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Auckland Council tells govt it is 'strongly opposed' to its planned model for the housing crisis

Auckland Council is warning government officials of the risks of disastrous housing developments like some seen in the United Kingdom.

File image. Photo: 123RF

It is facing off over the way the government plans to get thousands of prefabricated homes built here to tackle the housing crisis.

An email sent last week by council building control officers to the Ministry of Business, Innovation and Employment (MBIE), and obtained by RNZ, said: "We are strongly opposed to the planned model."

After the failures of KiwiBuild, the government wants quick changes to building regulations to streamline prefabricated housing, and has made that a top ministry priority this year.

"Faster and cheaper construction through greater use of prefabrication and offsite construction will also bring more affordable homes to the market," MBIE says on its website.

However, councils have expressed grave reservations about quality and liability falling on ratepayers.

"We believe this needs to be considered further with urgency before the head regulations are put in place and that it is not something which can be resolved by detailed regulations later - if the skeleton of the process is fundamentally flawed," the Auckland Council email said.

In the email was a link to a video by a much-lauded BBC documentary team, about how UK council tower blocks were built so badly that mass demolitions were needed.

The email said the documentary, despite being more than three decades old, was worth watching for similarities with New Zealand here and now.

"It ... has similarities of a drive primarily for 'faster and cheaper' construction ... which is of course a good objective, but not if it is at the expense of quality," the email said.

The government for months has been lauding the potential of "modern methods of construction", but this requires scaling up a small industry; for this, regulatory certainty and less red tape would help.

Its plan is to remove one of two layers of council consenting controls, to try to halve the number of inspections by limiting these to on-site installation, while factories came under a certification scheme.

"A second consent won't be required for the design or factory work," MBIE said.

Some prefabrication factories are in New Zealand; at least two are part of companies that have recently failed.

Many others are in Asia, where New Zealand building standards do not apply, though some of these have already been building for the New Zealand market for some years.

Behind closed doors, the Auckland Council officers warned MBIE there were "currently huge gaps in understanding" and that it was not in building owners' interests to let factories build houses without councils consenting them.

Publicly, the council issued a statement to RNZ saying its exchange of ideas with the ministry was "very much part of the usual process around regulatory changes".

Auckland Council's general manager of building consents, Ian McCormick, said: "We are continuing to work closely and constructively with them to discuss possible improvements".

The ministry in a statement said it had taken on board feedback "wherever possible, and a preferred approach has been identified".

"The quote from the email you reference in your query was only one part of a very productive conversation with Auckland Council."

These conversations were par for the course and "they have not slowed down our process", he said.

Worries more widespread

The worries are not confined to Auckland, or to issues of quality, with liability for councils and ratepayers the other nettle.

Local Government New Zealand in its submission told MBIE that councils should not be held liable if they were "unable to verify the components used in manufacture", or carry the can for other councils' consenting work (because a factory might be in one city, and the house end up in another).

A council might have little or no control over what's in these homes - the plumbing, electrics, the weatherproofing or fire-proofing of cladding or roofing, the structural integrity of a modular house - but still be expected to sign off on them at the end after inspecting only the foundations and connection of services like water.

MBIE already uses a system called MultiProof to speed up consenting of standardised designs, but the Building Act specifically excludes councils for liability under it.

The government for its part, backed by parts of the building industry, has been talking up factory manufacture as more precise, safer, with less waste; so, a higher quality of build in a construction industry beset with quality control problems.

A Cabinet paper last October from Building Minister Jenny Salesa laid all this out and said there was "broad support from the building sector for these proposals".

The ministry got 470 submissions in its consultation about the reforms.

"The use of modern construction methods has the potential to transform New Zealand's building system to operate more efficiently and better meet housing needs," Salesa said, promising further consultation to get the rule changes right.

Councils' consenting of factory builds at the moment was inconsistent, and this "uncertainty makes it less appealing" to manufacture houses, she said.

One bonus of the government plan is that the cost of checking on factories in Asia would not fall on ratepayers, as it can when that duty falls to councils.

But just how the government's proposed manufacturer certification scheme would work is unclear.

LGNZ wants it administered by the central regulator, or a specialist certification agency.

However, when the ministry attempted this with its supposedly flagship CodeMark building products assurance scheme - using the administrator Jas-anz in Australia - it ended up with certification that was full of holes.

Lawyers writing in the latest Build magazine say that some prefab housing suppliers might try to dodge council inspections on-site, and "attempt to rely on the manufacturer's certification" entirely.

"This could result in a reduction in building quality and an increase in enforcement action."

Building consultants have raised worries with ministers for several years, warning for instance, that the Building Act could not compel a house importer to ensure it was built to the New Zealand Building Code.

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