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$9700 per property WOF cost for landlords?

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$9700 per property WOF cost for landlords?

Property investors should be very alarmed that the amount each landlord could be expected to pay for upgrades associated with a proposed warrant-of-fitness scheme is $9700 for each property, Mike Butler of NZCPR said today.

The estimate is included in recommendations from the Children’s Commissioner who lobbied the government two years ago with Working Paper No.18: Housing Policy Recommendations to Address Child Poverty. Its 12 recommendations include a warrant-of-fitness scheme and a push for insulation and heating.

Early indications from two trials that are under way show that more properties fail than pass the test that requires ceiling insulation 120mm thick, under-floor insulation, and a supplied heater, Mr Butler said.

A rough cost-benefit analysis based on information in Working Paper No.18 shows that the total cost to owners of the 465,000 rental properties throughout New Zealand, at an average cost of $9700 per property, would be $4.5-billion.

The only benefit quantified in the report showed a saving of $2.90 per household (with a child aged less than 15) per month as a result of receiving insulation, which would be just. $34.80 a year per household or $16.1-million a year for 465,000 households.

That $16.1-million a year saving goes to the health system and private landlords pay $4.5-billion, which is a proposal that just does not stack up, Mr Butler said.

Property professionals know that no changes are required and the key problem in the rental sector is problem tenants, not problem landlords, Mr Butler said.

The WOF scheme should either be scrapped, or, if the government is really keen to spend to save money, the government should pay for the private sector upgrades, Mr Butler said.


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