What to make of this?

Upgrades to insulation and glazing requirements introduced in May 2023 received overwhelming support from the public and the building sector. The standard – known as H1 – reduced heating requirements in a new, four-bedroom home by up to 40% and energy required to heat and cool larger commercial buildings by 23% on average, according to expert estimates.

So why does Minister Penk want to unwind the new standard?

Part of his reasoning is based on feedback from builders and developers in Tauranga and the rest of Bay of Plenty that the standard added $40,000 – $50,000 cost to a new home and created overheating issues.

“Builders frequently raise concerns with me over the new requirements within clause H1 of the Building Code that they say are adding tens of thousands of dollars onto the cost of a home. There are also frequent reports of moisture and overheating issues that are leading to increased energy usage making the requirements counter-productive,” he said.

“In the middle of a housing crisis, while Kiwis are still living in cars and emergency accommodation such as motels, it is critical that we don’t create artificial barriers through well-intended but badly implemented policies.”

Cheap and not so cheerful

Cheaper homes are a good thing, but living in a cold one isn’t much fun, never mind the additional cost of keeping it warm.

Penk has asked Ministry for Business, Innovation and Employment (MBIE) to start work on undoing changes to the H1, part of the Building Code, despite 99% of public submissions during consultation supporting improved insulation standards.

His decision was promoted by a flurry of complaints MBIE received in a building sector survey following the introduction of the H1 standard.

Complaints included:

  • Homes were now too warm and owners were having to run air conditioning in winter
  • Upgrades had added $35,000 to the cost of building a four-bedroom home
  • Changes were adding 6-7% to building costs
  • Many architects or designers did not understand the H1 changes
  • The changes were “excessive” or, according to one respondent, “based on fanciful ideas of environmentalist and greedy suppliers”

More choice

Penk believes there should be more choice regarding insulation. “The evidence is that construction costs have increased by 41% since 2019. Housing affordability is the second-worst in the OECD as I understand it. …When people are saying – the ones who build the homes – that there are $40,000 or even $50,000 additional costs to new builds, that makes housing unaffordable for many Kiwis,” Penk said. “Certainly, I would be an advocate for people choosing to have as much insulation as they want, but that’s entirely different from saying that the government must mandate something that makes housing totally unaffordable for many young Kiwi families.”

Wary of making changes to the Building Code that could create uncertainty in a subdued sector, Penk wants to reset the standards to 2022 levels – “Not the distant past”. But the Green Building Council said the move would take New Zealand back to standards that were decades out of date compared with most of the OECD.

Bad for health

Much of the debate stems from the state of New Zealand’s housing stock. According to a 2022 Aotearoa Housing Survey carried out by AMI Insurance and Habitat for Humanity, more than 300,000 Kiwi families go to bed earlier to stay warm during winter, while 145,000 households heat only one room to reduce costs.

Cold and damp homes can cause chronic health issues like asthma and pneumonia. The survey found 42% of households were worried about dampness in their homes, while almost one in 10 households were worried about significant mould.

Penk accepted that cold, damp houses contributed to significant health problems for New Zealand. However, increasing the amount of housing stock available and getting more people housed was crucial and was about trade-offs.

“The problem with New Zealand housing stock – and the reason that there are respiratory problems and other health problems and lots of issues in fact associated with housing that isn’t energy efficient – is that 50 percent of New Zealand’s homes were built more than half a century ago, that’s the problem,” Penk said. “It’s not the ones that were built last year that need to be to a higher standard.”

The rules might be changing for insulation in new homes, but that is unlikely to change a landlord’s obligations under Healthy Homes Standards set out in the Residential Tenancies Act.

Does your rental measure up to Healthy Homes standards? Call 0800 GOODWINS for a checklist.