Instead of renting the property, Collins said many would-be landlords would just sell it on the open market.
In a statement, Davidson called out Collins personally for this criticism.
"For Judith Collins to champion the plight of a minority of landlords, who don't want to spend the money making their investment property safe, beggars belief."
She said there were thousands of children and elderly people being admitted to hospital with respiratory diseases linked to mould and dampness in their rental property.
"If landlords can only justify an investment by leasing out a property that makes New Zealanders sick, then they shouldn't be in the business."
In response to Davidson's comments, Collins said: "National wants housing to be affordable for all New Zealanders.
"These changes, in conjunction with a raft of others, are pushing rents up higher, they're already up $40 a week under this Government and they will go up further with these changes."
But it is not just National who say the rules would increase rent.
In a regulatory impact statement (RIS) by the Ministry of Housing and Urban Development, officials had a similar perspective.
"It is likely that landlords will increase the rent they charge a tenant to offset, to some extent, the costs incurred from upgrading their properties, or choose to sell their properties."
New Zealand Property Investors' Federation (NZPI) executive officer Andrew King also said the rules would mean rents would increase across the country.
A commitment to ending "energy poverty" by ensuring every Kiwi has a warm, dry, secure home was part of the Labour/Greens supply and confidence agreement.
Yesterday, Davidson said she was thrilled to see the new rules will be in place.
