The Government has announced its intention to reform the building consent system with the aims of improving efficiency and consistency in building consent delivery. At present some 67 Building Consent Authorities (BCAs) – which are usually local and district councils, can also be regional councils (for dams) and private organisations – operate across New Zealand, each with varying practices, leading to delays, costs, and inconsistencies. Building and Construction Minister Chris Penk emphasised that the system is not meeting New Zealand’s needs.
ISSUES WITH BUILDING CONSENTS
The existing BCA structure requires inspection and consent for building projects at the district or city council level. However, inconsistencies in interpreting the Building Code across different BCAs have led to project delays and added costs. This situation has been particularly challenging for large-scale builders, modular construction firms, and manufacturers working across regions, who must work with multiple BCAs.
New Zealand’s high building costs and restrictive consent process have also contributed to one of the least affordable housing markets globally. Minister Penk stressed that these inefficiencies are among the primary drivers of high building costs, impacting housing affordability nationwide.
PROPOSED REFORM OPTIONS
The Government is evaluating several reform options to create a more integrated building consent system:
- Consolidation of BCAs: This voluntary option would allow councils to collaborate and pool resources for building control functions, addressing barriers to integration and enhancing efficiency.
- Regional BCAs: This model would establish fewer, larger regional BCAs replacing the present local council BCAs. With economies of scale, regional BCAs would standardise processes, enhance consistency, and reduce duplication across regions.
- Single Point of Contact: A centralised submission system would be introduced for builders, with inspections contracted out to BCAs or private providers. This approach would encourage competition and specialisation, reducing the burden on builders and promoting efficiency.
REVIEWING LIABILITY SETTINGS
The Government is also reviewing liability in the building system. Currently, councils and their ratepayers may bear liability for the cost of remediation of defective work, even though others may also bear responsibility, but be insolvent or harder to pursue legally. This has led councils to take conservative approaches, often adding time and cost to the consenting process. The Government’s 2023 options paper noted that BCAs carry excessive responsibility for assuring Building Code compliance, and reform could relieve some of this liability burden.
WHAT’S THE PROCESS FROM HERE?
The Ministry of Business, Innovation and Employment (MBIE) will work closely with building industry stakeholders to discuss potential reforms. Based on this feedback, further recommendations will be prepared for the Building and Construction Minister, with public consultation scheduled for early 2025.
CONCLUSION
These reforms are part of an effort to address issues in New Zealand’s building system. A related amendment, the Building (Overseas Building Products, Standards, and Certification Schemes) Amendment Bill, was recently introduced to Parliament. This bill aims to promote competition by recognising certified overseas building products, simplifying the approval process, and reducing barriers to quality imported materials.
If you have questions about the proposed reforms or how they may impact your projects, please contact us for advice. We are here to help you navigate these changes and prepare for the evolving regulatory landscape.
