Homes of the future to be built with cheaper, more varied building supplies
Changes to regulatory standards will make it easier for builders to use new products – and for NZ to build more prefab and modular homes.
Mōrena, and welcome to The Bulletin for Friday, April 5, written by Catherine McGregor.
In today’s edition: International group says transport plan will have damaging environmental and economic impacts; Māori wards to again be subject to community referendums; mental health minister refutes PSA’s suicide prevention office claims. But first, the announcement of less restrictive product standards has been welcomed by the construction industry and prospective new-build owners alike. Will it be enough on its own to encourage more homebuilding?
Choice of building materials set to significantly expand
Last year Stuff business reporter Miriam Bell published a story headlined ‘Why is it so hard to get new building products approved?’. She talked to entrepreneurs who told her they were confident they could dramatically cut the cost of homebuilding – if only they were allowed to use more cost-efficient building materials. One told her it had taken him five financially ruinous years to obtain consents to build steel-frame homes using prefab materials from China that meet the NZ Building Code. Yesterday the government announced it is loosening those rules to allow the NZ sale of products which meet building standards from trusted overseas jurisdictions. Announcing the changes, building and construction minister Chris Penk noted it’s about "50% more expensive to build a stand-alone house here than in Australia" and some of that is due to NZ’s overly-restrictive building product standards.
Risk to smaller building companies from looser rules
The rule change, which was among the pledges National ran on, is in part a response to the 2022 Commerce Commission market study into residential building supplies. The commission found that the problem isn’t only the building regulatory system itself; it’s also how the system incentivises designers, builders and councils to “favour familiar building products over new or competing products”. Naylor Love chief executive Rick Herd told Newsroom last year that while the leaky building crisis had made the construction industry hesitant to use lesser-known products, he, like the rest of the industry, was in favour of loosening the rules. It comes with some risk, however. “The important thing is the contracting organisation that’s using that product is big enough and has the balance sheet to stand behind it if it fails,” Herd said. A smaller company could be destroyed by the cost of replacing faulty product, he said, leaving property owners to carry the can.
Councils to publish consenting wait times
Thursday’s announcement was part of a series of government initiatives aimed at making it easier and cheaper to build houses in NZ. Last month Penk announced he would require building consenting authorities – which are generally councils – to report on the time it takes them to issue building consent and code compliance certificates. The idea, he told The Post, was to get a firm grasp on whether consenting delays are as big an issue as many homebuilders say they are, and in which areas the problem is most acute. “Stats NZ data shows that Wellington City issued 77 consents for new buildings in the last quarter of 2023,” report Luke Malpass and Tom Hunt. “That compares to 3408 in Auckland, 1278 in Christchurch, and 256 in Hamilton. Next door to Wellington City, Hutt City issued 186 in the same period, while Porirua issued two.” On Wednesday PM Chris Luxon suggested New Zealand could eventually shift away from having councils act as building consenting authorities, RNZ reports, noting that overseas jurisdictions had far fewer – sometimes just one – for the entire country.
What about the RMA?
While increasing the variety of building products available to the construction industry and accelerating consent-processing times will help make homebuilding more affordable, there are many more problems to address, including the widely reviled Resource Management Act. Last year the newly elected coalition government repealed Labour’s reforms to the act just four months after they passed into law, restoring the old RMA while the government works on a replacement system. In an article for The Spinoff, Mike Fox, founder of modular building company EasyBuild, argues that all smaller residential projects should be removed from the RMA “as it is no longer fit for purpose and the planning process is too subjective – often hijacked by neighbours, anti-commercial practices, personal agendas and nimbyism”.
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International group says transport plan will have damaging environmental and economic impacts
A group of 88 academics has raised major concerns with the government’s transport plan, saying its focus on driving and road freight was "at odds with aims of economic growth and value-for-money" and would be a setback for New Zealand’s climate change mitigation plans. RNZ’s Russell Palmer reports that the group, from New Zealand and other countries, “with expertise in transport, urban planning, health and more”, raised five areas of concern in their submission on the draft Government Policy Statement (GPS) on Land Transport. Among them is the plan to cut public transport funding, with the academics warning this could leave entire neighbourhoods without public transport access and make it harder for those with lower incomes or disabilities to get around. Transport minister Simeon Brown says the plan includes “adequate support for the public transport services that New Zealanders need” and he’s disappointed the academics “chose to overlook the significant investment made in public transport by this draft GPS."
Māori wards to again be subject to community referendums
The government will restore the ability for communities to hold referendums on whether to introduce Māori wards, reversing the previous government’s law change allowing councils to decide whether to establish the wards for their city or district. Under the new bill, which National committed to in its coalition agreements, binding referendums will also need to be held on Māori wards established unilaterally by councils after Labour's legislation came into effect. Since the 2021 law change, almost half of NZ’s councils have voted to introduce Māori wards. Auckland Council is a notable outlier, having voted down a Māori ward proposal in October last year. Local government minister Simeon Brown says the new bill will reverse the “divisive changes” introduced by the last government. “Local community members deserve to have a say in their governance arrangements,” Brown said. Local Government NZ says re-introducing referendums “will take local government backwards and is at odds with [the government’s] own values of fairness and localism”.
When monopolies clash
Auckland Airport wants to put up its landing charges to help pay for a multibillion dollar revamp of its terminals. Its biggest customer, Air NZ, is complaining that the airport is over-charging. So who is right? What is fair? And what happens when two effective monopolies butt heads? In the new episode of When the Facts Change, Bernard Hickey talks to Auckland Airport CEO Carrie Hurihanganui about the dispute, how the Commerce Commission factors in, and what the airport is planning to mitigate its long-term impact on the changing climate.
Click and Collect
Mental health minister Matt Doocey has refuted the PSA’s claim that the Suicide Prevention Office will close due to Health Ministry cuts.
Sales of EV vehicles declined by 75% in the first quarter of 2024, compared to the average across 2023.
How shares in former dairy industry darling Synlait went from over $13 to just 67c.
A two-week “porker invasion” that spooked picnickers at a Tauranga park is over after a family of nine pigs was captured and removed.
Feeling clever? Click here to play 1Q, Aotearoa’s newest, shortest daily quiz.
Alex Casey ranks the unsettling cover imagery that adorned the books by ‘90s kids-lit king Paul Jennings. Stewart Sowman-Lund recaps all the public service cuts announced so far. Gabi Lardies digs into the claim that landlords have lost $1.3 million in unpaid rent in just two months. Tommy de Silva dreams of what Auckland could look like in 50 years’ time. Hera Lindsay Bird advises a reader who’s considering backing out of a chance to study in France.
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Once again Luxon showing his ignorance, this time with saying building consents could be nationalised! You would still need specialised local knowledge to avoid many issues, so leave it where at least we can have local input & awareness BEFORE things progress too far.