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Dampness and ''mould dripping down walls'' is a ''respiratory burden'' on children, Child Poverty Action Group spokeswoman Dr Nikki Turner says.
The recently released study ''Dampness and moulds in relation to respiratory and allergic symptoms in children''
studied about 46,000 children aged between 8 and 12 in 20 countries, including New Zealand.
The research revealed ''wheezy children'' more commonly had had exposure to dampness. Dr Turner said the report provided extensive evidence that living in damp or mouldy homes caused health problems including recurrent runny noses, chesty coughs, wheeziness and eczema.
If a child had asthma, it was made more severe by dampness and mould, Dr Turner said.
The Government needed to focus on making houses dry because many houses, particularly rental houses, were damp. Property owners needed to be ''socially responsible''.
''And quite a few of them have mould dripping down the walls and it's just so bad for kids' health. We can't be trading off sick children against capital gains. Change has to happen.''
Dunedin mother Andrea Bartley (23) said she paid $290 a week to rent a two-bedroom South Dunedin house for herself and sons Aiden (4) and Issac (2).
The Bayview Rd house was a cold and damp ''icebox'' with mould on the walls, roof and curtains. The material on a pram was covered in black mould after four days inside the house, Ms Bartley said.
Her children were constantly sick with flu and infection and Issac's asthma had returned. She bought a dehumidifier, which was costly to run and would fill in two hours, she said.
She regularly opened windows but the mould continued to grow.
She had rented the house in December, and for the sake of the children's health she returned the house keys yesterday after moving in to her mother's place to look for a dry rental home.
She was struggling to find somewhere suitable.
Click property management managing director Andrea Elliott said many Dunedin homes were older, poorly insulated and had unsatisfactory heating.
''There are always going to be some `slum lords' who just want to collect their money but we want to work with landlords that look after their property and make sure that the property is being well maintained and cared for.''
Some tenants required education on how to air homes and to open bathroom windows when having a shower, not to dry clothes inside and not to use unflued gas heaters.
Landlords should install decent heat pumps and regularly service them and insulate houses, she email@example.com