Industry leaders within Aotearoa’s development trade have reason to feel optimistic as New Zealand’s construction sector prepares for a transformative phase. The government’s announcement of reforms to overhaul the building consent process comes as a response to persistent issues of delays and rising costs faced by developers.
These long overdue reforms aim to streamline operations, improve consistency, and address the fragmentation that has long obstructed progress. Hon. Chris Penk, Minister for Building and Construction, made this significant announcement in late September 2024, heralding a hopeful new chapter for stakeholders across the industry.
What Challenges Have Builders Faced in the Past?
For years, builders have faced a consent process described by Penk as “cumbersome,” contributing to New Zealand’s ongoing housing crisis. Currently, builders can wait over two months for building consents and up to 18 months for resource consents.
It can be a nuisance for everyone involved in the housing project, as it escalates costs and also slows down much-needed housing construction. The inconsistency across the country’s 67 Building Consent Authorities (BCAs) further exacerbates these issues, creating confusion and inefficiency for builders operating in multiple regions.
The newly announced reforms aim to tackle these persistent problems head-on. Key measures include voluntary consolidation of BCAs and the establishment of larger regional consenting authorities.
These necessary steps are designed to foster a more predictable, speedy, and equitable consent process, ultimately benefiting both the construction sector and the general public by paving the way for more affordable housing.
What Changes Will Streamline Operations in the Construction Industry?
A standout feature of the reform is the shift towards voluntary consolidation of BCAs, enabling local councils to pool resources and expertise for building control functions. Several councils have already expressed interest in this collaborative approach, recognising that shared services can lead to economies of scale and more consistent decision-making.
This change is particularly beneficial for developers engaged in large-scale projects, such as modular or prefab housing, which often span multiple regions. One major reform involves the formation of larger regional BCAs that will serve as a single contact for builders.
It’s intended to ease the administrative strain of working with various consent authorities, improving clarity and efficiency throughout the process.
The consolidation could stimulate competition among consenting providers, likely leading to faster and more efficient procedures. For companies, this means shorter delays and reduced overhead costs, positively influencing project timelines and overall profitability.
How Is the Industry Responding to These Reforms?
The Property Council of New Zealand has enthusiastically endorsed the government’s initiative, calling it a “pivotal moment” for the construction sector. Leonie Freeman, Chief Executive of the Property Council, emphasised that the inefficiencies of the current system have long hampered housing development, driving up costs and stifling sector growth.
Builders and developers, often frustrated by a patchwork of local regulations, view these reforms as a vital overhaul that could enhance productivity and enable more ambitious projects.
However, caution is warranted. John Gray, president of a homeowners’ advocacy group, raised concerns about the potential reintroduction of private certifiers, a system that previously contributed to the infamous leaky homes crisis of the 1990s.
While private certifiers could expedite the process, Gray stresses that rigorous quality control measures and mandatory insurance are essential to prevent a recurrence of past failures.
What Long-Term Benefits Can We Expect for Housing Affordability?
The reforms aren’t just about immediate gains; they fit into a larger strategy to address New Zealand’s housing problems. By making building approvals easier and building costs lower, the government hopes to cut costs, allowing developers to lower prices for homebuyers and helping many Kiwis find homes within their budgets.
Additionally, the reforms propose a shift in liability away from local councils for defective building work. This change aims to foster innovation and encourage councils to approve more projects without the fear of financial repercussions, potentially leading to the adoption of new technologies and construction techniques that could further reduce costs and improve quality.
What Challenges Lie Ahead in Implementing These Reforms?
While the reforms herald excitement, challenges lie ahead. Transitioning to a regional BCA model will require significant coordination among councils, and ensuring consistent quality standards across larger regions is no small feat. Moreover, the introduction of private certifiers, if not managed carefully, could reignite concerns over building quality.
While the government gears up to gather feedback from industry stakeholders in early 2025, it is crucial for builders and developers to remain actively engaged in the consultation process. By voicing their needs and concerns, they can help shape the implementation of these reforms, ensuring they deliver the intended benefits while mitigating potential risks.
Conclusion
The recent reforms to New Zealand’s building consent process promise to profoundly impact the construction industry by addressing longstanding delays and inefficiencies. For business leaders, this represents a crucial opportunity to advocate for a streamlined system that facilitates faster approvals and lowers costs.
Those working within the construction industry will experience significant operational changes as a result of these reforms. By actively participating in upcoming consultations, industry stakeholders can play a pivotal role in shaping these changes to ensure they yield meaningful benefits, ultimately improving project timelines and contributing to more affordable housing solutions for all Kiwis.