Healthy Homes Confusion - Re heating tool

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2391 posts

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#3103427 12-Jul-2023 19:17

mattwnz:

Also with the recent tax changes around rentals, it is clear that the government would prefer the rentals were new houses that meet the building standards. However they have just dramatically improved the insulation standards on new builds, so most of the new homes built over the last decade do not have great insulation, as many were just built to the minimum standard. Most developers tend to build to the minimum standards to keep their build costs to a minimum, so they can maximise profit. Whereas someone building a home for themselves will often upspec things like insulation, as it will save on heating costs in the long run.

yes

however the new insulation rules only catch us up to the minimum standard. even with the new spec, thats still only minimum spec not a good spec.

most people building themselves do bare minimum spec. a big part of that is our drive to resale for profit, average home ownership is now only 5 years. plus most simply do not know any better. not many teach people this stuff, the media only teaches basics for poor people and even then can be incorrect because its over simplified. even pro's over simplify or have vested interests to not give correct information.

the other problem is the building industry, which does not like anything different. stories around builders walking away from jobs because they can't get their head around why people would ever want better, eg better earthquake measures. plus the system is designed around pre approved solutions, which only applies to minimum code.

mattwnz

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#3103441 12-Jul-2023 20:36

Handle9: You’re making the assumption that rentals are priced cost plus rather than what the market will bear. You can try and build whatever pricing model you like but if the property down the road is priced $50 a week cheaper then you’re SOL. Similarly if there is a scarcity of properties the rental cost is based on what people will pay not the landlords costs.

That is where a building warrant of fitness, including showing the ongoing heating costs etc could help those who have invested in buying new or super insulating their older homes. They did this with cars, showing the ongoing fuel costs. They also do it with elelctrcal appliances. So IMO it coudl happen with houses. So going for the lowest rent maybe false economy, if you end up avoing to pay a lot more to heat it. Instead it incetises peopel to improve their rentals compared to others in the market to maximise their returns . The issue though will be the costs with the red tape in running such a scheme and there maybe lots of hangers on trying to make a buck out of it.

tweake

2391 posts

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#3103454 12-Jul-2023 21:18

mattwnz:

That is where a building warrant of fitness, including showing the ongoing heating costs etc

thats actually pretty tricky to do. it would be quite crude because it would only deal with the theoretical and the big obvious stuff. eg the insulation in new homes is only theory, how it gets installed changes how well it works. it also doesn't factor in things like windwashing which will depend on how sheltered the location is. then trying to translate that into a heating cost. also things like double glazing (before last month) where only the glass insulation value was measured, not the installed insulation value (which includes the frame).

homestar is one thats trying to do that. they do it based on points for certain things, but my problem with it is different things should be weighted differently and they should be in order. its over simplified.

the other thing is the human factor. people will disagree highly on what the heating costs is, especially with nz culture of not heating homes well. this happened in the early heat pump days, people complained that the heat pumps cost them more to heat than their resistance heaters. it was actually because they where heating rooms rather than sitting in front of a heater just heating themselves.

MikeAqua

7779 posts

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#3103579 13-Jul-2023 10:38

Handle9:You’re making the assumption that rentals are priced cost plus rather than what the market will bear. You can try and build whatever pricing model you like but if the property down the road is priced $50 a week cheaper then you’re SOL. Similarly if there is a scarcity of properties the rental cost is based on what people will pay not the landlords costs.

No assumption at all. This is how I price our rental properties. I'd be happy for a property to sit empty until the right tenant comes along.

We re-let one of our properties this year, after long term tenants moved out of the region. I took exactly the approach I outlined, and I produced a number that I thought was a bit cheeky but the property was let within a week to a low-risk tenant. So .... works.

Mike

JimmyH

2886 posts

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#3103654 13-Jul-2023 13:55

I suspect the calculator is deeply flawed.

I helped out a family member who rented out the house they use to live in after they had to relocate for work. They had a 4Kw gas heater in the living room, and it was toasty warm (I have stayed there several times during winter, so I can attest to this). The gas heater was getting a bit old, so before they rented it out they removed it and got in a reputable independent professional installer to put in a heat pump. The used a large established company that specialises in domestic and commercial heating and cooling. The installer sent an actual heating engineer around who looked at the insulation etc and did a lot of measuring and computing, and recommended a 5.5 Kw heat pump on the basis that "it was more than sufficient for the size of the space", and they were told they could get away with 4Kw if they wanted to. But my family member then erred on the side of caution and over-specced the install, with a 7Kw unit just to make sure.

All was well until the property manager got a healthy homes assessment done. When the calculator (apparently MBIE supplied) was used they were told they needed to rip out the 7Kw unit (only around 18 months old), and replace it with an 11Kw unit to be compliant. Which was nuts. Aside from being single glazed the property is well insulated and not huge. 7Kw is plenty, replacing it with 11Kw would be lunatic.

They went back to the installer, who said they had an ongoing issue with the MBIE calculator generating recommendations that were wildly inaccurate, and they were getting a lot of people approaching them to have perfectly adequate heating uprated when there was no valid reason to do so. On the basis of written certification from the installer, my relative decided to leave the 7Kw heat pump in place. I'm told the tenants are pretty happy, and when asked by the property manager they said they didn't find the property cold.

I don't mind the concept of healthy homes, but it does sound like there is a problem with the heating assessment tool that they are using. My relative is quite hacked off - and they have no reason to cheap out on things like heating installation and actually erred on the side of over-speccing (at a non-trivial cost), given that they will eventually move back into it themselves.

tweake

2391 posts

Uber Geek

#3103659 13-Jul-2023 14:19

JimmyH:

I suspect the calculator is deeply flawed.

I helped out a family member who rented out the house they use to live in after they had to relocate for work. They had a 4Kw gas heater in the living room, and it was toasty warm (I have stayed there several times during winter, so I can attest to this). The gas heater was getting a bit old, so before they rented it out they removed it and got in a reputable independent professional installer to put in a heat pump. The used a large established company that specialises in domestic and commercial heating and cooling. The installer sent an actual heating engineer around who looked at the insulation etc and did a lot of measuring and computing, and recommended a 5.5 Kw heat pump on the basis that "it was more than sufficient for the size of the space", and they were told they could get away with 4Kw if they wanted to. But my family member then erred on the side of caution and over-specced the install, with a 7Kw unit just to make sure.

...........

have you got any details of the room size, window size, location etc ?

early on there was issues with the calc giving high heating requirements. i was told it was the weather data they used and that it was fixed a few years back.

Johnk

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#3103764 13-Jul-2023 18:31

I will say before they tweaked the calculator a wee while ago, new builds where failing, and older apartments as well. Now with the tweaks they made not so long ago, we see the kWs needed to be about right with the size of the space.

Its not just about "heating the space" sure a 4kw unit might do it, but it has to sit there working away pretty hard on the compressor to achieve it, costing a lot more in running costs.

These rules aren't new and have been around for just over 4 years now, with very simple to follow guide books online, with plenty of resources to help meet the compliance.

Its not very often I come across a heat pump installed since July 2019 that does not meet the standards, the ones we do, looking at the quality of work it is probably best the unit is replaced and installed to be a better standard....

I am not a landlord, nor a renter, but I do believe these rules are for the betterment of our country's homes, I also would advocate for 12month WOFs on buildings, especially for the draughts section of healthy homes, the state of some of the homes I see is shocking; Thankfully it is getting better and more homes are being assessed for healthy homes compliance and passing on first attempt.

*I deal with healthy homes compliance daily...

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Handle9

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#3104452 15-Jul-2023 17:30

MikeAqua:
Handle9:You’re making the assumption that rentals are priced cost plus rather than what the market will bear. You can try and build whatever pricing model you like but if the property down the road is priced $50 a week cheaper then you’re SOL. Similarly if there is a scarcity of properties the rental cost is based on what people will pay not the landlords costs.

No assumption at all. This is how I price our rental properties. I'd be happy for a property to sit empty until the right tenant comes along.

We re-let one of our properties this year, after long term tenants moved out of the region. I took exactly the approach I outlined, and I produced a number that I thought was a bit cheeky but the property was let within a week to a low-risk tenant. So .... works.

Nah, it’s just means you’ve previously under priced the rent. The rental market hasn’t been properly coupled to capital costs for a while.

Stephendnz

51 posts

Master Geek

#3104498 15-Jul-2023 19:55

MikeAqua:

Handle9:You’re making the assumption that rentals are priced cost plus rather than what the market will bear. You can try and build whatever pricing model you like but if the property down the road is priced $50 a week cheaper then you’re SOL. Similarly if there is a scarcity of properties the rental cost is based on what people will pay not the landlords costs.

No assumption at all. This is how I price our rental properties. I'd be happy for a property to sit empty until the right tenant comes along.

We re-let one of our properties this year, after long term tenants moved out of the region. I took exactly the approach I outlined, and I produced a number that I thought was a bit cheeky but the property was let within a week to a low-risk tenant. So .... works.

Good to see that you are all for suggesting that the OP should just follow the rules blindly on how heating assessments are calculated.. But You want to run your own rules re rents. Go you renegade you.

Maybe you overlooked this little rule in the Tenancy Services rules.

"Market rent is the amount a landlord might reasonably expect to receive, and a tenant might reasonably expect to pay, for a tenancy. It needs to be similar to the rent charged for similar properties in similar areas."

"If a landlord charges significantly higher rent than the market rent, a tenant can apply to the Tenancy Tribunal to ask for the rent to be reduced."

Good luck with your rent pricing policy.

mattwnz

20155 posts

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#3104535 15-Jul-2023 23:10

That is interesting. I wonder if Australia have similar rules considering how much rents over there are skyrocketing at the moment. It also seems to go against market forces that apply to most other things that are sold in NZ. eg Super markets could put up the price of a 1 kg block of tasty cheese to anything they want, people just won't buy that product if no one wants to pay the price.

Handle9

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#3104536 15-Jul-2023 23:22

Stephendnz:

MikeAqua:

No assumption at all. This is how I price our rental properties. I'd be happy for a property to sit empty until the right tenant comes along.

We re-let one of our properties this year, after long term tenants moved out of the region. I took exactly the approach I outlined, and I produced a number that I thought was a bit cheeky but the property was let within a week to a low-risk tenant. So .... works.

Good to see that you are all for suggesting that the OP should just follow the rules blindly on how heating assessments are calculated.. But You want to run your own rules re rents. Go you renegade you.

Maybe you overlooked this little rule in the Tenancy Services rules.

"Market rent is the amount a landlord might reasonably expect to receive, and a tenant might reasonably expect to pay, for a tenancy. It needs to be similar to the rent charged for similar properties in similar areas."

"If a landlord charges significantly higher rent than the market rent, a tenant can apply to the Tenancy Tribunal to ask for the rent to be reduced."

Good luck with your rent pricing policy.

Lol. Both discussed methods of calculating rent would more than likely be accepted by the tribunal as both reasonable and able to be justified. Go and read section 25 of the Residential tenancies act.

Handle9

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#3104537 15-Jul-2023 23:26

mattwnz:

That is interesting. I wonder if Australia have similar rules considering how much rents over there are skyrocketing at the moment. It also seems to go against market forces that apply to most other things that are sold in NZ. eg Super markets could put up the price of a 1 kg block of tasty cheese to anything they want, people just won't buy that product if no one wants to pay the price.

It doesn't go against market forces at all. The point of section 25 is if a landlord wants to charge outlandish rent, particularly in the case of a rental increase. Market rent is no problem at all. The main application is a landlord trying a de facto eviction to force a tenant out with a ridiculous rent increase. This has been the law for nearly 40 years.

The key words in the act are "....exceeds the market rent by a substantial amount." There are substantial rent increases happening in Australia across the entire market. This provision of the act wouldn't stop that at all.

tweake

2391 posts

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#3104617 16-Jul-2023 10:31

Handle9:

Market rent is no problem at all.

if one landlord hikes up the price its "excessive rent" but if all landlords hike up the rent its "market rent". as a lot of them all talk to each other, belong to investor groups etc, they call all work together to reach common goals.

thats how you game the system.

tweake

2391 posts

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#3104618 16-Jul-2023 10:34

mattwnz:

That is interesting. I wonder if Australia have similar rules considering how much rents over there are skyrocketing at the moment. It also seems to go against market forces that apply to most other things that are sold in NZ. eg Super markets could put up the price of a 1 kg block of tasty cheese to anything they want, people just won't buy that product if no one wants to pay the price.

have a look at https://youtu.be/gqFPhsO-2W0 and https://youtu.be/DNxXRigHri4

fe31nz

1229 posts

Uber Geek

#3104887 17-Jul-2023 00:17

tweake:

if one landlord hikes up the price its "excessive rent" but if all landlords hike up the rent its "market rent". as a lot of them all talk to each other, belong to investor groups etc, they call all work together to reach common goals.

thats how you game the system.

Collusion between competitors in a market is seriously illegal - if you ever run across some evidence of it happening, tell the Commerce Commission immediately.

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