Our leaky buildings saga is a long way from sorted

The recent sale of some Auckland apartments for as low as $20,000 has raised eyebrows. 

But dig a little deeper and you discover most are plagued with water-tightness issues; being sold by owners virtually walking away from their leaky buildings.

The saga has been labelled a national tragedy, and New Zealand's largest man-made disaster.  Despite the issue being exposed in the 1990s it is still far from over. Homeowners continue to pay the price and taxpayers are footing the bill for rotten hospitals and schools. 

The last report, now four years old, put the number of homes with watertight issues at a conservative 174,000.  That is a cost to the country of around $47 billion.  That figure does not include those other buildings.

According to journalist Peter Dyer, who has spent the past seven years researching the crisis and wrote the book Rottenomics, we are still making the same mistakes.   "Everyone I talk to says we are still building them."

As the building industry faces huge pressure to build more homes, with a lack of trained craftspeople, untested new products, imported labour and councils under extreme pressure, could we be heading for another similar disaster?

Dyer says the leaky homes curse was the combination of several factors but at the root of it all was the economic/political revolution in 1984 and Rogernomics. "The idea that if you turn the business of government and industry to the private sector and get government out of the way, we'll end up in a neo-liberal paradise where everything will be better quality and less expensive.  Of course that didn’t happen, especially not in the building industry." 

There were a number of factors that came together from then, the big one was the decision to allow untreated timber to be used in construction. "That was widely blamed, the most popular scape goat, but it wasn't the only issue."  

The 1990s saw the scrapping of building apprentice schemes and changes to the building code allowing for new building designs like Mediterranean stucco homes with plaster cladding - and many of these designs didn't drain properly.  It also caused a massive de-skilling of builders resulting from the closure of government-run technical training bodies.

You'd think 30 years on, the issue would be resolved... and while the government has gone some way to addressing some of the issues, Dyer says a lack of intervention means the free market is still calling the shots.  He also says there’s some denial about the issue … and that the problem is just too big.

"Governments haven't been able to address it because the three year term is too short and it is a long-term problem. They need to come up with a structural solution and it just won’t work in a three year cycle when they're focused on getting re-elected.”  

In October this year, Building and Construction Minister Jenny Salesa announced a raft of changes to the Building Act which include lifting the competence standards for builders, and new legal requirements surrounding building products being ‘fit for purpose’.  The changes will also require manufacturers to provide detailed product information, including on performance and testing, and give MBIE the power to investigate products and building methods.

Peter Dyer has read the proposals and believes they contain gaps. 

He says they don’t adequately address rebuilding the skills base, or builders being able to "ring fence" liabilities for shoddy work using multiple companies and legal entities.

It is also interesting to note that despite the continuing reports of personal horror stories around leaky buildings, research suggests there's still low awareness of the issue, and the risks surrounding existing homes and new builds.