Leaky homes crisis NZ's worst

The cost of the leaky building crisis beats anything New Zealand has faced but will enrich the Government by at least $2 billion.

A study commissioned by the North Shore City Council rated the crisis the country's worst, and found the Government reaping at least 25c for every dollar paid on leaky house repairs.

Mayor Andrew Williams said he would present the findings of the study by consultants Covec to today's Auckland mayoral forum.

The report rated the rotting-homes crisis New Zealand's worst catastrophe, three times the cost of the annual road toll and worse than any natural event.

"This is a man-made disaster, the scale of which far exceeds the cost of any of New Zealand's most common large-scale natural disasters, i.e. floods, earthquakes and cyclones," Covec found.

GST and company tax levied by the Government from spending on materials and expert fees generated the $2 billion, Covec said.

This week's Court of Appeal ruling went against the council, finding in favour of Takapuna and Mairangi Bay owners.

Mr Williams expects insurer RiskPool to appeal in the Supreme Court because the decision had big implications for all councils.

He was one of six mayors trying to iron out a solution with Building and Construction Minister Maurice Williamson late last year, backing the 65:25:10 homeowner/council/Government repair bill scheme.

But those talks broke down just before Christmas and Mr Williamson last month said the repair bill was so "ginormous" that the Government had almost despaired of finding a solution.

The Government has no liability for leaky homes but he says he has taken steps to improve the building industry: proposing reforms to the Building Act, streamlining volume consents so builders get faster approval, and changing the scheme to license qualified builders.

Mr Williams yesterday said the Government response was too weak and the council commissioned Covec's Contribution to Government Revenue of Leaky Building Repairs to emphasise the seriousness of the disaster still unfolding.


DISASTER COSTS

> Leaky buildings: $11.3 billion.

> Road accidents, 2008: $3.7 billion.

> Napier earthquake, 1931: $648 million.

> Lower North Is/ Marlborough floods, 2004: $470 million.

> Cyclone Bola, 1988: $332 million.

Source: Covec report to North Shore City Council; 2008 dollars.

 

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