The building sector is pushing for a delayed introduction of new, more rigorous building code requirements amidst soaring inflation and supply chain issues – but green building advocates say the cost of inaction would be far too high
The Government is being urged to hold firm on an impending deadline for more stringent insulation rules, with concerns a delay could undermine New Zealand's wider decarbonisation programme for the building sector.
The Ministry of Business, Innovation and Employment last year announced a number of changes to the Building Code to improve energy efficiency.
Among the measures due to take effect from this November are new insulation rules intended to reduce the energy needed to heat residential homes by roughly 40 percent, compared with previous requirements.
However, some in the building sector have called for the changes to be delayed by a year to allow more time for preparation.
Master Builders chief executive David Kelly told Newsroom the organisation was not opposed to the changes, but had concerns about implementing them at a time of record inflation which was disproportionately affecting the construction industry.
“It can be the best policy in the world, but if your timing is wrong you don’t get the benefits that you thought you were going to.”
Kelly said builders were unable to give a fixed price for work due to uncertainties about how long a project would take and how much costs would rise, which created both customer uncertainty and the possibility of risk-averse banks changing their lending terms.
With consumer confidence already dropping, a fall in the number of new builds was likely to follow which could be exacerbated by the changes.
“Bringing that [the building code changes] in now we believe will accelerate the extent to which consumers get cold feet, and that will lead to an uncontrollable drop which means that businesses will just go broke.”
“When I was working in central government and I was in charge of the rollout of double glazing throughout New Zealand, it wasn’t a matter of, a number of parties are ready to go and therefore you go - everyone has to be ready, because it works as a whole system.” – David Kelly, Master Builders chief executive
While there was no guarantee that the situation would have improved sufficiently in a year’s time, an extended transition period would allow businesses to adjust their operating model and better prepare for the effects of a downturn.
Kelly said there was insufficient knowledge within the industry to design and build houses to the new technical standards, and there was widespread agreement of the need for a strong education programme for the sector.
Master Builders was unconvinced by manufacturers’ claims that there would be sufficient materials to meet the current deadline, with some information suggesting businesses were “scrambling” to secure supplies.
“When I was working in central government and I was in charge of the rollout of double glazing throughout New Zealand, it wasn’t a matter of, a number of parties are ready to go and therefore you go - everyone has to be ready, because it works as a whole system.”
Customers and builders who were ready to meet the higher standard could still voluntarily do so early if the implementation date was moved back a year, Kelly said.
NZ Green Building Council chief executive Andrew Eagles told Newsroom the Government needed to stick to the November 2022 date as planned, given the work that had already gone into that deadline.
“Right now you’ve got window and insulation providers putting in quite a bit of time and effort to gear up for this, and pushing it back creates massive uncertainties…
“How do we know that in future, other policy agendas won’t be pushed back when some people decide against it?”
“If we cannot even do this minor improvement to our homes in a sector where the technologies and the methodology is relatively simple - it's not complex to put some additional insulation in - it seems a pretty dire situation when faced with a three to 3.3 degree warming, unliveable world.”
Eagles said a delay could also spark concerns about the Government’s commitment to its longer-term Building for Climate Change programme, set up to reduce emissions associated with the building and construction sector.
“Already the homes we build are five times our carbon budget, even for 2 degrees [of global warming] ... and these are fairly minor, relatively simple improvements that the sector can do.”
Claims about materials shortages did not stack up, he said, with the Windows and Glass Association as well as the Insulation Association having indicated they could deliver to the November deadline.
While builders did need to develop knowledge of how to calculate the insulation requirements and meet other specifications, those were not insurmountable challenges.
New Zealand’s insulation values were already two to three times worse than those of countries with similar climates, Eagles said, with poor-quality homes leading to significant health and wellbeing issues for some.
While Master Builders has estimated the changes could add at least $25,000 in compliance costs to the average home, Eagles said figures he had seen indicated a cost closer to $12,000 to $18,000, while the costs needed to be kept in perspective.
“It sounds like a lot, doesn't it? But for homes costing $400,000 to build, and then the land on top of that … it's a relatively small proportion.”
Pushing back the changes would do nothing to ease the energy bills of Kiwis dealing with high living costs and send a poor signal about New Zealand’s commitments to addressing climate change, he said.
“If we cannot even do this minor improvement to our homes in a sector where the technologies and the methodology is relatively simple - it's not complex to put some additional insulation in - it seems a pretty dire situation when faced with a 3 to 3.3 degree warming, unliveable world.”
"Achieving net zero 2050 is a long term challenge that requires bold vision, commitment and perseverance." – John Sneyd, MBIE
John Sneyd, MBIE's general manager for building system performance, told Newsroom the ministry had convened workshops with industry leaders to better understand any issues which had developed since consultation on the proposals took place last year.
"MBIE is fully committed to working alongside the building and construction sector to ensure successful implementation of these important changes. We are considering the feedback from these workshops and will continue to work with the sector to determine what further support is required in the coming weeks," Sneyd said.
While there was no doubt that material shortages and price increases were a problem, along with global shipping constraints and high commodity prices, "achieving net zero 2050 is a long term challenge that requires bold vision, commitment and perseverance".
"Any changes we can make to reduce the climate impact of houses will have a lasting effect for future generations."
MBIE had received overwhelming support for the building code changes from throughout the sector, including residential home owners and tenants, through the consultation process, Sneyd said.
