Annual report overview 2008-2009
Key achievements in a challenging year
This newsletter draws on our 2008/2009 Annual Report to outline some key achievements during a very challenging year for us, and for the building and housing sector.
Delivering value for money has been a top priority, particularly as we operate in a sector that has acutely felt the economic downturn. After sustained growth from 2002 to 2007, the number of new residential building consents fell to their lowest level since records began in 1965. Jobs have been lost too - at the end of June 2009, 8,800 fewer people worked in the construction industry compared with the peak in December 2006.
This downturn significantly affected the Department’s budget. Of every three dollars we get, two come from third-party revenue - from building and licensing fees and levies, and from the investment of residential tenancy bonds.
So it is pleasing to list some key achievements, and to begin delivering on the priorities of a new government. Already, new building laws are in place that will benefit industry and consumers, and more regulatory change is coming. Big steps have been taken in licensing builders, in how leaky homes are handled, and in delivering smarter tenancy services.
The year ahead will be just as challenging. We will continue to invest in research and evaluation, in developing leaders across the Department and in improving our core business systems. These investments will increase productivity and deliver long term value.
We will also build on the $3.171 million savings achieved during the 2008/09 year. This newsletter, which replaces last year’s printed summary report, is an example of the new approach.
We will continue to work closely with individuals and organisations across the sector. Delivering more with less will remain our focus, as we work hard to achieve a building and housing market that delivers good quality homes and buildings for the benefit of all New Zealanders.
Katrina Bach
Chief Executive
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Sector backs building law changes
A new building law came into force on 1 August 2009 with wide backing from the sector. The Building Amendment Act 2009 made three key changes that will come into effect once Government approves the relevant regulations:
- National multiple-use building consent approvals were introduced. This will fast-track the consent process for group home builders who build homes on sites across the country using the same, or similar, designs.
- A new streamlined process was set up for minor variations to building plans after building consent. This will save time for applicants and Councils.
- A project information memorandum will be voluntary from 1 February 2010.
These changes were the first step to streamlining the Building Act 2004.
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Review aims for simpler building regulation
Simpler and smarter building regulations are on the way with a full review of the Building Act 2004. The Department will carry out the review, working with a reference group from the building and construction sector and consumers.
The review aims to reduce the costs associated with building control without compromising quality. It will cover what building work needs consent, based on actual levels of risk and complexity, so the amount of work requiring consent can be reduced.
It will also look at the underlying risk and liability framework in the sector, and how the role of building consent authorities might change if more responsibility is transferred to builders, designers, and consumers.
The review will explore the extent to which licensed builders could self-certify their work, and the possible role of home warranty insurance.
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Getting a building consent for a simple home will become easier now that a new compliance document covering essential building specifications has been developed. This document will be published in October 2009.
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Licensing builders to encourage professional skills
Licensing building practitioners recognises their professional standards and skills, and lifts those standards and skills over time. Consumers and building consent authorities can also be confident that building work meets the required standards.
Changes to residential building work will boost the uptake of the Licensed Building Practitioner scheme. From March 2012, critical building work will need to be supervised or carried out by licensed practitioners, where it affects three areas:
- the primary structure of a house
- external moisture management systems of a house, such as roof and wall cladding
- design of fire safety systems in small to medium sized apartments.
This is all work that needs to done right first time round. It represents about half of all building consents.
Owner builders, or do-it-yourselfers, will be able to seek an exemption from these requirements, but like professional builders they will be accountable for their work.
The Department is now working with the sector to further streamline licensing by giving greater recognition to existing trade qualifications and reducing costs.
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New ways to support the rental housing market
A rental market that works well is in everyone’s interests. The Department reduced the 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.
These changes were made without compromising quality. The 2009 annual survey of clients of the Department’s mediation services showed positive results, with high levels of client satisfaction with mediation, the Service Centre and local offices.
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Landlords and tenants are big users of the Department’s services - during 2008/09 tenancy 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.
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Review of approach to weathertightness
A new approach to weathertightness, one that emphasises getting properties repaired and fit-for-purpose again rather than on attributing fault and litigation, is being considered by the Government.
The Department’s services to leaky home owners include advice, assessment and dispute resolution. In 2008/09, the Department received 783 eligible claims, issued 923 assessment reports and resolved 195 claims through mediation.
Weathertightness services continued to improve. Extra support was provided to clients where they were finding it difficult to make progress. The quality and timeliness of assessment reports also improved.
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Financial performance: income and expenditure
The Department’s work is funded through a mixture of Crown funding and revenue from fees, levies and other sources. Funding from the Crown in 2008/09 was $24.695 million and revenue from fees and levies was $44.527 million.
Fee and levy income:
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Building levies |
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Interest from tenancy bonds |
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Tenancy Tribunal fees |
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Electrical workers levies and fees |
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Licensed building practitioners levy and fees |
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Other |
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The Department’s total expenditure in 2008/09 was $66.105 million. The allocation of output expense was:
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Building Regulation and Control |
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Occupational licensing |
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Purchasing and Monitoring Advice – Housing New Zealand Corporation |
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Residential Tenancy Services |
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Sector and Regulatory Policy |
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Weathertight Homes Resolution Service |
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The Department’s 2008/09 Annual Report provides full details of financial and service performance. A copy is available at www.dbh.govt.nz