Submission on smoke alarm & insulation bill closing very soon ! Last day is 27.1.16

[mrsaneperson]

To make an online submission on the new RTA amendment bill on smoke alarms and insulation law requirements please go to :

https://www.parliament.nz/en-nz/ECommitteeSubmission/ac05da83-4547-4242-9589-a56a00bd2185/CreateSubmission


Have your say !!

The bill calls for mandatory requirements of smoke alarms and their number and specific insulation factor requirements on all rental properties.

[props4u]

Thanks for notifying us

[artemis]

I attended the Select Committee public hearing today, and will post a summary shortly. Bottom line - all oral submitters are really happy to spend Other People's Money. Nobody seemed to realise that it's the tenants who will be paying.

Meantime, until 11 pm tomorrow 11 Feb you can still make a submission on the (mostly rubbish) MBIE discussion paper here:

http://www.mbie.govt.nz/info-services/housing-property/tenancy/proposed-residential-tenancies-regulations-for-insulation-and-smoke-alarms

If you'd like a copy of my submission which has gone to the Select Committee and also to MBIE please PM me your email address. It's a Word document.

[flyernzl]

Good work.

[artemis]

Following on from previous post, here is a summary of the people who spoke to their submissions. (I didn't but should have, as nobody spoke from the landlord's POV.) Surprising that most submitters went well beyond the clauses in the Bill. What's that about? Surely they don't think there are going to be major changes at this stage in proceedings? The only ones that stuck to the topic were the insulation guys.

1. Citizens Advice Bureau. POV - tenants. Want mandatory fixed heating. Want more that $500 exemplary damages for landlords who fail to disclose correct state of insulation in tenancy agreements but did not have an opinion on amount. Want a neutral party to determine if insulation as stated in the tA is correct. The submitter did say that insulation on its own won't heat a property. Re MBIE CEO being able to take action, they want the words 'significant and serious' removed. Want stricter guidelines on retaliatory notice. (The chair did point out this was already in the Bill.) They want all notices of termination to be 90 days as 42 days in some situations is too confusing.

2. Building Industry Federation. POV - insulation suppliers and installers (aka $$$). Said there are 270,000 rentals with insufficient insulation. Want incentives to start much earlier as industry won't cope if everyone wants insulation installed in 2019. (We know what happens when demand exceeds supply ....). Want an approved provider to certify all DIY installations, with liability passing to the certifier. (Did I mention $$$?) Much of their oral submission was about how dangerous foil under floor insulation is, and though it is by far the cheapest option they think only medium-high density bulk insulation should be allowed. They didn't say if they supply and install foil ....

3. NZ University Students Association. POV - students. Mould and cold in rentals make them sick. Want ventilation added to the Bill, not opening windows and cleaning off mould though. They want security stays on windows and extractor fans in kitchens and bathrooms. (OPM.) Prefer a Warrant of Fitness regime.

4. Methodist Church Public Issues Group. POV - poverty with a dash of climate change tossed in. Overcrowding a key cause of poverty. 50% of Pacific Islanders rental houses are overcrowded, 25% of Maori. Quoted some numbers which are still to be finalised - $1800 to insulate and do smoke alarms, compared to $2200 for a full rental WOF. (The WOF number might not be right, it was hard to hear.) 16 out of 19 landlords had already insulated their rentals. No more information given on that.

5. Vic Uni Students Association. POV - students. Handed MPs a photo of mould on a ceiling. Basically similar to NZUSA, want better ventilation supplied. Basic issue limited supply and high demand, with limited student income.

[Perry]

Handy summary. You seem to be right on target with the comment:
"Oral submitters are really happy to spend Other People's Money."

No surprises, there. Wasn't it Maggie Thatcher who said that the
problem with socialism is that eventually, one runs out of other
people's money to spend?

As you looked at the SC people, did you get any intuition as to
where they saw the largest number of votes coming from?

[artemis]

Handy summary. You seem to be right on target with the comment:
"Oral submitters are really happy to spend Other People's Money."
.... As you looked at the SC people, did you get any intuition as to
where they saw the largest number of votes coming from?

Not quite sure what you mean, Perry. Do you mean among members of the SC or the Parliament or the voting public?

There is a National majority on this SC.

Bit of a write up in the Dom Post of the SC today, mostly anecdata about students who don't ventilate their flats.

http://www.stuff.co.nz/national/76736008/students-ask-for-stricter-tenancy-rules-in-the-battle-against-cold-and-mould

[Perry]

Yes - I did not say that at all clearly - sorry.

Did you get any idea of any SC member seeing
more votes in this, that or t'other submitter's
PoV, or the entity the submitter represented?

E.g. more votes from students than from any insulation
companies and their staff.

[Wayne]

That article has a lot of words but only these ones really tell the true story

But Wellington landlord Adrienne O'Sullivan said in her submission that the benefits of the bill were "vague and unsubstantiated" and would hit tenants in the pocket, as they would end up paying for new minimum standards "one way or another".

The Ministry of Business, Innovation and Employment's cost-benefit analysis of the proposed measures lacked rigour and should not be relied on by legislators, she said.
"Rather than correctly comparing costs to benefits, it would be more accurate to say it compares frogs to pears."

[artemis]

Not really any indication. Most members of the SC said nothing at all and asked no questions. Even those few that did speak seemed to be trying to remain fairly neutral in response, which I guess is appropriate when hearing submissions.

There were more questions and comments directed to the two student groups than to the other submitters, though, which suggests pollies recognise a large pool of potential voters when they see one.

[artemis]

That article has a lot of words but only these ones really tell the true story

Thank you. That was moi.

[Perry]

MBIE Errors Led Insulation Benefits To Be Vastly Overstated Says Economist
23 Feb 2016

A calculation error may have led the Government to massively over-
state the benefits of forcing landlords to insulate rental properties.
Wellington economist Ian Harrison claims a report by the MBIE)
included a double calculation on the benefits which flow from
insulation. This, Harrison claims, led the measured benefit of the
programme to be increased by 3.44 times. While Housing Minister
Dr Nick Smith claimed that for every dollar spent there would be
a benefit of $2.10, Harrison claims using "realistically estimated
benefits" the actual benefits would be just 28c for every dollar
spent, with costs being put on tenants.

[artemis]

Heh, economists shootout at the OK corral.

There is a thread about this on the Trademe real estate message board at the below link, which has a different take on the 'mistake'. Though not really a great idea to say a professional economist doesn't know what he is talking about.

http://www.trademe.co.nz/Community/MessageBoard/Messages.aspx?id=1615030&topic=21&#p32985796

[Perry]

No one is immune from arithmetic errors -
no matter what their profession.

[flyernzl]

Media Release from NZPIF:

Minimum Standards good for tenants

The NZ Property Investors' Federation generally supports the Residential Tenancies Amendment Bill, which introduces minimum standards for residential rental properties.

"Although the new regulations will initially be applied to rental property owners, it is obvious that Government appreciates it is tenants who will ultimately pay for the rental property improvements" says NZPIF Executive Officer, Andrew King.

The Bill will require all rental properties to be insulated by 2019, a timeframe that insulation installers are expected to be able to achieve.
The Bill recognises that some properties will be difficult and therefore more expensive to insulate, so it includes some exceptions to the new regulations. "This is quite a pragmatic move" says King, "as it means that some properties that can't be insulated will still be available to tenants and won't be lost to the rental pool. This is great as there is actually a shortage of rentals in parts of New Zealand, and we wouldn't want to lose any."

In a clever move, the Bill requires all landlords to specify the insulation in their rental properties. This creates a competitive environment and is likely to encourage owners to go beyond the minimum standard if they can.

If a rental property is already insulated, it will need to be at a level that meets the 1978 regulatory standards. If there is no existing insulation then owners will need to meet the current standard levels.

"There has been some questioning about this aspect of the Bill" says King. "However the cost of topping up existing insulation to current standards just isn't worth it. The cost is almost the same as completely insulating a property but there would only be a very minor improvement in efficiency."

An Installer at a recent Select Committee hearing confirmed that the cost of topping up an average rental property to current standards would be between $2,500 and $3,000.

The chart below shows the minimal increase in insulation efficacy from 1978 levels of R1.9 to current levels of R2.9.
Looking at doubling the level of insulation (rather than the 50% increase from 1978 levels to today), the author of the study said “does it really make sense to double your insulation costs to go from an R2.0 to an R4.0 and only gain an additional 2.5% efficiency? I don't think so. I really don't think you would see a noticeable change in your utility costs and certainly not enough to offset the cost."



The Diminishing Benefit of Extra Home Insulation, by James Fricker, B Mech Eng, CPEng, M.AIRAH, M.IEAus.
April 2002.

ENDS