The quest for healthy rentals is often portrayed as a battle between sickly tenants and their merciless landlords. But where do the middlemen (and women) sit on the issue?
It’s hard not to view New Zealand’s quest for liveable rental housing as an intense, politically-charged feud: on one side are the renters, the NGOs and the government pushing for warm, dry homes. And on the other are the wealthy landlords and property owners, seemingly ever-eager to avoid upgrades in order keep profit margins as high as possible.
Earlier this month, Andrew King of the Property Investors Federation reportedly urged landlords to delay installing heat pumps until after the election, when a potential National government would scrap the requirements and make heat pumps and insulation optional. King’s comments were criticised by many including the NZ Green Building Council and the Real Estate Institute, while the Labour Party called them “deeply disappointing”.
Once again it appeared that an elite group of asset holders were attempting to neglect their dilapidated houses, condemning their hapless tenants to “free market” mechanisms and the toxic black mould slowly creeping up their kitchen walls.
Of course, the landlords vs tenants binary is far too crude to fully capture the complexities of the issue, nor the lengths most landlords are going to comply. But what about the property management companies – the businesses taking care of properties on behalf of landlords and presumably acting in their interests? What side are they on?
On Monday Barfoot and Thompson made headlines when director Kiri Barfoot joined Asthma and Respiratory Foundation NZ, the Hutt Valley District Health Board, Community Housing Aotearoa, NZ Green Building Council and university researchers to sign a letter calling on National to scrap its plans to overturn the Healthy Homes Standard, set to come into effect next year.
The standards were necessary, the letter said, to better protect the 700,000 New Zealanders affected by respiratory illnesses due to cold, damp homes.
“We don’t agree with everything in the Healthy Homes legislation… but people who can’t afford houses should be able to live in at least warm, healthy houses,” Barfoot told Stuff. “I don’t know why people would have a problem with that, particularly if they can afford to have a second home.”
Some took umbrage with the letter, with landlord advocacy group Stop the War on Tenancies calling for a Barfoot boycott.
“I would be outraged if a property manager I employed was lobbying a political party to increase my compliance costs for no sound reason and I would take my business elsewhere,” spokesperson Mike Butler said.
While it might be seen as a risky business move to antagonise already disgruntled landlords – the people that employ you to look after their properties – Barfoot said substandard homes and the landlords that permit them are an unwelcome cost that bring down the value of the housing portfolio.
“We’re not very tolerant of slum landlords,” Barfoot told The Spinoff. “The people who refuse to put in insulation or refuse to do repairs – we don’t really want them to be associated with us.”
So what’s the response been from landlords so far?
“I’m sure some have given their opinion,” said Barfoot. “But I guess we want to make sure people comply with the law, and we don’t want landlords who try and evade the law.”
Last year it was reported that property managers were dropping landlords who refused to comply with the Healthy Homes Standards and insulate their homes. While Barfoot said reminding landlords about their responsibilities was an ongoing issue, most of them were eager to comply, and it usually came down to a lack of awareness.
“I think most landlords are really good. Most only own one other house, and a lot of them are just trying to have a second income for when they retire. Most are genuinely caring people who want the tenants to have a nice house to live in because they know they’ll attract good quality tenants who will stay longer and have less hassle.”
That’s also the view of Helen O’Sullivan, CEO of Auckland property managers Crockers. In preparation for the standards coming into force next year, her company has been carrying out a professional assessment of every house in its portfolio to ensure that they’re “home fit”, the Green Building Council’s healthy homes certification. Once a property is assessed, the agency works with the landlord to make any upgrades necessary.
“We’re encouraging our landlords because it’s a great selling point to have a home that’s warm and dry when it comes to market.
“Initially there had been a few concerns about the unknown. You don’t know what you don’t know. But once we went through that process with landlords, they see that there’s a cost, but in many cases, it’s not too scary.”
But of course, there’s the position taken by the National Party that those upgrades are going to result in tenants paying higher rents. Is that what O’Sullivan is seeing with Crockers’ portfolio of upgraded houses?
Not at this stage, she said. Banks were offering plenty of low interest financing options for landlords to make the necessary upgrades and spread the cost out.
“There are tools available. They’re not entirely on their own in this.”
David Faulkner, director of property management consulting firm Real-iQ, agreed that the claim that landlords are being forced to raise rents or sell their properties because of increased costs didn’t stack up. He said pushback usually comes from veteran landlords who had gotten away with leasing sub-standard houses for years.
“All that huff and puff (about the cost of upgrades)… that’s rubbish. Investors are queuing up to buy property.”
“For every landlord that whinges about extra costs, fine, go, because they’re going to have other investors who will replace them. And I suspect that they may be more socially aware about their responsibilities to tenants.”
According to O’Sullivan, that type of social responsibility had become a critical motivation to address the poor state of New Zealand’s houses.
“The quality of the New Zealand housing stock is, by world standards, generally acknowledged to be quite low. And that is a challenge that we’re dealing with.
“Ultimately, healthy homes will make a big difference to the quality of life for a number of tenants. That’s got to be a good thing.”
Read Andrew King’s response here.
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