DCC, builders frustrated by regulations

Gray Brothers Builders carpenter Andrew Loach, of Dunedin, does what many in the building...
Gray Brothers Builders carpenter Andrew Loach, of Dunedin, does what many in the building industry would like to do, and slices through a copy of the Building Act 2004. Photo by Stephen Jaquiery.
New regulations aimed at fixing New Zealand's leaky homes scandal have backfired in Dunedin, creating a mountain of paperwork and driving up costs - not to mention blood pressure levels - for homeowners, builders and the Dunedin City Council. Chris Morris reports.

Builders describe it as a "knee-jerk overreaction". Homeowners grit their teeth every time they grapple with it.

A Dunedin City Councillor says it is interpreted by "policy wonks" in Wellington, and Cabinet Minister Rodney Hide suggests aspects of it should be ignored.

Even the Dunedin City Council's chief building officer, Neil McLeod, the man tasked with enforcing its rules, says the frustrations are justified.

It is the Building Act 2004, the legislative document aimed at tackling New Zealand's leaky homes scandal.

It is also the piece of policy work that has created a mountain of paperwork, costs and headaches for those encountering it, as the onus goes on local authorities to document every step of the decision-making process for building consents.

The result is a rapidly expanding Dunedin City Council staff tasked with grappling with the Act and its requirements. In just more than a year, the DCC's building team has grown from 23 staff members to 31, and five more are to be hired in the next few months.

The Wellington-based Building Industry Authority, which had a staff of "about 14", had also been replaced by the Department of Building and Housing - created by the 2004 Act - which now boasted a staff of more than 300, Mr McLeod said.

Of course, the extra manpower is needed to wade through the paperwork, but the inevitable result is that costs rise. In Dunedin, council consent fees rose 5% on February 1, and a second increase, of 23%, is scheduled for July 1.

But, in Dunedin, there is just one problem: without a history of leaky homes, the city gets the headache of enforcing the new rules, without many of the benefits.

"Let me put it this way," Mr McLeod explained diplomatically in an interview with the Otago Daily Times.

"Before the Act, Dunedin had very few leaky buildings; almost none. After the Act, Dunedin has very few leaky buildings; almost none.

"You can read what you like into that."

Mr McLeod is not an outspoken critic of the Act - he has working relationships with those in Wellington to consider, of course - and believes it has done some good, even in Dunedin, by improving the council's processes.

But he does not shy away from acknowledging the frustration it has created for everyone.

The Act's requirements had forced "a huge culture shift" within his office, in order for the council to gain, and retain, its status as an accredited building consent authority.

The council's systems and performance was audited regularly by IANZ (International Accreditation New Zealand), and any failings could see the council at risk of losing that accreditation, he said.

"That's been a huge culture shift in our office and required quite a lot of retraining and implementing a lot of new systems.

"Accreditation has improved our business in many ways, but only at quite a large cost. Does that produce a better house? In some cases, yes."

The changes also affected the average homeowner. Previously, anyone could, in theory, sketch a plan for a renovation job on a piece of paper and bring it into the council office for approval.

Provided it satisfied relevant codes, the work was usually approved, and builders were left to figure out how to put the pieces together, he said.

In theory, the principle still applied, except the same person walking into the council's office today would probably react with "horror" when shown the long list of design plans and other documents now required.

All of them took time and technical "nous" to produce - or, if professionals were called in, money.

"You can still do that yourself if you have got the nous to work through the system, but more and more we are finding people saying it's too complicated."

And even those days appeared to be numbered, as more changes had been expected to be introduced in 2010 that could have meant only licensed building practitioners would be permitted to furnish design or other drawings, Mr McLeod said.

"The frustration is obviously that people have to pay more money for the service and it takes longer to produce the documentation."

And, until recently, those delays have been growing ever-longer.

The 2004 Act gave councils and other accredited BCAs up to 20 working days to process consent applications, an increase from 10 days to reflect the additional paperwork and workload.

Even so, Mr McLeod said, the percentage of consents processed within 20 days dropped to a low of 35% early last year, before the council's recruitment drive and a slump in consent applications received - due to the economic climate - helped lift the figure above 90% today.

"We are very pleased when there's a bit of a slump, because we can get back and actually do some training. We have been running at full throttle for more than four years now. In fact, we have been running at more than full throttle."

But the frustrations remained, he said.

"I suspect they (homeowners) are frustrated at how long it takes to get a set of drawings produced by a professional. I suspect they are frustrated at the money it takes.

"I accept there's frustration in all of that, but that's a Central Government requirement. It's not something dreamed up by the Dunedin City Council."

So, was Mr McLeod personally frustrated?

"I'm not going to answer that," he said, smiling.

Others, such as Cr Dave Cull, would, however. He believed the Act and the IANZ requirements were "extremely prescriptive", and needed to be streamlined.

Instead of simply describing an outcome, the Act created a two-tiered system. Building plans now not only had to comply with the relevant codes, but council staff also had to ensure what was built matched the plans.

Problems arose when a change was needed on site: if a part was not available, builders could no longer substitute a secondary, but equally effective, part that complied with the same codes. They first had to return to council staff and apply to amend the plans.

"It just puts a whole lot more work, and therefore costs, into the system. At some point the ratepayers, or the consent applicants, have to pay for that. It's driving the consents fees ever higher."

Builders spoken to by the ODT agreed, many describing the extra requirements introduced with the 2004 Act as a "knee-jerk overreaction".

James Crooks Building Ltd director James Crooks, of Mosgiel, said the Act had fuelled frustration within the industry.

"There was a need for a better plan . . . but you have got to draw the line somewhere. Especially smaller jobs; what's required is quite frustrating."

Gray Brothers Builders owner Mark Ward believed much of the leaky homes problem in Auckland could be traced back to an absence of skilled apprentices coming through to take up roles in the city.

The same was not true of the building industry in Dunedin, he believed.

He had a copy of the 2004 Act in his office, "but I haven't read it".

"It just drives you crazy. I have got more important things to do than read that."

There may be some signs of hope, however. Last month, Building and Construction Minister Maurice Williamson signalled the Government's intention to review the 2004 Act to "cut red tape and better control costs without compromising building quality".

That review would include reassessing which projects needed consent and the removal of unnecessary regulations.

The Building Amendment Bill (No 2), which received its first reading in Parliament on March 10, also aimed to make obtaining a Project Information Memorandum (PIM) voluntary, to save time and lower building costs, he said.

The moves came as Stewart Construction managing director Ross Middlemass said consent fees and planning costs - which could add nearly 10% to the cost of some building projects - could be creating an incentive for people to break the law.

"There's probably quite a few people who say `I'm here for 50 years, I'm not going to worry about it' and do their own thing. I could see it happening - it's happened before," he said.

It was a position discussed recently by Act New Zealand party leader and Local Government Minister Rodney Hide after a Christchurch businessman, Gary Bull, experienced frustrations with building regulations.

Mr Bull had been told a new shower for his able-bodied employees needed wheelchair access, driving the cost of the project up from $2000 to $10,000, according to TVNZ'si

Asked if Mr Bull should ignore the law and "do it on the sly", Mr Hide responded: "Look, as a minister I can't recommend breaking the law, but I believe he should," the report said.

Other Dunedin builders spoken to agreed the Act was creating an incentive to build illegally, although all said they had no personal knowledge of such activity.

Cr Cull agreed: "There's a real danger there that you are kind of encouraging people with the compliance regime."

However, it was not an approach supported by Mr McLeod, who warned those building illegally risked fines or possible prosecution, not to mention difficulties when they came to sell their homes.

Potential buyers who discovered discrepancies when checking a home's configuration against council plans could ask the owner to apply for a certificate of acceptance as a condition of the sale.

The certificates, introduced with the 2004 Act, allowed homeowners to have illegal work retrospectively approved by the council, but could still lead to a prosecution or a $1000 infringement notice, depending on the circumstances, he said.

It was hard to judge the amount of illegal work in Dunedin, but the council did a "roaring trade" in the certificates, he said.

"We see bedrooms built into basements, we see walls removed between rooms in a house, and all of that becomes a real issue to a homeowner when they come to sell the property.

"We certainly do a roaring trade in certificates of acceptance. We might be doing one a day or two a day. To a large extent, that can be due to how the housing market is going. We can get quite busy with those."

The council only gained the power to issue the fines in December, and issued five in the first month - four of them relating to one $500,000 commercial project in the city.

The builder, designer, and two others associated with the project, faced with a delay as the council requested more information about their project, "decided they didn't want to wait and fired ahead anyway", Mr McLeod said.

Perhaps it was not surprising.


The Building Act 2004

• Act introduced in 2004 in response to New Zealand's leaky homes scandal.

• Local authorities become accredited building consent authorities, responsible for documenting consent process and checking on-site compliance.

• Mounting paperwork forces Dunedin City Council to hire more staff; consent fees rise to cover increasing council costs.

• Homeowners face longer delays, and increasing costs as more forced to hire professionals to ensure compliance with the Act.

• Cr Dave Cull and builders say frustrations creating incentive to complete work illegally, without consents.

• Council issues five $1000 infringement notices in December; does a "roaring trade" in granting certificates of acceptance to owners declaring illegal work.

• Government announces plans to review which projects need consent and for the removal of unnecessary regulations.


- chris.morris@odt.co.nz

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