O'Rourke Denis: Residential Tenancies Amendment Bill — Third ReadingText is incorporated into the Bound VolumeO'Rourke Denis: Residential Tenancies Amendment Bill — Third Reading[Sitting date: 31 May 2016. Volume:714;Page:11524. Text is incorporated into the Bound Volume.]DENIS O’ROURKE (NZ First): It is a very good time of the year for us to be considering a bill like this because as we know winter is well and truly now upon us. It reminds us about what it would be like to permanently live in a caravan or a car or a garage or any property that is not properly insulated. Those are issues that are not actually being very well faced up to by this Government at this time. However New Zealand First will support this bill even though it could do so much more.It does only three things in fact. First of all it provides for smoke alarms and nobody disagrees with that; they are well worthwhile and they will save lives. It does improve insulation for some homes but with standards that are inadequate. I will come back to that later. And it does provide for regulations for a number of things like the chief executive being able to take cases direct to the Tenancy Tribunal for persistent breaches of the regulations. It streamlines the process for recovery of possession when a tenant has skipped and it increases penalties for breaches of regulations up to $4000.All of that is good. I have no problem with that. But I would have to disagree with one provision for regulation which is the one that allows a landlord to state in a tenancy agreement that despite making reasonable efforts they have not been able to satisfy themselves of the extent of insulation. I disagree with that. That will be a cop-out. It will mean that some landlords will use that as a means of escaping the regulations. It should not be there. They should have to come up to the standards like anyone else and if they cannot establish what the insulation is then that home simply should not be on the market as a rental property.We could see much better from a bill like this. It is a lost opportunity really to improve New Zealand’s rental stock from what it is now. The two areas many have spoken about and which I reiterate are that insulation standards for properties built between 1978 and either the 2001 or 2008 standards will not be adequate and secondly the lack of any worthwhile genuine heating standards. This bill means that properties built between 1978 and 2001 with the insulation standards that were enforced over that period will be for ever permanently exempted from coming up to the 2008 standards. That is a great shame. I would have thought that over time all properties should have to come up to those standards whenever they were built.The rationale that we hear from the members opposite is that because around 80 percent of the two modern insulation standards would be achieved by the 1978 standard it would be unnecessary and uneconomic to upgrade those properties to the higher standard. But I do not accept that that is actually even factually correct because there will be a lot of properties that will be under even those standards and of course some that will be over it. It will be patchy. I know that as a matter of fact because I had my home built in 1984 shortly after the 1978 standards came in. I remember investigating methods of insulation and there were all kinds of things that complied with those regulations. Some were good and some were not very good. I hope that I chose a reasonably good one. But the fact is that there will be a lot of properties that were built to the 1978 standards that are clearly not very well insulated at all and that is just a fact that the figures that are bandied about by the Minister for Building and Housing will not reveal.The other claim made is that if the cost of upgrading to the modern standards was imposed on the properties built after 1978 then that would cause that cost to be passed on to the tenants the rents would increase and so on. That is actually completely untrue; that is not the way markets work. A regulation creates a level playing field as they say lifting all ships with the higher tide. There would be no grounds for one landlord increasing rents for this class of home over another and they would not get away with it in the market.What of course do increase rents are house prices because rents are based on the recovery of the cost of capital of houses. That is what is driving the rent increases today and therefore it is entirely the fault of this Government for doing nothing about increased house prices and for its complete mismanagement of the housing portfolio in New Zealand. It is that that has caused the increase of house prices and it is that that has caused the increase of rents not a regulation that would require a better standard of insulation. The members opposite who are trying to argue that are delusional over what really does cause increased rents.In fact if the Government really was concerned about rent increases because of increasing insulation standards for 1978 and newer properties then it could if it wished allow landlords to expense the whole of the cost of insulation upgrades in the year that the expense was actually incurred. That would be a significant incentive for landlords to invest in insulation and it would therefore not matter at all whether the property was built before or after 1978 or which standard of insulation applied to it.As far as we in New Zealand First are concerned when a property was built should make no difference for the purposes of insulation standards. But if a property was built after 1978 and had insulation standards that were too far below standard it would be reasonable to have a longer period of time for compliance—maybe 8 or 10 years to do that. If that had been in this legislation that would have been supportable but what is not supportable is that those properties will never be required to come up to modern standards. In fact looking further forward as technologies improve what we should have is a regime that says we will act to improve all rental housing stock progressively up to whatever the modern standards of the day would be—allowing of course a reasonable time to do that. If every landlord was required to do that then there would be no market penalty or advantage for any landlord over another. So there should be no problem in doing that. That is what we should be aiming for in this country.Lastly I simply want to say that heating and ventilation must also be subject to minimum requirements for performance of a property. There is not much point in having minimum requirements for insulation and then over time making sure that all rental properties come up to those standards unless there is also a performance standard for heating and for ventilation. That is just common sense and why this bill does not move into that area I just cannot understand. The truth is as many others have said and as many submitters said the cost savings in the avoidance of illness alone and the avoidance of a whole raft of social problems that arise from inadequately insulated and inadequately heated homes are just so huge that it makes a bill like this and much more totally justified. Much more should be done many more savings should be incurred and much less illness would result. So the matter is really urgent.In the end New Zealand First is really disappointed that the bill does not go further in that respect. We would like to see it do so. As far as we are concerned this is just a work in progress for the next Government.