Overcoming red tape development obstacles

Making it compulsory for developers and builders to take out insurance covering the structural integrity of their houses would pave the way for more affordable housing, according to a building company head.

Saturday, October 31st 2015, 12:00AM

by Miriam Bell

Matrix Homes managing director Sean Murrie said the legacy of the leaky homes debacle has led to Council caution which is a major obstacle to solving Auckland’s housing issues.

“Councils understandably want to avoid further liability claims for leaky or structurally unsound houses.

“While developers are legally bound to fix defects that occur within 10 years, they regularly collapse their companies upon completion of the project leaving the Council the ‘last man standing’.”

Compulsory insurance for developers would focus the industry on quality and limit Council’s exposure to construction problems.

Murrie said Council red tape is still holding back the supply of housing – despite efforts to free up land for housing and the creation of Special Housing Areas (SHAs).

“Even if the land is a designated SHA, Councils can still refuse building consents if they think the area’s infrastructure might become overloaded and the Council is reluctant to invest in such infrastructure.”

Other problems are Councils each having different rules in terms of the amount of outdoor area required, the percentage of the section that can be built on, and different requirements for off-street parking.

However, Murrie said these obstacles could be overcome if central and local Government worked together more collaboratively.

For example, Councils currently have to carry SHA infrastructure costs alone. Central Government should help Councils fund the additional infrastructure.

It is possible to build quality, affordable houses, but the current administrative and regulatory environment is slowing the process down, Murrie said.

For this reason, another practical strategy would be for Councils and Government to develop a consistent regulatory approach across the country.

Murrie’s comments come as construction activity in Auckland ramps up in a bid to address the city’s supply shortage.

They also come in the wake of the recent exposure of shoddy construction work on a $50 million-plus Auckland housing development.

While the Council has confirmed its commitment to high construction standards, there is public concern that high levels of construction activity could result in lower quality work.

Building and Housing Minister Nick Smith’s recent statement that he is considering allowing builders to self-certify their work only added to the concerns.

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