problems, asthma, and things associated with unhealthy homes—unhealthy homes that are unhealthy because of dampness and lack of ventilation that allows mould spores to proliferate," Little told Parliament (see the video above from 1 minute 20 secs)

"That is the problem that we are trying to fix. It is a reasonable demand to have in the 21st century that New Zealanders in rental accommodation have a minimum standard that at least keeps them healthy," he said.

The Government is in the final stages of passing its own Residential Tenancies Act amendments to improve insulation standards and force the installation of smoke alarms from 2019. But tenants groups, the Children's Commissioner and child poverty campaigners say it does not go far enough and have supported Labour's members bills. The Government's bill does not force those houses built before 1978 to insulate if there is not enough crawl space in ceilings and under floors to do so, which includes about 100,000 houses to be exempted from the tougher rules. It also does not force landlords to install heating options.

It followed an announcement in July last year by Building and Housing Minister Nick Smith that rejected the idea of a Warrant of Fitness for houses and allowed exemptions from insulation standards for landlords unable to install underfloor or ceiling insulation because of a lack of crawl space. See our previous stories on that here and here.

The debate followed the death of two year old Emma-Lita Bourne in 2014 from a respiratory illness caused by living in a cold, damp state house in Otara. The house was insulated in the ceiling, but had wooden floors without carpets and Bourne's family could not afford to use the heater provided for them by Housing NZ. The coroner's report is available here.

Dunne's support qualified

Peter Dunne's vote was the deciding vote to send the bill to Government Administration Committee, although he said late last night in a statement this support for the bill was qualified, given he did not see mandated minimum standards as the best way to improve housing quality.

"It’s all very well to require a method of heating, but that doesn’t mean much if you can’t afford the increased cost of electricity," he said, adding he would like to see the Government set aside funding for tenants and landlords to improve standards.

“This Bill must do more to address how to provide support to those most in need to ensure them a healthy home that is also an affordable one. This now puts the ball firmly in the Government’s court to respond with detailed policy of its own in this area. United Future’s position on this Bill is dependent on the Government’s response and nothing should be taken for granted at this stage."

Dunne's qualification raises doubts about whether the bill will pass through the second and third readings needed to become law.

Smith says rents will rise

Smith told Parliament Little's bill was impractical and was a poor substitute for the Government's measures.  (See Smith's speech on the bill below).

The Government is changing tenancy laws to make sure rental properties that can be insulated must be insulated by July 1, 2019, although around 100,000 homes will be exempted because there is not enough under-floor or ceiling space to insulate them. Smith said last year the insulation retrofitting of an estimated 180,000 rental properties was expected to cost landlords NZ$600 million, while the requirements for smoke alarms was expected to cost them NZ$7 million. Officials estimated these extra costs were expected to increase rents by around $3.20 per week.

"The first irony in this bill is that for all the rhetoric of caring more about healthy homes, it will take 4 years longer than the Government’s approach to getting uninsulated homes upgraded," he said.

"We are requiring all uninsulated rental housing to be done to the latest 2008 standard by July 2019. The debate is whether homes insulated under an older standard should be upgraded. This does not make economic sense," he said.

"Those built after 1978 have insulation that reduces heat loss by 84 percent and those after 2001 by 87 percent. The cost of upgrading this insulation to the 2008 standard of 92 percent is not justified, because the cost would exceed the benefits. The idea that you are going to have tens of thousands of children not going to hospital because of a few percentage points reduction in terms of insulation and heat loss does not withstand scrutiny."

Smith said Government had been influenced by cost-benefit analysis when setting its standards.

"This is important because every cost that we impose on the rental sector is ultimately passed on in rents. Insulating an uninsulated property provides NZ$1.80 of benefit for every NZ$1 that is spent and makes good sense. But to gain a few percentage points of extra insulation by requiring those properties that are insulated but not right up to those last few percentage points of the current standard actually imposes more costs on the very families who we are trying to help than there are benefits," he said.

'Don't make us pay for heat pumps'

New Zealand Property Investors Federation Executive Office Andrew King said compulsory heat pumps were not the answer.

"Some families cannot afford to pay for electricity and the cost of compulsory heat pumps will only push up rental prices and make it even harder for them to use their heaters," King said.

"Rather than making them compulsory, the NZPIF believes that allowing them to be tax deductible or providing subsidies for them would be a better strategy," he said, adding that poor families should be given electricity vouchers during winter to pay for heating.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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19 Comments

maybe peter dunne is making sure he has friends and a job for the next parliament to bite the hand that feeds

...gosh forcing landlords to have standards, just like car owners, food outlets, hotels, plumbers, builders and so on have to! Whatever next...just wait for the wailing to start. Perhpas rather than rents up, house prices might come down ...so what will probabaly kill the Bill more than anything else.

rastus, The Residential Tenancies Act (1986) s. 45(1) (b) (c). always has required Landlords to meet all the requirements that homeowners enjoy. http://www.legislation.govt.nz/act/public/1986/0120/latest/DLM95099.html

This Bill (and the Governments too) are just popular and socialist interference that will cost.

Never ever let facts get in the way of a good story.

.... and which part is the "god story"

How many landlords even know the Act exists let alone follow any of it?
I have passed onto many mum and pop investors and well as other info needed as they did not know any requirements other than finding a tenant
https://tenancy.govt.nz/starting-a-tenancy/

What utter garbage. The overall standard of housing in this country is a national disgrace and many tenants live in damp,mouldy and uninsulated conditions. My wife is a long serving practice nurse and sees all too many children with medical conditions brought on by precisely these conditions.
Any landlord not prepared to bring his/her property up to a reasonable standard should be ashamed of themselves.Clearly,many are not.
PS. I am a landlord.

We were talking about this today at work. A classic example that has been around a long time are those dodgy run down student flats in Dunedin we often hear about. Those landlords charge mega bucks for those shite holes and it's nothing more than exploitation.
Why do we accept people should be allowed to live is such conditions just cause they are called "students"?
It can't be good for health or for study.

This is when the government is found totally lacking as there's obviously a large needed market for student hostel accommodation and it should be subsidized to a degree also I believe as this would keep greedy landlords in check with their price gouging of desperate people.

Justice: It's a mistake to think everyone thinks like you. You may have wanted a plush student flat but when I was a student we purposely looked for run down ones. We wanted to have a lot of parties and wanted to find a place that would suit that. Given a plush place we would have destroyed it. Anyone looking from the outside would have thought "oh the poor students" but that simply wasn't the case.

NZPIF has a good point. It would be quite helpful if insulation installs were tax deductible.

I renovated a flat for rental put in insulation double glazing and hrv unit. Tenant said her breathing was bad I went to check unit and found windows closed washing drying inside and hrv off. There is just no helping some people.

I still remember one commercial building where someone complained that the air conditioning was too hot. She had the remote for the local controls at her desk and she wasn't using them. Literal control of heating or cooling. What can you do?

Christlucas you have highlighted the biggest problems right there.......the wet washing and closed windows issue just tells me that people have no common sense anymore......most landlords would be better off installing condenser clothes driers and make sure they have good extractor fans and heaters on timers in the bathroom area and a good quality extractor in the kitchen and also install security locks on windows so they can be left open. Too many people can't even pull the drapes open and let any available sunshine in...let alone open the window.

'The private member's bill sponsored by Labour Leader Andrew Little would set minimum standards for insulation and heating of rental properties within six years.

What a pity the global economic system isn't going to last another six years.

Zombie apocalypse?

You have some good posts on this site, however you must be the most depressing person to have at a dinner party.....

I am not a residential landlord , and frankly I don't wannabe one either, instead we have exposure to NZ Property through the NZX , and an interest in some commercial property

I may have missed out on capital growth , but the hassles are not worth it

I would rather have seen something like "The Public Servants and Bureaucrats Disclosure Guarantee Bill"........I am sure that BH would get some highly interesting headlines for future articles on finding out who in the services is invested and where!!

Missing what it takes to get a dry home, for starters any form of "Leaky Home" and your stuffed. The problem is moisture, I open the house all day but running a dehumidifier all night when closed up still pulls out 2 litres of water from nowhere and thats not including the bedrooms that are closed off. Just the constant 70-90% humidity in Auckland is a nightmare, if we had 20-30% humidity that many countries had and a whole lot less rainfall we wouldn't have a problem. NZ should have been building specialized houses to cope with the local conditions, we are still building all the wrong houses. Timber framework should all be treated to H3 for starters. We build a fence from H3 but your $1M house gets what is basically untreaded wood in terms of rot prevention if it stays wet.

I agree houses should be designed for human comfort, not built to code but to do that requires a engineer or scientist running computer simulations on the design.
The software is available but thats not going to happen.