New Zealand Healthy Homes Act
Crockers | Reading Time: 4 Minutes | August 2019
What is the Healthy Homes Act
NZ Healthy Homes Standards- The Basics:
- The Healthy Homes Guarantee Act is a policy that was brought in to increase the quality of rental homes
- The primary concern is to make homes warmer and drier for New Zealand renters and reduce the number of hospitalisations due to poor housing
- Labour’s new regulations come into effect from July 1st 2019
- Landlords are required to meet insulation regulations by July 1st 2019, and all private residential properties must meet the full list of regulations by July 1st 2021
In 2017, the New Zealand government brought in the Healthy Homes Guarantee Act to improve the health of people living in rental homes.
This year, Labour has finalised the list of regulations which came into effect on July 1st.
Labour MP Phil Twyford says that these regulations have been put in place because of the large number of people who are hospitalised due to poor housing.
He states that “Most landlords do a good job, but the fact is the lack of legal standards means some rentals are not currently fit to live in.”
Although many landlords provide adequate housing, these regulations aim to bring everybody up to livable conditions.
New Zealand Healthy Homes Regulations and Landlord Obligations
The Healthy Homes regulations include legal standards for heating, insulation, ventilation, moisture and drainage, and draught stopping.
Landlords are legally required to meet these regulations. Insulation standards are required from July 1st 2019, and the rest need to be completed by July 1st 2021.
Below are the healthy homes standards as per the Ministry of Housing and Urban Development:
What are the effects of Healthy Home standards on the market?
Firstly, there is concern that the cost of renovation may be passed on to tenants.
Like the ring-fencing of losses policy change, the Healthy Homes Guarantee Act may lead to rent increases if landlords are unable to cover the costs themselves. Affordability is Labour’s other chief housing concern, therefore rent increases are a step in the wrong direction.
Secondly, the new regulations may skew supply and demand.
Due to financial pressures and widespread demand for insulation installation, some landlords may be unable to meet these new regulations on time.
This was seen in the lead up to the 2019 deadline. In Dunedin for example, rental properties are sitting empty because they do not meet previous insulation standards.
If more and more landlords decide that it is too expensive to maintain a rental property, then the logical progression is a shortage in much-needed rental properties. Peter Lewis from the Auckland Property Investors Association speculates that this would be a likely outcome if landlords were “vilified” by new policies.
There is already a shortage of rental properties in New Zealand. With the upcoming Healthy Homes deadlines in 2021, we can expect to see similar issues arising as landlords work to meet housing guidelines.
Are there more changes to come for Healthy Homes standards?
Labour has a long list of housing policy changes on the horizon, but for now the Healthy Homes Act is the most pressing issue for residential landlords.
One further change that could be on the horizon is government grants.
The most common concern with the new regulations is the cost to landlords. Many are able to absorb these costs, however an insulation subsidy would take some of the pressure off.
Another consideration for the future of the bill is the cost of electricity.
It is argued that it doesn’t matter whether there is a heating source if tenants can’t afford the increased electricity costs.
Improving insulation and installing energy efficient heat pumps make homes easier to heat. However, there are likely still families that will feel financial pressure either way.
Winter Energy Payments already exist for many people on benefits. With these new changes, we might see this extended to more groups of people.
Although electricity costs are a fair concern, public policy is a blanket strategy. It would be difficult to only regulate housing improvements on an individual level!
These new standards aim to protect as many tenants as possible. Whether it improves the rental marketplace remains to be seen.