Regulation Is Not The Answer

New Zealand Centre for Political Research

The New Zealand Centre for Political Research is a web-based think tank that takes a research-based approach to public policy matters and encourages the free and open debate of political issues.

Exaggeration and sensation are all too common failings of politics and the media. Advocacy groups use the technique as well, as the New Zealand Herald recently pointed out in an editorial discussing the “wild claims” of the co-chair of the Children’s Commissioner’s Expert Advisory Group on Child Poverty, who likened the situation of poor children in New Zealand to those living in the slums of India. The Herald went on to describe the “attempted emotional manipulation by child poverty campaigners”, concluding that the advocates “have not done their cause any good by insisting that as many as one in four New Zealand children live in poverty. Such statements devalue their case and cast them as extremists. The children they aim to help would gain more from advocacy that is as sober as it is sound.”[1]

The same Expert Advisory Group that is claiming one in four New Zealand children live in poverty, has also recommended the introduction of a compulsory warrant of fitness test for rental housing. They have justified its imposition on the basis that it would alleviate a range of child health problems including preventable injuries, respiratory illnesses, and infectious diseases – which they largely attribute to overcrowding, dampness, and cold.

Their recommendation states, “We recommend that the government ensure all rental housing (both social and private sector) meets minimum health and safety standards, according to an agreed Warrant of Fitness, such as the Healthy Housing Index. These standards should be monitored periodically and effectively enforced, and gradually increased over time.”[2]

The threat of a compulsory warrant of fitness for rental housing should evoke the strongest possible response from property investors. They will be well aware that such a scheme would come at a considerable cost, which would not only drive up rents, but would force some property owners to sell. By increasing rents and reducing the availability of rental housing, this misguided policy would hurt the very families that the advocacy groups purport to want to help.

A housing warrant of fitness would also have serious cost implications for taxpayers, as another ‘unintended consequence’ of such a law change would be an increase in the level of the accommodation supplement and other welfare benefits, in order to cover the cost of the rent rise.

Regulatory creep would also ensure that the 63 requirements arbitrarily included in the warrant of fitness checklist would expand. In fact, the Expert Advisory Group has already suggested that the health and safety standards in an agreed Warrant of Fitness should be “gradually increased over time.”

However, it’s not just rental property owners who should alarmed at this proposal. Omnipotent moral busybodies like the Children’s Commissioner and the poverty action groups will never rest. Once a bureaucratic scheme like a housing warrant of fitness is put in place, requiring council inspectors to charge a fee for regular assessments, the pressure to extend the scheme to all housing – under the guise of safeguarding all children – would be irresistible to the advocates driving this agenda. After all, as the lobbyists will say, poor children live in private houses too, and if it’s good enough for rental homes, then it’s also good enough for homeowners. It would only be a matter of time before all New Zealand homes would be inspected by the clip-board armed housing police.

While some may say that such an expansion of the scheme to cover private housing would be unlikely, the problem is that once government schemes that infringe the rights and freedoms of citizens are in place, the pressure by bureaucrats and advocates to expand them never ends. As President Ronald Reagan once warned, “The nearest thing to eternal life we will ever see on this earth is a government program.”

This week’s NZCPR Guest Commentator, Mike Butler, a long term property investor and NZCPR Research Associate, has used the Official Information Act to obtain the background papers to the housing warrant of fitness scheme. What he has discovered, is that most of the problems associated with the health and safety of children, that child poverty advocates have blamed on housing, are actually caused by the tenants themselves. In other words, because it is notoriously difficult to influence tenant behaviour, advocacy groups have instead demonised landlords and called for state control of their houses.

In general, if the children of tenants are picking up diseases caused by overcrowding, such as rheumatic fever, pneumonia and meningococcal disease, it is not the fault of the house. If children are catching colds because a house is too cold, it is more likely to be the occupants who are not heating their home adequately. If a child’s asthma is getting worse because of damp and mould, it is more likely to be caused by the occupants not wiping away condensation and opening the windows to allow for adequate ventilation.

The recent focus on insulation by a long procession of interest groups has exacerbated the problem by creating the illusion that a well insulated house will be a warm house – and indeed that is the case but only if it is properly heated. Without heating, a well insulated house is like an ice box, making the problems faced by families who can’t afford heating just so much worse.

In addition, the savings in energy consumption from a well insulated home of around 5 percent a year has been dwarfed by the 10 percent a year increase in the price of electricity.

In his research, Mike also found data to indicate that a high percentage of families who are renting their homes heat them using un-flued gas heaters. The fact that the child poverty advocates have not zeroed in on this issue, calling for such heaters to be banned – as they are in many other countries because of the health risks – shows just how ideological and political this debate really is.

The study of poor health amongst children found that 57 percent of homes used un-flued gas heating, which produces dangerous vapours and dramatically adds to dampness and mould problems in a home. As a result, these heaters have been banned in Canada and some US and Australian states.

Un-flued and bottled gas heaters produce toxic fumes that include carbon monoxide, sulphur dioxide and nitrogen oxide.  When used in rooms that are not ventilated, these heaters can deplete oxygen levels causing incomplete combustion, which can worsen respiratory problems, especially in asthma sufferers.

In addition to safety concerns over fumes, burns, and fires, these heaters generate large volumes of water vapour. Their operation will often double or treble the total amount of moisture in the home, significantly increasing mould, mildew and condensation problems. This not only creates health risks, but the moisture can also damage window frames, curtains, and carpets, not to mention other household contents.

According to the Building Research Association of New Zealand, an un-flued or bottled gas heater produces around 200mls of water vapour for each kilowatt-hour of output.  That means a 2kW gas heater would result in the equivalent of a 2 litre milk container of water being splashed around inside of the home every 5 hours of operation.

In other words, if families live in areas where wood fires have been banned – thanks to the efforts of the environmental lobby – and if parents don’t want to use electricity to heat their homes because of the high cost of power, they may well be using a source of heating that is harming the health of their children. Again, this is not a problem with the house, but one caused by the occupants.

The Residential Tenancies Act provides important protections for tenants. It makes it unlawful for a landlord to let substandard rental property. Section 45 of the Act requires that the premises are kept in a reasonable state of cleanliness and repair, and that they comply with all of the health and safety requirements set by the government. Any landlord who breaches the Act faces substantial penalties.

In his article WOF politics to hurt tenants, landlords, Mike explains that the estimated costs to property owners of implementing a warrant of fitness are substantial:

“A paper from a Ministerial Committee on Poverty meeting on August 20, 2013, obtained under the Official Information Act, showed the likely cost of improvements per dwelling to total $2955. The Building Research Association of New Zealand survey estimated repairs averaging $9700 for rentals and $8000 for owner-occupied dwellings.

“Likely forced upgrades of $12,655 on each property would mean an immediate cost of around $873-million for 69,000 state houses to achieve a 30-year benefit of debatable proportions. It would also force similar costs on private property owners that would lead to rent increases of around $20 to $30 a week.”

After reading the research – Mike’s full report is available HERE – it is clear that claims by the Children’s Commissioner and other advocates that children in New Zealand are being harmed by rental housing, lacks credibility. The reality is that poor health outcomes are largely the result of tenant behaviour: overcrowding, a failure to heat the home adequately, and to ventilate it properly, are causing most of the health problems identified by the advocates. Having a warrant of fitness scheme in place will not address these behavioural matters, but it will result in billions of dollars being spent on a new bureaucracy that will affect millions of people, but achieve little.

Whichever way you look at it, this is not good policy. It may sound compassionate, but in reality, it would be a public policy disaster. Already some of the voluntary warrant of fitness housing trials have resulted in a failure rate of up to 94 percent for perfectly reasonable and rentable homes.

When the principle driving public policy advocacy is wrong, then it should be rejected. A bureaucratic housing warrant of fitness regime, covering half a million rental houses – and a million more if all homes are included in the scheme – is not the answer to the problems that child poverty advocates claim they are trying to address. It is parents who are responsible for the health and safety of their children. Those parents, who are experiencing difficulties in keeping their children healthy and safe, should be the focus of child poverty advocacy.

To download Mike Butler’s full report Rental property warrant of fitness a costly mistake, please click HERE. You can sign the petition opposing a compulsory warrant of fitness scheme HERE.

 

THIS WEEK’S POLL ASKS: 

Who do you believe is mostly responsible for the health and safety of children living in a rental house, the landlord or the parents?

Click HERE to vote – and look on the right hand sidebar     

 

 Read this week’s poll comments daily HERE  

 

Click HERE to see all NZCPR poll results

 

FOOTNOTES:

1. Herald, Wild claims hurt writer’s good work
2. Expert Advisory Group, Solutions to child poverty

 
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