Will this Bill improve our rental housing?

The government wants to make some changes to New Zealand’s Residential Tenancies Act (RTA), the law that governs the relationship between tenant and landlord. Under the draft Bill, landlords will be required to insulate their homes and install smoke alarms. That’s good, right?

Yes and no. Smoke alarms and insulation are a good thing. But if the Bill becomes law as is, we won’t see great insulation and smoke alarms immediately appear in all rental homes. First, the standards won’t be implemented for a couple of years. Second, only currently uninsulated homes require insulation at modern standards; the Bill does not require housing that has some insulation to upgrade this to modern standards.[i] Third, the Bill does not include standards for safety, meaning that many homes will remain dangerous – and we’ll miss out on massive potential savings for the public purse.[ii]

Finally, once the standards are implemented, in many homes, they won’t be enforced. The Bill requires landlords to provide information to tenants about whether or not properties meet the new standards for smoke alarms and insulation. This is certainly better than the current situation. But in some parts of New Zealand it’s hard to find a rental home. Many tenants struggle to find homes they can afford and deal with discrimination. Tenants without other options will move in anyway. As I wrote recently, we already know, thanks to an MBIE-commissioned cost-benefit analysis, that under such a “market forces” enforcement regime, a third of landlords would not comply with standards. Other enforcement regimes, such as an audit of a sample of properties or a universal inspection “WOF” approach, increase compliance to 80-90%.[iii]

The Bill also increases the time available for a tenant to say to the Tenancy Tribunal “hey my landlord evicted me for asking for repairs, can you guys annul my eviction notice?”. An additional 14 days to the current 14 is great, but, as I’ve written recently, it won’t convince many tenants to complain about their home not meeting standards. Landlords can still choose not to renew a lease, or serve a 90 day notice for other reasons, claiming it’s not about the repair request, and even if they don’t, it’s not fun to be living in the house of someone you just took to court (and it’s not fun to be looking for a home when your name appears on the Tenancy Tribunal database). The changes proposed won’t change this situation. But a change in culture and in legislation to encourage more secure and long-term leases might.

One more thing. Recently I wrote positively about one of the changes proposed in the Bill, which was to ensure that when the Tenancy Tribunal ruled that a home didn’t meet standards, that home had to fixed up. (Currently, the landlord might simply just compensate the tenant and put the house back on the market in the same conditions the next day). But perhaps I celebrated too soon. Lyndon Rogers from Anglican Advocacy is warning that a loophole remains as the Bill is currently drafted. He suggests that Sec 78 be reworded so that it includes all relevant requirements relating to the condition of a rental house in the RTA –not just those in the Health Act. I hope this was just an oversight that will be corrected.

While I’m troubled by what’s missing in this Bill, it’s great that Parliament is thinking about the terrible state of our rental housing. And I’m pleased that we have the chance to give our thoughts to the select committee. If you have any thoughts about the Bill or the issues it seeks to address, please make a submission – it need take just a couple of minutes. Submissions close this Wednesday 27 January.

More information: 

He Kainga Oranga submission on the Residential Tenancies Amendment Bill 2016.

Renters United submission on the Residential Tenancies Amendment Bill 2016.

References:

[i] Howden-Chapman, Philippa, Kate Amore, Sarah Bierre, Elinor Chisholm, Anna Hamer-Adams, Jenny Ombler, and Kimberley O’Sullivan. 2015. “What Effect Will the 2015 Budget Have on Housing?” Policy Quarterly 11 (3): 13–19.

[ii] Blick, Gary, and Preston Davies. 2014. Cost Benefit Analysis for a Minimum Standard for Rental Housing. Wellington: Sapere Research Group for the Ministry of Business, Employment and Innovation. http://www.mbie.govt.nz/what-we-do/housing/pdf-document-library/cost-benefit-analysis-minimum-standard-rental-housing-report-prepared-for-mbie.pdf.

Keall, M, Nevil Pierse, P Howden-Chapman, Chris Cunningham, Malcolm Cunningham, Jagadish Guria, and Michael G Baker. 2014. “Home Modifications to Reduce Injuries from Falls in the Home Injury Prevention Intervention (HIPI) Study: A Cluster-Randomised Controlled Trial.” The Lancet 385 (9964): 231–238. doi:10.1016/S0140-6736(14)61006-0.

[iii] Blick and Davies, Cost Benefit Analysis.

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