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The other housing crisis

Each winter, cold houses in New Zealand cause the death of almost 1600 people, and hundreds of thousands more have their health and wellbeing severely curtailed. It’s a national emergency, but the government agency tasked with addressing it has had its budget slashed to the bone. Cold comfort for freezing New Zealanders, writes Peter Newport.

We’ve all seen the ads on TV. The almost too-perfect male presenter telling us, ever so nicely, to keep the curtains closed and get some insulation fitted.

It turns out that these public-service ads might be better produced in the style of the shock-horror drink driving messages, complete with bloody accidents and funerals. We are just not getting it. Out of 1.5 million New Zealand homes, 750,000 – that’s half – are still not properly insulated. The social cost is huge: 45,000 houses, home to more than 100,000 people, have no insulation at all.

Like many problems, it’s complicated. But a combination of high electricity prices and cold damp houses are forcing many New Zealanders to decide between food and heat this winter. Even people who earn decent money are suffering; meanwhile the government’s subsidy campaign to get us all warmer and healthier is stealthily having its own heat turned down.

It’s worth being clear that everybody agrees that cold, damp houses cause massive problems. Dr Kate Baddock is Chair of the NZ Medical Association. She also works as a GP in Warkworth, just north of Auckland.

“We are always seeing children, and adults, who have health issues as a consequence of being cold and damp at home,” she says. “These are allergic diseases, as well as respiratory problems, and skin infections caused by damp clothes and damp bed sheets – all caused by people being miserably cold when they shouldn’t be.”

Dr Kate Baddock, chair of the NZ Medical Association. Photo: supplied.

Every single government agency and health expert agrees – even the landlords and property investors agree. Cold damp houses are a national embarrassment. And yet they are part of our national identity.

There are two fascinating aspects to this story. One is why our houses are so hopeless in the first place and the second is why not enough is being done to solve the problem.

On the answer to the first question, everybody agrees. We built cold houses originally because everybody thought New Zealand was warm, or at least temperate. And our national mind-set 50 years ago, or even 20 year ago, was to have a decent size house on a decent bit of land and if it was a bit chilly for some months of the year, get over it.

People would rather invest in size and space than warmth. But the sheer masochism of it has become part of our folklore, lovingly passed from generation to generation. Tens of thousands of parents know that if their kids go to university they are going to end up living in a freezing cold dump of a student flat. It’s like a rite of passage. It was good enough for us, so it’s good enough for you. It’s our pioneering spirit, suck it up. Ice on the inside of the windows – a badge of Kiwi honour.

But report after report, study after study, has shown that this wonderful national tradition is having a dramatic, widespread effect on our health, wellbeing and overall quality of life.

The latest version is a 66 page report, from 2015/2016 data, prepared earlier this year but not fully released until a few days ago, on June 22nd. The study from the Building Research Association of New Zealand (BRANZ) is titled Warm, Dry, Healthy? [PDF] and was funded by a research levy on the building industry. The headlines around a parallel, smaller study all focussed on the simple fact that rental property was in worse shape than privately owned and occupied property.

Not a big surprise. But buried in the full report is a blow by blow description of just how unhealthy New Zealand homes are. The study documents how we tend to only heat one or two main rooms in our houses, and not the bedrooms. This goes against World Health Organisation medical advice that says it’s seriously unhealthy for adults and children to sleep in cold rooms, no matter how many duvets and blankets we pile onto our beds. The WHO says bedrooms at night should be at least 18 degrees for young children and no less than 16 degrees for adults, all night long.

The study also reports that our houses don’t have double glazing, and even where there is insulation it’s often too thin or does not cover all of the roof or floor area. The document is full of scary images of black mould and rotting window frames.

Another fact highlighted by the report: many New Zealand bathrooms not only have no proper ventilation but also no heating at all.

But it’s not just our pioneering addiction to being cold and miserable that explains all of this. It’s the cost of heating.

Electricity is famously expensive in New Zealand. I’m based in Queenstown. There’s some cosy, often empty, mansions here but far more average housing that’s either rented or owned. There’s also a lot of really sub-standard housing rented out to minimum wage seasonal tourism workers. Many of the houses here are pretty standard Kiwi homes: badly insulated, with single glazing – totally unlike the sort of homes that well groomed, smart guy on TV is telling us are optimal.

The cost of heating a house in Queenstown can easily be higher than $1,000 a month, when electricity, firewood and bottled gas is taken into account. In a social media poll, which completely lacked the budget and two-year resources of the BRANZ report, these were some typical responses.

Sarah: I have a brand new house I’ve just built with above code insulation and my power bill was $800 last month so perhaps there is a bigger story as to why we get charged so much for electricity yet geographically are so close to where the bulk of it is produced in this country.

Alycia: We live in a beautiful well insulated, double glazed, 2 year old house, with a ducted heat pump and this month’s bill is just shy of $600 😭😭😭. We don’t run the heat pump all the time either but we have three children one is only 1 year old so need to keep the house warm and dry but we are on one income… I very nearly cried when I saw the bill.

Paul: We pay over $700 for a 3 bedroom shed… wooden house with single pane windows, the house is literally freezing, the wood burner could never heat the house so panel heaters in the bedrooms (single pane windows make an oil heater a waste of money) AND we get in trouble if we do not open windows to stop the moisture building up. Single pane windows on a rental should be illegal in my opinion!

Some people said they had changed electricity providers and saved a lot, but there was a clear link in Queenstown between the high price of power and inadequately heated houses. One response highlighted the welcome fact that the Central Lakes Trust is providing 50% insulation subsidies for existing homes.

Combine high electricity prices with the poor levels of insulation highlighted in the BRANZ report and we have a formula for mouldy, damp, cold and dangerous houses. The 750,000 houses that the BRANZ report says are under-insulated will need cash to get them up to scratch and even more cash to pay for the heating. Cash that many people simply don’t have.

Otara toddler Emma-Lita Bourne, who died in 2014 after being hospitalised with pneumonia. The coroner said cold, damp housing may have contributed to her death. Photo: supplied

That’s where EECA comes in. The Energy, Efficiency and Conservation Authority is the government agency that pays for that guy on TV and whose mission is “to make New Zealand a better place to live – economically, environmentally and socially – through the better use of energy”.

EECA has spent some spectacular amounts of money getting around 300,000 New Zealand houses sorted out with subsidised insulation. But look at the numbers and it’s clear that something unusual is happening. They show a shift from the funding of remedial insulation work for all of us to focus on lower income groups with health issues. That seems fair and reasonable, but the fact remains that the change in policy will dramatically slow down the retro-fitting of insulation, especially to older homes.

Between 2009 and 2013 $347 million was spent by the government on helping us all get better insulated. Another $80 million was tipped in by community organisations. That total equates to around $85 million of subsidies each year over five years. In that period 241,000 homes had their insulation sorted out.

But then in 2013 the government reduced its insulation subsidy funding to $100 million over three years. That’s a drop down to $33 million a year, and this time the subsidy was only available to low income families with “high health needs.” In the latest three year period 55,000 homes had their insulation fixed.

When that scheme ran out last year, the government voted only $18 million over the next two years (2017 to 2018) for a continuation of the programme. That’s down to $9 million a year; the target is only 20,000 low income rental houses with health problems linked to cold and damp living conditions. Just last week the government tweaked the eligibility criteria to include lower income homeowners as well as tenants, but did not increase the budget. Don’t forget, that BRANZ report released only a few days ago says that 750,000 houses – half of our entire national housing stock – is under-insulated.

And that well-groomed guy on TV that I keep mentioning, the one who tells us to close the curtains and use our expensive-to-run electrical heating appliances carefully? His budget has been slashed too.

Here’s the EECA media budget to promote warm, dry housing over the past three years: it’s been cut by $1.5 million from last year to this year. EECA point out that some of the marketing drop could be linked to the end of the Energy Star appliance efficiency scheme.

Source. EECA. The figures include the Energy Spot, and other advertising (TV, digital, etc) to promote warm, dry housing, including the Warm Up New Zealand insulation programme. It also includes promotion of energy efficient products for the residential sector.

Andrew Caseley, the current boss of EECA, has only been in the job for five months. He says that EECA is proud of the 300,000 homes insulated since the various insulation schemes started in 2009, but admits that the new scheme is having some trouble getting even the reduced levels of support into the market, to the people that need it. Specifically, low income households with health problems linked to cold and damp living conditions.

“Overall I think we’ve done very well. The qualifier is that, over the past year, it has been more challenging to get traction with the landlords.” The background to this is that the new rules are complex and landlords agree the scheme is not working properly, even though they stand to gain by getting soon-to-be compulsory insulation work subsidised. Add that to the reduced EECA subsidy budgets, and it starts to feel like the government’s insulation programme is going backwards, not forwards.

Andrew Caseley, chief executive of the EECA. Photo: supplied

Caseley says the reason for the extra red tape and complexity is to avoid quality issues like those experienced in Australia, where subsidised insulation materials became an increased fire risk when placed next to electrical wiring, due to poor quality installation work.

I asked Andrew King, executive officer at the Property Investors Federation, which represents around 5,000 landlords, why the current EECA insulation scheme is not working.

“We’re trying to get to the bottom of that but the subsidies are not as good as they first appear. It’s 50% off, but landlords are finding that the installers linked to the scheme are charging so much that it’s often cheaper to just get the job done by someone else and avoid the subsidy altogether. There’s something going wrong with that scheme, but we’re still not exactly sure of what it is, or how to fix it.”

While landlords and EECA meet to try to figure out how to fix the scheme, the public health issues linked to poor insulation and high electricity costs get worse as we continue into the depths of winter.

Andrew King reckons that electricity vouchers are the answer. “Landlords have been installing heat pumps more and more into rental properties, but they’re finding that people just don’t use them because of the cost. There’s fuel poverty out there. If we want to keep those low-income kids out of hospital during the winter months then let’s give the parents vouchers to help them afford to pay for electricity.”

“Landlords get in in the neck with people saying why don’t we reduce the rents, but it’s so expensive to run a rental property that’s just not realistic. It’s not an easy situation for anybody.”

Worst case of visible signs of mould anywhere in the house. (Source: BRANZ report ‘Warm, Dry, Healthy?’/ Insights from the House Condition Survey 2015 physical house assessment)

It’s clear that everything is connected: the current high capital cost of housing and the ability of people to either live in that house or balance the books as a landlord who rents the house to tenants.

I ask Andrew King to give me his 60-second solution to the problem. It’s perhaps an unfairly difficult challenge, but he does well. “I would look at the council building regulations and try to make them more flexible so that we can build houses in a way that matches supply with demand. We need to be able to increase and then decrease housing supply quite rapidly. We need to be able to turn off the housing supply tap as well as turn it on. We need to get the cost of building houses down and realise that if we want big houses we have to pay more, so our attitude to housing needs to change as well. And people need to realise that if they want to rent a warm, dry property its going to cost more than a dunger property.”

I think back to the conversation I had with NZ Medical Association chair Dr Kate Baddock. She’s a formidable, no nonsense type of doctor, exactly the type of person you’d want as your GP. She’d told me that the state of our housing was affecting people in all income brackets. I’d asked her how it felt to be treating children from cold, damp homes, knowing that their illnesses were preventable.

“We would be less than good at our job if we were not to address, or attempt to address, the social determinants as well as dealing with the actual, subsequent health issues. If we don’t try and do something about housing, if we don’t try and do something about people’s living conditions, we will always be the ambulance at the bottom of the cliff.”


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