Tuesday, May 6, 2014

Mike Butler: Landlords blamed for power price



Wild claims about cold housing used by proponents of a rental property warrant of fitness look like an attempt to shift to landlords the blame for expensive electricity, most of which is generated by government-owned companies.

The electricity price per kilowatt hour has soared over 40 percent since 2008, from 17.044 cents to 23.969 cents, according to my Contact Energy bill. Data from the Ministry of Economic Development shows that average residential retail electricity prices have almost doubled since 2000. Meanwhile, rents have increased by around 60 percent since 2000.

One fact is simply that a dwelling remains cold if a heater is not turned on.

The presence of power sockets in every room in every house in New Zealand, and the wide availability of plug-in electric heaters, means that there is currently no impediment to clean, dry heating in every home.

If the only impediment to heater use is the rising price of electricity, politicians should focus on power prices instead of blaming landlords.

A warrant of fitness will not encourage a tenant to turn on a heater, even a high-end heat pump, if they don’t want to pay for the electricity.

Tenants should be very alarmed at rent increases that would come with a warrant-of-fitness scheme that is being tested.

Costs of such a scheme are likely to far outweigh the benefits, according to information from the Children's Commissioner, that shows that the total cost to owners of the 465,000 rental properties throughout New Zealand, at an average of $9700 per property, would be $4.5-billion, while benefits would only total just $16.1-million a year.

The WOF scheme should either be scrapped, or, if the government is really keen for $4.5-billion to be spent to save $16.1-million a year, the government should pay for private sector upgrades.

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