Big changes on the cards for building consent process

Sunday, 29 September 2024

The Minister for Building and Construction announces new reforms to simplify New Zealand's building consent system. Aiming to reduce costs and delays, these changes address frustrations expressed by builders and aim for nationwide consistency.

Plans by the Government to overhaul the “cumbersome” building consents process are being lauded as a potential game-changer for the struggling construction industry.

Building and Construction minister Chris Penk said the Government was investigating “major reform“ of the system, citing unreasonably high building costs, housing affordability and an onerous consenting process as the main drivers.

“New Zealand has some of the least affordable housing in the world, which has dire social and economic implications,” he said on Sunday.

Leonie Freeman, chief executive of Property Council New Zealand, said the move was long overdue and could mark the beginning of a new era for the construction industry.

“Our members, including the country’s leading property developers, investors, managers and property experts, have been clear: the current consenting system is plagued by delays and inconsistencies across regions. It’s hindering progress and escalating costs for projects that are crucial to meeting New Zealand’s housing needs.”

The Government is looking at major reform of New Zealand’s building consent system.

She said the announcement represented a pivotal moment for the property sector: “The Government’s commitment to exploring solutions that will streamline building consents is a positive step toward addressing these long-standing issues. It signals that we’re moving in the right direction for a more efficient, predictable, and cost-effective development process.

“At the heart of this is the goal we all share: building more homes, more quickly, and at a lower cost. The ripple effects of a more efficient system would be felt across every community in New Zealand.”

Penk said the current consent system sapped productivity and disincentivised growth and development.

“There are currently 67 BCA’s (Building Consent Authority) across the country, each with different practices and approaches.

Building and Construction Minister Chris Penk is looking to cut red tape, costs and delays.

“We have a single building code that is supposed to apply consistently to all building work nationally. However, there are many instances of builders submitting the exact same plans to different BCAs and finding considerable additional costs and delays result from differing interpretations of the building code.”

Options the Government was looking at included allowing councils to group together to deliver building control functions, establishing a smaller number of BCAs and setting up a single point of contact for builders to submit plans to, with building inspections contracted out to existing BCAs or private consenting providers to create competition and encourage specialisation.

Consenting delays often resulted in project hold-ups, increased costs and strained client relationships, says Master Builders chief executive Ankit Sharma.

It also planned to look at liability settings across the whole building system, as part of the work.

“Under the current settings, councils and their ratepayers are liable for defective work. Joint and several liability means councils can be ‘the last person standing’ available to foot the bill when things go wrong. This creates a highly conservative and risk averse approach, which contributes cost and draws out deadlines,” Penk said.

Chief executive of the Registered Master Builders Association Ankit Sharma also welcomed the consultation, saying it had long advocated for a centralised, nationally aligned consenting system that reduced unnecessary red tape and streamlined approvals.

A recent Master Builders survey had shown 80% of members dealt with multiple BCAs, while 66% reported delays in the consent process.

The delays often resulted in project hold-ups, increased costs and strained client relationships. Branz research showed that variations in how BCAs interpreted regulations could add up to 10-15% in additional project costs for builders working across multiple regions, Sharma said.

AUT Professor of Construction Management John Tookey was also enthusiastic about the potential reforms.

“It’s excellent and it’s about time … it’s been an ongoing issue.”

He was particularly interested in the liability issue, believing the fewer councils were involved in the process the better.

ACT’s Housing, Building, and Construction spokesman Cameron Luxton used the example of cost blow-outs at Dunedin Hospital ‒ from $10,000 a square metre to $30,000 a square metre ‒ as a reason to go “even harder,” suggesting the Government should explore allowing home builders to opt out of needing a building consent altogether “provided they have long-term insurance for the building work”.