Our performance against our Statement of Intent 2008/11

The Department's Statement of Intent 2008/11 established the Department's overall outcome for 2008/09 as follows:

The people of New Zealand have access to quality homes and buildings that meet their needs, reflect our environment and contribute to a sustainable New Zealand.

Four intermediate outcomes were identified to contribute towards achieving this overall outcome:

• buildings that perform well in the New Zealand environment and contribute to sustainability
• a strong, well-performing sector with skilled building and housing professionals
• well-designed, well built, warm, safe and healthy homes and buildings that meet the changing needs of New Zealanders and contribute to strong, effective communities
• confident building and home owners, tenants and users.

This Annual Report addresses the Department's performance against the above outcomes.

Performance measurement from 2009/10 onwards

The Department's Annual Report for the 2009/10 year will report against revised outcomes and measures developed in response to Government priorities and published in our Statement of Intent 2009/12. The measures for outputs, included in the Information Supporting the Estimates for Vote Housing in Budget 2009, were also revised.

Intermediate outcome 1: Buildings that perform well in the New Zealand environment and contribute to sustainability

During 2008/09 the Department continued to work closely with the building and housing sector and the Government on implementing and refining the framework established under the Building Act 2004. The Act established the basis for systems for building consent authority accreditation, the licensing of building practitioners and a regulatory framework for product certification.

Building Amendment Act 2009

The Building Amendment Act 2009 made three key changes to the Building Act 2004:

• national multiple-use building consent approvals were introduced
• a new streamlined process was set up for minor variations to building plans after building consent
• a project information memorandum will become voluntary from 1 February 2010.

Robust policy development resulted in a short, well-targeted Bill with practical application that enjoyed wide sector support and came into force on 1 August 2009. The Act will simplify the building consent process, particularly for building designs that are being replicated such as stand-alone garages and simple house designs, once the relevant regulations have been approved by Government. This is a first step to streamlining the Building Act 2004.

Reviewing the Building Act

As part of the Government's regulatory reform programme, the Building Act 2004 will be reviewed in response to concerns about:

• implementation at a local government/consent authority level
• costs and complexity of the building consent process
• consumer confidence in the technical ability of practitioners
• allocation of risk and liability.

Terms of Reference have now been agreed for the review, and initial work completed on the allocation of risk and liability, including advice on home warranty insurance.

Building Code changes

Obtaining building consent for simple homes will become easier following the development of a new Compliance Document which sets out basic building specifications. This was promoted through a very successful design competition for starter homes. The document includes the key elements to ensure building consent and is due for publication in November 2009. A Compliance Document was also developed to streamline the consent requirements for Department of Conservation backcountry huts. A number of other recommendations arising from a review of the Building Code were incorporated into the Department's technical work programme.

Good progress was made on developing a new fire safety framework that will include fire safety performance requirements and approved design methods.

Product certification scheme

The product certification scheme was put in place from 30 October 2008, as a voluntary way of demonstrating that products meet required building standards. The Department has worked with two organisations to become certifying bodies. A number of seminars were delivered, and several product applications are now being evaluated.

Building consent authority accreditation

All 76 local authorities and the five private organisations currently providing services to councils have achieved accreditation against phase 1 standards. The standards promote consistent and good quality building controls, and will encourage continuous improvement and better customer service. Building control functions for the Chatham Islands were transferred to Christchurch City Council. In addition 26 local authorities completed their biennial assessments (including phase 2 accreditation requirements).

A review of the implementation of phase 1 has identified ways in which the scheme can be improved in the future.

Review of Fencing of Swimming Pools Act 1987 {FOOTNOTE}

The Department is reviewing the Act in response to concerns about clarity and consistency of enforcement. Options for improving the regulatory regime without compromising child safety are currently being investigated.

Intermediate outcome 2: A strong, well-performing sector with skilled building and housing professionals

Encouraging professional skills through licensing

Licensing building practitioners recognises their professional standards and skills, and lifts those standards and skills over time. It also gives confidence to consumers and building control authorities that work meets required standards.

Proposals to simplify and streamline the licensing scheme were developed in consultation with an industry reference group during the year. The Department is now consulting more widely on these proposals, which aim to give greater recognition to trade qualifications and further reduce costs.

From March 2012, critical building work will need to be supervised or carried out by licensed practitioners, where it affects the following areas:

• the primary structure of a house
• external moisture management systems of a house, such as roof or wall cladding
• design of fire safety systems in small to medium sized apartments.

Owner-builders will be able to seek an exemption from these requirements.

New licensing classes for roofing, bricklaying and blocklaying, and external plastering, were launched on 1 November 2008 following consultation with industry groups.

Productivity Taskforce

Building and construction sector leaders were brought together for a forum in August 2008. The Productivity Taskforce, one of two taskforces set up by the forum, made a series of practical recommendations to the sector and to the Government to lift skills and performance in building and construction. The recommendations include:

• providing greater disclosure of the Government's forward capital investment programme to help the sector plan better
• improving the efficiency and effectiveness of the Government's building and construction procurement practice, by adopting approaches already used by the New Zealand Transport Authority
• developing a sector skills strategy which includes improving entry level training, continuous professional development and stronger career opportunities within the industry.

A subsequent Building and Construction Sector Forum of industry and Government leaders held in July 2009 has endorsed the findings of the Taskforce. Industry and central and local government leaders will work together to take the Taskforce recommendations forward.

Technical education programme

A technical education programme was developed for implementation in 2009/10. The programme aims to lift building quality by developing a better understanding of the Building Code and Compliance Documents among building officials in territorial authorities, designers and architects, and residential builders.

Intermediate outcome 3: Well-designed, well built, warm, safe and healthy homes and buildings that meet the changing needs of New Zealanders and contribute to strong, effective communities

Increasing innovation in the housing market is a Government priority. This includes increasing the supply of affordable housing and broadening the range of options for consumers.

Innovation in housing design

A starter home design competition to encourage interest in high quality, simple house designs for first home buyers attracted more than 140 entries. The Minister for Building and Construction announced five awards in March 2009, and the supreme winner was Stephen Smith of S3 Architects Limited in Auckland.

Finalists' designs will be widely promoted through public displays, publications, technical education material and master classes. Housing New Zealand Corporation will build the winning design as a show home on a site in Mangere.

Research and sector trends

The Department worked to improve the collection and presentation of data on trends in the building and housing sector. This will continue to be an area of focus, to support decisions by businesses and local authorities as well as our own policy development.

Research commissioned by the Department found that meeting projected future household population growth in the Auckland area, given current land availability and existing zoning rules, will require a significant shift to higher-density housing (including dwellings suitable for families).

This innovative modelling and analysis of land supply and related issues will be used by the Department as a basis for developing policy recommendations and by councils to inform their planning decisions.

The Department also commissioned a study of ten intensive urban residential developments on greenfield and brownfield sites in Auckland, Wellington and Christchurch. The study highlighted ways to better facilitate medium density development in the future, and this work was used to develop the Urban Taskforce's recommendations.

Urban Taskforce

The Building and Construction Sector Forum held in August 2008 established two taskforces that developed practical proposals on skills and productivity and on urban development, presented at a second forum in July 2009. The Urban Taskforce identified ways to improve urban development by removing barriers and reducing the cost of good quality urban development projects.

Housing New Zealand Corporation

The Department worked with Housing New Zealand Corporation on a number of initiatives delivered through the Corporation, such as Welcome Home Loans that provide mortgage insurance to help aspiring homeowners into their first home; and loans to support social and affordable housing, particularly in relation to not-for-profit providers and Māori.

Further initiatives to be introduced in the coming year include the Gateway programme, where leasehold land will be made available to aspiring homeowners; and giving state housing tenants the option of purchasing their home.

Intermediate outcome 4: Confident building and home owners, tenants and users

Developing an alternative approach to weathertightness with greater emphasis on getting homes fixed

The Department worked on a possible new approach to weathertight issues that focuses more on getting properties repaired and fit for purpose again, rather than on attributing fault and litigation. Policy advice from the Department is currently being considered by the Government.

Improving services to owners of leaky homes

The Department currently provides claims advice, assessment and dispute resolution services to owners of non-weathertight homes. In 2008/09, the Department received 783 eligible claims, issued 923 assessment reports and resolved 195 claims through mediation.

The Department has continued to improve weathertight services for clients. In 2008/09, this included:

• actively following up claims to identify where clients were finding it difficult to make progress, and providing additional support to clients at these stages
• improving the quality and timeliness of assessment reports.

Unit Titles Bill

The Unit Titles Bill will establish a more modern and flexible legal framework for joint ownership and management of land, buildings and facilities by communities of individual owners. With increasing numbers of people living in apartments, it is essential for the legal framework to reflect modern realities. The number of apartments in unit title developments increased by almost 50 percent during the three years to 30 June 2009.

Strong sector engagement contributed to the draft Bill and continued as the legislation progressed. Public submissions were of a high quality, and a significant number supported the proposals in the Bill, which was reported back to Parliament in September 2009.

Residential Tenancies Amendment Bill

The revised Residential Tenancies Amendment Bill will clarify the rights and responsibilities of tenants and landlords. Some aspects of the Bill were refocused in a short timeframe to address new Government priorities. The Bill is due to be reported back to Parliament in October 2009.

Supporting the effective operation of the rental housing market for landlords and tenants

The Department reduced our operating costs of delivering services to the rental market, despite an increase in demand for services such as dispute resolution. Changes included:

• increasing use of telephone mediation, which offers more flexibility for clients as well as lower costs
• reviewing the number of community venues directly serviced
• developing new channels for delivering education and advice to landlords, such as web based seminars.

During 2008/09 advice was given in over 450,000 telephone calls, over 500,000 bond transactions were processed and over 37,500 disputes were resolved through mediation.

The 2009 annual survey of clients of the Department's mediation services showed positive results. There were high levels of client satisfaction with mediation, the Service Centre and local offices among those surveyed.

Monitoring the Government's investment in Housing New Zealand Corporation

The Department worked with Housing New Zealand Corporation (the Corporation) to raise the quality of performance measurement relating to state housing assets and improve accountability.

Improved asset based performance measures were included in the Corporation's Statement of Intent for 2009/10, and will underpin the Minister of Housing's Ownership Schedule (a key component of his Accountability Agreement with the Corporation).

The Department also worked with the Corporation on their value for money programme, including asset efficiency indicators and savings for the 2009 Budget.

Retirement villages

The Retirement Villages Code of Practice 2008 was passed in October 2008 and will come into force on 2 October 2009.

The Code of Practice will provide better consumer protection in line with the Retirement Villages Act 2003, by ensuring retirement village operators give full disclosure to existing and intending residents.

The Department and the Retirement Commission carried out extensive consultation in developing the Code of Practice. The Department also worked with residents, operators and other key stakeholders to publish a Best practice guide - Determining refurbishment and fair wear and tear in retirement villages in June 2009.

Working with the timber industry

The Department is working closely with the timber sector to develop clearer, simpler and more effective requirements for structural timber used in houses and buildings. This includes simplifying treatment and grading requirements, improving identification and having a more robust quality assurance regime. Timber growers, millers, treaters, auditors and sellers are all involved in the change process, which will enable consumers to be confident that timber supplied is fit for purpose. This has followed some instances of timber being inappropriately used in structural applications.