Suggested rules to force landlords to have more water efficient houses could protect renters from skyrocketing water bills, tenancy advocates say.
Concern is growing that looming water charges could spell an increase in Wellington rents, as property owners prepare for increased bills.
Landlords cannot lump their water bill on renters - unless their property is one of the very few that already has a water meter - despite confusion circulating over who will have to pay after July 1, new water entity Tiaki Wai has confirmed.
However, this doesn’t stop landlords from increasing rent or installing a water meter before the 2028 gradual rollout, prompting concern from some renters.
Property owners including landlords will get a separate bill for water services from Tiaki Wai, instead of paying for water services directly through their council rates.
With Tiaki Wai taking over Wellington water assets, the agency has warned the quarterly bills will be higher than what ratepayers currently pay, saying more money is needed to address historical underinvestment.
The charges are forecast to reach as high as $6831 a year within a decade.
There are currently just 628 water meters installed in Wellington residential or community organisations, and without one, landlords cannot pass the water bill off to their tenants.
However, Renters United president Luke Somervell worried landlords would either put up rent, or jump at the chance to install a water meter and charge tenants, without caring to fix water efficiency issues on the property such as leaks.
Landlords can increase rent every 12 months and the law does not limit how much this could be. However, Tenancy Services recommended remaining consistent with the market.
Tiaki Wai’s increasing bills aimed to upgrade old, failing infrastructure. But inside Wellington rentals, problematic plumbing is common and could make volumetric bills even higher, Somervell believed.
“That’s going to be another cost passed on to renters,” he said.
One suggestion could force water efficiency requirements on rentals with a change to the Residential Tenancies Act 1986, noted a report commissioned by Wellington City Councillor Geordie Rogers.
The report, by the Infrastructure Commission, referenced the introduction of Queensland’s Residential Tenancies and Room Accommodation Act in 2008, which required tenants to pay volumetric charges - but only so long as the premise was water efficient.
Efficiency requirements could include basics like eliminating leaks, but also other measures such as more efficient shower heads and water faucets.
It presented a good opportunity to raise the standard of efficient homes, which would benefit everyone because less water would be used, Somervell said.
“Way too many landlords have been able to get away with having leaky homes for way too long and it’s a tremendous waste of our resources as a country.”
Another option Somervell proposed would be a fixed amount landlords paid, with any use above that being charged to the tenants.
He worried there would be no incentive for landlords to create water efficient homes because they wouldn’t be affected by the end price.
“Imagine there’s a leak, which in Wellington this happens all the time, and as a renter, let’s say you’ve got a water meter, and you have to pay the volumetric charging for the leak. That’s ridiculous,” he said.
“There’s just the concern around who is going to be getting passed the hot potato.”
Councillor Geordie Rogers said having protections at the bottom line was a “good place to start”.
“Renters shouldn’t have to pay the costs of their landlord refusing to fix property,” he said.
“I imagine as charges increase significantly over the next 10 years, there’ll be a larger incentive for landlords to install water meters so they can pass those costs on.”
Rogers said he’d asked the Tiaki Wai chair to not only think about how price structuring was implemented for homeowners, but renters as well.
However, establishment director Dougal List said, “Renters are not specifically referenced in the draft Tiaki Wai Customer Charter or the draft Debtor Management and Hardship policy because landlords will be responsible for the water bill and Tiaki Wai will not have any direct financial relationship with tenants.”
The organisation plans to roll out water meters in 2028, and charges for volumetric use could be passed on to renters.
The details of how this charge would be applied, including fixed costs versus volumetric charging, will be developed in the coming years.
For the small number of residential properties with water meters, they will continue to receive volumetric bills from July, but from Tiaki Wai instead of the council.
Sammy Carter is a journalist for the New Zealand Herald covering news in the Wellington region. She has previously worked at the Rotorua Daily Post.