Constructive 2022: Consents and H1/AS1
NAVIGATING THE BUMPY ROAD AHEAD
New Zealand's economic outlook, and the impacts on our sector continue to dominate the news headlines. As we discussed last month, much of this is out of our control. But there are also some areas where we can adjust to improve our sector's ability to build the homes and buildings New Zealand needs. We are a key contributor to New Zealand's economy, and we are advocating to ensure we have the best conditions to withstand the choppy waters ahead.
We believe system wide change is required to address the issues facing our sector, but in the meantime, we need to also address specific issues which can provide some short-term respite. Two that we have been focused on recently include consenting and thermal efficiency measures raised in the H1/AS1 changes to the building code.
Lumpy consents continue to cause significant delays
We continue to receive reports across the membership regarding the lumpy quality of consenting processes. Delays across most or all regions are adding further stress to the already challenging environment. It is time for the Government to step up and address this issue.
We're supportive of the current review that MBIE is conducting of the wider consenting process. Most players in the industry would agree that the consenting system needs to be improved. It needs to be more efficient, easier to use, and should allocate risk more appropriately and in a more responsive fashion. We have made the importance of these issues clear in our high-level discussions with MBIE. We support a full review and system change, band aids on the current system will not provide the level of change required.
There is a lot of work going into new technologies that can support quality assurance throughout the build process and make a more efficient consenting system. These should be incorporated into the system as a matter of urgency.
We know the cost of consenting delays is significant. On average, our builders have reported that a delay of just one week incurs a cost of almost $9,500. We estimate that our members are incurring costs of almost $100 million per year. That doesn’t consider the cost to homeowners who need to stay in alternative accommodation for longer.
We understand that it will take some time before MBIE's review and other work makes any system-level change that will materially ease the pressure points in the consenting process to make it more responsive.
In the meantime – it comes down to communication. We encourage you to work closely with your council contacts, so that you are prepared and understand requirements. Investing time in these relationships can really help. Then it is also about communicating with your homeowners, so they understand the process and what to expect.
Thermal efficiency changes needed in the long term, but not right now
Master Builders also wants to update you on an issue where we’ve made strong representations to government on your behalf. The transition period for the H1/AS1 changes to the building code, relating to thermal efficiency, are as members will recall, will end in November 2022.
Registered Master Builders, in concert with NZBC, Offsite NZ and Business NZ have jointly written to the Ministers of Finance, Housing, and Building and Construction, respectively, to request the transition period be extended for a further year given the acute challenges currently being faced across the sector.
While we support changes to the Building Code that result in better homes for New Zealanders, we reflected your representations the strong feedback we received from our respective members and the wider industry that implementing the changes this year will cause extreme pressure to our already strained and stretched construction industry.
We pointed out that H1 insulation changes will:
- adversely impact the already increasingly costly building of homes.
- negatively impact the already severely disrupted supply chain.
- provide too short a time given current manufacturing methods to meet updated H1 requirements, especially for windows.
- negatively impact consumer confidence in the residential building industry.
- further dampen demand on the back of interest rate rises, more restricted credit, and economic uncertainty.
- Exacerbate the mental wellbeing issues which are already of great concern to us in the sector.
While acknowledging their importance for the Government’s Climate Change response and its commitment to improving build quality and performance, we emphasised that there is only so much that can be asked of the building sector at this time. The current timetable for new regulations is in our view a bridge too far so we have asked for a year’s extension to ease one pressure being faced.
We will continue to provide updates on this important issue.