KiwiBuy Kiwi Beg KiwiFail

May 15, 2018

KiwBuild was supposed to add 100,000 houses for those struggling to get into their first home.

But KiwiBuild has turned into KiwiBuy or even KiwiBeg.

The government buying houses that were going to be built anyway will put public money at risk without adding a single extra dwelling to the nation’s housing stock.

The housing shortage is caused by an imbalance between supply and demand.

There are several reasons for that including a consent process akin to trying to run through a river of treacle in gumboots.

Not PC gives some examples of the hoops that add time and cost to the process:

. . .In recent months, for example, and like every regular applicant for building consents, I’ve spent many, many hours replying to council’s Requests for Further Information (RFIs). These days it’s often less about being a designer than it is about being a lawyer, explaining the building code clauses to the processor at the other end of an email.

The simplest RFI responses are to tell the questioner where precisely in the document set they can find the answer to their question, already addressed. But in recent months it’s been getting worse. Among other things, in order to keep things moving I’ve been required to tell council the make and model of a shower and the finish of a bathroom cabinet; the colour of bedroom carpets (accompanied by a calculation to show they’re bright enough); the normal process by which to pour a concrete footing in engineered soil, to abandon approved details because the territorial authority has decided they don’t like them, and to replace them with those they’ve now decided they do; to discuss the acoustics of polystyrene sheets (that are not being used for acoustic purposes); to resupply calculations and statements that the processor has already received, but lost; to explain why handrails are not required on steps with fewer than two treads, and how an opening window into an open lightwell allows light and air into a room; to draw up a list of a project’s “construction and demolition hazards”; to provide mechanical ventilation rates for areas we’ve shown will use natural ventilation; to draw up simple diagrams because processors are unable to read fairly standard plans; to confirm the use of smoke detectors (when they’ve already been clearly placed and labelled on drawings); and (in the absence of council finding anything else to ask about) to draw a detail of a bathroom splashback — just some examples of recent Requests from processors, all of which have wasted my time and theirs, unnecessarily dragging out the consenting process, and all at the time and expense of clients who were once very eager to build. . .

The worst example that I’ve come across was an applicant being asked to draw on a plan where the furniture would go.

If the government was really serious about a long-term solution to housing it would be addressing problems with the Resource Managment Act and building regulations.

It would also ensure council staff stop playing silly beggars with the consent process.

Until that happens KiwiBuild, KiwiBuy and KiwiBeg will be KiwiFail.

 

 

 


Check your swtich board regularly

September 23, 2015

The power went out in our office.

We called an electrician who found this in the switchboard:

switch

The whole board was replaced when we altered two years ago.

The electrician found some of the what-nots (for which there is a technical term which escapes me as I type) needed tightening – some because they can come loose over time, some because they’d never been tightened properly in the first place.

Friends lost power recently and the cause was also found to be due to over-heating in the switch board.

The Fire Service reminds us all to check our smoke alarms when the clocks go forward and back (mutter, mumble, forward this weekend, which is at least three weeks too early). It would pay to check switch boards at the same time.


Targeting earthquake risk

May 11, 2015

Building and Housing Minister Dr Nick Smith announced a targeted approach to building regulations for earthquake safety at the National Party’s Mainland conference yesterday:

“The priority in developing this earthquake strengthening policy for buildings is public safety and minimising future fatalities. We also need to ensure the response is proportionate to the risk, that the costs are minimised and that we retain as much of our built heritage as possible,” Dr Smith says.

The four significant changes to the policy are:

  • Varying the timetable for strengthening relative to earthquake risk
  • Prioritising education and emergency buildings for strengthening
  • Reducing the number of buildings requiring assessment; and
  • Introducing new measures to encourage earlier upgrades.

“The timeframe for identification and assessment of five years and strengthening of 15 years is to be varied relative to seismic risk. The return period for a significant earthquake (MM8) ranges from 120 years in Wellington, to 720 years in Christchurch, to 1700 years in Dunedin, and only once every 7400 years in Auckland. New Zealand is to be categorised into low, medium and high seismic risk zones with timeframes for assessment of five, 10 and 15 years and strengthening of 15, 25 and 35 years,” Dr Smith says.

“Education and emergency buildings will be targeted by requiring that in high and medium seismic risk areas they be identified and strengthened in half the standard time. We are prioritising all education buildings regularly occupied by 20 people or more. We also want to ensure buildings like hospitals can maintain services in the aftermath of a significant earthquake.

“The scope of buildings requiring assessment is to be reduced from an estimated 500,000 to 30,000. We are excluding farm buildings, retaining walls, fences, monuments, wharves, bridges, tunnels and storage tanks. The new methodology for identifying earthquake-prone buildings will ensure the focus is on older buildings like unreinforced masonry that pose the greatest risk.

“Building owners are to be encouraged to upgrade their buildings ahead of the allowable timeframe by establishing a web based public register and requiring notices on such buildings highlighting the level of risk. There will also be a new requirement to strengthen earthquake-prone buildings when doing substantial alterations.”

The Government also confirmed that the earthquake-prone building definition as being less than 34 per cent of the new building standard (NBS), a 10-year extension for listed heritage buildings, and exemptions from strengthening for low risk, low occupancy buildings, would remain in the policy.

“The effect of these policy changes is that buildings like schools, universities and hospitals in high and medium seismic risk areas will have to be upgraded more quickly, but buildings in low risk areas like Auckland and Dunedin more gradually. This more targeted approach reduces the estimated cost from $1360 million to $777 million while retaining the safety gains. The policy will result in an estimated 330 fewer deaths and 360 fewer serious injuries from earthquakes over the next century,” Dr Smith says.

“The select committee is considering the Bill and will be reporting back to Parliament in July with passage later this year. We will also be consulting on the detailed regulations like the assessment methodology, the Earthquake-Prone Buildings Register, the building notice requirements and the definition of substantial alterations.

“There are no easy answers to the seismic risk posed by thousands of older buildings in New Zealand. We cannot completely eliminate the risk to life, nor save every heritage building, nor avoid a bill for hundreds of millions in upgrading. This is the most comprehensive policy of any seismically active country for dealing with older buildings and strikes the right balance between safety, cost, heritage and practicality.”

The Minister’s full speech is here.

The schedule of the revised timetable by location is here.

A map of the new zones is here.

This policy is pragmatic and practical and has been greeted positively.

The Construction Strategy Group says it is realistic:

The targeted risk-based policy adopted by the Government toward strengthening of earthquake-prone buildings appears realistic for the circumstances with which the country is dealing says the Construction Strategy Group (CSG).

Chairman of the CSG, Geoff Hunt, said today that in adopting a measured position reflective of the realities that earthquake risk in New Zealand varies significantly between regions the Government was taking a realistic approach.

“A policy which puts aside more onerous and unreasonable requirements for upgrading commercial structures in low risk regions, and disposes of top level upgrades for little-used farm sheds and such buildings as isolated rural country churches, is practical and sensible,” he says.

“The CSG has long advocated a policy that takes account of risk factors. It is supportive of the intention to set a ‘must upgrade’ base line of 34 percent of today’s new building standard. The new time frames for upgrading earthquake-prone structures are also helpful in bringing cost factors into line with affordability.

“The regional categorisation of regions into low, medium and high risk zones will allow local government to take a realistic policy approach.

“The openness to public scrutiny of a building’s earthquake resistance status is also helpful to public safety. It will also ensure constant pressure on building owners with at risk buildings to have them brought up to speed sooner rather than later.

“Priority focus on upgrading the 30,000 most at risk buildings and on upgrading schools and hospitals is a matter of necessity.”

Dunedin Mayor Dave Cull said the move was positive:

He said strengthening must still go ahead, but he was pleased Dr Smith had listened to the concerns of southern councils which had lobbied him ”intensively” for two years for change.

”To his credit, he’s listened to those concerns and yes, he will [now] adjust according to [earthquake] risk,” Mr Cull said when contacted last night.

Mr Cull said the ”one size fits all” edict had been detrimental to the lower South Island because of the large number of older buildings.

”Basically, it would have been uneconomic to fix [earthquake proof] them and a lot would have had to be demolished,” Mr Cull said.

The first policy proposed for earthquake safety measures took no account of risk.

Owners of historic buildings in low risk areas like Oamaru and Dunedin would have been forced to demolish their buildings because they would not have been able to do meet the proposed standard in the proposed time.

This policy takes a much more balanced approach based on risk.

It doesn’t mean that earthquakes won’t strike low risk areas nor that a quake won’t kill people.

The Minister rightly says We cannot completely eliminate the risk to life, nor save every heritage building, nor avoid a bill for hundreds of millions in upgrading.

This policy balances risk and cost.


10 major changes to RMA proposed

January 22, 2015

The government will be including 10 major changes to the Resource Management Act in the second stage of reforms:

Overhauling the Resource Management Act (RMA) is critical to addressing housing supply and affordability, and maintaining the momentum of economic and job growth as well as better managing New Zealand’s environment, Dr Nick Smith said today in his 20th annual speech to Nelson Rotary.

“The Resource Management Act has produced over 80,000 pages of plans and rules across New Zealand’s 78 councils. This 10-metre mountain of red tape is holding back the development of new houses and jobs, and it is not performing well enough in managing key resources like freshwater,” Dr Smith says.

“The Government is planning the most significant overhaul of the Act since its inception 25 years ago. We want to modernise the purpose to make it more practical and relevant, standardise council plans and simplify the process for gaining consents.”

It shouldn’t be necessary for every council to have their own individual plans and rules for every aspect of resource management and planning. At least some of these could be standard across the whole country.

Dr Smith today also released an independent report by Motu Economic and Public Policy Research – commissioned by the Treasury and the Ministry of Business, Innovation and Employment – into the impacts of planning rules, regulations, uncertainty and delay in residential property development.

The report concludes that the RMA is adding an extra $30,000 to the cost of an apartment, an extra $15,000 to the cost of a home, and that it is reducing the capacity of housing development by 22 per cent.

“This report is consistent with the conclusions of the Productivity Commission and the Organisation for Economic Cooperation and Development in highlighting the high administrative burden of our system of environmental regulations, but also adds new information by estimating the actual cost of its flaws. It indicates that over the last decade, the RMA has added $30 billion to the cost of building and reduced new housing stock by 40,000 homes,” Dr Smith says.

Dr Smith also cited practical examples in his speech of where the RMA had wasted health and education funding, and where councils were using the RMA to unnecessarily interfere in people’s lives.

“Our first phase of RMA reforms has made a positive difference in getting consents processed more quickly, including for major projects like the Waterview Connection in Auckland, but we have always made plain more substantive change was required,” Dr Smith says.

Dr Smith outlined ten major changes the Government would be including in its second phase of reforms in 2015:
• Add natural hazards
• Recognise urban planning
• Prioritise housing affordability
• Acknowledge importance of infrastructure
• Greater weight to property rights
• National planning templates
• Speed up plan-making
• Encouraging collaborative resolution
• Strengthening national tools
• Internet for simplicity and speed

“Today’s speech sets the direction for reform. We have a power of work ahead to do with officials, our support parties and Cabinet committees to finalise and draft the required Bill. Our ambition is to have the Bill before Parliament and through a full select committee process this year,” Dr Smith says.

“These reforms will be pragmatic and moderate. We want to reduce the mountain of plans and rules that make the RMA a barrier to new housing and jobs, but retain the core environmental controls that ensure we keep New Zealand special and such a great place to live.”

The proposed changes won’t discount the importance of the environment but will ensure that environmental, economic and social considerations are in balance.

The full speech is here. In it Dr smith says:

The big challenge in the environmental area is finding a path that better manages New Zealand’s water, air, oceans and native flora and fauna while
enabling our economy to grow and prosper. Key priorities this year will be passing a new Environment Reporting Act to give greater clarity to New
Zealand’s important clean, green brand. . . .

Environmental protection and enhancement and economic development aren’t mutually exclusive.

 . . . the most challenging of my jobs this year will be the reform of the Resource Management Act. The Act, in governing the use of water, land, air and the coast, and which is responsible for protecting heritage, native plants and animals is so wide-ranging that it has implications right across the economy and into almost every facet of life.

There is not a single official anywhere who understands this huge pile of RMA plans and rules. Even at a local level, only a few individuals working in council or in planning consultancy will fully understand how the rules work in their city or district. . .

If they don’t understand it how can anyone else?

  The OECD published in November a comparative study of its 34 member countries on the cost burden of environmental regulation. In most OECD reports New Zealand ranks very well as a good place to do business and create jobs. We ranked bottom when it came to the administrative burden of the Resource Management Act. I have no problem where there are costs to achieve good environmental outcomes. The OECD study actually showed that many countries had more stringent
environmental policies than New Zealand but a far lesser administrative burden.

A key difference of the New Zealand system of environmental regulation under the RMA is that we have a very fragmented system where there are
differing rules in every district and region, and secondly that we require consents for most activities when most other countries simply had national
standards that had to be met.

National standards would be far better for many activities.

Examples can be more powerful than national or international studies. I get inundated with hundreds of complaints from all corners of New Zealand and
from people from all walks of life with frustrations over their experience with the RMA.

My first example is the Stoke Medical Centre, a typical suburban GP clinic on Main Road Stoke, employing 15 full-time staff. Three years ago the practice
wanted to expand its staff and extend its permissible opening hours. This required a change to their resource consent which Council ruled under the Act
had to be notified. Six months and $57,000 of bills later the amended consent was granted with the requirement that they had to provide seven new bike
stands. And this cost excluded the time doctors and practice staff had spent on the process. The bike stands cost $35 each but the bureaucratic paper
associated with each meant they ended up costing over $8000 a stand. The tragedy of this case is that the $57,000 consent cost will ultimately come out
of the health budget and people’s GP charges in an area where there are many low income struggling families and retirees.

It is not just health dollars that are being wasted under the RMA. The resource consenting process for Nelson’s new Young Parents’ School
officially opened by the Prime Minister last year was a fiasco. The new school is smart social policy aimed at supporting teenage mums by enabling them to
continue their education, while also ensuring their pre -school children are engaged in education from an early age. The school is sited at Auckland
Point School where the roll is a lot less than the school’s capacity. The Principal and Board of Trustees fully supported the initiative being on their
school site.

The problem was that the school is designated under the RMA for “primary education” and the Young Parents School was about providing education for
secondary school age mums and early childhood education for their children. This meant under the RMA a change of designation, notification of neighbours
and a full Commissioner hearing at a direct cost of $64,000. There would have been no change out of $100,000 if you included the considerable staff
time of the Education Ministry, Kindergarten Association and school. This process also delayed the Young Parents School’s opening by more than a
year. More was spent on the RMA bureaucracy than on the facility for the specialist teachers, young mums and their babies.

The nonsense of this case is that the RMA is meant to be about protecting the environment and whether Auckland Point School has primary, pre-school or
secondary students, makes not a jot of difference. The early childhood regulations and building consent requirements are separate and ensure the facilities are safe and appropriate. More good would have been achieved for the environment had the $64,000 of cash been deposited in the school’s composting bins.

I could give hundreds of examples of the RMA wrecking Kiwi family dreams of building their own home. I choose this Nelson example because it illustrates how far council planners under the RMA are now intruding into people’s lives. A couple in their 60s bought a 630 square metre flat section in Sanctuary Drive in the Marsden Valley. Their architectural designer produced plans for their dream home that included an internal access garage in the front corner to minimise the portion of the section used for the driveway and located their living area so as to maximise the sun. The orientation was similar to 14 other homes in the subdivision. They were gobsmacked to have their consent application declined on the basis of a new RMA rule that had just come into
effect in late 2012. They were told they had to relocate the garage out the back and have their living area face the road. 

The RMA justification for rejecting the design was that the house failed to provide for a “positive private to public space relationship”. In plain language they wanted the living area to face the road so the residents would keep a safe eye on the street. The couple abandoned the section at a cost of many thousands of dollars. So much for a person’s home being their castle.

The RMA is being used to micro-manage building designs down to the extent of what direction people should look.

This sort of madness has been repeated in Auckland and had property magnate Bob Jones venting his spleen late last year. He owns a 17-storey CBD building and wanted to re-establish a ground-floor shop window that had been blocked off by a previous tenant. Not only did this minor work require a $4500 resource consent, but because it would have people looking out on a designated heritage site, the consent required a cultural impact statement and consultation with 13 iwi. This is all for permission to replace a window!

This isn’t only madness, it’s expensive, wasteful and the triumph of bureaucracy over common sense.

These and many other examples show why change is needed.

The Motu Economic and Public Policy Research report is here.

 


Whose property is it?

November 3, 2014

The High Court has ruled against a property owner’s appeal for permission to demolish a building he owns:

The eight-storey Harcourts Building on Lambton Quay, which was built in 1928, has been declared earthquake prone and most of its major tenants have left.

Its owner, Mark Dunajtschik, says he cannot afford to strengthen the building, but after one consent hearing and three court cases he has been told he cannot demolish it. . . .

In seeking the right to demolish, Mr Dunajtschik argued earthquake strengthening would cost $12 million, which was not worth it for a building worth just $14.5 million.

However, the court ruled an earthquake-strengthened historic building would be worth $18 to 20 million, changing the economics completely.

Property magnate Sir Bob Jones, who gave evidence to the hearing, thinks the post-strengthing value of the Harcourts Building would be even greater, and accused Mr Dunajtschik of not understanding the market.

Mr Dunajtschik declined to respond to that.

The Environment Court ruling leaves everyone in limbo, saying only that the building cannot be demolished. It does nothing for a building owner who does not earn enough from it to pay for its upkeep.

The ruling also does little for public safety, since the building would not be legally required to be strengthened for at least another decade.

Nor does it do much for a nearby tower block housing the Ministry of Foreign Affairs and Trade, which the Environment Court itself says could collide with the Harcourts Building during a major earthquake, and have its lift shaft wrecked.

The owners of Christchurch Cathedral have permission to demolish the building which suffered major earthquake damage but a community group is fighting to have it rebuilt.

A poll  found that 51 per cent of people want the cathedral restored, compared to 43 per cent who want it demolished and replaced with a new building.

About 77 per cent of those polled believe Christchurch people should have a say in the future of the cathedral, while 58 per cent feel a close tie to the building and would be sad to see it demolished. A majority of 68 per cent of those polled believe restoring the cathedral would be a morale boost for the city.

The poll found that 66 per cent of people believe it is possible to restore the cathedral.

More people – 66 per cent – want the cathedral to be restored if there would be no cost to the ratepayer and it would cost about the same as a new building.Thirty per cent would still be in favour of a new cathedral even if there was a cost to ratepayers. . .

The ratepayers don’t own the cathedral and the poll didn’t take into account the safety risks in rebuilding.

In both cases the property rights of the owners are being overlooked.

Whether or not the value of the Wellington building would be higher if it was strengthened, the decision on how and how much money the owner spends should be his unless those telling him he can’t demolish it are willing to contribute to the costs of strengthening it.

The cathedral owners have made the decision to build a new cathedral on the site of the old one on the grounds of safety and cost.

It is their building, their money and their risk and therefore their decision.

Property rights are an important plank of democracy which are eroded if other people can dictate what owners do without compensating them.


Rules reduction task force launched

October 21, 2014

Local Government Minister Paula Bennett has launched the Rules Reduction initiative, opening the way for people to submit examples of property regulations and local rules that don’t make sense.

“People can now head to http://www.govt.nz/rulesreduction, to start telling us what bugs them when it comes to loopy rules and regulations,” says Mrs Bennett.

“I’m also pleased to announce the Rules Reduction Taskforce will be jointly chaired by Jacqui Dean MP, Parliamentary Private Secretary for Local Government, and Michael Barnett ONZM, Chief Executive of the Auckland Chamber of Commerce.

“Both Jacqui and Michael bring with them a strong understanding of the local government and business sectors and will be well placed to guide the Taskforce in its work to cut red tape.

The remaining members of the Taskforce will be appointed within the next month, and will include central and local government experts, and specialists from the building and trades sector, with further announcements to come on the timeline for the Taskforce’s work.

“I’m asking property owners, builders, tradespeople and businesses who have experienced the issues caused by irrelevant or unnecessary regulations, to help draw these to our attention,” says Mrs Bennett.

The information gathered will inform the Taskforce, which will consider submissions and ultimately recommend any necessary changes.

“Central and local government need regulations which are effective, and help get the job done – not get in the way. Regulations that frustrate property owners and business people also suck up councils’ precious resources in administration time and effort.”

“We need to hear from New Zealanders about examples that have got in the way of their building, renovation, landscaping, and home improvement plans, so that we can cut the red tape where it needs to be cut, to help them get on with the job.”

The submission form can be filled out online at http://www.govt.nz/rulesreduction

Facebook (facebook.com/cutredtapenz) and Twitter (twitter.com/CutRedTapeNZ) will be used to spread the word and encourage submissions via the online form to the Taskforce.

When we were altering our home last year, our builder told us he reckoned legislation, most of which was unnecessary had added about $20,000 to the cost of a new home.

Some rules are necessary for safety’s sake and to protect people from shoddy standards.

But this task force should have no shortage of rules which at least need to be simplified and probably could be done away with altogether.

And building won’t be the only area where fewer rules could reduce costs without causing any harm.


Why not make it permanent?

July 1, 2014

Import tariffs on a range of building products will be temporarily suspended from today – a measure which is expected to reduce housing costs and increase competition in the residential construction sector, Housing Minister Dr Nick Smith and Commerce Minister Craig Foss.

“The building materials covered by the tariff suspension comprise about 90 per cent of the cost of the material in an average new house. Currently, these materials attract tariffs and duties that add an estimated $3500 to the cost of a new home. These will be cut to zero per cent tomorrow for at least the next five years,” Dr Nick Smith says.

“The scheme includes a comprehensive list of materials such as roofing, cladding, framing, windows, doors, insulation, plumbing and electrical components, fixed cabinetry, paint and builders’ hardware and fixings,” Dr Smith says.

“New Zealand is a small market for building materials. While we would prefer as much content as possible is locally manufactured, we need the competitive pressure of imported products to ensure we are getting best value for money,” Mr Foss says.

“It is through competition and choice for consumers that we keep costs down.”

The tariff suspension comes off the back of the Budget 2014 initiative to temporarily remove anti-dumping duties for building materials, for which legislation was passed under Budget urgency in May. The temporary suspension of tariffs on building materials will reduce Crown revenue by $5.5 million each year, which was provided for in Budget 2014.

“Suspending import tariffs on building materials is consistent with this Government’s strong public commitment to address housing affordability, particularly given the need for building materials for the Canterbury rebuild and increased construction activity across the country,” Dr Smith says.

“There is no single magical solution to improving housing affordability. We are freeing up land supply, reining in development contributions, cutting compliance costs and investing in skills and productivity in the construction sector. It is about making a whole lot of changes like removing tariffs and duties that aggregate together to make homes more affordable.”

I have just one problem with this – that the removal of tariffs is temporary.

When we spend a lot of time and energy extolling the benefits of free trade to other countries we have to be open to imports ourselves.

Tariffs protect inefficient producers and add costs to everyone who builds something new or repairs something old.

Why not make the suspension of tariffs permanent?


Southern swell of confidence

January 8, 2014

A southern swell of confidence is set to drive record activity this year.

A record wave of business activity is set to sweep across the nation in 2014, driven by a swell of optimism from the South Island, according to ANZ’s quarterly Business Micro Scope survey of small firms. Retailing, agriculture and manufacturing are leading a lift in optimism which has seen firms’ expectations of their own activity, hiring and profitability for the coming year soar to new highs.

Fred Ohlsson, ANZ’s Managing Director, Retail and Business Banking, said:

“Rising confidence is sweeping across New Zealand, further boosting the outlook for businesses and the economy in 2014. Construction and agriculture are caught in the tail wind of the Canterbury rebuild and increasing commodity prices. But optimism is at or near historic highs across all major sectors, paving the way for a broad-based uplift in business activity, employment and economic growth.

“These factors have come together to create a sweet spot for the South Island, with optimism in Canterbury spilling over to the rest of the island whose record-high optimism now tops that of Canterbury itself. Though not quite at these levels, business confidence in Auckland also enters the New Year at a new high which bodes well for the role of our largest city in the upturn.

It is significant that optimism is at or near record high in all sectors – not just construction on the back of the Canterbury rebuild.

Highlights from the Dec 2013 ANZ Business Micro Scope survey of small firms:

[Net percentages reflect the balance of sentiment – i.e. positive minus negative responses]

• Confidence is at its highest since comparable data was first collected in 1999, with record numbers of firms expecting to up activity, hiring and profitability in 2014.

• A net +45% of firms expect to lift business activity in the coming year, double the long-term average. A net +17% plan to take on more staff and +29% expect profits to rise.

• Confidence in Canterbury (up from +21% to +27%) is spilling into the Rest of the South Island (up from +21% to +30%) which now leads the nation. Auckland firms continue to gain confidence, reaching a new high for the region of +24%.

• Services is the most upbeat sector, at +25%. Retailing recorded the largest lift in confidence (from +14% to +22%), followed by Agriculture and Manufacturing. Agriculture was the top sector for profit expectations for the first time in two years.

“These findings mirror what we’re hearing from customers: they see the approaching growth wave and are gearing up to ride it in a way that positions them better for future economic cycles. For a nation of small businesses, this spells good news for employment and the ongoing strength of our economy.”

Confidence is  vital for business investment – it’s what encourages them to take risks, including the risk of employing more people and  increasing pay rates.

It also tends to be infectious – businesses which see confidence increasing in other businesses are more likely to feel more confident about, and see new opportunities for, their own.


Cathedral isn’t public property

December 3, 2013

The group trying to stop the demolition of Christchurch cathedral has lot its bid to appeal to the Supreme Court.

http://www.nbr.co.nz/article/supreme-court-denies-bid-stop-demolition-christchurch-cathedral-sf-149504

The Supreme Court (Justices John McGrath, Susan Glazebrook and Terence Arnold) considered four Court of Appeal findings in dispute.

First, the Court of Appeal found public funds donated to the cathedral were irrelevant in determining the church’s powers.

Second, the church is free to demolish the existing structure.

Third, the church has no obligation at all to maintain or repair the existing structure.

Fourth, the church is required to have “a” cathedral, not maintain or repair the existing one.

The Supreme Court found the issues raised were that of interpretation of the law, not legal errors in the Court of Appeal findings.

“We are accordingly satisfied that no legal question of general or public importance arises from the application for leave to appeal,” the judgement says. . .

Christchurch lost a lot of beautiful buildings in the earthquakes and there is a sentimental link to the cathedral for many people, whether or not they are members of the congregation.

But while the cathedral is regarded as a public building it’s not public property.

It’s the church’s property and it’s up to them to decide on whether they should try to reconstruct what’s left of the existing cathedral or build a new one.

They’ve opted for a new one and should be left to spend their money on that rather than fighting for their property rights in court.


Heritage trumps safety

October 11, 2013

Quote of the day:

. . . Deaths in earthquakes are somewhat unavoidable. But deaths caused by regulatory structures that force that little value is placed on human life, or that prevent a building owner from tearing down a building very likely to kill a pile of people in a quake, are worse than tragic – they’re stupid. Offsetting Behaviour.

It’s in a post on heritage rules which make some buildings untouchable and how the burden of providing the heritage amenity falls on the owner of the building.

He has a better idea:

I’ve suggested an alternative structure where we run heritage protection as an on-budget Council expenditure. Have each Council decide how much money they’re willing to put into heritage preservation, perhaps have Central provide a matching grant, and open it up to further voluntary contributions from the public. Then, have the heritage boards decide how and where they want to spend the money – paying building owners for the amenities they provide. This would force some consideration of the cost of providing some heritage amenities and focus preservation efforts on where they’re most cost effective. . .

If the public values something private and takes away the rights of the owner, the public must be prepared to pay.

As it stands heritage is trumping both property rights and safety and this is what will happen.

The next step in the fracas that the future of the Harcourts building in Lambton Quay has become is likely to result in Wellington’s own version of the Marie Celeste, that abandoned ghost ship of the Atlantic.

After all the to-ings and fro-ings to get the only commercially viable option of demolition and rebuilding approved, the owner has pulled the plug and intends to cordon off and abandon the building for safety reasons because its heritage value is apparently unique but unaffordable to retain. . .

Buildings will be abandoned, become eyesores and still be dangerous.


Heritage trumps property rights

October 9, 2013

The Property Council is deeply disappointed with the Environment Court ruling that the heritage-listed Harcourts building in Wellington’s city centre cannot be demolished.

While public safety is an obvious concern, the decision sets a dangerous precedence for all owners of historic buildings and the wider public. It fails to consider the hefty financial cost of upgrading the building to the New Building Standard (NBS), whether feasible or not.

In many cases building owners will have the will, but not the financial ability to carry out structural work when constructions costs can often be higher than the total value of the property. The unintended consequence is for the buildings to remain standing but becoming derelict – creating a greater risk to the public. . .

In a worst case scenario for Wellington, NBS requirements mean that the buildings are left for ‘demolition by neglect’ resulting in large areas of the city left vacant and causing an economic downturn in the affected areas .

Someone with historic buildings on a farm we visited a few months ago is leaving them to be demolished by neglect.

They had a plan to restore most of them but their consent was blocked by a heritage order so now they’re doing nothing and all the buildings will eventually fall down.

“Every main street in every town in New Zealand has a Harcourts type building. The construction cost of the required works would more often than not be higher than the end value of the building,” said Property Council’s Wellington branch president Andrew Hay.

In many cases the same buildings are owned by local authorities and it is in no one’s interest to cripple the finances of small towns simply for heritage preservation.

Wellington’s local government must take into account the rights of property owners in this regard if the health of its commercial property market is to be at optimum.

Property Council calls on the Government to explore financial incentives for property owners of heritage buildings to upgrade their structures to the minimum NBS.

Allowing heritage values to trump property rights without any compensation or assistance towards funding work needed to make a building safe will cause problems all around the country.

Many owners won’t be able to afford to get their buildings up to the required standard and, even if there was a case for public funding, the country’s books aren’t in a state to do so at the moment.

Given that, safety should trump heritage values and owners should be able to demolish buildings which are unsafe.


Freedom Tower

September 11, 2013

It’s still September 10th in the USA but it’s the 11th (11.9 to us but 9.11 to them) here.

I woke up that morning to hear my farmer saying “they’ve crashed” and spent the next few hours checking in to the live broadcasts as the horror unfolded.

Each time I travel I’m reminded of that day and how it changed the way we do things.

But twelve years on the focus is on the Freedom Tower which is  nearing completion.

Soaring above the city at 1,776 feet, One World Trade Center will be America’s tallest building – and an indelible New York landmark. Designed by David M. Childs of Skidmore, Owings & Merrill, the 2.6-million-square-foot building will include office space, an observation deck, world-class restaurants, and broadcast and antennae facilities.

Begun by Silverstein Properties in April 2006 and taken over by the Port Authority of New York and New Jersey, construction has accelerated in the last year.   . .

 

 


Victory for property rights

July 26, 2013

The Court of Appeal has upheld a High Court ruling that Church Property Trustees is entitled to demolish Christchurch Cathedral if it constructs a new cathedral on the same site.

Derek Golding  took photos of cathedral’s stained glass windows taken in 2007 which show how beautiful the building was before the earthquake.

But this is what it looked like in March.

cathedral march

New Zealand’s built heritage is young by world standards. Preservation of historic buildings for future generations should be taken seriously but not done at all costs.

The Cathedral has been regarded as public property but it isn’t.

It’s the property of the church and the decision on whether it is possible or preferable to attempt to preserve what’s left of the building is theirs.

By ruling in the trustees’ favour the court has upheld their property rights.


An isolated case?

June 19, 2013

They had applied for building consent.

The City Council  responded with several queries.

One of those was a request for a furniture plan.

A furniture plan?

Why should anyone but the owners be concerned about where the furniture goes and why does it matter for a consent?

Is this an isolated case or is it one of many examples of compliance requirements which add to the time and cost of building for no useful purpose?


215,000 and counting

May 23, 2013

Share this if you like our progress in making homes healthier for Kiwi families.<

New Zealanders have been very slow to build to suit our variable climate.

Designing and situating a house to make the most of the sun, insulation and double glazing make a huge difference to comfort levels and reduce the need for heating


Cost higher than risk?

March 7, 2013

Proposals for changes to the system for dealing with earthquake-prone buildings have caused consternation among councils.

The proposals set out a consistent national approach to dealing with these buildings.

Essentially the proposals would require all non-residential and multi-unit, multi-storey residential buildings to have a seismic capacity assessment done within five years. Owners of buildings identified as earthquake-prone would then have up to 10 years to strengthen or demolish these buildings. . .

That might have looked feasible on a drawing board in Wellington but it’s not regarded as affordable or necessary by provincial councils.

The Government’s proposals to deal with earthquake-prone buildings place too much emphasis on the earthquake risk, at substantial cost, in comparison to other risks (both natural and other) that individuals and local communities face, the Dunedin City Council says. . .

The consultation document contains proposals to improve the earthquake-prone building system, in response to the recommendations of the Canterbury Earthquakes Royal Commission.

The proposals include substantial changes to local systems that could cost $1.8 billion in the southern South Island, according to an assessment commissioned by local councils.

They include a much greater role for local authorities in assessing buildings and much shorter time frames for either upgrading or demolishing earthquake-prone buildings. . .

The plan has also met with outrage from some civic leaders and landlords.

Dunedin Mayor Dave Cull, Otorohanga Mayor Dale Williams and Hastings Mayor Lawrence Yule, who is also president of Local Government NZ, have spoken out against the proposals, saying provincial towns and rural communities would be financially ruined.

Timaru Mayor Janie Annear has described the proposals as devastating. . . .

Waimate mayor John Coles says if the proposals are implemented his town’s main street could be flattened.

. . . “Already some organisations, such as churches, have chosen to vacate their buildings because of assessments showing the building’s strength is well under the current level,” he said.

“It is my fear that organisations and businesses forced to find alternative buildings because of their own policies may not find suitable accommodation and have to leave town.” . . .

The Waitaki District Council describes the proposals as ‘‘inflexible, unworkable and unaffordable”.

It has been estimated it will cost the council $2.5 million – 2% of total rates it collects – to assess at-risk buildings and the community or building owners $178 million to upgrade them.

Those details will be included in a submission the council will make on the Government’s proposed changes to earthquake prone buildings, a draft of which was outlined to councillors earlier this week.

The submission makes it clear the changes, as proposed, will place a heavy level of compliance and cost on the council and community.

Overall, the council wants to see greater flexibility, rather than a ”one size fits all” approach, with the community able to decide what level of risk is acceptable.

While agreeing improvements can be made in the light of what happened in the Christchurch earthquakes, the council has concerns with many of the proposals and timeframes, which may prove unaffordable for the Waitaki community.

It says too much emphasis is being placed on the earthquake risk, at a substantial cost, in comparison to other risks communities faced.

Ultimately, the solutions must be risk-based, workable and affordable for both New Zealand and local communities. . .

The Christchurch earthquakes have changed the way we regard earthquake risk and the government has to address issues raised by the Royal Commission.

However, risk and cost must be balanced, especially in smaller, less populated areas.

The proposals are only proposals and are open for submissions until tomorrow.


Wool wonderful for rebuild

February 7, 2013

The closure of Oamaru’s woollen mill is due to several factors, among which is the decline in demand for wool carpets.

Why it is so difficult to sell a product which is natural, renewable, sustainable and grown on free-range animals in a world which is increasingly demanding such things is beyond me.

But the Christchurch rebuild could provide an opportunity to put wool to the fore on floors again.

With over two million square metres of floorcoverings needed for the Christchurch rebuild, Federated Farmers believes strong wool should be given a leading role.

“If the Christchurch rebuild does not bring woollen floor coverings to the fore, then how can we expect the rest of the world to do the same?” says Jeanette Maxwell, Federated Farmers Meat & Fire Chairperson.

“Late last year, we asked the Canterbury Earthquake Recovery Authority (CERA) what demand it projected for floorcoverings. The answer is a staggering two million square metres.

“That is enough to line every square centimetre of a country the size of Monaco.

“According to CERA, some 200,000m2 of floorcoverings are needed each quarter for the Christchurch rebuild. This demand exists right now and will last through to the third quarter of 2014, when demand will start to reduce.

“Farmers are not looking for a hand out but a fair go for wool that is grown and processed here. If you want to help your fellow Kiwi on the farm or working in wool processing, then specifying wool for the home or office is the way to go.

“It is a lot better environmentally than putting oil-based carpets down.

“We also asked CERA if it had any forecasts for insulation demand in the Christchurch rebuild, split by synthetic, glass fibre and natural fibre.

“Sadly, there does not seem to be and that makes me wonder if wool insulation is being overlooked.

“It is here that we need the Ministry for Primary Industries to work within government to get wool fully into the rebuild; both as a floor covering and as an insulation product.

“If there are blockages then Federated Farmers wants to know so we can help unblock them.

“Out of the tragedy of these earthquakes we have an opportunity to show just how versatile natural fibres like wool can be. Being a Cantabrian, I know Christchurch will become one of the most dynamic and progressive cities on earth.

“That is why we are so keen to get Kiwi wool well inside it,” Mrs Maxwell concluded.

More than two million square metres of floorcoverings  would use a lot of wool.

There’s an opportunity here that must be pursued because, as Mrs Maxwell says, if we don’t use wool we can hardly expect the rest of the world to.


Land affordability

January 5, 2013

Housing affordability is one of the causes de jour but asking prices across the country   shows the problem isn’t the price of houses.

The highest prices were in Auckland ($588,088) and Central Otago/Lakes ($515,859).

The lowest prices were in Southland ($264,028) and on  the West Coast ($277,538).

The difference isn’t in the price of the houses but the cost of the land they sit on which is a function of supply and demand.

The problem of affordability will be solved by people choosing to live in places where the demand for land is lower; by building houses which take up less land or in freeing up more land for development to increase the supply.


Building in Fantasyland

November 28, 2012

Questions are being raised about the practicality of Labour’s plan to build 100,000 houses for around $300,000.

Acting Minister of Finance Steven Joyce explains some of the flaws in the proposal:

One of the big issues in Auckland is the availability and price of land. The median cost of an Auckland section is nearly $320,000, which is around 60 percent of the cost of the house, and that compares with around 40 percent in the rest of New Zealand. That is why the Government is putting a big emphasis on land section availability in our biggest city. I have heard there are some people who believe there are thousands of sections around Auckland available for around $50,000, apparently. That is news to most people. I actually suspect we would have to zone all the land to Taupō as residential before we would get to that sort of price.

John Hayes: Has he received any other proposals on housing affordability?

Hon STEVEN JOYCE: I have received a proposal that would take $1.5 billion of borrowed money, magically build $30 billion worth of houses with it, provide those houses to people at low interest rates but apparently at no cost to the Government, and then get the $1.5 billion straight back again. Under this particular “back of the envelope” plan, apparently, two-thirds of these houses will be built in Auckland on all those widely available sections that sell for $50,000. A very esteemed colleague of mine has referred to this plan as Fantasy land.

Section prices in Fantasy land must be considerably cheaper than those in Auckland.

However, the Prime Minister has found somewhere else it would be possible to build a less expensive house:

Michael Woodhouse: Has he heard of any reports that would encourage the building of at least one house for $300,000?

Rt Hon JOHN KEY: I have. I have seen the reports that there would be interest to build one house for $300,000 in Lumsden. The advice I have had is that it is possible to build a house for $300,000 in Lumsden. That house would contain David Cunliffe and it would be called the doghouse.

I suspect it would be possible to build a house for less than that in Lumsden, and of a much higher standard than the average doghouse.


It sounded too good to be true

November 27, 2012

We need at least one more house on a dairy farm and heard about a prefab one which was for sale for $29,000.

It sounded to good to be true – and it was.

We went to have a look and found a very old, poorly designed building in need of major renovation and repairs.

It might appeal to someone with advanced DIY skills and lots of time.

But a quick calculation convinced us that we’d be far better spending more up front on a new house than attempting to bring this one up to standard.


%d bloggers like this: