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Disconnect between supply and demand for affordable housing, June 2020

"I found this article, published in Building Today and written by Mike Fox, to be very interesting and have shared it with my readers here. The article is a further independent evidence of the claims outlined in my blog post 'Building Bureaucracy' " - Mark

Building Today columnist and EasyBuild director Mike Fox says there is a massive disconnect between supply and demand for affordable housing. So why, he asks, are we continuing to build larger homes on expensive land that are out of reach for the average home buyer?

It is one of the biggest problems our country faces ó we cannot produce the affordable housing thatís so desperately needed.

But we can produce an overabundance of expensive homes. So why the massive disconnect between demand and supply?

Without political ownership and a major overhaul of the current regulatory processes, affordable housing will never be delivered. New Zealandís journey to housing unaffordability has been 30-plus years in the making.

Over the past four decades, Iíve built hundreds of homes, and have watched the market progressively tilt towards larger homes on smaller, very expensive lots, with building time frames stretching out and productivity plummeting.

Unfortunately, this is what our current system and market dictates, but it is woefully under-delivering on what we need to house everyone, especially in the dawning era where affordability will be paramount.

The current Governmentís worthy political aspirations to ramp up affordable housing by 10,000 units per annum under the guise of Kiwibuild crashed and burned in spectacular fashion.

They soon realised what those of us in the industry have long known ó the delivery system is broken.

At huge political embarrassment, they learned that our underlying system is plagued with hurdles, delays, costs at every turn, and is inadvertently skewed to only create high-cost land and, subsequently, high-cost homes.

Itís a pipe dream to think that the current system or market will produce affordable housing without intervention, especially in urban areas.

The sad thing is that the Governmentís response to fixing the broken system is to change the law so that government projects can sidestep the Resource Management Act (RMA) and leave the rest of the country stuck in the regulatory mire.

Why not be brave and fix the problem for everyone, once and for all? Instead, itís an opportunity lost, and the problem kicked down the road because itís politically difficult.

There are currently many hundreds of unsold new homes sitting in Auckland and other locations around the country because those that need the housing canít afford them.

We have been building a disproportionate oversupply of expensive larger homes, with the greatest area of demand being affordable homes hardly catered for.

This needs to change, and quickly. However, if we continue to follow the same regulatory processes, how can we expect a different outcome? It just wonít happen.

If we want affordable housing, we need to produce affordable land free of inflationary minimum size and design-restrictive covenants.

In reality, these covenants are put in place by developers to raise the price of subsequent section releases. They cut out a large portion of buyers who might be wanting a smaller, more efficient home.

Any meaningful changes will only come about under current systems by sidestepping the market and some of the feel-good niceties of planning, and simply getting on with pragmatically producing the housing, and centrally funding the infrastructure needed.

If the politicians have not got the wisdom or courage to change the rules that have created this mess, perhaps they will need to develop their own land that can be used for affordable housing. Previous governments have successfully done it before.

To solve this crisis, we need a different approach.

The solution is relatively clear ó we need fewer rules and political fortitude, as local authorities will need to be curbed and, in some cases, overruled ó and not just for Government projects.

I know of one private enterprise example where a smaller local authority has been sitting on its hands for more than 12 months like possums frozen in the headlights.

Itís a $40 million project that will deliver 150 affordable homes to market for less than $400,000 each, including the land.

Clients are crying out for the product, but what I refer to as two star-gazing planners just seem overwhelmed, and the project continues to sit in limbo. The plannersí strategy seems to be to go slow with the hope the project will eventually disappear.

How unjust is that on society? Affordable new homes being kept out of the market on the whim of a planner. All the while, holding costs are pushing up prices by the day, and the clients remain unhoused in motels and cars.

Another example is a transitional housing project, with a perfect site and location and the need overwhelming.

This time, the neighbours got a bit jittery, politicians circled, didnít like the heat, and the project was canned, resulting in more motel rooms booked.

God only knows what all this is costing the taxpayer. This is the crazy disconnected world the RMA creates.

If they asked me, I would remove all smaller residential projects from the RMA as it is no longer fit for purpose, and the planning process too subjective. The process often gets highjacked by neighbours, anti-commercial practices, personal agendas and nimbism.

More standardisation of design and modular building needs to be increased, and the consumer conditioned to not expect a bespoke home if they want affordability and value.

Building companies create the expectation that you can have your home any way you want. However, if the consumer realised that building bespoke added at least 25% to the cost of their home, they may view things very differently.

This is even more important now where people will be cutting their cloth accordingly, and looking for homes within their means that deliver efficiency on all fronts.

The social and health costs from not getting more affordable housing into the market far outweigh the cost of providing good housing. All these people forced to live in motels, cars and caravans need a stable, warm place to call home.

Is the RMA helping?

Although well intentioned, the RMA has morphed into a major stumbling block. Currently it is project-specific, and has no cognisance as to what the community actually needs to house its people, or what its impacts are on the financial viability of a project.

It is heavily weighted against the party wanting to commence a new project. The applicant is made to feel guilty until they can prove themselves innocent.

The surrounding homes seem to have an inordinate amount of say, and councils often pander to spurious objections.

Itís a cost-plus model, with the first person purchasing paying the bill for infrastructure, GST and all manner of other local authority fees.

The RMA, along with the 70-disjointed individual council district schemes, is an unsustainable model.

What about the Building Act?

In addition to issues caused by the RMA, since the introduction of The Building Act 2004, construction costs have soared, and productivity has plummeted.

Why? Considerable administrative process has cumulatively been forced into place, but it is adding very little material value.

Risk-averse behaviour has turned once helpful local authorities into gun-shy, chicken-little organisations slowing construction down, and demanding consumer money be spent to absolve themselves of liability.

The construction industry currently works at the speed that the controlling local authority can issue and administer consent ó and that impacts significantly on productivity and costs.

Some local authorities are brilliant while others are woeful. I have heard in some locations you can wait as long as 21 days for an inspection. How can anyone be expected to be productive or work within constraints like that?

In the past 15 years the cost of building has increased 110%, while the general cost of living has increased only 44%. Much of this extra cost is the result of compounding regulatory change, council fees and unfairly imposed infrastructure cost.

Many good operators have been worn down by the incessant regulatory creep and the growing army of Clipboard Charlies. They are exiting and taking much needed skills away from the industry.

We need strong leadership, meaningful change and a complete overhaul of the RMA, The Building Act and The Local Government Act so that the drivers and outcomes result in efficient, affordable and sustainable housing.

Change will only happen through collaboration between industry and policy makers, but there must be a catalyst for change. I believe we have reached that tipping point.

One would also hope housing can be depoliticised, and an across-party accord could be reached.

It is too important an issue to be used as a political football. Recent events have opened the gates of pragmatism, and we should take this opportunity to improve things for the industry.

A full review of the governing acts should be undertaken, and if regulation doesnít help the delivery of affordable healthy housing or make the industry more productive, then the time has come to ditch it.

Building Bureaucracy in New Zealand, March 2020

I will start with a positive note, that our Building Code in NZ is one of the best in the world, it is a performance based code rather than a prescriptive one (like we used to have before 1992) – although in many ways things were simpler for designers and builders back then… A prescriptive code has rules which must be followed, EG minimum ceiling heights etc… A performance based code has NO RULES, just performance requirements than need to be met by either a compliance path already set that does provide compliance if followed, or an alternative solution backed with evidence or documents that prove compliance. Sounds easy? It is not…

Now this great building code we have and its series of Compliance Documents and NZ Standards, is supposed to be uniform throughout the land – which sounds great as for example, the same house design in one district will then be assessed at consent application time the same as in every other council; but unfortunately this is far from reality. We have Building Consent Authorities which are certified and assessed by government officials from MBIE (Ministry of business, innovation and employment – funny how the words building and housing are not mentioned…) – these BCA’s as we call them, are governed by TA’s or Territorial Authorities which you and I know as City or District Councils. Thus it is ‘Councils’ who administer all building consent applications and in my experience (from working in towns all over NZ) no two are the same in the way they process consent applications, not by a long chalk…

Now these days and over the last five years or so, I seem to get an awful lot of rejections for all kinds of non-complying building code issues; sometimes over 30 RFI points on a ‘grizzle letter’ – what us designers call an RFI letter from council; a Request for Further Information… In fact I seem to get up to 30 different RFI points for essentially the same house design applied for in different BCA’s all over the country. Now if you do the ‘odds’ on that scenario; that is 30 x 30 x how many consent applications made, which is a huge number of potential RFI points that I have had to address – for the same house plan design I have been doing now for the last 5 years (the Solabode Mk2). Sometimes I have clients wanting the same house as their neighbor and so in the same BCA just a couple of years apart, I get a couple of dozen different RFI points once again – from the same BCA!

One does not know where to turn for help… as these RFI’s take several hours and days to address costing clients sometimes up to an additional $2000 in fees (sorry folks). One has to find additional evidence for, bother engineers and other consultants for, or argue till one is blue in the face that it DOES comply with the Building Code. Now I will add here that I am glad there is a procedure to check my drawings and specs by a BCA as I am not perfect and I do make mistakes (not very often after 40 years doing this - but I still do…) So I am very glad when they pick up on a lintel size that is woefully under strength or some other error of human that can happen. The problem is though, most of what they write on an RFI letter is either already on the drawings somewhere or is simply an interpretation of how it does or doesn’t comply; remember this is a performance based code so sometimes certain details stray a little from the acceptable solutions and drift into the alternative solution ‘grey area’. Read on…

Because bureaucrats are pedantic people and if I have said I have used NZS3604 where one aspect of my light timber frame is not quite as drawn in that standard, but nevertheless still complies with B1 Structure, then they pull me up and want full evidence to show how ‘on reasonable grounds’ it complies (those three little words are completely subjective did you notice, taking away any arguing power we might have). Nothing changes in real life but the council now has words on paper to remove any risk to that Council in case anything goes wrong with that building down the track. Yes we have Risk Aversion ladies and gentry, and they say it is to protect our ratepayers from footing the bill of a lost court case. Well it seems to me from working within this regime, that risk aversion is the primary, secondary and third consideration when BCA’s are checking every little detail on my plans. Such a regime is hardly helping to promote affordable housing, indeed any housing (as they keep telling us we have a housing crisis…) instead it just bogs everyone down, costs time and money for every client and everyone involved in the industry on this side of the council counter.

Now I pride myself on doing a thorough job, it is my job satisfaction and I also like to help builders and tradies so they don’t have to guess what I want in my clients new home. I have always been thorough and even my peers used to criticize me for such. I typically would produce a set of plans for a 100m2 2 BR house with 30 odd sheets of A2 paper filled to the brim with information, plus a thick specification with all the manufacturers technical literature attached. I like to use large scale drawings so even my old eyes can read it and I cover every base. Yet it seems the more detail I provide, the more RFI points I get on a grizzle letter! Where is the justice in that..?! I have even been told (off the record) by a consents officer, that indeed, the more detail I show, the greater the chance of more RFI points, - one just can’t win…

Now it has got even worse in these last few months my friends, I find myself arguing with these consents officers over small issues that they dig their heels in on because they feel they don’t have enough of a paper trail to protect them, - even though nothing will change on site as the house will get built just tickety boo… Such officers seem to want to preserve their position of power over us minions, they always say “it’s not about power” and I ask what is their word for it. Indeed one could even suggest this is sociopathic behavior, holding on to their position of power. You see Councils will NEVER admit they are wrong, they might get sued you see and so we are back to risk aversion; giving ground in an argument with me over even a minor point, is a difficult decision for a BCA to make, as they would have to admit that they were wrong… shock horror!

I am not the only one with these concerns, every designer, builder and tradie I talk to, agrees with me that ‘Councils’ are the biggest block to a smooth and economic building industry and that they frustrate everyone that comes up against them. One hears of politicians boast of streamlining the building process to ensure we all live in affordable safe and warm houses, they never mention the ‘elephant in the living room’, that the biggest block to getting all that is the bureaucracy we in the trade all have to deal with. While I hear the same complaints from my peers, I don’t see anyone challenging the system, they all seem to be scared of poking their heads up, with the fear that if they criticize they may have an even harder time of it on their next job. In other words, the industry as a whole is frustrated but at the same time under the belief that Councils are ‘god’ and cannot be challenged. I think the sociopaths in council just love that…

I know this because it has happened to me dear reader, very recently, when on one job in a certain council I argued a wind zone assessment and after using three ways to prove my point finally won the point, even though several of their officers told me they all agreed it was a higher wind – but offered no evidence to back their conclusion; wanting only my evidence to prove otherwise. Since then it seems they have been out to get me and on a recent job actually declined a consent application – even after almost completing a long and arduous process to comply (at great expense), for a very shaky reason indeed, which the client and I with the help of an engineer, has proved to be unfounded. Thus even after months and thousands of dollars spent, we have to start all over again with this consent application; it is absolutely draconian behavior and serves no one but the power mongers in that council.

I will probably get ridiculed or worse for saying all this but it has to be said; it is thwarting the residential building industry in NZ and costing us all majorly. Something should be done about it!
In my next blog I will discuss the delicate relationship between on-site building inspectors and the beliefs all our builders have about them, that should be juicy reading too.

Passive House v Passive Solar Design, March 2020

Greeting from the Ecotect / Solabode desk, it has been awhile as I have been too busy sorting out peoples eco house projects up and down this country. Quite a few new developments in the last couple of years, both in my work and the architectural/building community at large, who seem to all be getting on the 'green' band wagon... and about time too as we are well into the 21st century now and we are supposed to be experiencing all those science fiction advancements for the benefit of humanity... Alas humanity still suffers, the planet, animals and the environment seem to be suffering even more and while there are some great movements towards changing all and such, we still have a long way to go before the 'hundredth monkey' falls into line.

One must not judge though, as we are all at our own stage of evolution and spiritual/personal growth, we will all 'get there' in the end... one hopes. However, one is no better than the ignorant if one has certain knowledge and does not poke their head up, as other tall poppies have before, and speak their truth. Such behaviour does run the risk of being lobbed off at the neck, in all manners of speaking and one of those kind ways is often in the form of asking me to 'see reason' to realize that we must 'walk before we can run', in other words take the middle grey ground... - but I cannot. My feeling is one must draw a line (in the sand) and stay behind it until someone is convincing enough to make you move the line. On some subjects recently, I certainly have changed my position - on the cause of climate change for example, but let's not go down that rabbit hole just now, I would rather stay on task here about affordable home design in NZ; - do your own research though on that climate stuff...

On one particular subject, I have been criticized every time I question the principles of the so called 'Passiv haus' movement in NZ... now this movement is growing with intensity and is becoming the 'catch cry' or 'go to' position on what is purported to be the highest standard of residential building in NZ. It is quite a recent addition to building 'movements' in NZ, just a few years of promotion from a certain group of people compiled mainly of northern Europeans, North Americans and other design professionals who have travelled in those countries. It is building tech and methods from very cold winter, well-off western countries where money is available for such high building standards. And don't get me wrong, in such countries I would also be looking seriously at building my own house in such a way - if I could afford it. In temperate New Zealand though? Even Central Otago (where it seems to be very popular) are our winters anywhere close to those in continental countries in high northern latitudes..? - no way at all!

Some main Passive House tenants are: airtight houses, which means non opening windows or triple glazed timber frame windows imported from Europe which open inwards (I still can't see how that seals out our horizontal rain...) - and internal heat recovery ventilation machines, also imported from Europe and costing up to $20k plus installation where each room gets an air duct from a central pump unit. Personally I would rather open a window for fresh air, certainly carefully in very cold weather but the thought of all those microbes multiplying in all those corrugated tube ducts running all through the house, doesn't make me excited. Add to that the maintenance, filter cleaning and eventual breakdown of the machine... how can such a thing being included in a 'passive' house? - this is an 'active' system is it not..? and is it healthy..? - a main tenant of our NZ Building Act. An airtight building envelope is asking for trouble in my experience; we tried some of those ideas in the 1980's with disastrous results using aluminium foil backed linings, foil vapour barriers in our skillion ceilings. Better to let our building envelope 'breathe' moisture vapour, rather than trap it. They even do air blower tests to make sure the building is airtight! This makes me shudder...

So these Passive houses do use a bit of my all-time favourite 'Passive Solar gain' but they don't seem to give it a high priority, they rather boast about their underfloor hydronic water pipe heating system which also runs on an imported heatpump... in NZ where even our lowest sunshine hours town or region has more sunshine hours than the highest sunshine hours region in northern Europe..! So not only are these jobbies high cost but in my book they are also a high cost to the planet in terms of 'carbon debits' (for want of a better term) and also a cost to our local economy which misses out from all that money spent overseas when we have a perfectly good building material/component industry here employing our own people. There are other aspects they like to use too, SIPs panels (structural insulated panels) made from oriented strand board and polystyrene in a sandwich, imported from China. A great idea I agree, but why are we not making them here from Plywood made in 3 NZ factories and polystyrene made in at least one factory in each island.

Simple direct gain passive solar design has no moving parts, costs no more than a well-designed comfortable house, is built using conventional trade-friendly methods (so they don't add fear costs) and provides better than 60 % higher thermal performance than a full code compliant standard house built in NZ. Very little additional heating is required and only after 2-3 days of cloudy winter weather. They are safe, super comfortable modest affordable homes that use local materials and built by local trades and suppliers. These are the true 'Passive Houses' - passive means there is nothing to do (except maybe draw the curtains at night), Solar means the sun is involved providing a massive amount of free energy on a daily basis (up to 1kW per hour for every square metre of north facing glass) and design means it is not by accident.

This technology started in the USA in the 1970's with large glazed front homes and after quickly realising the awesome power of the sun, the designs were toned right down to avoid over-doing it and then in about 1982 the NZ Ministry of Energy, commissioned a group of local architects and other experts, together with Mr Dave Bruer a passive solar architect from the USA, to adapt the new generation 2, Passive solar design methods to the NZ climate conditions. That work resulted in a thick design manual with all the design tools required - and a series of designers seminars throughout the country to teach the methods. That manual was called Design for the Sun and I still use it today nearly 40 years later. - it's been around a lot longer than your Passiv Haus tech and it was developed specifically for every region in NZ. You don't hear much about simple Passive Solar Design - because there is nothing to sell and in this consumer world we live in, you only hear about stuff that makes money for someone with stuff to sell.

There are other topics I need to get off my chest but that will do for now, thanks for reading.

'Eco' House versus 'Normal' House, 25th May 2010
People ask me frequently: "how much extra does an 'Eco' house cost over a 'normal' house", - my answer is always "nothing!" - which usually surprises everyone, and it seems the general impression out there is that an eco house does cost more - which unfortunately is a belief that is not helping us all to improve our new housing stock.
Let me qualify; if you were building any new house would you not fill the wall and ceiling framing cavities full of insulation to maintain good comfort? the cost is generally just 2 to 3 % of the house cost so it makes good sense. An eco house is simply insulated to that same level because often there is no benefit insulating to higher levels unless heat losses can be significantly reduced through glazing (more than just with curtains) which is where heat loss is greatest.
To further qualify; eco homes often have more glazing on their north sides to utilise passive solar heating. Good quality Low E double glazing is an expensive component but rather than adding extra, the passive solar eco home is simply designed to redistribute the total area of glazing, putting most on the north side, moderate areas on east and west sides, and almost none on the south side. Thus no extra cost.
But wait theres more; The 'tack on' solar water heating panel is an extra expense you say. I say no, that if you were building any new home, why would you not include a solar panel to significantly reduce your power bills. The extra capitol cost of the solar system, usually less than 4% of the total house cost, stays with the value of the home and will be realised every day in power savings and upon resale of the home. Thus a solar water system is not an extra on the eco home.
I specify good quality curtains as part of the building performance design, because as mentioned, the large windows of contemporary home designs are their greatest heat loss element. Curtains significantly reduce radiant heat loss at night, not an extra expence on the eco design because your 'non' eco home should also have them - if you want to feel comfortable that is... - and isn't that the main point of a house?
If a home was appropriately designed from the ground up to offer comfort levels and energy efficiency to its occupants (both 'no-brainer' common sense features) and if it were also designed to be space efficient to save on materials and cost, (as everyone wants to save money) and if it were to be built using safe non toxic materials (for why would you want a poisonous house?) materials that were simple and natural (low embodied energy to reduce our carbon footprint) and sourced locally (as it makes good sense keep our own people and industries in work) - would you not have a good affordable house? why would you need to call this an 'eco' house? While others still consider these to be 'eco' houses, I design and consider them as 'Normal'.


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