26 Jan 2018

Dismal rental WOF uptake blamed on tight market

2:51 pm on 26 January 2018

A rental warrant of fitness scheme run by Wellington City Council has had dismal results, with just two houses given a WOF in the first six months.

Wellington houses

A councillor said an extremely tight rental market had contributed to the scheme's failure so far. Photo: CC BY-NC-ND 2.0 Jared Kelly / Flickr

A councillor said an extremely tight rental market had contributed to the scheme's failure so far, while a housing researcher who helped develop the scheme said it showed self-regulation rarely worked.

Since the voluntary scheme was launched in mid-August last year, the new government has passed the Healthy Homes Guarantee Act, which brings in higher minimum standards for rental properties.

The council scheme allows landlords to pay $250 for a thorough assessment of their rental property against 29 criteria, including weather-tightness, adequate insulation and heating.

It was lauded by Wellington mayor Justin Lester, who said at the time that "every Wellingtonian deserve a warm, dry home".

But nearly six months on, only two properties - one in Ngaio and the other in Johnsonville - have been issued a WOF.

The council would not provide the number of landlords who had applied for a WOF but whose properties failed.

The Sustainability Trust, which carries out the inspections for the council, said it could not provide the numbers as its agreement with the council required it to keep them confidential.

Councillor Brian Dawson, who holds the council's housing portfolio, said he was disappointed by the low number but not surprised.

"If you were looking for the worst possible time to introduce a voluntary scheme, we probably managed to find it - we had this perfect storm of really low housing supply versus really high demand," he said.

That had dampened the scheme's potential as a marketing tool for landlords.

"At the moment landlords don't need to market their rental properties very much - they just put them on TradeMe and they're gone."

TradeMe figures released last week showed median Wellington weekly rents had jumped $30 since October, while the number of rental properties had dropped by 70 percent on the previous year.

WOF could merge with new legal standards

The WOF was designed by public health researchers at Otago University, who have had interest from several other councils around the country.

Professor of Public Health Philippa Howden-Chapman said the voluntary nature of the scheme would have contributed to the low uptake.

"Like lots of self-regulation, it requires motivation from the party, in this case the landlord, and we know that self-regulation is not spectacularly successful in any area."

However, she was pleased that about 800 people had downloaded an associated app they could use to assess whether their property would pass a WOF.

"It means that people are actually going through and looking at the house and looking at where it could be improved," she said.

"Hopefully it will have filtered through in some way [into] improving the quality for tenants."

Mr Dawson said now the government had passed legislation to tighten up rental property standards, the council would consider how to merge that with the WOF scheme.

"Our suspicion is that [the legal standard] will be ... just below where the warrant of fitness is and we will need to look at - with our partner, with Otago University - how that affects the warrant of fitness, if it affects it at all."

Housing Minister Phil Twyford told Parliament during the legislation's third reading in December that the new standards would cover heating, insulation, ventilation, draught stopping, drainage and moisture.

In the meantime, the council was also considering how to improve the WOF uptake, including whether to incentivise landlords, or lower the $250 application cost, Mr Dawson said.

An economist at think-tank The New Zealand Initiative, Sam Warburton, said some landlords could also have delayed signing up for the Wellington scheme because of uncertainty about whether a new government would introduce its own scheme.

"Wellington brought this in around the same time as Labour, New Zealand First and the Greens were all looking at a similar policy [if they were elected]," he said.

He rented out rooms in his own house and had considered going through Wellington's scheme, but decided to wait after a change of a government - and changes to tenancy laws - became more likely.

If the council kept its scheme it should change it to a star-rating system that allowed landlords to advertise their properties as being over and above the new legal minimum, Mr Warburton said.

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