Report on the Review of the Building Code: Background

3.1 Building and housing sector - an overview

The building and housing sector is an important contributor to New Zealand's economic and environmental performance and social wellbeing, employing about 190,000 people and contributing around 5 percent to gross domestic product. It affects every person in New Zealand - where they live and work, and how their communities function.

The sector covers physical building and construction, building professionals and local authorities, through to home and building owners, investors, landlords, tenants and property managers. It has a key role to play in long-term, sustainable strategies for the economy, society, environment and culture.

The government influences overall sector performance, the quality of building and housing, and the built environment. The government's interest in the sector is a consequence of the drive to build a sustainable economy, and to sustain family and community living standards.

3.2 Department of Building and Housing

The Department of Building and Housing is the government agency responsible for delivering on the government's building sector policies.

The Department was established in November 2004, bringing together as a one-stop shop the building and housing sector policy, and related regulatory functions and dispute resolution services, from a range of government agencies.

The Department's establishment arose from concerns in the late 1990s over the weathertightness of many buildings. These concerns led the Building Industry Authority (a Crown entity set up in 1991 to administer the Building Act 1991) to commission an inquiry, which led to a report (known as the Hunn report). The inquiry found widespread quality issues, some of them of considerable concern. The inquiry determined that these issues were caused, not just by poor performance of individual builders or designers, but by systemic failure within the building control system.

The government enacted the Building Act 2004 and established the Department of Building and Housing.

The vision in establishing the Department was to give the people of New Zealand access to quality homes and buildings at reasonable cost, provided by a capable and vibrant building sector and rental market. This includes ensuring homes and buildings reflect the New Zealand environment and contribute to a sustainable New Zealand.

The Department operates amid ongoing changes in society, the economy and the physical environment.

• The population is projected to grow to 5.05 million by 2051.
• Net migration has increased demand for housing.
• The population is ageing - ie, the percentage of older people is growing.
• Urbanisation is increasing.
• House prices continue to rise, with affordability issues resulting in a decrease in home ownership and increase in the number of people renting.
• Climate change is increasingly becoming an issue, particularly in terms of its effect on the built environment.

3.3 Building and housing sector reforms

The government has instigated wide-reaching building and housing sector initiatives, including:

• a review of tenancy law, to clarify and balance the rights and obligations of landlords and tenants
• a review of the Unit Titles Act 1972, to bring it into line with current trends in multi-unit accommodation
• work to ensure leaky homes are fixed, with effective disputes resolution processes, and future homes are weathertight
• bringing together government agencies to address the issue of housing affordability
• major reforms of the operation of the building and construction sector.

The Department of Building and Housing leads these initiatives, in particular implementing reforms provided by the Building Act 2004. These reforms address the whole process of building, looking at each of the different stages - design, consenting, construction and inspection.

Their overarching aim is to ensure that buildings are designed and built right first time.

Specific reforms are:

• the introduction, from 1 November 2007, of a licensing system for building practitioners, to ensure the sector is skilled, competent and accountable, and has the confidence of consumers
• the accreditation and registration of building consent authorities, to strengthen decision-making processes at the critical building consent and inspection stages
• the first full review of the New Zealand Building Code since its introduction in 1992 (the subject of this report)
• the development of a voluntary certification scheme for building products, so manufacturers can have their products certified as being Building Code-compliant if used properly
• an investigation of consumer warranties for building work.

The reforms reflect that, to build right first time, all parts of the building process must be robust.