Nick Collins: Rating system would reveal the inside story

Hundreds of thousands of Kiwi homes are poorly insulated. Photo / Mark Mitchell

A house may look just like its neighbour on the outside, except for the colour, perhaps.

But if you peel away the layers, there may be some startling differences.

Imagine if there was a national standard for rating the performance of our homes - energy and water use, levels of insulation, efficiency of the heat source, health and comfort ...

A home rating tool would allow owners to assess their home's performance and, importantly, reflect the value of improvements.

More than a "nice to have", a residential rating tool is the key to help address New Zealand's poorly performing houses.

New Zealand's homes are on average six degrees below World Health Organisation recommended minimum temperatures. Some 45 per cent have problems with mould and 250,000* either have no ceiling insulation, or insulation in less than half of the roof area. Some 700,000* houses have no (or little) wall insulation and 740,000* houses with suspended floors have no underfloor insulation.

Our homes are also seriously resource inefficient, consuming vast quantities of water and energy to operate at less than optimum levels.

The rating tool scheme is needed because, put simply, if you can't measure you can't manage.

More and more, New Zealand homeowners are coming to recognise the benefits of sustainable housing. The Government's Warm up New Zealand: Heat Smart programme is helping to drive homeowners to make changes to upgrade insulation and heating in their houses.

But further action is required, and not simply by government. Banks, the real estate industry, landlords and homeowners each have a part to play in improving the performance of the nation's homes.

A residential rating tool will provide the extra momentum necessary to convince New Zealanders to take action and improve the performance of their homes.

There is presently an industry initiative, led by BRANZ, the NZ Green Building Council and Beacon Pathway, to develop a single residential rating tool for both new and existing homes.

Home rating tools are gaining popularity in other nations such as Australia, the United States, Japan and Britain. Many of these countries are operating multiple rating systems that focus purely on new builds.

The industry-led proposal is unique: a single residential rating tool for all New Zealand homes, both new and existing.

The intention is to go beyond a simple rating tool. A star rating from 0-10, coupled with a scheme that delivers credible, independent advice about what needs to be done to improve a home's rating, will assist home owners to prioritise improvements that lift the quality and performance of their homes.

A simple, free, self-assessed version of the rating scheme, offering 0-4 stars, will be available online. A home rating tool of this nature will help to encourage private investment to renovate New Zealand's poorly performing housing stock.

Interestingly, recent international research reveals that homes with performance ratings sell quicker and for a higher value than non-rated homes.

In summary, National's Warm Up New Zealand: Heat Smart scheme should be underpinned by a residential rating tool that would:

Provide a prioritised plan of solutions to improve the performance of the home.

Be an independent and credible system to compare the performance and quality of a home at the point of purchase, upgrade or rental.

Provide an incentive to invest in upgrading a home to achieve higher performance levels, giving an indicative value to the upgrades undertaken.

Reduce the demand on precious energy and water resources.

Generate data to assist government in understanding the challenges that exist in the current housing stock, and target solutions.

The Government will need the support of the banks, landlords and the real estate industry if any substantial change is to be realised.

Banks have the largest investment in homes - $150 billion in outstanding residential mortgages, according to the Reserve Bank's Financial Stability Report. As such, banks must respond to the current economic climate and offer a package of mortgages to support large-scale renovations.

Rental properties mustn't be overlooked and there is little reason for landlords not to act. In fact, it is in landlords' best interest to address poorly performing homes - tenants will stay longer, the investment will be reflected in the increased value of the home, and warm, dry homes need less maintenance.

Of course, much of this change must be driven by consumers who need to value a home's performance as much as they do its location and aesthetics. Demand for well-performing homes will increase with consumers' understanding of the features and benefits of sustainable housing, and the real estate industry must be ready to respond with the use of a home rating tool.

Given the scale of the problem presented by our existing housing stock, we all need to pull together to deliver the standard of housing all New Zealanders should enjoy.

* Insulation estimates based on the Census, BRANZ House Condition Survey and Environment Canterbury's Clean Heat Scheme).

* Nick Collins is general manager of Beacon Pathway Ltd, a research consortium working to find affordable, attractive ways to make New Zealand's homes more sustainable. It includes a mix of industry, local government and research organisations.