Keeping the cost down

The Registered Master Builders Association and the Construction Strategy Group have prepared a report that investigates the impacts of regulation on housing affordability.

The paper found that the cost of constructing a residential building has increased 110% in the last 15 years, compared with an overall increase of 44% in the cost of living over the same period. The report identified that around 85% of these increased costs are related to land availability and the sub-division, resource consent and town planning environment.

Home owners are often faced with challenges in subjective town planning for subdivisions when resource consent is required. The paper argues that regulations are often introduced without examining whether the benefits of the regulations outweighs the cost incurred by the individual.

The report recommends that over-regulation may be reduced by:

  • Specifying and limiting the authority of council planners;
  • Requiring the council to include housing affordability impacts in defining the desired character of neighbourhoods;
  • Designers and builders being more diligent in complying with District Plan requirements and not using councils as their review process;
  • Standardising conditions that trigger a resource consent requirement;
  • Councils bulking up large-scale earthworks and infrastructure consents; and
  • Evaluating costs and benefits before introducing regulatory changes.

The report also recommends central government involvement in ensuring fairer prices for infrastructure development and supporting product quality and competition. Further, liability of Building Consent Authorities should be reduced for risk aversion and the system should be reformed to allow land to be brought to the market faster.

Let us know what you think about how effective these changes would be if they are implemented in the future in the comments section below.

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