The National Party seeks a safe, prosperous, and successful New Zealand that creates opportunities for all New Zealanders to reach their personal goals and dreams.
We believe this will be achieved by building a society based on the following values:
- Loyalty to our country, its democratic principles, and our Sovereign as Head of State
- National and personal security
- Equal citizenship and equal opportunity
- Individual freedom and choice
- Personal responsibility
- Competitive enterprise and reward for achievement
- Limited government
- Strong families and caring communities
- Sustainable development of our environment
Or so I read on the National Party’s website. And I thought we had a National Party government.
And so I was bemused to read that the government is to propose legislation, and regulation-making power, to require all rental properties to have smoke alarms installed and to be insulated.
Quite how this fits with the National Party’s stated values (especially the four from “individual freedom” onwards) is a bit of a mystery. It is also mysterious how it fits with the emphasis the government claims to have been putting on improving the supply of housing and housing affordability.
I glanced through the Cabinet paper and am pretty sure I found no discussion or analysis of any market failures. There was certainly no discussion of government failures. And, perhaps as ever, both in the Cabinet paper and in the commissioned cost-benefit analysis on MBIE’s website, possible private benefits are routinely described as “social benefits”. People make choices, and revealed preferences tell us something about the value they place on things.
The private rental market is a competitive one, offering a range of types and standards of accommodation. That seems to me to be as it should be. In that respect, it is like the owner-occupation market. Personally, I had not had smoke alarms in the houses I’ve owned and lived in (but did have them in a rented apartment) until very recently. Securing a building consent forced us to have them installed. I would happily have them removed if I could (I’m pretty sure the cost-benefit analysis did not factor in the time and aggravation in digging out the broomstick to turn off yet another alarm triggered by routine cooking vapours).
I don’t yet see a RIS on the MBIE or Beehive websites. Perhaps one will display more signs of analytical rigour, but it is difficult to be optimistic on that score. This has all the signs of “ feel good” policy, which typically results in poor policy. And if it is such a good policy, with such a compelling social case that we can coercively override private preferences, why not mandate such standards for all existing owner-occupied homes as well? But perhaps to mention that option is just to give ministers ideas. Sadly there is also no sign in the Cabinet paper as to why rental properties (where mobility is considerably easier) should be subjected to this regime, and not owner-occupied properties. Are private renters so uniquely unable to assess their own interests?
UPDATE: I didn’t get far enough through the Cabinet paper to get to these fairly damning paragraphs, which I thank a reader for pointing me to
Regulatory impact analysis
113 The Regulatory Impact Analysis (RIA) requirements apply to the proposal in this paper. Two Regulatory Impact Statements (RIS) are attached, one for the indicative smoke alarm and insulation standards and one for tenancy abandonment. A final Regulatory Impact Statement will be developed for smoke alarm and insulation standards following public consultation.
Smoke alarms and insulation
114 The Regulatory Impact Analysis Team (RIAT) in the Treasury has reviewed the smoke alarm and insulation RIS. RIAT considers that the information and analysis summarised in the RIS does not meet the quality assurance criteria. As well as lacking analysis (particularly of the proposals to strengthen enforcement powers, rec 8), there has been inadequate consultation.
115 Given the broad and pervasive nature of the problem definition, the objectives are narrowly defined, preventing consideration of alternative standards and methods of improving health outcomes for tenants. RIAT is not confident that the range of potential options has received adequate analysis, particularly for enforcement.
116 The RIS does identify, describe, and where possible quantify, likely impacts of the proposals. However, the impact in practice will be highly dependent on the responses of individual tenants and landlords, which are difficult to assess given the limited consultation. RIAT notes in particular that the cost-benefit analysis for smoke alarms is dependent on an assumption of high or full compliance. There is also a lack of discussion about the potential for landlords to pass on to tenants increased costs of insulation (in the form of higher rents).
117 Finally, the RIS does not differentiate the proposal to strengthen enforcement powers for RTA breaches from the proposed standards for insulation, despite these options addressing different problems. RIAT recommends that more consideration be given to including enforcement matters in the monitoring plan which should enable informed analysis in any future reform.