Photo: RNZ
The government wants to speed up house building by allowing builders to sign off their own work.
The usual critics seem unusually optimistic, but there are warnings the process needs to be handled properly or New Zealand risks another leaky buildings crisis - which last time around cost the country about $11 billion.
Building and Construction Minister Chris Penk's plan would mean builders and plumbers not longer needing to wait for inspections and resource consents from local councils by self-certifying the work themselves, something electricians can already do.
With the scheme still out for consultation, final details are not set to be nailed down and announced until sometime next year.
Options being considered
In a long-form interview with RNZ for the Focus on Politics podcast, Penk said it would be a risk-based approach only used for straightforward jobs, or by trusted construction groups with a proven track record and the finances to pay out to home-buyers if things do go wrong.
This would be paired with harsher penalties for those found breaking the rules.
"An obvious starting point would be single-storey detached residential dwellings, of which there are many thousands ... we hope, as many as possible able to be built every year in this country," he said.
"From a technical point of view, there's a standard design known as '3604' which is in effect a simple, standard residential dwelling of usual proportions, for which we would consider the risk to be low.
"That might give us a starting point and it might be that that would be enough to have as a scheme for self certification to get a lot of bang for the buck without needing to enter into risky territory where there's more complex building typologies or renovations."
He said it was yet to be decided if the scheme would cover alterations, but they could be added later if the system worked as planned.
His announcement had highlighted the 569-day average for getting a house fully consented, and the 10 or more council inspections typically required. He told RNZ he was hopeful of halving the time taken, but that this was not a target or firm commitment.
The number of in-person inspections could also be brought down - perhaps to one at the start and one at the end - with other checks done remotely via teleconferencing and the like.
Another detail still being explored was exactly what requirements would need to be met for a building company to be considered trusted. Other backing could include indemnity insurance.
Penk had told RNZ's Checkpoint on Tuesday it would not be one-person operations, and reiterated that.
"Strength of financial position is probably the point to emphasise, we can't have operators that are too small, because almost inevitably they won't have a sufficiently strong position that if they were to be sued or otherwise held accountable, then they would be able to come to the party and meet those shortfalls.
"But of course, it may also be the case that a large outfit may be in a perilous financial position - and sadly, there have been a few examples of those over the years."
Construction franchises would also need some consideration.
"It is effectively a number of relatively small businesses under a single banner, and the extent to which the master franchisor might be able to be held accountable or might be prepared to offer an assurance effectively underwriting the quality."
Risks, complications, and insurance
Institute of Building Surveyors president David Clifton warned of the risks if the process was not properly handled, highlighting a need for stronger continuous education processes in the industry to get the current high inspection failure rates under control.
"There are some fundamental foundation blocks that need to be put in place," he said. "The first one is some real steps around the cost of consent, and the time that consents take needs to be established. We need to understand how much our failure rates actually are and what is acceptable before we go self certifying.
"In Auckland Council at the moment, there are reasonable number of posts on LinkedIn talking about failure rates well in excess of 20 percent, I don't think that's acceptable to then turn the tap on and start self certifying."
Penk believed cowboy operators were largely responsible for the high inspection rate failures, and pointed to permanent licence cancellation or higher fines as ways to counter that.
"The size of the fine is up for discussion. Just to be really blunt, it needs to be sufficiently high to be a disincentive for people to be operating in a shonky way ... it seems to me that at the moment, $10,000 fine for example and a temporary loss of a license as a licensed building practitioner, isn't a sufficient deterrent."
The announcement included confirmation there would be stronger qualification requirements for builders, but the details were still in the design phase.
Clifton highlighted education as key to bringing those inspection failure rates down. He said the current system for ongoing on-the-job training - continuous professional development - for builders and general contractors was "reasonably easy to comply with, there isn't much need for formal training courses and the like - just supervising your staff".
Standardising simple house designs and materials would also be needed to ensure consistency of approach and ease of construction, he said, along with setting up a professional indemnity insurance market.
"Professional indemnity insurance is an expensive and high-threshold product. You don't just get it willy nilly normally," Clifton said.
"That market in itself has to mature, there has to be the financial backing for that market, and that means international insurance markets need to come to the party and say 'hey, yes, we we can help backstop this insurance piece and make sure it's suitably funded' so if there is a claim, the insurance is going to stand up.
"If you can't achieve it with insurance market backing, then you're going to have to come up with another scheme - so things like a government-backed scheme or something like they have in the UK, or you're going to have to look to the likes of Master Builders, Certified Builders and their guarantee scheme and upgrading that into an insurance-type policy scheme."
However, he said that approach would be a "big ask" for those professional bodies, which were primarily set up to represent their members rather than providing insurance the public could claim against.
Penk acknowledged there was more work to be done.
"Yeah, we will need to have a few key details locked in from the start, and those will go to the criteria of the building companies operating at that high level and from a tradesperson perspective, making sure that the relevant registration boards - which already exist, by the way, and are created by statute - have the necessary mandate to provide a system that's really robust.
"There will need to be more education and ongoing certification will need to be meaningful ... I'd rather have a system that's more stringent, if anything, in terms of assuring us that such people are qualified ... but then give them the quid pro quo, which is the ability to get on and do that job relatively unencumbered by inspections that don't necessarily add anything."
He said he had not yet discussed indemnity with international providers, or reinsurers - who cover insurers in case of large-scale or sector-wide failures - but had been speaking with some New Zealand-based insurers.
"They tell me that they would require there to be certain conditions in place, such as an effective regime for cracking down on cowboys ... high standards of ongoing education, appropriate licensing and so on, which is all the things that we want in any case."
He acknowledged there could be a risk - however small - in the high cost of insurance leading to higher prices for house builds than under the previous system, but it would be part of the system anyway.
"If you're thinking about building new homes or even renovations and in terms of a cost of doing business, I think it's inevitable that insurance will be part of the picture anyway. If we require it then, yes, there's a possibility that will effectively mandate an additional cost but I think that cost if anyone's acting in a reasonably prudent way, probably exists anyway.
"It might be that we allow [in some cases] - for the comfort of the homeowner - that they would require that their tradesperson still have their work signed off by council, and that might be the remedy for those for whom insurance isn't obtainable or isn't obtainable at a reasonable price."
He committed also to ensuring councils would not be liable for works they had not themselves signed off on.
Non-partisan approach 'really important'
Labour's Kieran McAnulty this week expressed cautious optimism for the changes.
Penk felt maintaining a bipartisan approach to the system would be "really important".
"I've been pleased that actually, they seem to be very minded of the need to improve our systems in building control ... we know there'll be good engagement because New Zealand Inc requires that we get some solutions to the housing supply and affordability crisis that's dogged this country over successive governments.
"I'm very hopeful we'll have a bipartisan approach, such that the sector as a whole and therefore New Zealand can enjoy the confidence that the settings won't change every three or six or nine years."
The self-certification consultation revealed on Tuesday follows Penk's other work with the sector, including plans announced a month earlier to reduce the number of consenting authorities. Other moves have included not requiring consenting for granny flats (buildings 60sqm or less); making virtual inspections the default; and in April the loosening of restrictions on overseas building products.
"It's interesting in this, the further get into this discussion, the more you realize that everyone's interests are aligned here, be it the homeowners, the governments, certainly local government on the current footprint of building consent authorities and insurers, everyone wants a system that rewards people who are doing good work and penalises those that are not."
