Hon MAURICE WILLIAMSON (Minister for Building and Construction) Link to this
I move, That the Building Amendment Bill (No 2) be now read a second time. I begin by acknowledging the previous Minister for Building and Construction, the Hon Shane Jones, who actually introduced the bill into the House just before the end of the last parliamentary term. I would particularly like to pass on my extreme thanks to the Local Government and Environment Committee, which I believe worked very well together in refining the bill and bringing some minor amendments back to the House that I think all of the members of the committee across all parties were in reasonably general agreement with. It was nice finally to be involved with a bill that was not terribly controversial.
This bill takes some initial steps to reduce compliance costs under the Building Act 2004 and to streamline the building consent process. I stress to the House that the bill really is only the beginning of a very long process of reducing that red tape and compliance. The bill has now been considered by the Local Government and Environment Committee, which was exceedingly well chaired by Chris Auchinvole, and I thank the committee for its careful consideration of the bill and for expediting its passage through the select committee process. It has been a marvellous process. Given the current economic downturn, it is important that the bill be progressed quickly so that the sector can benefit from the initiatives in it.
I take the opportunity now to outline the three simple yet effective initiatives that this bill covers. The bill introduces a streamlined building consent approval process for house designs that are replicated on a substantial basis, in order to remove the duplication that occurs when councils have to approve the same, or very similar, building designs over and over again. Under the bill, group home builders will have the opportunity to apply to the Department of Building and Housing for a national multiple-use approval for standard house designs that they use repeatedly. A national multiple-use approval can be included as part of a building consent application to fast track the approval process by councils. The national multiple-use approval is designed to streamline the building consent process for group home builders, reduce duplication of process by councils, and reduce costs for homeowners.
The select committee has recommended what I think are two very practical changes to the bill as introduced in relation to the national multiple-use approvals. The first is to provide for regulations that allow minor customisations to be made before and during the construction phase to house designs that already have a national multiple-use approval. This provision will allow for some flexibility and individuality of design by homeowners while still remaining within the scope of that central approval. The second change recommended by the select committee is to provide for regulations that put a limit of a recommended 40 working days on the time taken by the Department of Building and Housing to process a national multiple-use approval. I think that is a realistic time frame, and imposing this limit by regulation means that at some stage later another Minister might decide that even 40 working days is too much and may want to bring the length of time back. I believe that these refinements will help to ensure that the national multiple-use approval is commercially viable for group builders. I know they will welcome it—in fact, they have been desperately waiting for this legislation to get through.
The second initiative in the bill is to introduce a streamlined process for making minor variations to building plans after a building consent has been granted.
Hon David ParkerHon MAURICE WILLIAMSON Link to this
If the member had been listening with his ears open he would know that at the beginning of my speech I gave Shane Jones a lot of credit. I have already given him some praise.
The bill enables regulations to be made that define when a variation to consent building work is minor and therefore does not require a formal amendment to the building consent. Again, I think most of us in this House will see that as a very sensible move. I know that on a number of occasions when people wanted to make a minor change by slightly moving a hand basin, a cupboard, or a shower box, it quite regularly meant they had to go back to the old consent grinding mill. This initiative will mean that those minor variations can be made without that being necessary. It will save time, cost, and frustration for building consent applicants as well as for councils.
The third initiative in the bill is to make obtaining a project information memorandum—known as a “PIM”—voluntary. The initiative will remove the cost of obtaining a project information memorandum for building consent applicants when the information in the memorandum is not considered relevant for a particular building project. Critical notifications previously attached to a project information memorandum will now be attached to the building consent. Councils will continue to promote applying for project information memoranda, and doing so early on in the building project. The initiatives in the bill will reduce the time and transaction costs involved in the building consent process for homeowners, developers, builders, and councils, and are, indeed—as I said earlier on—the first step in the significant amount of reform that is required of the Building Act 2004.
Once again I give my thanks to the select committee—and in particular to Chris Auchinvole, the chair—for the committee’s rapid consideration of the bill. All members of the committee from all parties worked well and the committee has made pragmatic recommendations. I acknowledge the submitters, who made written and oral submissions on the bill, and the building sector for its input into the formulation of these initiatives. I commend this bill, as reported back by the Local Government and Environment Committee, to the House.
Hon SHANE JONES (Labour) Link to this
Tēnā koe te Assistant Speaker, i tēnei pō. Let me stand and reflect from our side of the House that the Local Government and Environment Committee acted in an expeditious manner. The members seized themselves of the issues. As we have heard, they were modest in number as a consequence of the quality of thinking and architecture that went into the original bill, if not the policy.
We have very little to differ over, but let us just rehearse some of the reasons why this Building Amendment Bill (No 2) was necessary. The first reason was that after the leaky homes episode broke, it was evident that excessive liberalisation had taken place in the building industry in the regulatory approach used to manage the effects of poor building, or of builders who were operating either without following plans or in a way that was just not up to it. As is often the case in our country, the pendulum swung. It was my view, for the period of time that I was the Minister for Building and Construction, that the pendulum had swung too far. This was an attempt to maintain a level of confidence amongst house purchasers, and also within the building industry, so that regulatory creep did not thwart initiative within the industry.
I am particularly glad, and I am sure that I speak for my colleagues, that the current Minister embraced the initiative originally brought forward by Shane Jones—
—the Hon Shane Jones, and has been happy to claim it as work for himself. Of course, we look for some distant sign that the Minister will be able to replicate and emulate this kind of thinking as he takes the portfolio forward in areas such as the Plumbers, Gasfitters, and Drainlayers Board, but that is for another day.
In my view, the notion that central government should be involved in allocating building consents makes a great deal of sense. It enables those developers and architects of houses that are of a relatively uniform nature to gain consents that reduce the costs they face by getting a consent within every single territorial authority and being confronted by gratuitous levels of variability. So in that regard I think that the officials have done quite a reasonable job in striking the balance between not only expeditious processing and committing themselves to a time frame but also preventing entities, companies, developers, and other commercial interests from being put through a protracted process.
There was a member of the select committee who feared that the national multiple-use approval system would lead to a homogenisation of ticky-tacky houses. I completely understand that all members of the select committee are entitled to form their views, but I think that view was misguided.
At all times those of us who have our pen above the regulatory pad need to bear in mind that what we pass as law or as regulation can easily fall into the hands of sub-national levels of Government. Their attempt to give effect to that law drives industry either completely nuts or imposes costs on the members of the industry or the actual people who simply want a dwelling for them and for their families that is safe, warm, secure, and will not leak. This national multiple-use approval system will offer that in a way that does not impose unnecessary levels of delay or gratuitously high levels of costs.
The notion of the project information memorandum attracted a fair bit of anxiety from people who felt that the interests of those who suffer mishaps, etc. and who are condemned to live life with a physical handicap might not be taken care of, and the Historic Places Trust felt that those buildings that fit within its category might be torn down without people having to go through a necessary process and knowing what the historical value of the building is. That is all very fine. The select committee formed a view, and the Minister has carried it on. Indeed, members on this side of the House felt there was an unnecessary level of bureaucratic burden.
Possibly the last thing I would say about this bill is that when the original response was derived as to how to deal with shonky builders—not only in Auckland, but predominantly in Auckland—in the residential house construction sector, there was a fear that every nook and cranny, crevice, and sliver of opportunity for wretchedness had to be rooted out. It would appear that we exceeded what was necessary. That is why there are minor variations and customisations, if people want to change. In fact, I know of some people who have been known to do house alterations and have 11 metre gaping holes in their dwellings. Things of that nature would need a building consent. But if someone is going to change a window or a door, or build a little bit of a whare outside for the teenagers after they have discovered the pleasures of life that have since passed this generation by, why should one need a building consent? [Interruption] I congratulate the member on recognising that my rugby playing abilities have not departed, despite being at the age of having been born in 1959.
But there is a range of amendments that need not require the full attention of a consenting agency, and Kiwis ought to be able to attend to those problems, to get on with life, and to hire a decent builder. If they do not have the presence of mind to hire someone who can do the mahi, do the work, and if they do not make a decision as simple as that, then why should ratepayers and taxpayers constantly be burdened with meeting the costs of their perfidy? We are not having any of that. That is why this is a very good minor variation section.
In all, I just hope that the bureaucrats are encouraged by the Minister to pass the necessary regulations in a mercifully short period of time, and that they are adequately resourced, because this bill is designed to make the industry and the sector more efficient. As I said earlier, it reflects a great deal of effort from the officials. But the quality of the legislation is reflective of the quality of the mind lying behind its architecture. Kia ora tātou katoa.
CHRIS AUCHINVOLE (National—West Coast - Tasman) Link to this
It is with great pleasure that I stand to speak in support of the Building Amendment Bill (No 2). Indeed, it was the first bill to progress through the Local Government and Environment Committee when chaired by me. [ Interruption] I thank members. What a nice bill to start with! There was a suggestion at the select committee that the bill should be renamed the “Shane Jones Building Amendment Bill”.
It did not preclude the member at the meeting. The suggestion was voted down. Fair tribute has already been paid by the Minister for Building and Construction, Maurice Williamson, to the origin of the bill; that has been recognised. There are a few very interesting aspects to the bill, one of which is the percentage of houses that are built in New Zealand under the category discussed in this bill. It is a very large percentage. Others may remember; I think about 40 percent of the houses that are built fit into this category—volume builders build volumes.
Mr Williamson and Shane Jones—honourable gentlemen, both—have given a thorough analysis of the bill, which saves me a couple of pages of my notes. The bill will make the amendments to the Building Act 2004 necessary to achieve the purpose of increasing the flexibility and the efficiency of building consent processes in order to facilitate an increased supply of affordable homes. It is indeed a shame that the Act has to be amended so soon, but it is a good thing to do; it is necessary because the original Act imposed massive costs and complexities on the construction industry. It crippled the industry in some ways with excessive bureaucracy and administration—something the Labour Party unfortunately is highly fond of, or was highly fond of. Thanks to its overzealous desire to burden the industry, and consequently the homeowner, with high compliance costs, fewer New Zealanders were able to fulfil their dreams of owning the home that they would have owned if such cumbersome law had never been enacted.
Chris HipkinsI think it speaks for itself. We have only to ask around. The fact that this bill has been given some priority in treatment is proof that the Government is committed to improving home affordability, and it is commendable that it is receiving support from both sides of the House.
I point out, however, that the Building Amendment Bill (No 2) will simultaneously make buying a home potentially more affordable, and also ensure that the homes and buildings built are of good quality. There is no forsaking or compromising of the quality aspect of the regulation. We went into the last election with a clear manifesto that the new Government would put a high priority on reducing unnecessary compliance, and that it would increase efficiency and reduce costs. That is what this Government is about. This bill is part of the Government’s ongoing commitment to that manifesto. I am delighted to be chair of the select committee that handled this bill. It was, as I said earlier, a nice bill to proceed with. It came forward, and it was simple, straightforward, and meritorious.
I think it is prudent to summarise the points I made when speaking to the first reading, as to what significant changes will occur as a result of the bill and why they are necessary. Firstly, the bill will mean that instead of the status quo, which sees applications assessed by councils on a case by case basis, even in cases where the proposed building work is to be replicated within the same subdivision, there will be a system of national multiple-use consenting for buildings that are to be replicated several times on a national basis. Instead of the long-winded process whereby developers are required to wait for each building consent to be processed before work can proceed, the building design will be approved—
Members can keep up; they should just think quickly. The building design will be approved on a national level, and building consents issued at the local level. Decisions made by the local building consent authority will therefore be restricted to site-specific matters, and any customisation or variation of a multiple-use consent—
Do members want it in Scottish this time?
Secondly, the Building Amendment Bill (No 2) will allow major and minor amendments to be distinguished and, hence, treated differently. For example, amendments that are likely to affect compliance with the building code will continue to go through the formal amendment process, whereas minor variations—as described by my parliamentary colleague on the other side of the House, Shane Jones—will be defined in relation to the national multiple-use purpose approval as a minor modification or additional variation to the plan. Amendments will now go through a far less rigorous procedure, obviously reducing compliance costs.
Thirdly, the Building Amendment Bill (No 2) will make voluntary the obtaining of a project information memorandum from a building consent authority that is a territorial authority. Under the original Act a project information memorandum had to be obtained before a building consent could be issued. The original primary purpose of a project information memorandum was to save owners or developers time and money by providing advance warning of issues that needed to be taken into account when developing plans for building work.
However, as most project information memoranda are applied for after a building consent application is made, they become somewhat redundant and are now in many ways an unnecessary cost. This Government is in the business of eliminating unnecessary building costs, and is not in the order of imposing them.
The Building Amendment Act (No 2) has been before the Local Government and Environment Committee. The select committee received 17 submissions: nine from local government, three from industry bodies, three from private companies, and one each from a Crown entity and a community advocacy group. They each provided wide support for the purpose and proposals of the bill. Is it not a good sign that this House can put a bill forward to a select committee and those making submissions provide support for it? Key issues raised were around the clarification of the proposals, the implementation of the proposals, and the details to be included in the regulations. As a result, the committee recommended few changes, and the general consensus of the vast majority of interested parties was reflective of the fact that this bill is essentially sound.
The purpose of the recommendations is primarily to ensure greater clarity in the legislation. The main recommendations were as follows. The first was to have an amendment that would explicitly allow minor customisation, as prescribed in regulations, to be made to plans and specifications that had national multiple-use approval, both at the time of applying for a building consent and after a building consent has been issued. The second was to clarify that any permitted customisations would fall within the scope of the national multiple-use approvals, and amendments—
If the member does not know what it means, I will speak to him afterwards. The committee recommended amendments to the definition of “minor variation” and the insertion of a new definition of “minor customisation” to distinguish between plans that do and do not have national multiple-use approval. The third recommendation was to impose by regulation on the Department of Building and Housing a time frame of 40 working days for processing applications for national multiple-use approvals—and let us remember that we are talking about 40 percent of the houses that are built.
The recommendations are eminently sensible. They will ensure that the national multiple-use approval is commercially viable for group home builders by providing the certainty of a time limit on processing applications, and by allowing for some measure of customisation. The changes also provide greater certainty to councils when processing building consent applications that rely on national multiple-use approvals. The Building Amendment Bill (No 2) will be a clear boost for the building industry at a time when companies are struggling and builders are looking for work. Under the original Act, builders were waiting for up to a fortnight at a time to get on-site building inspections done, thereby increasing costs, which is unacceptable.
We are embarking on a process to improve efficiency and to reduce unnecessary costs in a number of legislative areas. This is particularly important in the current economic climate. Ordinary New Zealanders are struggling every day with overburdensome compliance costs and regulations, and we are doing something about it. With pieces of legislation like the Resource Management (Simplifying and Streamlining) Amendment Bill and the Building Amendment Bill (No 2) coming to fruition, we are expecting that unnecessary time delays and costs will become a thing of the past. I am very happy to support the Hon Maurice Williamson in the second reading of this bill, as it is time that we recognise the problems inherent in the Building Act 2004 and make sure we fix them. Thank you.
Hon GEORGE HAWKINS (Labour—Manurewa) Link to this
I am pleased to speak tonight in support of the Building Amendment Bill (No 2), which was introduced by the Hon Shane Jones. He was such a busy Minister; he got things done.
Hon GEORGE HAWKINS Link to this
Ha, ha! It was really quite good to hear the Hon Maurice Williamson acknowledging the very hard work that Shane Jones had done. Too often in this House we just attack each other, but when something really good happens we acknowledge it, and acknowledging the work of Shane Jones was important.
I acknowledge the work of the Local Government and Environment Committee. Unfortunately, I was not on the committee at the time, but the chair, the member for West Coast - Tasman—or Tasman - West Coast, whatever it is; I do not know what it is called but I am sure he goes there not very often but occasionally—got this bill back into the House.
I think this bill will save a lot of frustration for many people. There have been unnecessary delays over building consents. I go back to the 1980s, when I was mayor of a place called Papakura—which is about to become a part of Auckland—and people used to be frustrated then by the use of red pens when examining building plans and building consents. But I think we got too liberal in the 1990s. As the Hon Shane Jones said, the pendulum swung too far. In an effort to fix the problems of leaky houses, it again swung too far the other way. But I think this will be quite a good bill, and it demonstrates, really, the foresight of someone like Shane Jones. There is nothing like Tories seizing on a good idea. When Tories get a good idea, they grab hold of it and on they go; I think that is really good.
This bill will also save people some money, and that has to be good. I imagine that Shane Jones gets piles of mail from people writing to thank him because he is saving them money, and that is what this bill will do.
This bill was part of a coordinated approach to assist the increasing supply of good quality but affordable homes, and that is really important at the moment. People want affordable homes. I come from an electorate where the housing issues are fairly glum, and where lots of people are in houses they cannot afford—which means there are mortgagee sales and all those sorts of things—or where they have to get the house right to sell again, because they have not had the permits for the alterations they have done. They should have had a consent for shifting a door, in days gone by. Well, those minor alterations to a general plan will not require people to go to that trouble again, and I think that that is quite sensible.
It is interesting to note that about 40 percent of all houses built in New Zealand are built by volume builders. That is quite a large number. People might remember that in the old days people talked about little houses on the hillside that all looked the same. Now, it will be an advantage if they are the same, in many ways, rather than that sameness being looked down on. Efficiencies can be achieved if a system of national multiple-use consenting is introduced, to provide a streamlined approval process under the Building Act for buildings that will be copied and built several times on a nationwide basis. That is very important.
The thing that surprised me about this bill was that there were only 17 submitters. That is not a huge number. I thought that maybe it was a good thing that people generally accepted the recommendations, and that not too many people were wanting to stand outside those recommendations. I am sure that the chair of the select committee would have preferred to see something like that for the resource management bill he is trying to get through the committee at the moment. But when we have good legislation that has been well thought out by the Hon Shane Jones and taken up by the Hon Maurice Williamson, things progress. So I thank the people who were on that committee, and I also thank the chair. It is good to get some things through fairly quickly. When councils looked at the way they have treated people in the past, I think that not too many of those councils were keen to come forward and admit that to the select committee. However, I think things are changing quite dramatically.
From time to time we come to the House, make speeches, and look around, but things in here are not the way they seem when they are reported in the paper.
By way of an example, Dr Paul Hutchison was not against the amalgamation of Auckland local authorities into one city authority until he got back to his electorate, when he changed. No one will go back to their electorate with the Building Amendment Bill (No 2), saying that it should change. The bill will stay the same, but, in the case of Auckland, the member for Hunua certainly did change.
Under this bill, people will now be able to make real savings in the sorts of houses they build. There will be economies of scale when builders work out that they can put up a pile of similar houses at a cheaper price, instead of every house being completely different. For those people who want to get a roof over their head, this bill will make things far easier. Variations to consented building work following the granting of building consents will become even more common than they have been. While some variations will require formal amendments to the building consent, others will not. I am pleased to hear the Hon Maurice Williamson say that there will be more legislation coming along, and I think that is important. This bill is a tidy little package, but it will not solve all of the problems that people face at the moment.
I finish by saying that I am also pleased to see on TV tonight that the National Government seizes all the good ideas. It has picked up not only the home insulation ideas, but also Shane Jones’ very good bill, which we are debating here, and made it its own.
SUE BRADFORD (Green) Link to this
I will take just a brief call on behalf of the Green Party to confirm that we support the changes to the Building Act as set out in the Building Amendment Bill (No 2) as reported back from the Local Government and Environment Committee. Unfortunately, I was not on the select committee that dealt with the bill, so I am not aware of all the detail, but I am pleased that although this legislation was originally brought forward by the previous Labour Government, the National Government has seen fit to proceed with it in a reasonably timely manner.
One of the main features of the bill is that it introduces a national multiple-use approvals process. This means that where buildings of the same design are being replicated on a substantial scale, they will not each have to go through an individual approval process as they do at the moment. This is a sensible amendment, which should mean substantially reduced costs at a time when price is becoming even more of an issue for all involved in the construction, development, and purchase of housing. I know there were concerns that this multiple-use approval mechanism might mean the encouragement of cheap, ugly, low-standard houses or units, not designed with reference or in relation to particular sites. However, I understand that these approvals will still need to go to the local building consent authorities, which will need to take relevant local urban design into account. I hope that requirement will provide sufficient protection, as it is a fact that all sites are unique.
As was made patently clear during the inquiry into housing affordability that took place under the previous Government, and which some of us took part in, the costs of housing in this country are comparatively high, and are still a real issue. I believe that the few measures contained in this bill will help to bring costs down, and to simplify processes, which virtually every stakeholder in the building sector believes have become too lengthy and complex.
For all these reasons, the Green Party commends this bill to the House, and, at the same time, acknowledges what George Hawkins said before, that this is only a very small step in the journey we need to make in the area of housing.
DAVID GARRETT (ACT) Link to this
I will just take a short call on the Building Amendment Bill (No 2). I have the pleasure of being on the Local Government and Environment Committee under the able chairmanship of Chris Auchinvole, the member for West Coast - Tasman. I say that it is a pleasure because, as a new member, one comes into Parliament with the desire to see some sensible things being progressed in a multi-partisan way, and the select committee process was an example of that. I agree with all previous speakers that it appears that the idea came from the Hon Shane Jones and was progressed by the National-led Government.
I was very pleased to hear the Minister for Building and Construction say that this bill was just the start of a process. In our view, a great deal more needs to be done in this area. I heard the wonderful phrase “regulatory creep” from Mr Jones, and we can all work out exactly what that means. For me, I relate its meaning to when Sir Edmund Hillary came down from Mount Everest and wanted to build his house. As I understand it, he had some plans drawn up by his father-in-law, or someone who knew his father-in-law, and the two of them went away and built the house. As we now know, the house was nothing very flash, but it sheltered the Hillary family for 50 years, and probably would have continued to do so for another 50 years if the site had not been bought. In that case, there was limited or no red tape—or another expression, beginning with “b”. We have come from that situation to one where if we want to move a window, we must get a consent.
I have two examples from my own life. I own a 1918 villa north of Helensville. It is the standard design with no dwangs and no insulation. Originally, it had conduit wiring and double-hung windows, and members will know the type of design. To me it is utterly absurd that if I wish to build an extra bedroom—which I need to do in order to accommodate my, sadly, soon-to-be teenaged family—the extension that will cost $50,000 or less will need to be built to 2009 building codes. Part of the house will be built to 1918 building codes, and part of it to 2009 codes. It makes absolutely no sense that the bit at the end will have to have insulation in the walls and double glazing. I can see some sense in having 2009 wiring, because we cannot buy conduit wiring any more, even if we wanted to, but what sense does the 2009 requirement make? It will add to the cost, even to the cost of the plans.
I said that I have two interests in this issue. My flatmate down here in Wellington happens to be an architectural draughtsman, who is also a friend of mine of 20 years’ standing. He tells me that because of the ridiculous level of regulation that has grown up over the past 10 or 20 years, the plans that he will draw up for that extension will cost about twice as much, in real terms, as they would have when we first met. That is not only because of the extra changes that have been made to the plans, but also because there are requirements as ridiculous as the one that states that instead of drawing a light fitting and saying that it must conform to “New Zealand standard No. whatever”, he has to draw every single light fitting. What sense does that make? It makes absolutely none. I am told by my flatmate that, as things stand, anyone who cuts a metre-square hole in the wall of his or her house in Wellington is committing an offence.
We have come a very long way from Sir Ed, and from my old mate Bernie Woods, who also came back from the war, and, with Edna, built his own house. Bernie was a photographer. I lament that change, and I want to see us go back to a sensible situation where, ideally, I can choose to build my extension without going through all of this nonsense, and without a permit if I choose. Provided I give a waiver to the relevant council, so that I or somebody else cannot come back at the council later, I should be able to do that. That should be my choice. I should be allowed to build my extension to 1918 codes, except where I choose to diverge from them in areas such as wiring.
In supporting this bill, I say to the Minister and the National Government that we will be hot on their heels to follow this up and to get further changes. If we cannot get back to Sir Ed’s day, we can at least get to somewhere near it, where I do not have to get some little clerk in a cardigan to give me permission to build a deck that happens to be 1.2 metres in its dimensions, and which I can quite capably build myself.
NICKY WAGNER (National) Link to this
I rise to support the Building Amendment Bill (No 2). It has been very interesting to listen to what has been coming out in the House today. We have had extremes of opinion, but what underlines the importance of this bill is that we are looking for more affordable housing and more affordable buildings.
This bill is designed to update and improve the effectiveness of Labour’s 2004 Building Act. As we have heard, it is the first step in a more comprehensive review of the legislation that is presently under way. Although the Act was passed in 2004, which was only 4 years ago, it already needs to be substantially reviewed. It needs to be amended because it is too complex, prescriptive, overly bureaucratic, and full of regulatory creep. It is costly as well. If we want more affordable houses and buildings, we need to fix this Act.
This amendment is designed to reduce compliance requirements and costs, and to improve the efficiency of the building consent process. It is designed to make sure that regulatory processes are as effective and as efficient as possible, while always maintaining the quality of construction. We need to reduce the costs for homeowners, developers, and builders, and we must reduce those costs without ever compromising the building quality.
The bill simplifies and streamlines. It streamlines the building consent process by increasing flexibility and efficiency, but it preserves sufficient checks and balances to make sure that quality homes and buildings are constructed. Although the amendments will have only a modest effect on the total cost of the building, they are expected to reduce the time and transaction costs involved in the whole consenting process, and any drop in price will be readily received by the public of New Zealand. We are well aware that time is money, and during the select committee process we were made aware of the frustrations of designers, of builders, and of property owners in the face of very complex rules and regulations, and enormously long waits for consents. Builders told us that they really wanted to comply with the Act, but found it almost impossible to get it right.
The bill has three main amendments. As we have heard discussed tonight, the first is the introduction of the national multiple-use approvals. The idea is that these approvals will simplify the consenting of multiple, similar buildings. At present volume builders, who are builders of large numbers of houses in a subdivision, even if those houses are identical, have to apply for a consent for each house separately, and wait until they have that consent before they can begin building. Once this bill is passed, a housing construction company building a large number of similar houses will be able to get the design approved and consented at a national level, and be issued with multiple-use approvals. These are multiple-use approvals for similar designs, but each consent will still have to be tailored to local conditions, and this is how we make sure that the buildings are designed for the people in the areas they live in. It will mean that new homeowners will get the advantage of economy of scale, plus the advantage of a more speedy consenting process, and homes that can be built more quickly and cost-effectively.
Secondly, the bill goes into a lot of detail and effort to define a new process for managing minor variations, and what are called customisations of plans. Anyone who has ever built a house or a building knows that however hard we try, however much we plan, there are always changes that need to be made along the way. This bill provides a way to do that in a simple and cost-effective manner. Under the 2004 Act, even the most minor alteration had to go through the process in exactly the same way as any new building consent. The bill allows regulations to be made that define when a variation is minor and does not require a formal amendment to the building consent.
It also defines a process for managing minor variations, and, in the process, it clarifies the process for managing major variations. A minor variation can be approved by a building authority by recording it in writing, by sending an email, or by making a file note, or even by putting a handwritten adaptation on the amendment to the plans. The building consent authority will not be required to issue an amended building consent. This will save a whole heap of time and costs for both the applicant and the building consent authority. Quality will be maintained because the amendment will be required to comply with the building code.
The minor variations or customisations that this amendment will cover are things such as changes in timber treatments, or a change from a window to a door. We have heard about our colleague who wants a new door, and he will be able to do that as a minor variation. The layout of a room can be changed, and the branding or types of insulation can be changed. These are quite different variations from those that are considered major variations, which will still require a formal consent. Those are changes like where a deck or carport is put on a building, or where a change is made in the type of material—for example, from brick to timber—in the type of piling, or in the building system.
The final amendment is to do with obtaining a project information memorandum. This bill makes obtaining that project information memorandum voluntary. Under the present Act, all building work requires a project information memorandum. The idea behind that was that when we get a project information memorandum we get all the information that is relevant to do the building. We get it before the work is started so that we can make sure that all the bases are covered. Evidence presented to us in the select committee showed that most project information memoranda were not applied for until it was too late. In other words, the process was absolutely useless to those people. Project information memoranda were not valued by builders and therefore were an unnecessary cost.
Making project information memoranda voluntary means that people who find them useful can access the information, but they will not have to pay for the information if they are not going to use it. The costs of obtaining a project information memorandum are not insignificant, by the time one has paid council fees and professional fees to make the application. But the biggest expense is the delay in building, which seems to happen very regularly. Voluntary project information memoranda will save a substantial amount of money, and the Registered Master Builders Federation estimates that at least 30 percent of all projects do not require them at all for things like putting in fireplaces, solar panels, and internal alterations.
I support the amendments to the Building Act. They will improve the legislation, making it more efficient and effective, and the changes will help make new housing and buildings more affordable and cost-effective. Thank you.
CAROL BEAUMONT (Labour) Link to this
I rise to speak in support of the Building Amendment Bill (No 2). As has already been mentioned by my colleagues, Labour supports this bill. Indeed, the bill was introduced by the previous Labour Government in response to some of the concerns that have already been mentioned tonight. I also acknowledge my colleague Shane Jones and the chair of the Local Government and Environment Committee, Chris Auchinvole.
I thought it would be useful to consider some of the background to this bill. It addresses three major areas of concern. First of all, there is the issue of national multiple-use consents. Mr Auchinvole may have already mentioned that 40 percent of all new homes in New Zealand are built by volume builders. Clearly, efficiencies could be achieved if a system of national multiple-use consenting was introduced to provide for a streamlined approval process. Although a building design would be consented at a national level, a building consent, as Ms Wagner has already mentioned, would still be required for each new building at the local level. That is important because each building at each site is unique in terms of ground conditions, foundations, connections to water, and other utility services.
Each building would also be subject to inspection by a local authority.
I do not think that the Building Amendment Bill (No 2) goes anywhere near to meeting the concerns of our colleague David Garrett from the ACT Party, because this bill still requires a building consent in order to ensure quality and safety. That is important. These things are not designed to irritate or to be there for no good purpose; they are there for quality and safety. The measure would reduce the time and effort required to process building consents, resulting in quicker approvals. It would also give designers and volume builders a greater degree of certainty. That was the first area of concern. The second concern was in relation to amendments to building consents, and, essentially, it was in response to concerns expressed by participants in the industry that the process for managing variations to building work was adding unnecessary costs and time delays to the process. The third concern, which Nicky Wagner has talked about in some detail, relates to project information memoranda, which are intended to provide a one-stop shop for all information relating to building work requiring building consent. Unfortunately, the minority of project information memoranda were applied for prior to building consent applications being made, and, consequently, in most cases, the benefit of providing advance warning when planning a building project is not being realised.
Those three areas were the background to this bill. The purpose of the bill, therefore, became to improve the efficiency and effectiveness of the building consent process, and to extend the Department of Building and Housing’s functions and powers to allow it to issue national multiple-use approvals for dwellings and buildings that will be replicated on a substantial scale. It also will reduce the statutory time frame for processing a building consent from 20 working days to 10 working days, where the application includes one of those national multiple-use approvals, and that is important. It will differentiate between major and minor variations to consented building work, and make it voluntary for an owner to obtain a project information memorandum, for the reasons I outlined before. The Local Government and Environment Committee considered these concerns and recommended very few changes to the bill, so I think the general thrust of the bill was seen as common sense and appropriate in order to respond to those concerns.
The main change that the committee put up was around the customisation of national multiple-use approvals. I am sure members will be very interested in this bit, so I will talk about it in some detail. The select committee has recommended that the bill explicitly allows minor customisations to be made to plans and specifications. A minor variation is around the actual building consent—a minor modification or additional variation to a building consent—whereas a minor customisation is a minor modification, addition, or variation to the plans and specifications to a building. Those were the matters that were changed by the select committee in considering this bill.
Labour introduced the bill while in Government for the background reasons I gave before, which were, essentially, to reduce unnecessary delays in the building consent process, and to reduce both direct and indirect cost to owners and developers associated with the construction process, while ensuring—and I underline this—that quality homes and houses are constructed. I think that everybody in the House would accept the importance of that. We have all seen the terrible consequences of the construction of buildings that are not of sufficient quality. Again, I think that it is important, having listened to comments like those made by our ACT colleague, to realise that the failure of good-quality regulation actually leads to some very, very unfortunate side effects that really damage people. The bill was also designed to ensure that quality homes and houses are constructed. People often like to make the comment that Labour is into unnecessary regulation or unnecessary compliance costs, and I think that a bill like this shows quite the reverse. It shows that we are about making sure that things are efficient and effective, and that we do not want unnecessary regulation or compliance costs, but we do think that the balance to ensure quality and safety is also important.
The bill was part of a significant package of work by the previous Labour Government in the area of increasing the supply of good-quality affordable homes. Labour has a very proud history in the area of housing. In our last term in Government we increased the housing stock by a net increase of over 7,500 homes. It is worth noting that in the last term of the Labour Government we celebrated 70 years since the first State house was built in New Zealand.
A number of initiatives were put in place to ensure that people could start to access good-quality affordable homes. That challenge remains today. I am certainly not saying that we managed to sort out all the problems, but we looked at initiatives like KiwiSaver to make it possible for people to save for their first home deposit, and we enhanced assistance for first-home buyers by widening the scope of the Welcome Home Loan programme and introducing a shared equity programme. We reduced the national average rent for State houses, and reduced the nationwide State housing turnover. Again, when people make accusations that the previous Government was a slum landlord, they forget that an intensive maintenance and modernisation programme was put in place around improving our State houses through Labour’s Healthy Housing programme. We completed improvements to over 9,500 properties and retrofitted more than 16,500 homes. Funding was put in place to insulate State houses, and all remaining State houses were to be insulated within 5 years.
Initiatives like the Hobsonville development were started to assist in providing affordable homes. One of the very sad things that happened in recent times concerned that Hobsonville development. Plans to include 500 State houses in the development were fought by John Key—the now Prime Minister—when he was in Opposition as the local MP. The plans ended up being axed because he made certain promises to people in his electorate, and said that they would not be inflicted with things like State houses in their area, because we do not want that sort of thing around here, thank you very much! That was a shame. The previous Labour Government did start that development, and it was going to be a substantial mixed housing development.
In its last term, the previous Government also passed legislation that enables territorial authorities to increase the supply of affordable housing in their local area, and we announced a review of public land for potential new housing developments and a boost for the not-for-profit sector, reduced compliance costs for starter homes, and the cutting of red tape through initiatives like this bill. My point is that this is an area that Labour sees as fundamental. The whole issue of quality affordable housing is one of our core principles, because, after all, we all know that housing is of fundamental importance to people.
LOUISE UPSTON (National—Taupō) Link to this
For many hard-working New Zealanders, 9 years of a Labour Government has meant that the dream of owning their own home has slipped further from their grasp. I stand to speak in support of the Building Amendment Bill (No 2). This bill means that housing affordability will get a little bit closer for those who have a dream of owning their own home.
What are the three initiatives in the bill? The first initiative is the introduction of national multiple-use approvals, which will streamline the building consent process for buildings to be replicated on a substantial scale. The second initiative is the provision of a new streamlined process for making minor variations to building plans after a building consent is issued. The third initiative is to make the requirement to obtain a project information memorandum voluntary, reducing the time and costs involved for building consent applicants.
We have had strong support from submitters for both the purpose and the proposals in the bill, and the Local Government and Environment Committee has been unanimous on the way forward with this bill. It is important to note, though, that many submitters have also supported the wider need for a much more significant review of the Building Act. Of course, that is a priority for this Government and our hard-working Minister for Building and Construction, Maurice Williamson.
Why are we embarking on this legislation? Of course, it was initiated by the previous Government, but this Government will be the one that takes it across the line. It is common knowledge that building a house is very time consuming and costly. Homeowners, developers, and builders face a mountain of compliance costs. The layers of local government bureaucracy are incredibly difficult to navigate and to wade through. There is such an amount of unnecessary paperwork, steps, and hoops to get through. I am thrilled that this bill will fix a number of those problems.
In 2008 National pointed out that the Building Act was estimated to have added an extra $20,000 to the cost of building a new home, pushing homeownership out of the reach of many hard-working New Zealanders. The construction industry is a vital part of our economy, and it is currently hurting. Many companies in my electorate in Taupō have already made the tough decision to lay off staff. Other building companies in Taupō are desperately trying to hang on to their staff and their apprentices, and to limp through these tough times. They need legislative changes that will make it easier for them to focus on what they do best, which is building houses, not doing unnecessary paperwork. The Government will keep the focus on cutting red tape and making it easier for people to do business. Changes to the Building Act fit nicely with the Resource Management Act simplifying and streamlining reforms that are also currently with the Local Government and Environment Committee. What a hard-working and harmonious committee it is!
Let us look at these changes in a bit more detail. Firstly, the Department of Building and Housing will be able to issue multiple-use approvals for dwellings and buildings that are to be replicated on a substantial scale. I tell members that this is not making changes to the product certification process, so quality will not be affected. Multiple-use consenting will help drive improvements in housing costs and affordability. Builders of group homes will be able to achieve economies of scale. They will follow a much simpler process, and the impact of that will be lower costs. There will also be less time involved in getting a project to completion, so companies like Jennian Homes, KiwiSpan, and Initial Homes, which have standard house plans, will be able to apply to have their plans approved. Those companies operate up and down New Zealand, and they work in multiple district council areas, so these provisions will get rid of some of the inconsistencies that they currently face with standard plans.
Secondly, there is also a reduction in the statutory time frame, whereby the time for processing a building consent application will be reduced from 20 days to 10 days. That is significant, when we consider the amount of time involved in some of those construction projects. Another key purpose of the bill is to differentiate between the major and minor variations to the consented building work, which will mean that minor pieces of work do not have to go through a huge, drawn-out, bureaucratic process, and that the amount of time and money involved will be reduced. It is a shame that Mr Shane Jones is not here—
Hon Darren Hughes—because I will use an analogy that will help make this point. If we look at the analogy of McDonald’s, that company uses a similar approach to standardise what it does.
The ASSISTANT SPEAKER (Eric Roy) Link to this
I do not think the member needs to make his point of order. Members cannot refer to the absence of a member from the House.
In terms of this analogy, in McDonald’s they have standard recipes, and they roll out the recipes up and down the country, so it is very efficient, it saves costs, and it makes it more affordable for members to have a Big Mac. In terms of housing, that means Initial Homes can roll out a standard design for one of its homes up and down the country. If customers want to customise their Big Mac, and they do not want it with gherkin, it is a small variation.
What we want to do is make it very simple and very easy for customers with a home from Initial Homes to change a window, change where a door is placed, or change the use of a room. That is what this bill will do.
It will also be voluntary for an owner of a building to obtain a project information memorandum from a territorial authority. A project information memorandum is a report provided by a territorial authority to a building consent applicant that provides information about the land and other requirements that might be relevant to a proposed building project. In reality, many of these project information memoranda are issued at the building consent stage, so it is an additional cost with no value.
This bill is really important in terms of saving costs, making housing far more affordable and more achievable for hard-working New Zealanders. The National Government wants to make sure that through these measures in the Building Amendment Bill (No 2) housing is more effective and more affordable, and that the quality is high, and that it is efficient to build and construct houses. There is no point having more than one design for one building company that builds these group homes. If we can have one simple plan that is approved up and down the country, we will not have the issue of whether it was a McDonald’s in Taupō or in Eketahuna or wherever it was, because it will all be the same. That is why this bill makes a lot of sense.
I hate to admit it, but the previous Government did have some sense in introducing this bill, but it will be the National Government that takes it over the line. It will be the National Government that reduces compliance costs and red tape. It will be the National Government that makes it easier and more affordable for New Zealanders to get into homes. We are very pleased that this bill is having its second reading. The select committee has been working hard. The submissions have been very much in favour of the bill, so that shows that we are on the right track. It is great to see that the select committee members are on the same page and that there is very little dissension in terms of where this bill is heading.
There was some concern from a member of the Greens that there might be some issues around urban design, but in reality it is about getting New Zealanders into affordable housing that is still high quality. I make the point that, yes, we are talking about driving down and reducing costs and cutting through red tape, but we are not talking about compromising quality. It is important that the houses built in New Zealand are of the standard we expect. The measures in this bill that we are talking about do not compromise the quality of housing. Those measures mean that we can build low-cost, quality homes. I am very thrilled to stand in support of this bill. It will ensure that home affordability and good-quality housing become an end goal for more of our hard-working ordinary New Zealanders. This bill is the start of a much needed reform of the Building Act, and that review is under way. I am thrilled to stand in support of the second reading of the Building Amendment Bill (No 2).
NIKKI KAYE (National—Auckland Central) Link to this
I rise to speak to the Building Amendment Bill (No 2). I will raise a couple of points. I know a number of speakers have gone through the substantive parts of the bill, but one of the reasons why I think this bill is so important for New Zealand at the moment is that housing affordability is now a major issue, particularly for young people. We have all heard the figure of $20,000 as the average cost of compliance per house. That is a massive cost for young people who are trying to get into homeownership. I support this bill because I think it puts us on the road to ensuring that younger people are able to get into their own homes.
The other point I will make concerns the select committee process. I know that we received a number of submissions from industry bodies, private companies, Crown entities, and community advocate groups. Although we had those submitters, the changes to the bill were actually very minor. I acknowledge the work that the Minister for Building and Construction, Maurice Williamson, has put into the bill, and also Chris Auchinvole, the chairperson of the Local Government and Environment Committee. I also acknowledge Shane Jones for the work that he did to bring this bill to the House.
The other thing I will mention in terms of the benefit of this bill is that the changes should also provide greater certainty to councils when they process building consent applications that rely on national multiple-use approvals. That is very important in an electorate like Auckland Central.
It is also important in the city of Auckland, where a number of multiple-use approvals could potentially be made. We have much more on-mass housing than elsewhere, and we see that in the city of Auckland, and particularly in my electorate of Auckland Central.
I would also like to comment on some of the substantive parts of the bill. Regarding time frames for processing applications, I know the select committee recommended that a time frame of 40 working days be imposed by regulation on the Department of Building and Housing for the processing of applications for national multiple-use approvals. This acknowledges that the processing of these approvals will be a new service. The committee recommended that the regulatory time frame be reviewed within 2 years. The other purpose of this bill is to differentiate between major and minor variations to consented building work, so that minor changes can be made without going through a full process, and I believe that this will reduce costs and save time. The bill is also about project information memoranda, and about making them voluntary. I think that is a very good aspect of this bill.
From a wider perspective, this is part of a package of legislation that is aimed at reducing compliance and regulatory costs in New Zealand. We are working hard on the reform of the Resource Management Act. At a time when businesses are really struggling, that reform will enable a reduction in basic compliance and regulation costs for those businesses. A lot of businesses out there are struggling, and the message I have received is very clear, not only from the building industry in Auckland but also from small businesses, of which there are thousands in Auckland and particularly in Auckland Central, and which are really looking to be cut some slack.
That is one of the great things about this bill. Here we see a bill that will enable a reduction in compliance costs and regulation. I believe that we will see the impact quite directly, particularly on younger people who are trying to get into housing. Hopefully this will result in a reduction in compliance, a reduction in the costs of housing, and more affordable housing for young people. Another aspect of the bill that I will touch on includes the reduction in the statutory time frame for the processing of a building consent application from 20 working days to 10 working days where the application includes a national multiple-use approval. I know we received a number of submissions on that, and I am very supportive of that aspect of the bill.
Again, from a wider perspective, this bill is part of our first 100 days in Government. We have simplified and streamlined the Resource Management Act, we are reducing consent processing, and we are cutting compliance costs. The reform of the Building Act has the same intention as our work on the Resource Management Act, and it is part of this Government’s ongoing commitment to cut red tape. At this point, I also acknowledge that a number of submitters mentioned that a wider review of the Building Act is needed. That should be part of our second phase of reform, which aims to reduce compliance and regulation costs to the industry. Our second phase of reform of the Resource Management Act will focus more on the meaty policy aspects around the environment.
It is also really important to acknowledge the people who are struggling in the construction and building industry at the moment. The global recession is hurting them, and it is not an easy time for them. I think it is important for this House to take the time not only to put through legislation that may, in the long run, lead to reduced costs in terms of housing, but also to think of those people who may be struggling in terms of work. That is why I am very proud of this Government. We are doing everything we can to support small businesses, both through reduction of compliance costs and ensuring that those businesses can get access to things like credit. We want to make sure that those workers and businesses stay afloat during times that are tough.
I reiterate again my support for this legislation. I know a lot of people have worked hard on it, not only from this side of the House—and I commend the Minister—but also the chair of the Local Government and Environment Committee, Chris Auchinvole, and Shane Jones, who was the person who first introduced this legislation. I acknowledge the work on both sides of the House. I acknowledge what this legislation will do for young New Zealanders who may be looking to get into a home in the future, and for those small businesses, in terms of reducing compliance and regulation. I finish by saying that I commend the Building Amendment Bill (No 2), which amends the Building Act 2004, to the House.