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May 6, 2013 | by  | in Opinion |
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Letters from a Young Contrarian: Just a Bunch of Woffle

Dear Reader,

Winter is coming. Sunny days are becoming fewer and farther between. It’s dark by six. I don’t know about you, but I’ve been finding it nigh on impossible to get up in the morning to make the mad, freezing dash to the shower. Jim Hickey’s on the telly every night telling me to rug up because it’s “cold enough to freeze the balls off a brass monkey”. So it’s not surprising that many of us have warmly welcomed new Minister of Housing Nick Smith’s announcement that he has asked officials to report back to him on the feasibility of imposing a warrant of fitness on all rental housing. The WoF checks would ensure a house meets minimum standards of insulation,
heating and air flow before it can be let out.

Considering the facts that 44 per cent of New Zealand’s rental properties are in poor condition and a third have inadequate heating (it’s as if our builders built homes exclusively in the summer sun, never thinking to install insulation for the winter), it sounds like a good idea for the Government to step in and force landlords to make the flats they own warmer and drier. But we should be wary of the fact that the implementation of minimum standards might very well lead to corresponding minimum prices that the poorest among us just couldn’t afford.

How so? Well, installing heat pumps and Pink Batts can be an expensive exercise for a landlord to engage in, particularly when they have lots of houses. The cost of these renovations will likely be passed on to renters in the form of higher rents.

Not every rental house needs insulation. For one, the level of insulation is dependent on a number of factors such as whether the rental property is in the middle of Auckland’s warm CBD or on the cold streets of Dunedin, and so a blanket minimum standard would be ridiculous.

Also, a lot of students consciously choose lower-priced, uninsulated properties so they can use their money in other places. Enforcing a higher minimum standard, higher-minimum-price model would discriminate against these students by preventing them from making the tradeoff between wearing extra layers in a cold house to save money or paying more each week to be a bit warmer.

In effect, students and poor people, who make up a majority of the demand for rental housing, will be paying for the policy of upgrading homes. Why can’t the rich or the Government pay for it?

Well the Government kind of does. Its Heat Smart scheme, which subsidises the cost of insulation installation, largely offsets the problem of increased rents as landlords no longer face the cost of upgrading, but all that is happening is that the taxpayer is now having to shoulder the cost.

This policy sounds like a good idea, but we have to remember that one person’s ‘minimum standard’ is another person’s ‘just right’.

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