The Government insists that new minimum standards to ensure rental homes are warm and dry will not push up the price of renting - and help will be available to landlords facing extra costs.
The Healthy Homes Guarantee Bill - which requires minimum standards for heating, insulation, ventilation and drainage in rental homes - passed its third and final reading in Parliament this evening.
The bill passed with the support of Labour, New Zealand First and the Green parties. It is the second major law to be passed by the new Government, after a bill extending paid parental leave passed its third reading just hours beforehand.
Housing Minister Phil Twyford said most landlords do a good job, but the lack of legal standards means some rentals are not fit to live in.
"A butcher isn't allowed to sell meat that will make their customers sick, but a landlord is allowed to rent out a house that is too cold, or damp and damages the health of its occupants.
"40,000 children a year are admitted to hospital due to diseases are related to poor housing, and 1600 New Zealanders' lives a cut short by illnesses caused by living in cold, damp conditions. This has to change."
Speaking before the third reading, Twyford said new standards might see extra costs for landlords.
"We think between $3000 and $5000, if you have to insulate from scratch and put in a heat pump. But we're going to be providing grants of up to $2000 per property to assist with that."
He said the winter fuel payments of $140 a week that the Government plans to introduce next year for older and low-income families will also help.
"We can't afford not to act. For every dollar you spend on retrofitting, you save $5 to $6 in public health spending. It's just time for us to do the right thing."
He did not think the bill's minimum standards would push up the price of renting.
"We think it will be pretty marginal, if at all. Rents are set by supply and demand, and if all of the landlords in the market have to meet these standards, one can't compete against the other by undercutting them by not providing those standards."
The National Party has criticised the bill as meaningless, saying that legal minimum requirements were already in place.
The Government will run a consultation process over the next 18 months to ensure that tenants, landlords, public health and building science experts and industry representatives have an opportunity to get involved in creating robust minimum standards.
Green Party housing spokeswoman Marama Davidson said the passing of the bill would have a positive impact on hundreds of thousands of families.
"The Healthy Homes Guarantee Bill will significantly improve the quality of rental accommodation, lifting children out of poverty and helping to reduce deaths from preventable diseases."