Sustainability Discussion Paper - WA

[Puppeteer]

There was a request for comment in today's West on a discussion paper put forward by the Department of Housing and Works.

Though you guys might like to take a look at it, as there is some discussion about mandatory modifications to houses to meet energy and sustainability ratings prior to being able to rent or sell a house (this paper is about established houses). There is also mention of having rents tied to the star rating of a house.

The document is frustratingly vague about the proposed measures, but there could be some significant ramifications to existing property owners. You can download the document here.

http://www.5starplus.wa.gov.au/uploads/SustainabilityExistingHomes.pdf

 

[Ausprop]

I'm hearing "let's push social responsibility costs onto landlords but not upset the electorate so we'll keep rents pegged", just like that beautiful manouvre that made illegal letting fees to tenants but not landlords!! and people wonder why supply of rental properties is drying up

 

[Dis]

Mandatory standards for water and energy efficiency are an excellent idea in my opinion. I'd be more than happy to do my bit (and loose a bit of profit if need be) if everyone else was doing their bit too.

 

[Puppeteer]

It's a wonderful idea in theory, but let's consider for a moment an investor who holds older property's who would need to spend a lot of money in order to attain an efficiency rating.

Most investors would need to borrow money to do this, and with interest rates going up it may well be impossible for a negatively geared investor (which is most investors) to attain finance, or even meet the repayments at higher interest rates, if they have overextended themselves. What's more, under discussion is a mandatory updating clause which means that this investor would not be able to sell the house either. So suddenly an investor has a house that they can't afford to keep and cannot sell.

I'm not against making houses more efficient. I think it's a good idea, but the proposed implementation (as far as I can make out) seems way off target. What's wrong with providing incentives, whether they be tax relief, or whatever to encourage owners to make the necessary changes, when, and if they can afford to. Have land tax/depreciation/negative gearing benefits to owners that have made the changes.

I know I'd be pretty damn miffed if I had just installed a hotwater system for example only to have to replace it tomorrow if I wanted to sell the house.

The discussion paper doesn't specify the types of things required to meet an efficiency standard, but it could extend to hot water, insulation, air conditioning, installed appliances, gardens, water tanks, irrigation systems, plumbing fittings, water recycling, historic electricity consumption and other things. To bring all of these up to standard to allow for a sale could be very expensive, especially considering that a buyer may have originally bought the house in the current scenario where these things don't need to be considered.

 

[TheBacon]

Thanks for the head up Puppeteer.

I'm happy to improve the environmental rating of my IP. Cost will be passed on to tenants eventually though, surely?

TB