Residential Tenancies (Healthy Homes Standards) Amendment Bill

Members, the House is in committee on the Residential Tenancies (Healthy Homes Standards) Amendment Bill. Members, we come first to Part 1. This is the debate on clauses 3 and 4, “Amendment to Residential Tenancies Act 1986”. The question is that Part 1 stand part. The member’s name just escapes me.

Chlöe Swarbrick: Chlöe Swarbrick.

CHAIRPERSON (Greg O’Connor): Chlöe Swarbrick.

Chlöe Swarbrick—I’ve only been here five years, Mr Chair!

💬 Hon Member: Ageing.

CHLÖE SWARBRICK: Ageing—I am. I have two questions at the top of this debate for the Minister that will come as no surprise, given the preceeding debate to this point. The first question to the Minister relates to something specifically outlined in the regulatory impact statement, at paragraph 23, on page 9—if the Minister or her officials would like to go to that point, so that we can get an answer for the committee tonight, noting, of course, that we’re not going to have a select committee stage, so we’re not able to get this information in front of us and thoroughly go through it as parliamentarians, through due parliamentary scrutiny; nor are we able to get our Official Information Act requests processed or our written questions answered in the next few hours that the committee has tonight.

So the first question relating to paragraph 23 on page 9, which I see the Minister and officials have got to now, is: what stakeholders were approached for the “targeted conversations” around this policy and the policy decisions that led to this legislation? I think that’s a really important piece of information and evidence for the committee to have in front of it as we continue this debate tonight, because, of course, as has been well canvassed, what the regulatory impact statement identifies is that tenants are going to be the most impacted by this legislation but it was not tenants who were consulted with. In fact, we saw these targeted conversations with stakeholders who were landlords, who were property managers, and, of course, as many have already identified, Kāinga Ora.

The second question to the Minister is kind of elaborating on her response to my questions in the House in question time yesterday. She noted, in response to a question that was about exactly these delays to the healthy homes standards and some of the failures of implementation and enforcement of the healthy homes standards, that the Government had actually considered a warrant of fitness at some point in time. Again, I note that whilst I put in an Official Information Act request yesterday and a written question on precisely this, we are not going to get a response in time for that to contribute to the substance of this debate, so I would really appreciate further information from the Minister on precisely when and how robustly and to what extent and whether it was consulted on and what on earth happened with this idea of a warrant of fitness, which, as we’ve canvassed in earlier speeches throughout this debate, would have addressed many of the key issues with the healthy homes standards, not least the fact that currently the burden for enforcement falls, in practice, on tenants to take their issues to the Tenancy Tribunal.

So those are the two key questions for the Minister. What key stakeholders were approached for the targeted conversations that led to this policy development and the legislation we’re debating tonight, and, secondly, when, how, to what extent, and where did the Government consider a warrant of fitness, and why did it come to the conclusions it did to not implement them?

Thank you, Mr Chairman. Just on the two specific questions that the member’s put forward, I think if the member goes through paragraphs 23 to 30 of the regulatory impact statement, it gives a clear indication of who the targeted consultation was. It’s an important question, but I think equally important is for members to understand what it is that this piece of legislation is doing. This is not a piece of legislation about whether or not we should have healthy homes standards for our homes in New Zealand. That bill has already been through this Parliament. That debate has been had. There has been a select committee process. Everybody has had the chance to submit on it. The bill we are debating tonight is about whether, in response to a global pandemic that causes supply chain issues around the world—the fact of the matter: there was a shortage of heat pumps in New Zealand for a period of time, particularly in the days of 2020 and 2021. We all know the tangle that we got into at the Ports of Auckland, and heat pumps were one of those products that got caught in the supply chain issues.

So I think it’s really important to have absolute clarity that we are not debating the “if”. That is a piece of legislation that was passed by our Government in our first term, something we made a priority of when we first came to Government, because people having warm, dry, safe places to call home was an absolute priority for us as a Government. So in terms of which stakeholders were consulted, it was those who had to comply. We were getting feedback that they simply would not be able to comply and therefore would be breaking the law—they would be knowingly breaking the law. So the targeted consultation was with those people and around the feasibility of meeting the regulated time frames that they had to comply within. It wasn’t about going and asking tenants whether or not we should have warm, dry, healthy homes, because, as a Parliament, we had already decided that. As a party and as a Government, Labour had already made that a priority and had passed law to that effect.

In terms of the warrant of fitness and whether that was considered—in fact, I think the member who asked that question in this committee stage asked me a similar question in oral parliamentary questions yesterday. There was a cost-benefit analysis that was undertaken in terms of the ability of putting standards and regulations in place, as opposed to a warrant of fitness, and it came out in favour of the approach that we ultimately took. This was a piece of work that I think, from memory—and I will get officials to confirm this with me—was carried out by Sapere Consulting. So that was a cost-benefit analysis that went beneath that.

Point of order. I seek leave for all parts to be taken as one question.

Leave is sought for that purpose. Is there any objection? There is objection. I call Chris Bishop.

Point of order. I seek leave for the document that the member has just noted, the cost-benefit analysis by Sapere economic agency to be tabled for the sake of this debate.

The member can’t seek leave on behalf of someone else. If the Minister had been reading from the document—

💬 Hon Dr Megan Woods: I don’t have it with me.

CHAIRPERSON (Greg O’Connor): But the honourable member tells me she wasn’t, so the call goes to Chris Bishop. Point of order, Chris Bishop.

Point of order. I was unaware of discussions between the parties, therefore I seek leave for all questions to be taken as one. Sorry.

Leave is sought for that purpose. Is there any objection? There is objection. Chris Bishop.

Thank you very much, Mr Chair. I have two simple questions—I want to say thank you to Chlöe Swarbrick for saying one of them that I was going to ask—the first question is: did the Government give consideration to an extension beyond 1 July 2025? We are dealing with Part 1. Was there consideration given to a further extension, bearing in mind that this bill extends it out to 1 July? So I suppose the question is: why specifically was 1 July 2025 chosen?

Then the second question is an interesting one, which is I’ve gone to the Housing and Urban Development (HUD) website, as I do often, and I’ve gone to look up the regulatory impact statement for the bill, which is all fine and you’ve got to scroll all the way down through the guff, anyway, you get to the time line—and this is on the healthy homes standards—and my question is: why is the HUD website advertising that the law has changed, when it hasn’t? So here we go, 1 July 2024, “Kāinga Ora … and registered Community Housing Provider (CHPs) houses must comply with the healthy homes standard.” Well, that’s not the law. The law, as it is at the moment, is 1 July 2023. So this bill extends the time line to 1 July 2024, but the bill is not law yet, by definition. We’re in the committee of the whole House stage. And, in fact, the commencement date is the 26th. And I heard the Minister in her first reading speech say that it’s expected to, you know, pass through tonight, although given this shemozzle of an issue, we may not be; it may be tomorrow—although of course, it’s still Wednesday in Parliament’s time, but real-life Thursday, you never know. We could still be here at midnight, you never know.

Brooke van Velden: It’s still Tuesday.

Oh, it’s all still Tuesday. It’s a good point. Good point. Thank you, Brooke van Velden. It’s been a long day.

Anyway, the point is this: so the website says 1 July 2024 Kāinga Ora homes and communities, registered CHPs must comply on 1 July 2025. Except those things aren’t the law—they’re not the law. I accept they’re going to be the law probably at some point in the next day or so, and then it will go off to the Governor-General, Dame Cindy Kiro, and she will sign the bill into law and it will receive the Royal assent and the commencement date for the bill is the—actually, I just want to say it’s normally the day after the Royal assent, but the commencement date for the bill is actually 26 November, which is Sunday. That’s all fine, but it’s not Sunday, and, in fact, the bill’s law hasn’t passed. It’s not the law. So my question is simply this, and I see the member’s checking off the website, which is good, which is fine. But I’m staring at it right here in the time line, 1 July 2024, all Kāinga Ora houses must comply with the law. Now, I accept the world is not going to fall apart on this issue, but this is untidy—this is untidy.

And you know, I don’t want to get all constitutional lawyer on the House, but, you know, Fitzgerald v Muldoon, I have it in my office. My friends gave it to me, framed A2 size, Fitzgerald v Muldoon. It’s in my office. And, of course, that stands for the simple proposition that Parliament makes laws, not Governments. And it was Mr Fitzgerald, a civil servant of some standing in Wellington in 1975 who rocked up to the High Court and said, “Excuse me, Mr Muldoon, you can’t just unilaterally declare that people should stop making contributions to the Labour Government’s superannuation scheme”, because, of course, these were the days when Parliament didn’t sit till June of each year, which sort of seems incredible to look back on now. But, of course, those were the days when the farmers had to go through the first part of the year. And I think also, frankly, if we’re honest, Rob Muldoon quite liked ruling without Parliament around. But Fitzgerald turned up and said to the court, “Mr Muldoon can’t do that.” And he was right because Parliament in this country is Sovereign, not the Government. So, look, I accept that this is not on the scale of Fitzgerald v Muldoon, but the principle is the same. So why has the website been changed before the law has been changed?

In answer to the first question that the member just put, in terms of the options for time frames that were considered, they are well spelt out in paragraphs 46 to 55 of the regulatory impact statement. They go through the four options that were considered: the status quo; an extension from 90 to 150 or 180 days, with a six-month extension only for public houses; option three, extension from 90 to 120 days for private landlords, and a nine-month extension for private landlords and public housing providers; or option four, which is what is in the legislation.

As to the website, I know I have a reputation as being a hands-on Minister, but I can assure the member that I’m not sitting there updating the Ministry of Housing and Urban Development (MHUD) website myself. I haven’t appointed myself webmaster-general at the Ministry of Housing and Urban Development—yet.

I have asked officials to check whether that is the case; it appears there has been information loaded up that shouldn’t have been. I’ve just asked officials to remove it, because clearly this is not law and has not been made law, but I would also like to reassure the member that the MHUD website is not Sovereign.

I want to thank the Minister for referring me back to paragraphs 23 to 30 of the regulatory impact statement. I can assure the Minister that in preparation for this committee of the whole House, I have indeed read the entirety of the regulatory impact statement. So, unfortunately, paragraphs 23 to 30 don’t address the question that I asked, and that was for a specific list of the stakeholders that were engaged with.

This is something which I put on notice to her office through written questions, but, of course—as I noted before—it’s not something that we’ll be able to get access to when it comes to the kind of content and the substance of this debate tonight.

So I think it is something that would be really beneficial for us to have in front of us, because it states very clearly at paragraph 23 that stakeholders were approached. So there was a conscious decision by the ministry—or the Minister or Cabinet or officials—to approach certain stakeholders and to intentionally solicit their feedback. So I think that it is entirely the remit of the House to ask for specifically who those stakeholders were.

Because, again, I note that it states, very clearly, that the stakeholders who were consulted with were property managers, were landlords, and were Kāinga Ora. We can say that Kāinga Ora—yep, we know that. But which property manager groups? Especially because it states that property managers who were consulted with gave very specific feedback. Which landlord groups? I would really, really appreciate—and I think that the committee would really benefit from a list of who those stakeholders were.

As the member has just indicated, she’s put in a written parliamentary question, which will be answered.

In terms of the information that I can get to hand to give in this committee stage—at this point, I’d like to say this is an indicative list. I’d like officials to go back and do a thorough search of all the records of exactly who was consulted.

But for the purposes of having debate at committee stage, Kāinga Ora—as the member has indicated—and then, of course, representative groups of landlords. Those that would be required to consult, that being the Real Estate Institute of New Zealand, which is a large body representing property managers; Crockers, which is a large property management company; and the New Zealand Property Investors Federation.

I want to thank the Minister for that indicative list and also very much appreciate that she’s across the detail and that she’d like to get back to me with more specificity in that written question answer. But I do really appreciate that.

To that list and to the stakeholders that were chosen and identified to be consulted with, my follow-up question is: was there an intentional policy decision or a decision by the Minister or by Cabinet to not consult with tenants or tenant organisations?

I feel like we have traversed this ground, that I have answered this question from the member. I said the purpose of the bill that we are debating here tonight is from those who were required to fulfil the requirements. It was not whether or not we should do it; that was a decision that our Government had already made. That was a decision that this Parliament had already. This was about the ability of those that were required by that law to fulfil the obligations under the law. Therefore, it was an intentional decision to consult with those who had the requirement under the law and whether or not they could fulfil it. It was around their level that they’d managed to do, what their purchase agreements looked like in terms of getting access to the materials. This wasn’t a question of whether or not we should do it; this was a question of whether or not there could be compliance. So it made sense to talk to those that were required to comply.

When it comes to that compliance, as the regulatory impact statement also canvasses, we have an issue with regard to data and the survey which many have bandied about. The 85 percent compliance from private landlords is data that comes from a survey commissioned by the Government to try to get a sense of compliance. However, I’d note that both in the regulatory impact statement and the departmental disclosure statement and in that survey itself, it outlines very clearly that that survey is “not statistically significant”. So I wanted to ask the Minister if there was any consideration given to other methods of collecting this data or this evidence, or if that as a baseline was acceptable to the Government.

Again, that was traversed in oral questions in this House yesterday. There is a large body of work that is going on in compliance, not through the Ministry of Housing and Urban Development but through the Ministry of Business, Innovation and Employment (MBIE), through the Tenancy Services team there. In fact, there was funding in the Budget to ensure that we did have expanded compliance services, and I outlined what they were in question time yesterday.

But, to recap, MBIE is responsible for the enforcement of the healthy homes standards, and they have a range of compliance tools. The Tenancy Services’ Tenancy Compliance and Investigation Team (TCIT) work programme is now required to complete 3,000 pieces of work with landlords and property managers for the year ended 30 June 2023. As I have informed this House before, that is not just reactive; that is a proactive compliance role that that team has. And, actually, most of the investigations that have been launched to date have been as a result of proactive initiatives by the compliance team there. Its work programme is based on a risk-based enforcement programme approach, and outcomes are determined by the extent of harm or the risk of harm, taking into account the scale, conduct, attitude, and the public interest.

So we are targeting a lot of the compliance measures to some of our most vulnerable communities, where we know that there have historically been homes that haven’t reached those standards. Since 1 January 2022, the TCIT has completed 572 cases where healthy homes were an aspect, of which 494 were proactive cases—so the vast majority of them were proactive; 78 resulted from complaints; 335 of those cases were in the light-touch work programme; 25 were detailed assessments; and the balance made up of proactive, general, and investigations. Approximately 33 percent of the cases that I just outlined resulted in TCIT determining that there had been a breach.

I move, That the question be now put.

Thank you, Mr Chair. I have a number of follow-up questions to the Minister of Housing, and I really appreciate what, I feel, is a pretty robust committee of the whole House stage, in absence of our opportunity to give this due parliamentary scrutiny at select committee.

So I just wanted to drill into those points as raised by the Minister, particularly about Tenancy Services, because I think this is one of the key issues when it comes to evidence and data on healthy homes standards compliance. It’s something which I put in a relatively flippant question earlier this year to the former Associate Minister of Housing the Hon Poto Williams about whether the Ministry of Business, Innovation and Employment (MBIE) needed to update its computer systems, because, of course, it is the case that with every new tenancy that is registered, documents or the contract have to be uploaded to Tenancy Services, and, as a result of that, the healthy homes standards compliance sheet as well has to be uploaded. Therefore, theoretically, we already have a kind of framework that would be able to track potential compliance. Is it the case that we just need a tick-box in the process of uploading data on these new tenancy contracts, so that MBIE can keep track of that proclaimed healthy homes standards compliance? I just wanted to ask the Minister: had there been any thoughts given to updating MBIE’s services to that effect?

Secondly, I just wanted to really drill into that point of compliance, because, as the Minister has already stated, there is increasing work when it comes to attempting to do some proactive mahi there with regard to compliance. But, none the less, what we’re seeing reflected in the regulatory impact statement is that even if this legislation weren’t to exist—this legislation that extends the time frame for compliance for private landlords and for Kāinga Ora—officials are advising that, effectively, there’s not really all too much of a penalty for landlords that don’t comply, even if they get to the Tenancy Tribunal, if they can showcase that they have been attempting to comply.

So, I guess, I just wanted to also ask the Minister: what consideration, if any, was given to, perhaps, creating, with this legislation that is going to have the greatest impact on tenants, as, again, identified in the regulatory impact statement that did not consult tenants—if there was any consideration of also incorporating a better backstop or a better form of enforcement with regard to compliance, particularly where cases get to the Tenancy Tribunal? It would have been a perfect opportunity to not just postpone the implementation of compliance but also to ensure that when compliance and those backstops were actually reached, we had proper enforcement provisions in the first place.

Thank you, Mr Chair. I had a question to the Minister in the chair, Megan Woods, regarding the consultation with stakeholders—just two basic questions. The first is: what was the time frame for the consultation? Was it last year or this year, and over what period of time? And then, secondly, when it comes to the consultation that did occur, the Minister touched on the fact that the consultation was not about whether or not the stakeholders were asking for an extension but it was merely about what the compliance was like for these stakeholders. Did these stakeholders ask for any extensions, or was it merely a data-gathering exercise?

I think there’s been a misunderstanding of an answer that I gave to another member. I said that the consultation wasn’t about whether or not we should have a healthy homes regime; it was about whether or not they could comply, whether or not there was an extension needed. So I think that we just need to be really clear what that answer was about. In terms of the stakeholder consultation, that was carried out in April and June of this year, I am advised.

I also wanted to ask the Minister about paragraph 12 in the regulatory impact statement—of course, everybody’s favourite document in this committee of the whole House stage—at page 8, paragraph 12. It states—and I quote—“Kāinga Ora predicts that there will be 5 to 10 percent of properties still to comply on 1 July 2023. This estimate does not account for any further issues in relation to trades constraints and supply of materials due to supply chain issues. This, of course, is part of the rationalisation of this extension, particularly for Kāinga Ora.” So, given that there is only a breakdown for Kāinga Ora and how many properties would be outstanding with compliance at that date as currently in the legislation for 1 July 2023, I’m wondering if the Minister or officials can perhaps share with us whether there was any estimation or prediction about how many private landlords would still be needing to comply at the time frame as outlined in the legislation as it stands prior to this amendment passing tonight.

The paragraph that the member is referring to, paragraph 12, talks about the number of tenants that will be outstanding at the July 2023 deadline. This goes to a point that I made in an earlier stage in this Chamber—that many of these, and a proportion of these, are not because of supply chain constraints. They’re not about the inability to get hold of a heat pump. It’s not about the inability to get hold of batts. It’s not about the fact that there might not have been enough tradespeople to install them or that those resources were stretched. It’s about the number of our tenants in Kāinga Ora homes who are some of the most vulnerable in our communities. There has been reticence for people to allow tradespeople in their homes in the time of a global pandemic. And that’s something that we are highly attuned to as a landlord, something we are respectful of—the wishes of our tenants. So while we have been approaching our upgrades on an area-wide or a street-wide approach, but with escalation services of it, we have been cognisant of the wishes and fears of many of our tenants around allowing tradespeople into their homes.

We are working through that. We have tenancy managers who are working with tenants to get them to a place where they feel safe; they don’t feel they are being put at risk—bringing a tradesperson into their home puts them at greater risk of contracting COVID. And that is something that we will always do. We always will put the welfare needs of our tenants first, and that may be conversations about whether or not the tenant needs to move. But that will be a critical thing and that is what that paragraph is referring to.

So we could have kept that July 2023 date. We could have pushed on through—we’re doing between 600 and 700 houses a week—but what we do know is that would have required an approach with our tenants that, as a landlord, we’re not prepared to take, given that we are a landlord to some of our most vulnerable in this country.

In terms of how that translates, in terms of what the delta will be for private landlords, of course that is slightly different. We know that the turnover of tenancy for private properties is much higher than it is for public landlords. We have usually, roughly, some caveats around the fact that it’s going to include multiple houses and multiple people within it, but you’d see about a 30 percent turnover in the private rental market, which, of course, is a trigger for needing to institute the healthy homes. So it is impossible to model. What you can see is that, at the moment, in terms of the starting and completing, we’ve got roughly the same. So you’d probably have to say there’d be similar figures. But it is very complicated.

I move, That the question be now put.

Thank you, Mr Chair. Just following up on those comments around putting the welfare of Kāinga Ora tenants at the forefront, I want to get an understanding if, at the point of developing this legislation and setting the new time frame, there was any analysis done around the potential impacts on the interrelationships between the wellbeing of tenants in Kāinga Ora homes—some of whom, as the Minister has acknowledged, are living in precarious situations or with health conditions—and how this exemption of the deadline may put additional pressures in the healthcare system as a result of people continuing to live in unhealthy homes, and what are some of those costs that may be incurred as a result.

Secondly, were there any considerations about additional support provided for Kāinga Ora tenants who may still be living in unhealthy homes while this compliance is moved forward? Because while I do note that acknowledgment—and that is true that many tenants in Kāinga Ora homes are living in particularly vulnerable situations—I’d have concerns about the fact that without additional support being provided while those homes are being made healthier, some of those tenants may end up facing worse health outcomes. So I’m just wondering whether there was any analysis around any additional support required to support those tenants while the deadline is met.

Thank you, Mr Chair. In addition to the comments and the questions of my learned colleague and mate Ricardo Menéndez March—that is, in reference to an earlier point in the debate from the member of Tāmaki, for those who are not following along at home and the officials who are having to listen to this debate. I heard from the Minister that the rationale, or one of the core parts of the rationale, for this extension, and particularly in relation to paragraph 12, was the fact that, apparently, the kind of 5 to 10 percent of properties still outstanding, or predicted to still outstand, to comply at that 1 July 2023 deadline is largely because the tenants in those Kāinga Ora properties are kind of particularly hard to reach, for lack of a better kind of definition.

To that effect, I did really want to drill into whether there were alternative approaches that were considered beyond just extending the time frame, because I think, as we’ve already canvassed in this debate quite thoroughly, as also identified in the regulatory impact statement, there’s not really all too much in the way of a penalty for a lack of compliance, even if you get to that Tenancy Tribunal stage, if you can demonstrate as a landlord that you’ve attempted to comply. So I’m just wondering what kind of consideration was given to those alternative supports around, for example, trying to support those Kāinga Ora tenants to perhaps understand that these things are part and parcel of a healthier outcome for them with regard to their homes.

But also, and the countervailing point, if this is kind of part of the rationale, then how is it that the Government can be certain that with these tenants who are concerned about the spread of COVID-19, a pandemic that is not going away anytime soon, an extra year on the time frame is going to get us there? Why were there not other ways of attempting to get that compliance up considered or contemplated or included in this legislation?

Just in regard to—I think I’ve already addressed the issues around compliance and penalties that the member who’s just taken her seat has raised, in earlier answers to questions. But in regards to questions that were raised in the contribution before that, in terms of whether or not there were considerations given to different approaches, whether or not there were considerations for further support for those tenants that were in these homes, one of the things I do want to make clear is that all of that 5 to 10 percent isn’t vulnerable tenants; I said a component of that 5 to 10 percent, so I wouldn’t like any member in this Chamber to misinterpret that.

But one of the things that we are operating is an escalation service. Obviously, our tenancy managers have intimate knowledge of tenants—their vulnerabilities, their needs, their requirements, what their health concerns may be—and I think many of us who are constituent MPs know that we’re often communicating with Kāinga Ora about the needs of particular tenants and what their needs may be. I know that it’s something that my office has—since all the time I’ve been an MP, it’s been one of the critical pieces of work that has continued through, and I know for many colleagues that that will be the bread and butter of their constituent clinics as well.

In terms of the compensation, I think that we always work with tenants on their particular needs. This wasn’t a consideration, and the modelling wasn’t given to that in terms of what the additional health costs would be. I think we kind of need to give probably some pause for thought on exactly what we’re talking about. We’re not talking about a 0 percent compliance; we’re talking about the fact that in the time since we’ve been in Government, we’ve gone from a requirement to have 0 percent of Kāinga Ora homes compliant with some kind of healthy homes standard to the fact that we now have 84 percent of our public houses either compliant or having the builders working on them at the moment making them compliant. And by the time we get to July of next year, given we’re doing 600 to 700 homes a week, we’ll be getting pretty close to 95 percent of those homes that will be compliant.

But I’m not content as a Minister to say 95 percent is near enough. If I now know that we can’t meet that target—I’m hearing from private landlords they’re not going to meet those targets—I think we have to do something. I don’t want to knowingly put people in the position of breaking the law, given that what we’re dealing with is not people just choosing not to comply with these standards. These are standards that people have got into the 80 and 90 percents in the midst of the fact that we have had a global pandemic that had lockdowns that went with it and supply chain constraints of some of the critical pieces of equipment that were required to make these homes compliant.

I move, That the question be now put.