Warmer, drier – and pricier?

Some of the standards that rental homes will soon be required to meet could leave both tenants and landlords financially worse off.

Housing Minister Phil Twyford announced the Healthy Homes changes on Sunday. They will require a minimum standard for heating, insulation, ventilation, moisture and drainage in residential rental properties.

From July 1, 2021, private landlords will have to ensure their properties meet the standards within 90 days of any new tenancy. By 2024, all rental homes must comply.

An analysis by the New Zealand Institute of Economic Research (NZIER) during the consultation on the standards looked at the costs for landlords, the costs of tenants’ increased energy use as a result of the changes, and costs to the Government in administering the standards.

The independent consultancy said the standards would address deficiencies identified in substantial proportions of the current rental stock of 574,000 dwellings.

New Zealand’s rental housing tended to be older, smaller and less well-equipped with insulation and heating appliances than owner-occupied homes.

The requirement for a heater that could heat the living area to 18 degrees Celsius would cost about $2800 per house affected, the analysis said. About 179,000 houses were lacking this. It would provide a net benefit per house affected of $941 over 15 years.

There would also be benefits for tenants’ health, and NZIER expected a reduction in power costs for those households.

Having ceiling and underfloor insulation equal to the 2008 standard would cost about $1340 per house. It would provide a net benefit per house of $677. The report said this change would affect about 190,000 houses.

‘‘Landlords bear the principal costs in the first instance, although may try to recover this through rents.’’

However, NZIER found that some changes had the potential to leave both landlords and tenants financially poorer.

Kitchens and bathrooms will be required to have extractor fans or rangehoods, which NZIER estimated would cost up to $260 in each instance. But this would increase tenants’ power bills, resulting in a negative net benefit of $216 per tenancy for bathrooms and a loss of $322 for houses with kitchen fans installed.

Requiring a moisture barrier to stop moisture rising into the home where there is an enclosed subfloor space would cost $533 in each house and deliver no financial benefits, the analysis said.

Infometrics economist Brad Olsen said the cost of maintenance was an aspect to consider.

‘‘Those tenants who may not be able to afford, or not want, to pay more for electricity will see no material gain in their renting situation,’’ he said.

The Real Estate Institute said investors should be given financial support to meet the costs.