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Rental Standards

Philippa Howden-Chapman

Every year people die prematurely in winter in New Zealand, a phenomenon unheard of in the coldest parts of Europe and North America, where houses are built and heated to protect people from winter cold. People are more likely to die in winter in New Zealand if they live in rental housing, because it is likely to be older and in poorer condition than houses which are owner occupied, and which provide more protection from the cold.

In July this year a coroner’s report stated “Whether the cold living conditions of the house became a contributing factor to the circumstances of Emma-Lita’s death cannot be excluded”. The rental house the two-year old was living in was cold and mouldy and the family had been unable to afford any heating. The Minister for Building and Housing, Nick Smith, responded by announcing “a pragmatic package” of changes to tenancy law to “make homes warmer, drier and safer … without imposing excessive bureaucracy or cost.” Most significant are the new requirements for ceiling and underfloor insulation and smoke alarms to be phased in by 2019.

The package also includes a number of amendments to the Residential Tenancies Act (RTA) aiming to quickly establish when a rental property is abandoned, increase disclosure requirements for landlords and strengthen MBIE’s enforcement powers. Tenants are still expected to be the ones to initiate complaints about poor housing, but they have longer to do so and landlords who retaliate will be subject to an increased maximum penalty of $2,000. However, tenants may still fear to complain, particularly where there is a shortage of rental housing.

The proposed law changes also gives teeth to MBIE to investigate breaches of the Act, although a recent extensive review of rental laws, Paper Walls, suggested that MBIE could have better used its existing powers under Section 124, to take over the direct monitoring of remediation.  MBIE has used this power only twice in the last 20 years. The amendment’s new Section 109 explicitly grants MBIE the right to investigate and take action against landlords in severe cases. It will be important to monitor MBIE’s use of these powers to investigate severely substandard housing.

Are the changes enough? The Government made the decision to introduce selected minimum standards in preference to implementing a comprehensive evidence-based rental housing warrant of fitness (WOF), which would ensure all houses passed a range of health and safety tests. In 2013 five councils and the NZ Green Business Council announced that they and the University of Otago, Wellington were pre-testing a 31-item rental WOF, developed by He Kainga Oranga/Housing and Health Research Programme for over a decade. Regardless, MBIE commissioned a parallel study of state housing alone. The results of the Councils’ and Otago’s WOF pre-test were made public in early 2014 and showed that the WOF was considered fair and acceptable by 85 percent of the landlords. While most rental properties failed, relatively small amounts of money were required to bring most of the surveyed properties up to the pass standard. The recently released results of the MBIE study were comparable: while only four percent of the 400 properties were fully compliant it was judged that an additional 48 per cent could be remediated to meet the comprehensive standards within two days, at relatively low cost.

By contrast, the Government’s proposed minimum rental standards are not evidence-informed and the Regulatory Impact Analysis, as Treasury observed, does not meet the quality assurance criteria – it lacked analysis and there had been inadequate consultation. The Minister gave no plausible reason why the regulations reverted to 1978 insulation requirements, now almost 40 years old, which are just over half EECA’s current standard (70mm vs 120 mm of thickness).

A recent cost-benefit analysis of ‘Warm Up NZ’ included heating, and this analysis demonstrated the high benefit:cost ratio (about 4:1) of the whole package. This has been overlooked by the Minister, who stated that heating is already required in the RTA 1986. This Act does not in fact refer to heating, but incorporates the Housing Improvement Regulations 1947, which require a fireplace or an approved form of heating in the lounge. It has been widely interpreted that an approved form of heating could include an electric socket, although a 2011 District Court case found this to be inadequate and ordered compensation to a tenant where the landlord had failed to provide some form of inexpensive heater to meet the regulations.[1] Heating costs for tenants are likely to remain high without requirements for an efficient and cost-effective heating source as well as thermally efficient insulation levels that meet the current Building Code.

Requiring all landlords to insulate their properties is a step forward, but suggesting low standards is a retrograde step. It appears to be a continuation of the Government’s practice to act with extreme caution, when more cost-beneficial measures could have far-reaching positive consequences for energy efficiency, health and CO2 emissions. The comprehensive Rental WOF proposed by He Kainga Oranga and tested by the councils includes the key, critical items that have been shown to warrant social investment, with randomised control trials clearly demonstrating reductions in the burden of disease and injury. It is a serious public health concern that the government is introducing comparatively ineffective standards for rental housing, where a growing proportion of low-income children and their families live.

 


 

[1] Complete Property Management Limited V White DC Christchurch CIV-201 0-009-3562, 3 February 2011 [unpublished].

 

Categories: Housing, Poverty
Philippa Howden-Chapman
About the author

Philippa Howden-Chapman

Professor - University of Otago
Philippa Howden-Chapman is a professor of public health at the University of Otago, Wellington, New Zealand, where she teaches public policy. She is director of He Kainga Oranga/ Housing and Health Research Programme and the New Zealand Centre for Sustainable Cities. She has conducted a number of randomised community housing trials in partnership with local communities and sector agencies to provide an evidence base to inform housing, health and energy policy. She has a strong interest in reducing inequalities in the determinants of health and has published widely in this area, receiving a number of awards for her work including a QSO, the Liley Medal and the Dame Joan Metge Medal. In 2014, she and the He Kainga Oranga team were awarded the Prime Minister’s Science Prize. She is currently the chair of the WHO Housing and Health International Guideline Development Group and was a member of the Children’s Commissioner’s Expert Advisory Group on Solutions to Child Poverty.