Tuesday, 25 March 2008

Shane Jones: Building the slums of tomorrow

kahui_house Discussion of Shane Jones's proposed amendment to the Building Act to remove some hurdles for producers of sub-standard boxes [story here; video here] seems to have omitted more than a couple of important points.

The first thing to note is that it's only a pimple on the bottom of a very expensive problem: one created almost wholly by over-regulation.

The second is the issue of councils, and the power they have over designers and would-be home-builders.  Now for various reasons, councils themselves are up in arms at Jones's proposal, but it has to be asked why councils should be involved at all in the job of inspecting and approving new houses? Why should they?  Why on earth should productive people have to go cap in hand to the unproductive in order to seek permission to produce?

It's not only dead wrong, but there's no incentive under any building legislation either mooted or extant for councils to deal with the consent process in a timely manner (and they mostly don't) or with the inspection process in a rational manner (and it generally isn't); under the present legislation councils are keeping builder's and home-owners waiting often for months while they determine whether or not permission will be granted to go ahead, and when or if permission is granted, and building finally commences, the irrationality of much of what builders face from the inspections imposed on them would try the patience of Job. 

The level of frustration most people feel on the productive side of building -- that is, those who build houses -- might be measured by the number of people on the other side of the fence -- that is, those whose only job is to get in their way. At present there seems almost more people on the dark side getting in the way than there are actually building houses.  As can be seen from a perusal of the 'situations vacant' sections of most trade journals, the only thing keeping the number on the dark side down is the paucity of applicants to fill all the positions created by a nannying bureaucracy and by too overbearing building legislation.

If councils could increase the numbers on the dark side, they would.  But it needs to be asked again, why are councils involved at all? 

There's no particular expertise that councils' harbour that can't be found elsewhere, and no reason at all that the market for houses be treated in any way that's substantially different to the market for anything else.  You don't ask council inspectors to examine your car or your boat before you buy it; there's no more reason to ask them to look under your bonnet before you buy than to look under your house while you build. 

There's no reason that the insurance market can't do the job that's essentially being asked of councils, one that insurers have demonstrated beyond any doubt they're capable of, while all this time councils have demonstrated just the opposite.   Insurers can look after housing in a similar way to how insurance operates with cars:  If we choose to build the housing equivalent of a Toyota Corolla, then premiums would be low and inspections straightforward -- inspections based on a previously agreed standard laid down by the insurer, and carried out in the timely fashion we've come to expect when we ding our cars.  If we want to build something a bit different, then both the standard used and the premium levied would be different, just as it would be if we chose to build a hot rod.  All good common sense.

trabant And if we want to build the housing equivalent of a Trabant, which is what Shane Jones seems to think we should all do, then we might expect to be discouraged by our insurer rather than encouraged.

The motivation to deal with an insurer is the same as it is when we insure our cars -- to protect our investment -- and also, in the case of houses, to ensure that future buyers are comfortable with the standard of our house.  (They might, for example, be looking for the seal of their favourite insurer before being comfortable enough to buy, and if we want to make a sale, we're obliged to meet the buyers standard or else watch them go elsewhere.)

The difference to how things are presently done should be obvious, and the motivations to improve standards and reward innovation clear enough.  Under an insurance-based system, both builders and insurers would be keen to protect their standards and to lower their premiums -- and they'd both be highly motivated to see the speed of processing and construction improve, and to reduce their costs by continual and ongoing innovation.

This is not what happens now.

It's usually maintained that government needs to maintain building controls and local governments inspect local buildings in order to maintain standards.  The proposal to build Trabants as the only way to get anything out of the present system should demonstrate fairly well that we're at the dead end of a dead system.  If this is 'innovation,' then who needs it?

What sort of 'standard' is being laid down by removing the hurdles from building cheap prefabricated boxes, but retaining them (or even having them increase) for any house of any greater quality that tries to get a flower instead of a weed out of the system?  By insisting on building weeds we're doing what architect Claude Megson called "building the slums of tomorrow" -- we're ensuring that the overall standard of the country's housing stock is rapidly and progressively diminished, and innovation progressively and permanently discouraged.

And not just discouraged, but effectively prohibited.  As Frank Lloyd Wright pointed out,

The building codes of the democracies embody, of course, only what the previous generation knew or thought about building...

That's true.  There are two main legislative burdens imposed on every home-builder, designer and would-be home-owner:  the Resource Management Act imposes the nostrum of "sustainability," insisting that "future generations" somehow be taken care of, while the Building Act with all its myriad controls insists that the remedies and methods of previous generations be rigidly adhered to. 

Either way, the present generation gets it in the wallet.

Both impositions are insane -- the former tying us to a generation that never arrives, and the latter to a generation whose innovations we are not allowed to supersede --  and between them they ensure that the prosperity and wellbeing of this generation of potential home-owners is sacrificed to those of every other, which means in essence to the whims and machinations of housing ministers and housing inspectors.

It's time they were all cut off at the knees.


  1. I you want to see sub-standard boxes come out to Botany South. The council should be hung drawn and quartered - and they are in the pockets of the developers.

    I hope you don't think the top pic is sub standard - those houses are much better than the rubbish being built out here.

  2. Very good article and well written, my thoughts exactly... well at least the first 3/4, the last couple of paragraphs were a bit mystical...! But absolutely, I say privatise housing inspection. Perhaps it should not even be mandatory for a house to be inspected...

  3. I heard somewhere that the fastest-growing city in the U.S. is a place where there are no building or zoning regulations.
    People use their commonsense and build houses and commercial buildings to a standard that protects their investment.
    I'll see if I can find some more info on it.

  4. Barracks for the poor. No frills- all needs met- hygiene & shelter.

    Aesthetics come later

  5. KG, you're probably talking about either Pahrump, Nevada, or Houston, Texas.

  6. Yes! I knew it was Nevada, but a search turned up nothing.
    Thanks for that.

  7. Yes, Houston is growing fast. But I think the fastest growing metro area (as a percentage) is Atlanta.

  8. Doesn't matter who administers the regs and consents. Simply make a law that the total permissible amount that the authority can charge is $1000 and the approval process has a max of ten working days.

    That would force the authority to issue a "book" of total requirements that was made available to the public and builders. These people would present plans to the authority with all the boxes ticked, and the authority would have to approve in 10 working days.

    Any new ideas and innovations *not* proscribed in the book would automatically be approved, albeit with a caveat to protect the authority and future buyers. As such new or innovative approaches proved out, the caveats would be removed.

    There is simply no reason why section development and building requirements cant be codified in a single book, and why plans cannot be produced in accordance with current knowledge in the book.

    Is $1000 enough? Yep. Each new dwelling produces rates, and we've already massively simplified the consent process by codifying it and reducing the consent process to 10 working days.


  9. As a developer, I would much prefer to offer home buyers a pre-paid insurance contract on a property than a Code Compliance Certificate of doubtful value -- which is all I'm able to offer at present, and which some councils will tend to withdraw even after their issue!

    I suspect that the cost for this would be no greater than the costs of endless bureaucratic nonsense and the associated large holding costs. I suspect in fact the cost to everyone would be substantially less.

    This would give developers, builders and tradesmen the ability to insure against risks -- something they have difficulty doing in this highly regulated environment, in which liability is confusing, but something on which the insurance industry has literally centuries of expertise.

    I strongly suspect that insurance companies would see this as an opportunity to market products, much as they do in the vehicle insurance market, where mistakes lead to inevitable claims -- this is after all just the management of risk, which is what insurance is about.

    It is however, something over which bureaucratic management has no facility whatsoever.

    I suspect that if so allowed as I describe here, the insurance industry would invest in risk assessment of products and methods, and use loadings where higher risk is identified. If such a system had been in existence over the last twenty years, a number of products (including the likes of untreated timber) would have carried such high loadings that their use may have been very limited at best, rather than approved by the Building Industry Authority (BIA), universally accepted by the building industry -- and the risk now apportioned seemingly at random by the Weathertight Homes Resolution Service.

  10. The Queenstown Lakes District Council contracted out their regulatory services to a company formed by a former employee. No real problem with that. The trouble was that even blind Freddie could see that the new company were able to reward themselves handsomely for placing a series of difficulties in the path of aspiring home builders. They charged like wounded bulls. The eventual outcry saw the council renege, pay out the company and re-absorb the function.

    The fault was in issuing a single license [to print money]. It should have issued a lot more of them and some true advantages would have accrued. Council could have pared their staff and costs, still got a reasonable return, and the freedom to pursue the ratepayer's interests in the areas they are meant to be focussed. The paying public would have a choice. The most reasonable and efficient firm would have taken the dominant position. It would have cost less to build stuff.

    Instead the whole bloated corpse of interference still floats around these expensive lakes. Council is still hiring and the owner of the former firm is enjoying his wealth.

    Pay up suckers. The show lurches on.


  11. I disagree that building sub-divisions of same or similar houses will be building the slums of tomorrow. Whether an area is a slum depends on who lives there not the design of the houses. Wellington's Mt Victoria and Newtown has streets of similar houses and they all attract premium prices, and the many similar State houses that have been sold to the private sector are eagerly sought after. In cities like New York and London some of the most expensive and desirable properties consist of rows of identical townhouses. Only an architect would believe that everyone wants an individually designed and unique house, the popularity of townhouses and apartments proves this in not the case.

  12. It's rather dull in town, I think I'll take me to Paree.
    The mistress wants to open up
    The castle in Capri.
    Me doctor recommends a quiet summer by the sea!
    Mmmm, Mmmm, wouldn't it be loverly?
    All I want is a room somewhere,
    Far away from the cold night air.
    With one enormous chair,
    Aow, wouldn't it be loverly?
    Lots of choc'lates for me to eat,
    Lots of coal makin' lots of 'eat.
    Warm face, warm 'ands, warm feet,
    Aow, wouldn't it be loverly?
    Aow, so loverly sittin' abso-bloomin'-lutely still.
    I would never budge 'till spring
    Crept over me windowsill.
    Someone's 'ead restin' on my knee,
    Warm an' tender as 'e can be. 'ho takes good care of me,
    Aow, wouldn't it be loverly?
    Loverly, loverly, loverly, loverly


1. Commenters are welcome and invited.
2. All comments are moderated. Off-topic grandstanding, spam, and gibberish will be ignored. Tu quoque will be moderated.
3. Read the post before you comment. Challenge facts, but don't simply ignore them.
4. Use a name. If it's important enough to say, it's important enough to put a name to.
5. Above all: Act with honour. Say what you mean, and mean what you say.