Pressure mounts for rental WOF

16:00, Mar 22 2013

A quick stroll down parts of Wellington's Te Aro or Dunedin's infamous student streets is a sharp reminder that not everyone lives in warm, dry homes.

For years, poverty and tenant advocacy groups have been campaigning to have minimum standards imposed on rental properties.

But it was only last month that the Housing Minister Nick Smith showed signs of listening.

He has asked officials to investigate the prospect of a rental "warrant of fitness," a prospect welcomed by Victoria University Student Association president Rory McCourt.

"It's a big one for us. We've got students paying $200 upwards for places that are really inhospitable for humans."

Of course, student digs are legendary for being crummy, but McCourt says it's particularly acute in Wellington because of the city's high costs of both housing and transport.

Those who move further out to find cheaper accommodation get hit with high train, petrol or bus costs.

However, he's also aware that when landlords do make improvements, rent hikes are usually not far behind.

McCourt is not alone. Citizens Advice Bureau mounted a campaign this week also calling for a rental WOF.

"Every year we see clients who are living in cold, damp or mouldy houses and whose health is suffering because of it," says CAB policy adviser Andrew Hubbard.

"Unfortunately when people come to the CAB to find out what they can do to address their rental house being in poor condition, there is little that we can help them with, because New Zealand's housing standards are so inadequate."

Supporters of the WOF note that the proportion of housing rented from private landlords has more than doubled in the last 20 years, and that 70 per cent of children living in poverty are in rental accommodation.

They also point out that minimum standards for rental properties are commonplace in Western countries, including Australia.

However, establishing the case for a rental "WOF" is very complex, says Housing Minister Nick Smith.

Firstly, he has to settle on what standards to impose. There are already at least three tools for measuring quality of housing in New Zealand and even more overseas.

And Smith says he won't speculate on what the criteria might be.

"It's actually very complex. You've got everything from it being watertight, what level of airtightness it is, what area it is, the quality of the building materials... and actually many of those things are opinions."

It's a cost-benefit exercise, he says. Requiring landlords to install insulation, for example, might cost them several weeks, even months, of rental income.

But there are also "very clear benefits from having our homes insulated", including lower health costs.

Smith says he's open-minded at this point, aware that "nobody likes cost" and that state intervention would likely hurt tenants as well as landlords.

"Any cost that's imposed through a warrant of fitness on a landlord is inevitably passed on to the price of rent...and that is why any such system needs to be carefully weighed up."

Despite the Government's coyness, it's not hard to guess what a rental WOF might involve. After offering subsidies for insulation, it's highly likely the Government would require rental properties to be insulated.

According to Otago University's Healthy Homes Index, every home should be at least structurally sound, be warm and dry, safe, have access to adequate services and protected from external hazards (think fencing, locks and noise protection).

Rory McCourt thinks that should also include adequate cooking facilities. Overseas students often have to organise their accommodation before they arrive, and might find that their kitchen is limited to a microwave.

Naturally, landlord groups are concerned that a rental WOF will unfairly put a burden on them.

Jackie Thomas-Teague, a long-time landlord and prominent property manager in Wellington, says she's a big fan of insulation. But not every house can be insulated and it is a big cost.

"The margins are very, very tight and I think people don't realise that. They make the assumption that landlord equals rich person."

She is also concerned that making improvements mandatory could push up the cost of getting them done.

"As a landlord I think [insulation's] a cost worth bearing but the reality also is that the insulation industry have racked up their prices accordingly when all these subsidies became available."

Tenants also need to bear some of the responsibility, she argues. Sometimes they have no idea how to work the heating efficiently, disregard limits on overcrowding, or don't ensure their houses are properly ventilated.

An education programme might be just as useful.

At heart, she thinks that the market should be left to sort itself out.

"I think the best way to do it is to just legislate for new housing, and as the housing stock expires and falls down, it has to be rebuilt to modern standards."

But Nick Smith says the building code is inadequate for monitoring the housing stock as it ages.

Building codes only assess a house at the start of its life, and when consents are needed.

"I'm sure we could all find a very rundown property that may, 40 years ago, have been granted a code of compliance certificate by the council [and] is not up to standard.

"But under our building act, councils are not required to reconsider those until such time as a new building consent application occurs."

Others argue intervention is necessary because some people are in no position to demand better conditions.

Registered Master Builders Federation chief executive Warwick Quinn says it's possible the Government could take a softer line.

"They could simply say, we're going to make information available so renters could make an informed choice and let the market impose its own conditions...

"But the other risk is, if you don't impose a minimum standard, then people who in distress and have no choice where to live, will live there anyway."