by Russel Norman
One of the series of damaging legacies from the new right revolution of the 80s and the 90s is the leaky housing fiasco. The NZ Herald reports this morning that the leaky houses fiasco is now threatening NZ’s credit rating because the liabilities are so large ($6 billion) to fix the houses.
The 1991 Building Act, passed by the new right National government but designed by the previous new right Labour government, took a laissez faire approach to regulation of the building industry.
The ideological assumption behind the 1991 Building Act was that markets always work perfectly and state intervention makes them work less well. Consumers have perfect knowledge of the products they are buying and govt rules just add costs. Communism is indeed a rule that says houses must keep the rain out.
So developers should be left to put up and sell whatever crap they felt like and consumers should be free to buy it, and as we hear from the same crowd now, the nanny state should butt out. And it did.
The result was that we had thousands of houses built that didn’t keep out the rain, they were rotting from the inside out and have made many thousands of people sick as they moulds and fungi produce various toxic spores. One estimate to fix the propblem is $11 billion and that doesn’t include the health costs.
Even John Banks now appears to have a rudimentary grasp on the issue:
However, Mr Banks said the Crown had to remember it was responsible for the slack building rules that let leaky homes be built.
“It was a previous government that put in the legislation that allowed for untreated timber, cavity-less walls, chicken wire and plaster. So they should at the least accept an equal liability with local government.”
Mr Banks believed National ministers understood this but he accused officials of behaving like ostriches whenever a hint of legal liability arose.
Perhaps we should send the bill to those who started it all – the National and Labour ideologues of the hard right who told us that markets always work perfectly and we shouldn’t have regulation – Roger Douglas and Ruth Richardson. Or their ideological heirs in Act, a good proportion of National, and a corner of Labour?
Published in Environment & Resource Management by Russel Norman on Sat, September 12th, 2009
Tags: leaky houses, nanny state, new right, Russel Norman
More posts by Russel Norman | more about Russel Norman
on the trolls and those who are unable to keep on topic
- “The ideological assumption behind the 1991 Building Act was that markets always work perfectly and state intervention makes them work less well. Consumers have perfect knowledge of the products they are buying and govt rules just add costs.”
Oh bless, Russel.
- “Perhaps we should send the bill to those who started it all – the National and Labour ideologues of the hard right who told us that markets always work perfectly and we shouldn’t have regulation”
Let’s begin by you citing those instances when you were told that “markets always work perfectly.”
Or was that just a bare-faced lie told with all the earnestness of a ten year old child?
I thought so.
If someone wants to buy a house constructed of “untreated timber, cavity-less walls, chicken wire and plaster” then they are free to do so. It’s really no-one else’s business. The issue of asymetric information is easily dealt with by buying from reputable companies, buying insurance, and paying for third-party advise and inspection etc.
It’s a question of incentives and making sure that buyer and seller both have sound financial reasons to take an interest in the outcome.
What’s not acceptable is for the rest of the population, totally unconnected to the transactions, to be put on the hook for the cost.
My old house doesn’t leak. It’s brick and tile. I had it inspected. It’s not rocket science.
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I did a building apprenticeship from 1984 -1988
during that time building methods and materials changed
I can clearly remember using the new finagled seslatic sealant for everything as outlined by the quantity surveyors and architects and saying “this shit will never work Look it only has a 10 year guarantee”
We also routinely remarked to each other that” there will be a lot of leaky homes in this country in 10 years time ”
I lay the blame fairly and squarely on the shoulders of the nut bar architects who decided we should all live in mediterranean style homes in a marine climate ie no eves and internal gutters “Madness “!!!!!!
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You’d think that when people make the biggest purchase of their entire lives, they’d be a bit more careful about it, wouldn’t you?
Apparently not. And also apparently, everyone ends up paying for this quirk of human nature, either directly by the government stepping in and picking up the tab, or by the purchasers losing their life savings (and being unable to spend those savings on stuff which supports the jobs of their fellow citizens) and/or going bankrupt and passing the loss on to the bank, who passes the loss on to all consumers in higher fees and interest rates.
Sooner or later, everyone pays. We are all linked to one another, despite the wet dreams of rightists.
Same goes for the financial crisis. The fuck ups of the few end up getting paid for by the entire society, one way or another.
So we’re better off having laws which set reasonable standards to stop crap like this happening in the first place. Surprise surprise.
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“If someone wants to buy a house constructed of “untreated timber, cavity-less walls, chicken wire and plaster” then they are free to do so. It’s really no-one else’s business.”
Yes it is because once a house is built it precludes the building of a better house (limits choice of overall housing stock). Houses aren’t “T” shirts.
“The issue of asymetric information is easily dealt with by buying from reputable companies, buying insurance, and paying for third-party advise and inspection etc.
It’s a question of incentives and making sure that buyer and seller both have sound financial reasons to take an interest in the outcome.
A Harcourts Agent had a house check on a house I was selling (for the buyer). There was a problem with the siding and a specialist had looked at it. The agents inspector flatly contradicted me when I told him and I got an ear full from the agent.
The people who get ripped off are socially isolated people, the sort who have dilligently saved. The builder just sheds his skin and starts again.
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As well as understanding how markets work we need to analyse who might be pushing the regulators.
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I notice the Greens haven’t responded to the idea of a Land Tax (unlike the Ontario Greens). Land Tax/Ti Tirriti = clash?
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I know people who would buy a leaky home. People get tricked all the time by con men.
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Hey, no worries, just need a second inspector to inspect the first inspector’s work. Not rocket science, as wat might say.
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I know this is being looked at, but can’t say what stage its at.
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rimu
- “You’d think that when people make the biggest purchase of their entire lives, they’d be a bit more careful about it, wouldn’t you? Apparently not.”
And why indeed should they take all the necessary care when the taxpayer/ratepayer is there to pay for their negligence? As with the banking meltdown, why should parties and counter-parties worry about loss and liability when they understand all too well that the state will step in to bail them out?
Remember, the state did indeed inspect many of these leaky homes. How did that work out for you?
- “everyone ends up paying for this quirk of human nature, either directly by the government stepping in and picking up the tab…”
But why? All that does is reduce the incentive for the buyers to take due care.
-”…or by the purchasers losing their life savings (and being unable to spend those savings on stuff which supports the jobs of their fellow citizens)…”
It’s the potential loss of savings which is the very incentive for people to take care, to deal with reputable firms, and to buy third-party inspections and insurance.
As for the savings supporting jobs, if the money you are talking about is all locked up in the house then it doesn’t support any jobs. And if you are talking about having to use savings to rebuild, then it is supporting building jobs.
- “…and/or going bankrupt and passing the loss on to the bank, who passes the loss on to all consumers in higher fees and interest rates.”
Which is itself a necessary incentive for banks to be prudent when it comes to lending money. Surely a good thing. And consumers can quickly change banks if they find that theirs has been reckless and is trying to pass on the cost to them.
- “Sooner or later, everyone pays. We are all linked to one another, despite the wet dreams of rightists.”
“Everyone pays” only because you in effect put a gun to their head and force them to hand over their earnings to reckless housebuyes they don’t even know. And you make it sound like this is a good thing.
- “So we’re better off having laws which set reasonable standards to stop crap like this happening in the first place. Surprise surprise.”
In case you hadn’t noticed, councils (i.e innocent ratepayers) are already on the hook for hundreds of millions of dollars because they were negligent in their existing duties.
What you are proposing is effectively removing liability from housebuyers, house-builders and banks and putting it onto the shoulders of ratepayers, to be managed by institutions which have already been proven negligent.
Sounds like a plan.
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- “Yes it is because once a house is built it precludes the building of a better house”
So you think its any of your business what sort of house I build?
Wow.
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Not me wat! I’ve always believed that you live in a house of cards.
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It need not. If maori land is considered to be allodial then that land would have to be not taxed but in all likelyhood it would still be considered feudal. If it were to be allodial the tax would have to be charged to the iwi body through a different mechanism to provide for whatever services are consumed by the iwi that are left unpaid for due to allodial title.
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Yea, the Land Tax is a great idea.
That will certainly up the Greens popularity.
Land tax proposals plus loss of MMP = no Greens in Parliment.
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The cost of fixing up with a leaky home is not the only thing stopping people from buying one. The fact that their home would leak and that builders would make a noise for months is enough.
I know someone who had $300,000 of damage from leaking. It fucked up their lives for years. Trust me, there are plenty of non-financial incentives to avoid that situation
This reminds me of another old chestnut that the right likes. Market theory says that as the price of something goes down, demand for it goes up. So, because health care is free, demand for health services is really high! As if people would choose to be sick! Hahahah
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…mmm Ruth-less and Roger-ed Frog?
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Strange that Roger Douglas, the one who believes in less government and cutting of benefits, is now defending the huge unearned welfare benefit he is receiving at the taxpayers expense. Good on the Greens for exposing these rorts.
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Wat
The idea that it is acceptable to let market forces control what the quality of houses is seems to be one of yours. Perhaps Russel was over egging his omelette when he said “work perfectly” but you use the whole chicken farm!
The reason we need good regulation around house building is easy to understand, if you can get your head around simple economic concepts.
People need houses and houses take a lot of our collective resources to build. If houses are leaky and make people sick we have to fix them. Who ever pays for it it diverts resources from enterprises that could do more to raise our standard of living.
Expecting buyers to make rational choices (this is for you too Rimu) and self police quality, is naive. For one thing it is well known that people are not good at making fully rational decisions and for another there is a huge power imbalance. Although it is the biggest purchase people are likely to make in their lives they are in competition with unscrupulous builders. The building industry can sell a house for what the market will bear, and that is not strongly correlated (IMO) with how much it costs to build. So if you can save $50,000 by building a shonky house that will only be water tight for 10 years, and you have no ethics, you will do it.
Expecting people to buy insurance is an interesting idea. I do not think insurance against shonky building practices is available. If I were an insurance company I would not offer it unless there were strong regulations, as it would be worried about having to pay out on most policies. You could make insurance compulsory, but it would be cheaper all round just to have proper regulation in the first place.
I do not expect Wat to agree, it seems ideology trumps economics in Wat’s world, a shame. I have found that, in my world, it is the other way around.
peace
W
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bliss,
- “People need houses and houses take a lot of our collective resources to build. If houses are leaky and make people sick we have to fix them.”
Who is this “we”? When did total strangers suddenly become liable because a few people made bad choices? Everyone else seems to be able to buy a decent home. Why should those who act prudently be expected to bail out the others?
If you are concerned about the standard of houses being built then you should take a close look at the incentives that are operating. If you tell housebuyers that the ratepayer will step forward and pick up the tab then what do you think will happen? Do you think they will still decide to pay for outside advise? Choose a safe conventional design rather than some new flat-roof thing? Still pay that bit extra for a reputable builder who will probably still be around in a few years to take to court?
Suppose people knew that the taxpayer would pick up the bill if the second-hand car they buy is a lemon? Do you think they would still pay extra to buy from a reputable dealer? Pay for an independant inspection? Buy insurance cover?
It is not only wrong to force other people to pay for someone’s bad purchases, it is almost guaranteed to result is shoddier housing.
We have already seen how good the councils have been at their inspection task. That’s why rate-payers are already on the hook for hundreds of millions. Why on earth would you want to extend that liability even further? It has been a disaster.
- “if I were an insurance company I would not offer it unless there were strong regulations,”
Well, you’re not an insurance company. Do you really think a bespoke design couldn’t get insurance?
- “I do not expect Wat to agree, it seems ideology trumps economics in Wat’s world, a shame. I have found that, in my world, it is the other way around.”
My, you do have a high opinion of yourself.
Incidentally, I do hope Russel tells us more about the great build quality under Communism.
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So, you’re saying that higher charges to see the doctor won’t reduce attendances.
Interesting.
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What unearned welfare benefit?
If you mean the travel allowance, I think you’ll find that was part of his MP’s compensation package: along with paid holiday and sickness leave, for example.
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Wat; Save the space hey! Bliss is right, hit the nail on the head; -
“It would be cheaper all round to have the proper regulation in the first place”
We had the proper regulation in the first place prior to 1991, Bruce L down the road from me is a retired plumber who told me the other day that the system worked well before 1991.
Then all the cowboys got in on the act and started using cheap short cuts like a window sealant that cracked after a few years. And if I remember correctly he said that building inspections were not necessary.
What panda says correlates with my mate Bruce L and those guys are actually in the trade who actually had to fix up all the collateral damage of of the luney right who’s legislation gave the cowboys free reign.
So who are we to believe Wat’s feeble apologies for corporate anarchy or those working in the industry?
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I recall that the Nats & the building Industry resisted (& still are) proper Regulation.
I listened last Sept. to the MP for Northland ( National) not only plead innocence in this fiasco but also for less regulation so as to allow developers & builders more freedom to fleece the community.
When will NZ voters wake up & elect representatives who have the communities interest at heart rather than their own self-interest.
The Mayor of Whangarei also backed him fully. A case of I’m All Right Jack ?
What happened to ‘ the polluter pays’ in respect of pollution of the body politic & ‘pollution’ of the environment by throwing up so many crap houses which are a blight & economic disaster ?
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Drakula,
Oh well, if your mate Bruce says so.
Be sure to let us know what your barber thinks as well, won’t you.
Funny how the vast majority of people manage to cope perfectly well with the housebuilding process and end up with perfectly servicable homes, despite attempts here to depict them all as hopeless victims. Presumably they did their homework and employed reputable builders. As I said, it’s not rocket science.
You also ignore the fact that the state inspected these dodgy houses and signed them off. Why would you expect the state to become any less incompetent in the future when you pile still more liabilities on?
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I think in my opinion they should be billed someone who started it all – the National and Labour ideologues.
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Wat goes into bat for Roger…but has his bails taken out by the first ball.
Very hard to defend the indefensible!
What a brave little batter.
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“I lay the blame fairly and squarely on the shoulders of the nut bar architects who decided we should all live in mediterranean style homes in a marine climate ie no eves and internal gutters “Madness “!!!!!!”
You mean those cool trendies we see in the TV programs?
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If you are concerned about the standard of houses being built then you should take a close look at the incentives that are operating.
True:
“”The reason I say that I do not owe any `refund’ to Wensleys is because what they paid me is the minimum they represented I would earn,” Boulgaris said.
“That representation was backed up by their projections. Those projections were reckless and untrue and designed simply to persuade me to take up employment with them.
“As they represented that I would be earning at least the $535,000 per annum (ie, over my time with them) that is the remuneration to which I am entitled.”"
http://www.stuff.co.nz/southland-times/1387178
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The idea of using untreated timber as framing was initiated by some green chemophobes in Waitakere city.
They claimed the boric salts were toxic and were poisoning the occupants.
Naturally the Eco City was sympathetic and as untreated timber is cheaper many were prepared to believe.
I presume those people will be willing to accept their share of the costs?
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And what are we going to do about the leaky boats?
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Then perhaps you could explain what he’s accused of?
As I understand it, MPs’ compensation package at the time included pension and flight benefits. Are you saying it’s okay for employers to renage on their employment contracts?
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really? I thought it was driven by timber companies who had technology for kiln-drying timber, and wanted this allowed as an alternative to chemical treatment so that they could make money out of it.
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Give ‘em 6 months.
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kahikatea,
The timber companies saw an opportunity for an unholy alliance.
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Wat, I’m curious about why you even bother to live in a democracy. You must be very pissed off much of the time – you certainly don’t come across as a very happy chappie here. You clearly do not like anything which smacks of telling you or anyone else what to do. No doubt there is a history behind that somewhere.
It seem to me that we human beings have always struggled to hold the tension between individual rights and collective responsibility, between self-reliance and mutual support. Societies throughout history have swung back and forth between anarchy and dictatorship, between feudalism and socialism, all the time trying to find a way to balance the forces I’ve mentioned. More and more societies appear to be opting for the democratic model, for all its flaws. But there are a few still not there yet. Perhaps you could find one to suit your particular taste for individual choice without regulation, which reflects your particular view of human beings and how we best function.
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These leaky buildings are concentrated in a few parts of the country where forced intensification became the norm.
THere are very few leaky buildings in the small towns of New Zealand. Certainly my houses don’t leak but I insist on eaves, decks outside the building volume and don’t ever allow a flashing to penetrate the cladding. Simple stuff.
But where Smart Growth takes hold excessive building costs and forced density in undesirable areas (next to railway tracks) forces lower standards of design and construction. The Smart Growth states have had the same problems although not so much leaks as with failed wiring and plumbing systems and failed cladding finishes.
In 1995 the Privy Council pointed out that we were the only juridicition in the developed world that lumbered councils with never ending liability for permitted and inspected work – and said it was daft. In most places Council;s liability ends after a fixed term (say seven years) or the first on sale. This creates a market where buyers are cautious and employ building surveyors and insist on guarantees from builders etc.
Just like we have with cars and boats – and which is why there is no leaky boat syndrome.
You cannot regulate for perfection. Soon we will have to build two houses on every site – one for the occupant and one for the building inspector.
DAFT DAFT DAFT.
Get the liability off councils and onto the construction and real estate industries.
Hold them responsible. Split liabilities means no liabilities.
The reason most jurisdictions maintain a buyer beware market is that in the US and Europe and most countires a large percentage of the housing stock is hundreds of years old and built before there were councils and inspectors and permits. Windsor castle for example.
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“And what are we going to do about the leaky boats?”
How many boats that are accessable to the Average Joe are worth at least $100,000 that the construction of a new house would cost? Though I agree with the the general thrust of your second comment as I’ve come to know several Americans who’ve migrated here and who tell me that their fellow countrymen would not accept the substandard quality of housing that Kiwis do, but they also come from a culture where owner building was until very recently the norm (rural New England).
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In 1995 the Privy Council pointed out that we were the only juridicition in the developed world that lumbered councils with never ending liability for permitted and inspected work – and said it was daft.
I’ve said much the same. There is an element of moral-hazard here, and I have always thought it came from the British model of making council responsible for everything. If this is not the case then I am pretty sure there is no excuse at all.
The reason this doesn’t go in the US isn’t about “build it yourself” it is that people there know damned well that they need an independent inspector, they generally use a buyer’s agent as well as a seller’s agent, for real-estate transactions and the bank gets in on it before there is a mortgage issued (and none of these people are willing to assume that the house is painted the same color on all four sides without walking around the house). Then they buy a warranty on the house.
But the County inspector? He doesn’t check much except that the sewer and water (and gas if you’ve got it) is connected according to spec. Americans KNOW they are on their own (*except for the people who are actually providing the money to buy the house or contractually “on the hook” if something goes wrong) when it comes to housing quality.
You can however, regulate minimums of insulation and vermin proofing, earthquake bracing and other stuff. That happens in the US. All that means is that the inspectors who show up have longer checklists, and people often have to invest in real improvements and repairs when they want to sell a house. It doesn’t mean the county (council) has any liability, or tells people what grade of lumber to use or whatever. The professional standards organizations set those standards… and the inspector checks that they are met.
I don’t know for certain WHAT happened here. Two things are in evidence:
Really cheap energy led people to put little or no importance on insulation and that affects almost any house more than a few years old.
“Leaky Homes” in that a lot of really REALLY garbage housing got built in the mid-late 90′s, even high-priced stuff was badly done.
I’ve never seen anything like the mess that exists here.
respectfully
BJ
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Smart growth caused the financial crisis and the leaky home crisis?
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or to put that another way; the same sort of incentives that apply to Wall Street apply to the property market.
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Owen McShane believes that Smart Growth caused every problem in the world, apart from Climate Change, which doesn’t exist.
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Smart Growth did not cause every problem in the world – just the ones I mention.
People as disparate as Paul Krugman,Thomas Sowell, and me as far back as 1995 all agree.
A 1000 dollar boat can drown you just as effectively as a 100,000 dollar boat and cars are worth about 30,000 and are much more deadly than your house.
Imagine how much your car would cost if you had to get a manufacturing consent for every car and if you local council had to inspect it at every stage of construction.
Your car would do 1 km to the litre, would weigh as much as a Sherman Tank, would travel at 20km per hour and would cost 200,000 dollars.
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I agree with Owen up to a point, Liability could be shared and if there is culpability with a builder the buck stops there.
But councils have the responsibility to thoroughly inspect buildings and prevent it getting to that stage.
As for the real estate industry that needs a dam#ed good shake up the Australian system is best where the seller and buyer have their own agents.
I think agents need to do a two year course at least they need to study basic things like ethics, conveyence and finance law and environmental concerns pertinent to the industry.
As it is we may as well sell our own homes.
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Sure do. I like to know that the next poor blighter won’t inherit a whole heap of problems.
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“Funny how the vast majority of people manage to cope perfectly well with the housebuilding process and end up with perfectly servicable homes, despite attempts here to depict them all as hopeless victims. Presumably they did their homework and employed reputable builders. As I said, it’s not rocket science.”
Funny how a huge number of savvy and careful people, architects and designers, builders and purchasers sucked into the same whirlpool. Not all the victims were wilful, ignorant or neglectful.
Systems broke down, checks and balances didn’t operate properly, and the collateral damage is plain for everyone to see now that walls have been broken open….. It was new technology misapplied in many cases, not fully understood, there were inexperienced or even dishonest contracters… those who escaped the crisis in many cases were merely lucky rather than virtuous. Only a proportion bought new homes of the suspect design, for example.
The supercilious phrase ‘not rocket science’ is an intellectual gem – no doubt they are hopeless victims in the perjorative sense? Yeah right, – victims of right wing cant. If the tide goes out for you some time, no doubt you’ll be a true stoic, aware of your own inescapable fault in the matter?
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Timber to be used in appropriately weather tight buildings- it’s actually ok. Chemicals are good for you. Drink more right wing vitriol . Duh
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Human beings have been building homes since we jumped out of the trees. You would think we’d know how to do it by now. And indeed we did, hundreds of years of practical experience made us cautious, we used well tried designs of sturdy materials backed either by a strong ethical commitment to doing things properly, or more recently (the last hundred years or so ) of legal frameworks to make sure that builders did indeed do things properly, because years of sorry experience showed that jerry building was an equally long tradition. We know in ancient Rome houses would just fall down. Many of the Nash buildings in London were jerry built and required incredibly expensive remedial work.
Most of us are not builders, I have difficulty putting up a shelf. It is absurd to suggest as some of the right-wingers posting here that the principal should be “caveat emptor”, there is a huge imbalance of knowledge and understanding. You would not expect to go to the doctor and expect him or her to take short cuts – nor you would buy a car without expecting it to be safe to drive -how would we know without sufficient regulation? Would we have to arrange our own crash testing every time we bought a car? . It is equally absurd to to suggest builders should be allowed to take whatever short-cuts they can to maximise profit and lower value. This is not the “nanny state” – this is society making rules and regulations that long and bitter experience has been shown to be necessary.
I live in Wellington. A large and destructive earthquake is at some point inevitable. Are these right-winger anti-nannies going to take their arguments to their logical conclusion and suggest if many families lose their family members because their building falls down because the builders omitted to bother with something as unnecessary as rebars, they could always sue the builder? (Presuming of course the “builder” still exists) And more fool them if they buy such a building, they should have checked if the concrete has rebars in them – I mean that’s what any sensible right-winger would do. Right?.
But then along comes an ideology that dogmatically and naively claims that all this regulation is superfluous, thereby making hundreds of years of practical experience redundant. At the same time new building and architectural techniques are introduced which have not been fully tested for the climatic conditions in New Zealand. For instance, monolithic claddings that give a superficial appearance of Mediterranean solidarity, but which in fact more nearly resemble the construction techniques of a caravan.
And then what happens? Goodness me, what a surprise, builders, planners, architects and councils allow the construction of tens of thousands of shoddy homes to unsuspecting purchasers, many in high density housing situations which by their nature are entirely unsuitable for this light form of building in any case – all this so the purchaser can save a few thousand dollars, the builder can make a profit several times greater, architects can pretend they’re being “creative”, and the council so they can save a few measly dollars on inspections.
Owen McShane blames “smart growth” because he doesn’t like smart growth – but it’s a dumb comment. High density housing will be the norm for cities in New Zealand, because we are now mostly an urban society. Smart growth is supposed to see high architectural standards and high amenity values and easy access to facilities and public transport. Smart growth also requires high construction standards. I would contend that New Zealand’s tradition of light timber frame building with insubstantial cladding is just not suitable for this sort of building – in that sense Owen has a point. But he seems to forget that most of the world’s urban population live in what would be considered high density areas, and their homes don’t leak, indeed some of their homes have been perfectly habitable for several hundred years, and are now highly desirable residencies for the wealthy. And then Owen has the gall to suggest the poor sufferers of this fiasco should hold the builders responsible. Excuse me, where are they Owen? Most of them have gone out of business and are no longer trading, thereby following a long-standing and convenient capitalist tradition, which is why all this regulation was required in the first instance.
The leaky-homes fiasco was a predictable result of political dogma going hand-in-hand with untrammelled speculative greed.
And now we may have a bill of many thousands of millions of dollars – an amount so great as to affect this country’s credit worthiness. Talk about being penny-wise, pound foolish.
These right-wingers make me laugh, their responses about this matter, as with many others so dear to the Greens, are so predictable – their brains seem barely more than boxes containing a few primitive political reflexes which a few simple words such as “sustainability”, “global warming” “environment” will invariably stimulate. .
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Precisely. The builders of houses are insensitivised to build cheapest house they can.
Some will. It has nothing to do with being bailed out. 10 weeks or months, let alone years in a leaky house is disincentive enough. And if anyone thinks that the government bail out (or insurence) makes it OK to not pay attention to what the buy is nutty. You and I both know that.
We is the community. Because in the long run it is cheaper to pay to fix the houses than it is to pay for ongoing health care. Or to just let people die, if that is what you want. Whilst I find letting sick people die moarally repugnant it is economically stupid to let productive workers become unproductive.
It is simple economics.
Cheaper all round to regulate. Cheaper for you, Wat. Cheaper for me and cheaper for everybody. Economics, Wat, economics.
If there were no way to ensure that the bespoke design met standards, of course no insurance company would insure. They would insist on standards, they would regulate.
I do have a low opinion of ideologues who do not let the facts get in the way. When facts, data and evidence confront my cherished ideology, I let go. I hate it, I would much rather be right about everything, but I respect the facts.
What about you, Wat?
blissed
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I think that councils have a liability when it comes to the services provided. They have to manage the sewers and water and the like.
The quality of the house needs to be certified by an independent inspector, the bank’s inspector and your inspector.
Though building Code inspectors in the US do exist, their role is to make spot checks… and to check when something breaks. They are there to ensure the contractors do what they need to do, not that individuals do those things. At work on the large buildings, not the small ones.
If a contractor builds sub-standard, not following his/her plans, he/she loses his/her license. Period. Out of business.
As to process- in general –
The contractor gets himself a PE with a certification, to go over the plans… then:
“The Department offers a Professional Certification Program which enables Registered Architects (RA) and Professional Engineers (PE) to certify that the plans they file with the Department are in compliance with all applicable laws. This reduces the amount of time a builder normally has to wait for a DOB permit by eliminating the process of Department examination and approval of the plans.”
We have a mess here in NZ. Reading Wat’s original comment at the top of the thread… there is some truth to this:
The issue of asymetric information is easily dealt with by buying from reputable companies, buying insurance, and paying for third-party advise and inspection etc.
It’s a question of incentives and making sure that buyer and seller both have sound financial reasons to take an interest in the outcome.
What’s not acceptable is for the rest of the population, totally unconnected to the transactions, to be put on the hook for the cost.
In general I will back his statement. This is absolutely true. The State should not be providing “home warranty” services to the housing sector. Not at all. People should KNOW that they are on the hook for ensuring that they don’t buy cr@p.
What has happened however, is that bad prior practice has created a situation in which the state itself IS signed on as a financially responsible party to the fiasco of leaky-homes. Worse, it created a situation in which nobody else was hanging there with it. Nobody else had a real interest in doing it right, because the state was backing the quality of the house.
So the builders could and DID cut corners.
So we are all collectively screwed and the builders are doing business under some other alias.
BJ
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And the DIYers, who had little or nothing to do with it, get regulated out of existence and into the hands of THE PROFESSIONALS. Oh yay I feel so secure now!
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No, that’s not what I was saying at all
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Surely the point is not so much WHO does the checking, but that it is done, and done properly. There’s no particular reason why it should be the council, but as it is the council that examines development proposals, gives permission for them, examines objections, has the plans etc etc. it seems pretty reasonable that they should continue to have this job. As it is the council who’s permission to develop allows developers to make the massive profits that they generally do, it seems a reasonable quid pro quo that a small amount of these profits are used to regulate the industry and protect the rights and wealth of their constituents. The basic problem is that most developers are so bl–dy greedy and have a sense of entitlement that in my experience is overweening. The experience of other countries may be different, but their way of working may not be relevant to us. Councils don’t themselves make the regulations under which they operate, it is government that does this. For instance, councils cannot insist on higher standards than pertain nationally, I know this, because insulation standards in New Zealand are pathetic, but any council that tried to improve this is constrained by the law. It’s absurd.
So following this observation, if it is government that sets the rules, if these rules fail, then it is the government’s responsibility to accept the liability that comes with this failure. That’s of course when we learn that far from being some nebulous entity that rules us with a rod of iron, or the nanny’s strident blandishments, that the government is actually US, and it’s we that are liable. And of course this is one of the principle tenets of capitalism, make the profit however, wherever and whenever you can, but make bl–dy sure that you cover your backside and parcel off the losses to some other poor unsuspecting sucker, ie all the other citizens of the country. It’s called privatising the profit, and nationalising the loss, and the last 25 years of neo-liberal economic dogma have taught us how to do this to perfection.
Much of this debate on this page is actually absurd. What has happened has happened. What has happened was entirely predictable, and indeed was predicted by many in the industry and interested outside observers. There is no debate about this. The debate seems to be revolving around who should pay for this fiasco, which is pointless; the result is always the same, it is US that pays for it. As a country we failed to organise ourselves effectively to invest in critical infrastructure that was fit for the purpose it was intended. We are now going to have pay massive amounts of money to correct this which could have instead gone into education or health or new public transport or subsidised housing for the poor, and the country will be poorer than it should be. The right-wingers amongst us could even have reduced taxes. We are crying over spilt milk, and this is childish. A more adult approach would be to work out some way to make sure it never happens again, and if that’s a proscriptive and directive approach, then so be it, it will be worth it; and those economic libertines who rail against the “nanny state” can either shut up or emigrate.
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The other way to ‘raise the bar’ is for any state infrastructure to be built to the highest performance and quality standards thus upping the ante for private development to meet that standard.
As an example I’d have all new state houses built to ‘Passivhaus’ standard.
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Damned few DIY people building their own house from the foundation up. Most do alterations. To really design and build a HOUSE from the ground up you need to know a hell of a lot. Moreover, you have to have someone paying you for your time… could be you, but its seriously difficult.
You can meet the code requirements yourself, but the council has to approve your plans in that case.
If you plan to build without plans, the county can disavow any responsibility for your actions. Good luck with selling it onward. In the USA the lack of a permit for construction or alterations made to the house is a “bad thing” when you go to sell it. The buyer’s agent will either require the permit, walk, or demand a large discount.
Do it yourself is “big business” in the USA, but the limits are pretty well set. That second floor added to the existing house… it doesn’t get done by casually tearing off the existing roof and then putting the sticks in yourself.
The required density in NZ is often dictated (particularly around Wellington) by the topography, not the council. I am not particularly keen to be anchoring a house to the side of a mountain or building at the bottom or top of a steep slope, in a region which is due for a severe earthquake.
BJ
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Spot on, Panda! And also some blame on idiots that buy a product because of the pretty package and do not worry about the quality of the product inside.
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“The 1991 Building Act, passed by the new right National government but designed by the previous new right Labour government, took a laissez faire approach to regulation of the building industry.”
Would someone elaborate on that? I’ve benn thinking this topic over and it occured to me that it was nothing but a blunt side swipe rather than (oot)
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“The leaky homes disaster arose from a “systemic” breakdown – contributing factors ranged from a “permissive” new Building Act, untested new materials, architectural trends, cost-cutting developers and shonky building practices to faulty oversight by councils and private certifiers and a Government agency which stood on the sidelines. ”
http://www.nzherald.co.nz/house-building/news/article.cfm?c_id=228&objectid=10328966
I suppose this sort of phenonema has been studied many times, but the japanese attack on Pearl Harbour comes to mind: no one has their eye on the ball, instaed they are doing their own thing (earning a buck for themselves).
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I am amazed that anyone would expect a purchaser of a new house to be aware of material types and construction techniques to be able to make a valued judgement about a house purchase. Builders can use any amount of cheap shoddy materials that would fail quickly but appear fine on a new build for a few years – We have planning and building regs that are vigorously applied in the UK to prevent this willful negligence on the part of builders. If it was relaxed an inch then we would be in a mess very quickly. I may not agree with every new regulation but I am glad builders are tightly monitored and regulated on house building – if I was in charge I would have banned flat roof houses or extensions in the UK until all were guaranteed for a minimum of 25 years by the building company with insurance indemnity cover. More often than not they were a shoddy cheap builders solution rather than a well thought out sympathetic design . It is only recently that material developments have helped solve a lot of these material failure problems and I am glad that builders again are regulated over which of these they can use and in which type of build.
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