A technician tests a heat pump unit for efficient operation after installation. Andrew King says not all tenants want such heating options. Photo / Warren Buckland, file
COMMENT
I believe that recent coverage of the issue of landlords and heating painted myself and the NZ Property Investors' Federation (NZPIF) in a poor light, so I want to clarify the federation's position on heat pumps and the Healthy Homes requirements.
The NZPIF has always seen the landlord/tenant relationship as a service provider/customer one. The NZPIF supported compulsory insulation in rental properties and agrees with many aspects of Labour's Healthy Homes law.
We have been encouraging our members to install heat pumps for around 10 years. While many tenants value having a heat pump, there is a significant proportion who don't want them or don't use them when they are provided.
To help tenants, the federation developed the concept of providing low-income tenants with electricity grants over the winter months. It was thought that this would be great for the tenants, provide better protection for the rental property and save taxpayer funds.
The concept was picked up by Labour, who introduced it as the Winter Heating Grant, albeit in a modified way. I am proud to have been part of this initiative.
The federation supports regulations that improve the living conditions for tenants if it does so in a cost-effective way. This is because tenants ultimately pay the cost of these regulations. Although the NZPIF supports many aspects of the Healthy Homes regulations, there are a couple that we don't think are good solutions.
One is topping up the insulation to current standards in rental properties that are already insulated. There is a point where adding extra insulation will not provide any additional benefit.
Increasing the level of insulation from the last standard to today's standard provides about a 7 per cent increase in efficacy. However, the cost of this top-up of insulation is nearly the same as installing completely new insulation.
We think it is a good idea to have heating in a rental property but we don't think every rental needs a heat pump. We also don't believe every tenant wants one.
The calculations for the Healthy Homes heating regulations are so conservative that practically every rental property in New Zealand will have to have a heat pump, the cheapest of the options covered by the law. Many rentals with existing heat pumps will have to replace them with larger models or add an additional heat pump.
Despite our concerns, the law has passed and we accept this.
On a related matter, in response to Covid-19, the Government has increased the depreciation limit on all assets from $500 to $5000 until March next year. Previously heat pumps were not tax-deductible, so this has presented a good opportunity.
We immediately notified our members of this opportunity and encouraged them to install heat pumps early. This is completely different to "urging landlords to delay heating".
I advised landlords to talk to their tenants and asked them if they wanted a heat pump or not. If they did, you might as well get on to it earlier rather than later. But, if they didn't, it was probably a good idea to delay.
I still stand by this as it takes into consideration the tenant's opinion. Neither I nor the NZ Property Investors' Federation urge landlords to delay heating.
• Andrew King is the president of the New Zealand Property Investors' Federation.
He's willing to take almost $2m below the RV.