Tuesday, March 17, 2015

Mike Butler: WOF under active consideration


One year of questioning the government under the Official Information Act on a rental property warrant-of-fitness scheme has revealed that amendments to the Residential Tenancies Act to enable such a scheme have been drafted and all information I requested on the scheme remains under active consideration.

Nearly a year ago, I sent in a request to the Minister of Housing, Nick Smith, under the Official Information Act, seeking all advice related to the warrant of fitness scheme for state housing and any proposed warrant of fitness schemes for private sector rental housing”.


On May 22, 2014, I received a response along with 38 documents and a list. But, large sections of a number of documents were blacked out, “redacted” as is the term on television dramas.

Information withheld included:

1. Ten paragraphs in a 10-page paper titled Warrants of fitness in rental housing, May 2, 2013, much of which concerned warrants of fitness in boarding houses.

2. Four paragraphs of an 11-page Cabinet paper titled Trial of rental housing warrant of fitness options with HNZ Corporation, November 29, 2013, much of which concerned the potential impact of private sector rental market.

3. Three paragraphs of minutes of Warrant of fitness meeting with officials, August 1, 2013.

4. Details of a proposed approach to stakeholder engagement in minutes of Rental housing warrant of fitness meeting with officials, August 12, 2013.

5. Details of a proposed approach to stakeholder engagement Rental housing warrant of fitness meeting with officials, August 29, 2013.

The information was withheld mostly citing s9 (2) (f) (iv) of the Official Information Act, and that relates to the constitutional conventions that protect the confidentiality of advice tendered by Ministers or officials.

I argued that the right for private sector owners of houses, flats, and boarding houses to know of the likely financial impact upon them, some of whom could be driven to sell up, outweighs the somewhat technical “confidentiality of advice”.

I complained to the ombudsman on July 31 and received a reply a few days ago that upheld the Minister’s decision to black out large sections of the information.

The Minister argued that “the advice was preliminary in nature” that Cabinet “had not weighed and balanced all the specific information to come to a decision” and Cabinet needed to do that pondering without “adverse publicity” which could prevent a “balanced, effective, and efficient decision”.

The Minister noted that “Cabinet has made it clear that it wishes to consider these matters following the Housing New Zealand warrant of fitness trial, which was designed to collect more factual information on the policy options and will inform further cost/benefit analysis”, adding that “all of the material relating to Mr Butler’s complaint remains under active consideration, so reasons for withholding the information still apply”.

An impartial cost/benefit analysis would be welcome because the analysis provided that cites a $4.80 benefit for every $1 spent on insulation and clean heat is woefully flawed in that it does not say that this figure is over 30 years and is mainly based on a dollar value intended to reflect a slightly reduced mortality of occupants of state houses that had been insulated.

A further document that was withheld, Housing Portfolio Legislative Bids 2014, dated December 13, 2013, contained details of a potential amendment to the Residential Tenancies Act to extend a housing warrant of fitness further than Housing New Zealand should Cabinet choose to do so.

WOF Paper – instructions for redraft, April 4, 2014, contains details of a potential warrant of fitness star rating system which is still under consideration, according to the Minister.

So much for the view that the rental property WOF proposal that we heard so much about during last year’s election campaign has died on the vine.

If it is under active consideration, Cabinet does need to set aside the fevered ranting pushing for a rental property WOF.

Any dispassionate look at the data shows quite quickly that the WOF proposal is socialized housing dressed up as a health and safety issue, with costs of upgrades to be forced on private sector landlords.

New Zealand has 1.7-million occupied dwellings, including 480,000 rental properties of which 69,000 are owned or leased by Housing New Zealand and the remainder owned privately.

The rental property sector is a $6-billion industry and comprises three percent of GDP, which means tinkering with a warrant of fitness regime would have a substantial impact.

2 comments:

brandon carterman said...

Good on you Mike for looking into this .I am personally against the WOF scheme. It will add costs on and increase bureaucracy when we need less .I'm also vexed towards many rental property management agencies who are also pushing to get the WOF scheme implemented - so it will drive up demand for their industry at everyone else's expense.

Myopic1 said...

The Wof for rental will hurt tenants the most through increased rents. The compliance interpretation between, owner, tenant & tribunal will waste so much time it will take 6 months to get a hearing. When I was a tenant if I did not like anything about the property, I went elsewhere.