Insulation compulsory for rentals from 2019

Nick Smith announced:

The Residential Tenancies Act is to be strengthened with new requirements for insulation, smoke alarms, better enforcement and faster resolution of abandoned tenancies, Building and Housing Minister Dr Nick Smith announced today.

“This pragmatic package of tenancy law changes will make homes warmer, drier and safer for hundreds of thousands of New Zealand families without imposing excessive bureaucracy or cost,” Dr Smith says.

“The new law will require retrofitting of ceiling and underfloor insulation in rental homes over the next four years. The requirement applies from 1 July 2016 for social housing that is heavily subsidised by Government, and from 1 July 2019 for other rental housing, including boarding houses.  There will be exemptions, such as where it is physically impractical to retrofit insulation due to limited space underfloor or inaccessible raked ceilings.

“There will also be a new requirement from 1 July 2016 for all landlords to state in tenancy agreements the level of ceiling, underfloor and wall insulation to help better inform tenants. These new insulation requirements in our tenancy laws are the logical next step following our programme to retrofit insulation in 53,000 state houses and the 280,000 grants from the Warm Up New Zealand scheme.

“Smoke alarms will also be required in all tenanted properties from 1 July 2016. Regulations will make landlords responsible for ensuring an operational smoke alarm is in place, and tenants responsible for replacing batteries or notifying landlords of defects. Long life (10-year) photoelectric alarms will be required where there is no existing alarm or when replacing an existing alarm.

I think compulsory smoke alarms is okay. I also support requiring landlords to specify if the property has insulation.

I think compulsory insulation may have unexpected consequences and lead to less properties available for rental, and higher rents.

“This package is a more pragmatic and efficient way of improving housing standards than a housing warrant of fitness scheme. Such a scheme would cost $100 million per year, or $225 per house for inspections alone, and these costs would be passed on to tenants in rents.

A full WOF scheme would have been a bureaucratic nightmare.  In a pilot 90% of properties failed.

“The Government is proceeding with the insulation and smoke alarm requirements because they are practical and deliver benefits far in excess of the costs. The insulation retrofitting is expected to cost $600 million, with benefits of $2.10 for each dollar of this cost. The smoke alarms are expected to cost $7 million and provide benefits of $15.10 per dollar of cost. Officials estimate the flow-on effect on rents for a property requiring ceiling and underfloor insulation and a new smoke alarm to be $3.20 per week.

Are these the same officials who project the surplus? 🙂