Archive | Construction

Updated: Non-residential spurt lifts building consents over $2 million for month

Published 28 April 2017, updated 30 April 2017 with figures around Auckland region:
A sharp jump in non-residential projects in March lifted building consents over $2 billion/month for the first time.

The total for all construction was $2.077 billion ($1.505 billion in March 2016). The total for the year was $19.529 billion ($17.357 billion) – a $2.17 billion rise.

Non-residential consents jumped 82% from $460 million last March to $837 million this March. The floor area consented rose 41%, from 230,000m² to 325,000m².

These consents tend to be lumpy, making comparisons in a non-residential sector between one month & another meaningless. The big tickets in non-residential for this March were office (which includes public transport) $191 million, hotels $167 million, hospitals, nursing homes & health $104 million, shops, restaurants & bars $102 million.

Residential consents for March were up 17.4% compared to last March, and up 14.9% for the year. Consents for new homes totalled 2779 this March (2315 a year earlier), and 30,626 for the year (27,789).

Total residential consents for the month were worth $1.199 billion ($1.021 billion a year earlier), and for the year $12.865 billion ($11.038 billion for the previous 12 months).

Home consents by sector, for month & year, previous period in brackets:

Houses: 1923 (1815), 21,434 (19,721), up 8.7% for the year
Apartments: 252 (32), 2671 (2536), up 5.3%
Retirement village units: 197 (134), 1915 (1929), down 0.7%
Townhouses, flat & units: 407 (334), 4606 (3603), up 27.8%

Around Auckland by ward, this March & last, and the March 2017 year & previous 12 months:

Region: 942 (788), 10,199 (9566)
Rodney: 122 (100), 890 (912)
Albany: 227 (178), 2518 (2332)
North Shore: 53 (75), 486 (533)
Waitakere: 55 (51), 652 (483)
Waitemata & Gulf: 116 (14), 961 (1239)
Whau: 40 (17), 310 (187)
Albert-Eden-Roskill: 37 (40), 670 (478)
Orakei: 12 (9), 306 (386)
Maungakiekie-Tamaki: 26 (22), 412 (462)
Howick: 24 (49), 495 (559)
Manukau: 38 (48), 394 (486)
Manurewa-Papakura: 114 (93), 1108 (876)
Franklin: 78 (92), 997 (633)

Attribution: Statistics NZ tables & release.

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Building institute launches 2 industry-improving scholarships

The NZIOB (Institute of Building) Charitable Trust has launched 2 $10,000 scholarships for projects that will improve the industry. Entries close on Friday 30 June.

The trust has also decided on its first fundraising event aimed at eventually making grant payments from earnings rather than capital.

Trust chair Gina Jones said yesterday the institute had established the scholarships to recognise, encourage & financially support recipients from a trade, technical or professional role to pursue a project linked to building through research, practice or professional development.

“We have a mission to encourage aspirational thinking that lifts the construction industry’s performance and we are particularly interested in applications from members who have a project that will introduce improvements to the industry.

“We’re looking for applicants with a project that has the potential to advance some aspect of design, construction or management of buildings in New Zealand, and thereby enhance the quality of our built environment.”

The successful recipients will be chosen by a panel comprising 3 past presidents of the institute. Winners will be announced at the institute’s awards night on Friday 25 August in Auckland.

Ms Jones said the trust’s first fundraising event would be a lunch with former All Black captain – and builder – Sean Fitzpatrick at Mac’s Brewbar in Wellington on 30 June, the day before the British & Irish Lions play the All Blacks at Westpac Stadium.

Link:
NZIOB Charitable Trust
Scholarship details

Attribution: Institute release.

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Statistics House quake damage prompts standards review

Building & Construction Minister Nick Smith said on Friday design standards & building laws would be reviewed in response to an investigation into structural damage to Statistics House in Wellington in the Kaikoura earthquake on 14 November.

He released an independent panel’s findings into the performance of the building during the quake, which focused on its design & construction and the land influences on it.

The panel found a combination of 4 factors contributed to the partial failure of lower floor segments.

2 of the factors – the flexible frames & style of floor construction – combined with significant shaking for up to 120 seconds, and localised amplification of the shaking, to compromise the support of the lower precast concrete floor units.

The panel also noted that the combination of factors that led to the partial collapse of floor units in Statistics House wasn’t anticipated by the design standards in place when it was built in 2005.

The Ministry of Business, Innovation & Employment, the Institution of Professional Engineers (IPENZ) & the institution’s technical societies have produced information for owners & building professionals responsible for assessing & designing multi-storey concrete moment-resisting frame buildings with precast concrete floor systems that may be vulnerable to loss of floor support during an earthquake.

Performance “unacceptable”

Dr Smith said: “The performance of Statistics House in the Kaikoura earthquake was unacceptable and could have caused fatalities. This quake was large & unusually long, but a modern building like Statistics House should not have had life-threatening structural damage. The building was designed to the industry practice of the time, but this did not fully account for the effects of beam elongation during an earthquake, an issue that was deficient in the concrete structures standard at the time of the design.

“The design flaw is quite specific to highly ductile framed concrete buildings with precast floor slabs, and particularly those with multi-bay frames. We need to follow up on similarly designed buildings through councils & engineering companies so that where it is a problem, it can be rectified. This has already been done in respect of Wellington as a consequence of the preliminary findings in Statistics House, but now needs to be followed up elsewhere.

“We also need to amend the concrete structures standard to ensure newly designed buildings are adequately designed to cope with beam elongation during long-duration earthquakes. This will be done this year.

“A compounding factor was geological basin effects that are not well understood but which have also been observed in other earthquakes internationally. This is not to do with reclaimed land but the amplification of ground shaking in a basin. This phenomenon is similar to the way sea waves respond to a wall in an enclosed bay. This is an area of seismic science that needs further research, particularly in respect of Wellington, and to be considered as part of a review of the earthquake actions standard.

Building law issue

“There is a building law issue that arises from this report on which I have asked officials to report. The Ministry of Business, Innovation & Employment has limited powers to follow up on design deficiencies like those identified in this report, beyond those specifically provided for following civil emergencies. This means the ministry cannot require building owners to follow up on these sorts of potentially serious technical problems. I have asked the ministry to report on whether additional powers are needed in the Building Act.”

Dr Smith said New Zealand was at the cutting edge of international seismic design standards, but hadn’t yet solved all of the potential ways a building can fail: “Most buildings in Wellington performed well despite the ferocity of the Kaikoura earthquake. We need to take the opportunity following such earthquakes to learn as much as we can and to further strengthen our standards & systems to improve building safety for the future.

“These detailed issues over the performance of modern buildings are important for improving design standards, but they should not divert attention away from the far more significant risk to life of older buildings. The Kaikoura earthquake was sufficiently distant from Wellington that the city did not get the dangerous high frequency shaking that poses the greatest risk to life.

“The largest safety gains for Wellington are to be made in the initiatives requiring unreinforced masonry facades & parapets to be tied back over the next year, and all earthquake-prone buildings under 34% of Building Code to be upgraded under the new law coming into effect on 1 July.”

Links:
Statistics House investigation
Framed buildings with precast concrete floor systems

Attribution: Ministry website & ministerial release.

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Updated: Home consents up slightly, but revision lifts November figure to 12-year high

Published 31 March 2017, additional material 1 April 2017
Consents for new homes issued in February were up slightly – by 39 – over February last year, to 2418, raising the tally for 12 months to 20,162.

Perhaps of greater note was the revision of the November consent figure, from 2973 to 3005 new homes. I think (without time to check fully) this is the first month of 3000-plus consents since the 3447 in June 2004, which included 977 apartment consents.

That high in 2004 came 30 years after the previous high, in 1974, which was toward the end of another construction boom.

The November 2016 high theoretically came without the push from apartments, only 375 of them consented that month. But, including the 507 flats & townhouses and the 205 retirement village units (recent extra segmentation by Statistics NZ), consents for intensive construction totalled 1087.

The suburban unit/townhouse segment has fallen behind the (mostly central) apartments sector only twice in the last 18 months. That segment of the market has seen 24% growth over the last 12 months to 4533 units (3651 in the previous 12 months), whereas apartment consents have slipped 4.8% to 2451 (2574) and retirement village consents have slipped 6.2% to 1852 (974).

Standalone house consents have risen 9.1% over the 12 months to 21,326 (19,546).

Residential consents in Auckland were up slightly for the month to 800 (787) to 10,045 (9534) for the February year.

The total value of residential consents nationally in February fell 1.5% from a year ago to $1.06 billion ($1.077 billion), but the annual figure remains 14.3% ahead at $12.5 billion ($10.94 billion).

Additional material:

Around Auckland by ward, this February & last, and the February 2017 year & previous 12 months:

Region: 800 (787), 10,045 (9275)
Rodney: 87 (80), 868 (888)
Albany: 196 (182), 2469 (2362)
North Shore: 72 (19), 508 (473)
Waitakere: 44 (44), 648 (474)
Waitemata & Gulf: 73 (179), 859 (1246)
Whau: 2 (8), 287 (179)
Albert-Eden-Roskill: 33 (20), 673 (456)
Orakei: 71 (8), 303 (485)
Maungakiekie-Tamaki: 6 (21), 408 (467)
Howick: 51 (51), 520 (602)
Manukau: 14 (51), 404 (454)
Manurewa-Papakura: 75 (67), 1087 (865)
Franklin: 76 (57), 1011 (583)

The total value of residential consents nationally in February fell 1.5% from a year ago to $1.06 billion ($1.077 billion), but the annual figure remains 14.3% ahead at $12.5 billion ($10.94 billion).

Residential consents this February & last, and the February 2017 year & previous 12 months, in a selection of provinces:

Northland: 131 (80), 1261 (896)
Waikato: 294 (274), 3512 (3160)
Bay of Plenty: 226 (200), 2517 (2055)
Wellington: 133 (113), 2023 (1711)
Canterbury: 361 (525), 5798 (6319)

Commercial presents mixed picture

Commercial sectors present a very mixed picture. Overall, floor space is down in this month’s & year’s consents, but values are up. There’s not an even picture across sectors.

Non-residential consent floorspace for February was down 12.9% to 189,000m² (217,000m²), and for the year down 18.2% to 2,631,000m² (3,218,000m²).

Non-residential consent value for February was up 10.3% to $410 million ($372 million), and for the year up 5.3% to $6.086 million ($5.777 million).

Big changes by value for the year were hostels, boarding houses & prisons up 42.8% to $227 million; and hotels, motels & other short-term accommodation up 85.2% to $276 million.

The value of consents for all construction for the month fell 6.2% to $1.492 million ($1.59 million), and for the year it was up 10% to $18.956 billion ($17.238 billion).

Attribution: Statistics NZ tables.

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Auckland above 10,000 home consents/year again

Auckland’s consent level for new homes got back above an annual rate of 10,000 in January after dipping in December. The 512 consents in January were 6 above the number a year earlier.

For the year, Auckland had 10,032 consents for new homes, compared to 9930 in the 12 months to December and 9275 in the 12 months to January 2016.

Nationally, consents for the month were up 3.4%, from 1695 to 1752, and for 12 months they were up 11.1%, from 27,124 to 30,123.

January is the traditional quiet month everywhere, but not usually as quiet as it got in Auckland’s central Waitemata & Gulf ward, where consents numbered only 9 in December and fell to 4 in January.

The Waitemata part of that ward covers the cbd & its western fringe, very much apartment & townhouse territory, so consent applications tend to be lumpy. In 8 of the last 12 months the ward had fewer than 50 consents, 3 months of 114, 155 & 179, and one outstanding month when 353 consents were issued.

In the previous 12 months, the ward’s consents exceeded 100 only twice, but they were months of 405 & 278, contributing to a total for 12 months that was 20% higher.

Looking forward into the new era of Auckland’s mostly approved unitary plan, when more intensification will be possible across 90% of suburbia, developers may disperse their search for cheaper land, resulting in more intensification in smaller centres.

Consents nationally for standalone houses fell slightly for the month but were up nearly 11% over 12 months, while consents for apartments have dipped slightly over 12 months and those for suburban townhouses & units are up nearly 28%.

Around Auckland by ward, this January & last, and the January 2017 year & previous 12 months:

Region: 512 (506), 10,032 (9275)
Rodney: 55 (60), 861 (865)
Albany: 194 (123), 2455 (2304)
North Shore: 17 (13), 455 (473)
Waitakere: 18 (46), 648 (465)
Waitemata & Gulf: 4 (80), 965 (1160)
Whau: 7 (11), 293 (189)
Albert-Eden-Roskill: 22 (29), 660 (449)
Orakei: 8 (10), 240 (490)
Maungakiekie-Tamaki: 25 (18), 423 (460)
Howick: 15 (17), 520 (572)
Manukau: 17 (36), 441 (419)
Manurewa-Papakura: 50 (37), 1079 (848)
Franklin: 80 (26), 992 (581)

Consents for the 4 residential market segments in January & the 12 months to January 2017 compared to the previous January & previous 12 months:

Houses: 1253 (1286), -2.6%; 21,277 (19,183), 10.9%
Apartments: 116 (89), 30.3%; 2430 (2511), -3.2%
Retirement village units: 98 (135), -27.4%; 1915 (1908), 0.4%
Townhouses etc: 285 (185), 54.1%; 4501 (3522), 27.8%.

Sector & total values against January 2016 or the previous 12 months:

New homes: $619 million/month ($641 million), -3.5%; $10.625 billion/year ($8.906 billion), up 19.3%
Alterations & additions: $129 million/month ($115 million), 12.4%; $1.899 billion/year ($1.728 billion), up 9.9%
Total residential: $748 million/month ($756 million), -1.1%; $12.524 billion/year ($10.635 billion), up 17.8%
Non-residential: $338 million/month ($310 million), 9.2%; $6.048 billion/year ($5.876 billion), up 2.9%
Total, including non-building: $1.108 billion/month ($1.083 billion), 2.3%; $19.055 billion/year ($16.922 billion), up 12.6%.

Earlier stories:
6 March 2017: Third quarter of plus-32% rises in Auckland construction input
10 February 2017: Townhouses & flats dominate shift in home styles

Attribution: Statistics NZ tables.

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Third quarter of plus-32% rises in Auckland construction input

The value of building work put in place in Auckland in the December quarter fell just short of $2 billion, and was up $500 million on the input a year earlier.

Image above: Residential work has soared well above the static input to commercial construction in Auckland.

Figures out from Statistics NZ on Friday show for the whole of 2016, $2 billion more was spent nationally on new homes than in 2015 – up from $8.4 billion to $10.5 billion – and across all construction sectors there was a $3.3 billion rise nationally to $19.87 billion spent for the year, all ex-gst.

Statistics NZ said residential work in Auckland rose 4.5% in the December quarter, and non-residential 17%.

Nationally, the 1.1% rise in residential work in the December quarter was the smallest increase in 6 quarters.

Combining the input in all sectors, the growth in construction input in Auckland hasn’t risen steadily since the market bottomed in 2011.

There was a spurt of 9-13% quarterly growth in 2012, and that was followed by quarterly growth of around 30% for the last 3 quarters of 2013, tapering off to a 20.5% increase in the March 2014 quarter and actually declining in the September quarter that year.

Since that dip, Auckland growth has been strong: 13.6% in the December 2015 quarter (compared to the same quarter a year earlier), then rises of 25.6% in the March 2016 quarter, 39% in June, 32.3% in September & 34.2% in December.

Attribution: Statistics NZ tables & release.

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Façades on 38 quake-hit streets to be strengthened within year

Councils from Hurunui (between Christchurch & Kaikoura) to Wellington have identified 38 streets where building owners need to secure unreinforced masonry façades & parapets within a year.

Building & Construction Minister Nick Smith said today: “The Kaikoura earthquake has increased the seismic risks in Wellington, Lower Hutt, Blenheim & Hurunui over the next 3 years. It is therefore prudent to require them to be secured and to help building owners with funding of these high risk, unreinforced masonry parapets & façades to secure them.

“The 38 streets have been selected by the councils on the basis of pedestrian & vehicular traffic and where the risks from unreinforced masonry parapets & façades are greatest. The next step is for councils to formally notify the building owners affected. Some owners may already have taken corrective work.

“The Government has established a $3 million fund to help building owners with the cost of securing the parapets & facades.”

Dr Smith said all 4 mayors had confirmed their councils would make financial contributions to this fund, raising it to about $4.5 million. The fund will be used to provide a 50% subsidy for the work up to a maximum grant of $15,000 for a façade and $10,000 for a parapet.

Link:
Full list of streets

Attribution: Ministerial release.

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Townhouses & flats dominate shift in home styles

Suburban townhouses & flats dominated the shift in building consent figures away from standalone houses last year.

The townhouse & flats segment of the market – essentially lowrise intensification outside the central urban areas – has grown by 330% since 2011, while the standalones have steadily lost market share, falling from 81% in 2011 to 71%.

Consents for all new homes last year totalled 29,970, up 10.5% on the 27,132 in 2015, according to Statistics NZ’s figures out yesterday.

Houses made up 21,310 of the 2016 total, 19,038 the previous year, so a rise of 11.9% for the year. For the month of December, however, the 1580 consents were down 4.9% for that month a year earlier.

Consents for the 4 market segments in December & the whole of 2016 compared to the previous December & the whole of 2015 were:

Houses: 1580 (1661), -4.9%; 21,310 (19,038), 11.9%
Apartments: 138 (427), -67.7%; 2307 (2539), -9.1%
Retirement village units: 193 (159), 21.4%; 1952 (1899), 2.8%
Townhouses etc: 294 (291), 1%; 4401 (3656), 20.4%.

Sector & total values against December 2015 or the previous 12 months:

New homes: $833 million/month ($868 million), -4%; $10.648 billion/year ($8.796 billion), up 21%
Alterations & additions: $156 million/month ($149 million), 4.3%; $1.885 billion/year ($1.727 billion), up 9.2%
Total residential: $989 million/month ($1.017 billion), -2.8%; $12.532 billion/year ($10.523 billion), up 19.1%
Non-residential: $595 million/month ($555 million), 7.2%; $6.019 billion/year ($5.919 billion), up 1.7%
Total, including non-building: $1.612 billion/month ($1.611 billion), 0.1%; $19.03 billion/year ($16.859 billion), up 12.9%.

Housing consents around the country:

Auckland: 740 (947), 9930 (9251)
Whangarei: 45 (41), 662 (447)
Kaipara: 20 (19), 267 (182)
Hamilton: 76 (142), 1179 (1205)
Bay of Plenty: 177 (176), 2520 (809)
Wellington region: 115 (106), 1992 (1721)
Christchurch & districts: 344 (510), 5202 (5830)
Queenstown-Lakes: 79 (62), 945 (816)

Around Auckland by ward:

Rodney: 60 (103), 866 (844)
Albany: 170 (156), 2288 (2274)
North Shore: 28 (143), 451 (480)
Waitakere: 43 (31), 676 (454)
Waitemata & Gulf: 9 (93), 1041 (1157)
Whau: 14 (24), 297 (201)
Albert-Eden-Roskill: 112 (144), 667 (445)
Orakei: 15 (70), 242 (506)
Maungakiekie-Tamaki: 129 (19), 416 (467)
Howick: 22 (46), 522 (585)
Manukau: 21 (26), 460 (406)
Manurewa-Papakura: 59 (55), 1066 (855)
Franklin: 58 (37), 938 (577).

Attribution: Statistics NZ tables.

Related story today: Smith exultant about figures that are plainly inflated

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Smith exultant about figures that are plainly inflated

Former housing minister Nick Smith, now building & construction minister, heaps praise on himself for a job extremely well done: “Building activity is at a record high, topping $19 billion for 2016 after 5 straight years of strong growth”.

But we all know it’s not true. Although Dr Smith said of yesterday’s building consent report that the figures he was quoting were “in inflation-adjusted terms”, both he & the rest of New Zealand know construction costs, land prices & house prices have been distorted way beyond the realm of the Reserve Bank’s narrow inflation focus.

It’s a sector which can be measured very accurately, but the figures Statistics NZ releases monthly on building consents for new homes carry distortions because of how applications are made. In some cases such as staged developments, consent applications & costs may be reported in different time periods. However, over a year, I suspect it’s reasonable to use these figures to carry out the calculations I’ve done here on changes in floor areas, values and values/m² of construction. The value of land is excluded from building consent figures.

Going back to the bottom of the market following the global financial crisis, 2011, the statistics show an average floor area of 191.6m². It rose the next year, declined for 3 years and recovered slightly in 2016. The percentage changes were rises of 2.9% in the first year and 1.8% in the last year, but falls of 2.7%, 2.6% & 4.3% in the intervening years.

The average value/dwelling was just under $280,000 in 2011, and rose in steps of $6600-16,000 during the next 4 years, equating to gains of 5.75%, 3.3%, 4% & 2%. Then, in 2016, the average jumped $31,000 to $355,300, a leap of 9.6%.

Putting those figures together to see what the consent value/m² has been, the starting point in 2011 was $1459/m². The end point, the average for 2016, was $1951/m² – a rise of $492/m² over 5 years, or 34%. In the first year off the market bottom the rise was 2.75%, but it’s since been consistently above 6% – 6.15% in 2013, then 6.75%, 6.71% and, last year, 7.67%.

An important factor in the equation is the falling proportion of total housing categorised as houses, distinct from 3 intensive categories – apartments, retirement village units and suburban townhouses & units – all of which generally have smaller floorplates than the average house but will generally be priced more highly per m² of building. The houses category fell from 81% of all housing consents in 2011 (when the apartment sector almost disappeared) to 71% in 2016.

Dr Smith habitually talks about consent figures as if they were actual construction. Statistics NZ doesn’t supply regular figures which would show the percentage of consents that turn into actual construction. Those percentages vary cyclically, according to figures I’ve seen long ago – heading into the peak of a boom the consent figures will have risen steeply, but once the boom ends actual construction can plummet.

In his release on the consent figures yesterday, Dr Smith said: “This is the longest & strongest growth phase in building activity in New Zealand history. It involves record levels of investment in homes, commercial buildings & infrastructure. The total value of consents in 2016, at $19 billion [for all consents, not just residential], is the highest ever and 30% more than the previous peak last decade, in inflation-adjusted terms.

“I am particularly encouraged by the ongoing strong growth in residential building activity, that has increased 19% nationally & 27% in Auckland over the past year. This is the fifth straight year of strong growth. You cannot grow a sector as large or as complex as building at more than about 20% compound/year without incurring problems with quality.

“The number of homes being built in 2016 – 29,970 nationally & 9930 in Auckland – is more than double that of 5 years ago and is the highest since 2004. This growth gives me confidence we will have the number of homes increasing in line with population growth by the end of the year.

“This ongoing strong growth shows the Government’s programme to increase housing supply is working. We have aggressively increased land supply with special housing areas in the short term, changes to Auckland’s planning in the medium term, and the national policy statement on urban development capacity & Resource Management Act reforms in the long term.

“We have complemented this with the Crown land programme and a record level of direct Government projects to build homes, such as Hobsonville. We’ve also provided record levels of assistance for first-homebuyers with the KiwiSaver HomeStart scheme, which has helped more than 20,000 people into their first home with about $500 million in KiwiSaver withdrawals for a deposit.

“This Government is, step by step, development by development, getting on and addressing New Zealand’s housing challenges.”

The figure of $19 billion includes $12.5 billion for new homes and alterations & additions to homes, $6 billion for non-residential buildings and just under half a billion dollars for non-building construction. The housing component has been rising rapidly – by 25.4% in 2012, 28% in 2013, then 20.5%, 10.5% and, last year, 19.1%.

The non-residential sector had 2 strong years – rises of 21.5% in 2014 & 15.9% in 2015, but was down to a 1.7% rise last year.

Related story today: Townhouses & flats dominate shift in home styles

Attribution: Statistics NZ tables & release, ministerial release.

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Smith lists the initiatives to improve coping with quakes

Building & Construction Minister Nick Smith listed 12 initiatives this week, not just to rebuild after earthquakes but to learn from the events and improve New Zealand’s resilience to future earthquakes.

Dr Smith made his points on the steps being taken to improve management of earthquake risks in a Rotary address in Nelson, as local MP.

You can read his full address here: Better managing New Zealand’s earthquake risks

The Kaikoura earthquake on 14 November measured magnitude 7.8, making it the largest in New Zealand since 1855.

Dr Smith: “We are one of the most seismically active countries in the world and we need to be at the leading edge of protecting people, infrastructure & the economy from earthquakes.”

The initiatives, those already legislated and those still on the way:

  1. New Earthquake-prone Building Act

The first initiative is the new earthquake-prone building legislation passed by Parliament last May, which comes into effect in June this year.

The first major change in the new law is a nationally consistent approach. However, Dr Smith varied the timeframes for buildings to be assessed & upgraded relative to the variations in earthquake risk. In high risk areas like Wellington, upgrades must be done within 15 years, in medium risk areas like Nelson 25 years, and in low risk areas like Auckland 35 years.

We have set the standard of an earthquake-prone building as being one that is less than one third of the current seismic standard. It is not a guarantee of safety. It is a pragmatic balancing between cost & safety.

We have also introduced in the law the notion of priority buildings such as schools, hospitals & buildings on major pedestrian access ways and required that these be strengthened in half the standard times.

A further new requirement is that if a building owner is doing a substantial upgrade of an earthquake-prone building, they must simultaneously strengthen it to this minimum standard.

  1. Adding natural hazards to the RMA

The second major change is to the Resource Management Act, scheduled to be made law in March: “This is one of those areas where politics has got in the way of rational risk management.

The Act lists seven matters of national importance that must be addressed in every single plan and consent considered across the country… but there is no mention of natural hazards like earthquakes. This lacks common sense. New Zealand faces multiple natural hazard risks and it was a serious oversight that these risks are not a mandatory consideration for new developments.

“Let me give a practical example of why this law change is so important: The Bexley subdivision in Christchurch was approved under the RMA in the early 1990s despite publicly available reports identifying the low-lying areas as having a high risk of liquefaction in a moderate earthquake. The several-hundred-page council report on which this subdivision was approved systematically works through each of the issues identified in the principles section of the RMA as required legally. There are many pages on the landscape, cultural & vegetation issues, but the report is silent on the very significant earthquakes risks.

“The hundreds of Bexley residents whose lives were literally tipped upside down, and the taxpayers who ultimately paid out hundreds of millions from the subsequent red-zoning process, would have much preferred these risks were properly assessed in the first place.

“This important change to the RMA is in the substantive second phase bill of Government reforms due back from select committee in coming weeks and due to be passed into law in March.”

  1. Post-quake Building Act reform

Next, the management of buildings following a significant earthquake: “This involves real clashes of people’s relative rights, and decisions in a high risk aftershock environment where lives can be easily lost by the wrong decisions.”

Cabinet approved Dr Smith’s proposed revamp of the Building Act to deal with these issues a week before the Kaikoura quakes.

“The bill provides greater powers to get damaged buildings down more quickly, and provides a quite sophisticated balancing of rights between private property, safety & heritage issues. I will be introducing this bill into Parliament in March with the aim of having it as law by year’s end.”

  1. Improving consistency of building assessments

An associated area of work is improving the consistency of engineering assessments. New regulations will be finalised in April.

“This is relevant to the short sharp assessment done after an earthquake as well as in determining what buildings are earthquake prone.

“We have introduced a new guide for post-quake building assessment. Buildings are stickered as white, meaning OK for continued use, yellow for restricted access and red for unsafe. There was a lot of confusion during the Christchurch quakes by both engineers & the public on the old system, but the experience from the Kaikoura quakes is that we now have a system that is the world’s best practice, well understood and which strikes a better balance between risk & the need for communities to be able to move into recovery mode.

“The more complex job is the regulations currently being consulted on for the seismic assessment of earthquake-prone buildings. There is significant frustration from building owners that different engineers can give quite different assessments of the proportion of the new building standard that a building meets. There are real practical difficulties in making engineering assessments of buildings that may be 50 or 100 years old with very little knowledge of the standards of concrete, steel or construction in any records.

“We are currently developing regulations under this new law to get greater consistency in these assessments. The new regulations will be finalised in April.”

  1. Standards, training of engineers & accountability

This concerns regulations, ethics & training of engineering professionals, but also what requirements there are to pass on information about potentially dangerous structures and the question raised by the ability of an engineer to escape accountability by resigning from their professional association.

“We made an important change to the code of ethics last year that is pertinent to the tragic collapse of the CTV building in which 115 people were killed, 60% of the total toll from the Christchurch earthquake.

“Much has been written about the inadequacies of the design of this building constructed in 1986. I am hesitant to comment on the specifics with police due to announce a decision in the next few months on whether to prosecute the engineers responsible, albeit there is frustration that this decision is taking so long.

“The pertinent and relevant issue is that in 1993, when the building was for sale, it was assessed by consulting engineers as deficient in its seismic design. The client wisely opted not to buy the building on this advice, but the system failure was that this information was not passed on to the relevant building authority – in this case the Christchurch City Council.

“The problem here is that consulting engineers are bound by commercial contracts and the information belongs to their clients, and in this case the client had no interest beyond deciding not to purchase.

“Commercial interests & privacy concerns must in these circumstances take a back seat to public safety. That is why the code of ethics, with the support of the profession, was changed in July last year requiring engineers to pass on such information to relevant public authorities.

“A second issue that I am testing in the courts is the notion that professional accountability can be avoided by an engineer simply resigning from the professional body.

“The circumstances are that IPENZ (the Institution of Professional Engineers) appropriately initiated an investigation into the issues of engineering practice around the CTV building, but the process could not proceed simply by the engineer resigning. This not only deprives the public of a proper process of accountability but the profession of the critical learnings that must flow from such failures.

“The courts will determine a definition of what the current law states and, if it is found that accountability can be avoided by simply resigning, we will need to amend the law.

“Our government has also significantly lifted our investment in the training of professional engineers with over $90 million of additional funding. There are 2500 more students studying engineering mainly at Canterbury & Auckland Universities today than in 2008.”

  1. Powers for addressing newly identified risks

Strengthening how the Government & councils can respond to newly identified building risks: “We do not currently have in law the equivalent of a product recall system in our Building Act. An example of such a problem is where we find an engineer whose work is not up to scratch, as has recently occurred in Masterton.

“A prudent response is to require other building owners to have their building designs checked. The Government & councils can try to persuade building owners that this should be done, and generally, as in the Masterton case, owners have co-operated. Where we know a particular engineer’s work is flawed, we need to be able to check their other projects.

“Another example is the recent problem identified in the Statistics NZ building in Wellington, where 3 precast floor components collapsed. The preliminary investigation identified problems associated with the long duration and how ductile beams interacted with the precast floor slabs.

“Seismic building design is an evolving science and we will identify new risks like this that have not previously been sufficiently considered.

“This potential design flaw can be fixed, and the prudent response is to require all buildings recently constructed with these features to be checked and, where necessary, repaired.

“We are doing this in the Wellington area using the special Kaikoura earthquake powers, but this is an area where public authorities need wider powers to ensure our buildings are safe.”

  1. Tackling high risk parapets & façades post-Kaikoura

Dr Smith announced on Wednesday that an order-in-council would be issued for owners of 300 buildings in Wellington, Lower Hutt & Blenheim to be given a year to tie back unreinforced masonry façades & parapets, and that regulations would be put in place by the end of February. The Government will provide a 50% subsidy up to $15,000 for a façade and $10,000 for a parapet.

  1. Supporting heritage building upgrades

A new heritage earthquake upgrade incentive programme fund of $10 million has opened for the first round of bids.

  1. Improving tsunami warning systems

The areas most vulnerable to tsunamis are near major faults. Dr Smith said the risks were greatest where you have deep water rapidly become shallow, and confined bays that exacerbate wave height.

“The most effective strategy for reducing these risks is a well informed public & improved warning systems. The Ministers of Civil Defence and Science & Innovation announced a further $3 million investment in improving Geonet’s natural hazard monitoring in December, in response to concerns about incomplete & confusing information about the tsunami risk following the Kaikoura quake.

“The Government is also exploring a wider investment in smart-phone warning technology that would further improve our capacity to ensure people are better informed during such events.”

  1. Supporting innovative design

Dr Smith said the Government was stepping up its support for innovative design in seismic-resistant buildings: “The Earthquake Commission and the building & construction ministry [which as far as I can see is actually part of the Ministry of Business, Innovation & Employment] are funding new guidance for low damage building systems, including seismic isolation, buckling restrained braces and viscous damping. The Pres-Lam system is one of these, and the first building in the world to use it is the Nelson Marlborough Institute of Technology.

“We should not underestimate the economic opportunities from these technologies. Countries like China & Turkey, who have lost hundreds of thousands of citizens in quakes and who are becoming a lot more wealthy, are looking for these sorts of technologies to step up their building safety.”

  1. Investing in seismic research

Seismic research is one of the Government’s 10 national science challenges, “which is why we are lifting our investment in improved science & engineering to support better earthquake resilience. New engineering research facilities have been built at both Auckland & Canterbury Universities.

“The natural hazards platform has been created with $14 million/year of funding to support improved research into all aspects of seismic design.”

  1. National policy on natural hazards

Dr Smith raised the prospect of a national policy statement on natural hazards in 2015, but said in his speech this week the Ministry for the Environment would start work on it this year.

He commented this week on councils’ questionable appreciation of risks: “I am not satisfied that councils sufficiently appreciated the scale of the sort of natural hazard risks that they are responsible for. It can be tempting to ignore significant risks in the hope that nothing happens.

“A current example is the challenges in the booming tourism community of Franz Josef.

This is one of the highest earthquake risk areas in the world, with the main alpine fault running through the town and significant movement of this fault projected every 80 years. This risk is compounded by the landslide risks of the foreboding surrounding country and the wild & dangerous Waiho River.

“We can design buildings that can withstand substantial shaking but, if a fault line rips through a building, there is little prospect of it remaining safe. Council had proposed to designate the area to prohibit any new structures in this strip but has come up against considerable resistance from property owners. It is currently proposing to drop the hazard zone.

“In a place like Franz Josef, where there can be more than 1000 tourists staying/night, there can be a tension between the local business interests and the national interests in ensuring the prudent management of safety of our visitors. The Government is working with the Westland District Council on these issues, but the example highlights the need for clearer national direction.

“This year the Ministry for the Environment will be starting work on a national policy statement on natural hazards to support the changes in the RMA.

“The purpose will be in strengthening the requirements & legal responsibilities on councils to ensure we more prudently manage these risks. This is a major piece of work that will take some years to complete, but will lay the national foundations for better long-term management of earthquakes & other natural hazards.”

Related stories today:
Better managing New Zealand’s earthquake risks
Smith lists the initiatives to improve coping with quakes
Fast fix ordered for Wellington & Blenheim unreinforced masonry

Earlier stories:
18 November 2016: Ministry to investigate buildings’ performance in quake
15 August 2016: Property Council calls Government’s new heritage support fund “underwhelming”
17 April 2016: QuakeCore lab opens
3 September 2015: Property Council suggests measures to help quake-affected owners
3 September 2015: Government bows to quake survivor’s submissions
14 August 2015: Smith talks up firmer hand on environmental rules
3 July 2015: Council falls into line on quake-prone checks
25 June 2015: Select committee seeks feedback on quake-prone buildings bill changes
20 May 2015: Changes proposed for managing buildings in emergencies
10 May 2015: 
Government eases quake strengthening targets
7 March 2014: Quake-prone buildings bill introduced

Attribution: Smith speech.

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