Labour wants more transparency and competition in building material prices and will set an all-of-government target for prefab manufacturing of new construction projects.
Ministers Megan Woods and Duncan Webb published their response to the Commerce Commission's market study into Residential Building Supplies on Wednesday.
They accepted eight of the Commission’s nine recommendations and took three further to include a price monitor programme, a broader offsite manufacturing strategy, and issue guidance on how to substitute different products.
The Ministry of Business, Innovation and Employment will be tasked with monitoring and publishing prices of key building supplies and its impact on suppliers.
Woods and Webb said this would help the Government track competition and consider whether further intervention was required.
Builders, architects and building consent authorities will be given more guidance on how building products can be substituted.
It has been difficult for these groups to swap out a brand-name product specified in a design with a different product, which may have reduced competition and price sensitivity.
Woods said there had already been some success in this area with plasterboard guidance that was issued last year. She said there were now more types than just Gib and more competition.
The bigger initiative, which the minister hopes will shift prices, is about promoting the uptake of offsite manufacturing, or pre-fabrication.
The Commerce Commission recommended the Government develop an all-of government strategy to coordinate and boost offsite manufacturing.
Kāinga Ora had already set a goal to increase the number of offsite manufacturing solutions they use by a minimum of 20% each year for the duration of the public housing plan.
But Woods said the Government would encourage other agencies to consider setting a goal of increasing offsite manufacturing by a minimum of 10% each year.
“It shouldn’t just be a housing program, we should be looking at it for our schools, we should be looking at it in our defence building — there are a range of areas where we can grow this industry in New Zealand,” she told reporters on Wednesday.
Budget 2023 includes hundreds of millions of dollars to be invested in building housing for defence force staff and new classrooms around the country. Some of this could be prefab.
Land convent review
Commerce Minister Duncan Webb said a common theme throughout the last three market studies had been the use of land covenants to block competitors from setting up shop nearby.
“Time and time again, land covenants have come up. Competition is a driver of lower prices and better quality – good for businesses and consumers,” he said.
As a result, the Government will begin consultation on an economy-wide review into the use of restrictive land agreements that make it hard for businesses to enter a market.
He said these covenants had already been found in various sectors, such as building supplies, supermarkets, petrol stations, and even the meat processing industry.
“Now we’re going to look across the whole economy at how these agreements are being used and whether changes need to be made to level the playing field for new businesses,” he said.
48 Comments
WTF have they ALL been doing.
The family home I was brought up in was prefab; 1958. I've built two in SIP panels. School classrooms were called prefabs, when I was a kid.
This is the equivalent of the floggings will cease when morale improves - the shortages will cease when - oops.
There will be shortages. Not just of products (processed parts of the planet) but of intellect.
Roll on an IQ test for political candidacy.
They ain't called labour for nothing.
They...
Labour to ...
Come up with ideas
Plan stuff
Instigate stuff
Run stuff
Finish stuff
Always to little to late.
Except ...
Gay rights
Cycle ways
Climate change spend ups
Emptying prisons...
Can we get some adults with real life experience in charge please
Indeed. I see they've probably earmarked money for the Orwellian disinformation project. https://youtu.be/jCO6Bi7xvLU
Covenants imply restricting a future land owner's right to actually own the land, given that what else does land ownership mean but the right to decide how the land is used? I've never understood how we tolerate them in any form. If you want to control how some piece of land is used (e.g. to not have a competitor build nearby, or control a view), then you should have to own that land too.
Ownership does not mean you have the carte blanche right to use your land any way you like without regard to the people around you or the environment in general.
Covenants, like any rule, can be misused if written badly, and there are a lot of badly written rules. But that does not mean covenants are not necessary.
What people want to know, especially when they are the first to buy into an area that is going to be further developed around them is, what are my neighbours allowed to do that I am not? That can only be clarified with covenants.
Without covenants, the quality of other later built houses is always less than the first house built as these following owners will never build a house that is better than what is existing as it would lower the value of their build. And conversely, pull up the value of latter build homes if they are built of a lower quality than the already better build homes and lower the value of the already-built home. Covenants prevent the ongoing building from descending to poorer quality builds.
Covenants are generally a further restriction of use under the statutory rules and are done so to either add value to a property to new development and then protect that value from being undermined by others(to their benefit) going forward.
Just think about it if the land next to your house had no covenant restriction on it that allowed anything to be built on it. Whatever it was it would affect if you wanted to live there, and if you did how much you would pay for the property.
And you are right in principle about what you say about buying the land next to you to 'control' your view etc. But by definition, you have just covenanted the land by default for what it can be used for, whether by not building on it, or by selling it on at some stage but with a covenant written into the agreement so the person you have sold it to is limited as to what they can do with it. So if the developer has already covenanted the land next t you on your behalf, then there is no need for you to buy the neighbouring land so it is far cheaper for you to become an owner.
We have a fundamental philosophical difference. I think my neighbour should be able to do whatever he or she wants with that land which I do not own. If I want to control what happens on that piece of land, I ought to buy it. Buy it and retain it, not buy it and then "sell" it with a condition on the future use that limits the use rights of future land owners. Your example of additional houses not "bringing down the neighbourhood" may explain a large part of why housing is so very expensive in this country.
You are talking about a philosophy that is impractical in society and exists nowhere.
NO ONE has a carte blanche right to do anything they like with their land.
And buying land and retaining it to be used as you see fit, is a covenant by default. So you believe in covenants.
And my example you mention about additional housing has nothing to do with why houses are very expensive.
I think my neighbour should be able to do whatever he or she wants with that land which I do not own. If I want to control what happens on that piece of land, I ought to buy it.
Control and preference are two different things. Covenants are common within developers who wish to set a tone for the style of their subdivision to ensure a profit e.g 10 year restrictions on growing trees over a certain height to preserve the aesthetic of the street while it is brand new.
Not everyone agrees with this, and often it is across a spectrum vs a yes or no answer, but value is one thing and impact on neighbours is a fundamental consideration to having a community. If someone moves in next door and builds their house up to 3 stories blocking all afternoon sunlight from your house and making it cold as hell you will naturally be in a fit. Also your line of thinking allows for those with greater wealth to move anywhere they please and discredit their neighbours by building however they wish as they have the means to do so, thereby further disadvantaging their neighbours who do not have such opportunity.
Yes exactly. People that are against covenants haven't thought it through. Yes, there are some poorly written covenants, just like there is with Govt. legislation, but they are the outlier, not the norm.
When people tell me they don't like covenants, I ask them what ones were they looking to break? No junk cars in the front yard? No living in a tin shed with grass waist-high etc.
Generally, It's just they don't like a rule pointing out something they won't do anyway. People can act strange sometimes, which ironically causes the need for the very rules which then they will complain about even if it does not affect them.
1. No, because you don't own the structure of the building.
2. The law came about as an act of legislation, it can just as easily be removed - when there is a will.
I note an underlying tone of reasoning in all your arguments for coventants - GREED. The ability to dictate what other's can and can't do to create, preserve or embellish your own wealth by controlling others. The examples you put up of 3 story buildings and set backs, character, etc., can all be covered adequately by local legislation without the nimby parade's help. The difference, of course, is that local legislation is set through a democratic process, whereas the nimby covenants are not.
1. If you are in a BC then you do own the land in common with the rest of the owners, plus the BC rules also apply to what you can do within your own dwelling. So you must disagree with BC rules as well.
2. You said they aren't legal entities, but they are.
Covenants are democratic because you have the choice to buy into that structure or not. If you don't like it, then go buy somewhere else. A developer cannot cater to everyone's needs, so if the covenants are set correctly they will target the market he is especially after.
And you are confusing greed, with making a profit.
And the history of local legislation was that they were called covenants in early history when small groups of people started living beside each other, and were too small a community to be able to employ managers to run it like a city is today.
There are good and bad covenants, but the only thing worse is no covenants when the general legislation is run by a city entity that is so removed from the wants of the local community that they then use that general legislation to override the local needs for the benefit of outsiders who gain the most benefits because they are last in, ie never shared the risk by being the first in.
And without anyone being willing to be first in, it sort of defeats the ability to get anything built and sold.
'Competition is a driver of lower prices and better quality'
Prices, maybe.
Quality is a matter of we've used the best, first. Best sites. Best 500-year-old Rimu and Kauri. Best oil.
The song was premature; houses nowadays are built out of ticky-tacky. And anyway, if we reduced population to carrying-capacity levels, there are enough houses already already.
Correct!... Fletcher is part of the influential and high powered lobbying 3000 + Group.
They tell the government what to do!
they are led by...
Air NZ
FULTON Hogan
Fletchers
Chorus
these guys hold the Government to Ransom because they employee 3000 + employees and will threaten layoffs if they don't get preferential treatment!
they do what unions do without being a union
Totally agree shaft! Fulton & Hogan are pretty much a law unto themselves. Do local and central government assign anybody to check the quality of their work? Not in my experience. The quality of the road building and repairs they perform is abysmal ! F&H had a contract to grade the gravel roads in our district prior to our current contractor. Brand new big flash grader. At the end of their contract period the cutting edge on the grader was like new, it barely ever touched the road. I watched the driver grade our road one day and I reckon he was in top gear! The road surface got progressively worse under their management. The current contractor however is doing a fantastic job. Road has never been so good!
There seems to be no performance criteria on these massive companies!
"Kāinga Ora had already set a goal to increase the number of offsite manufacturing solutions". Kainga Ora uses the cheapest product they can get their hands on, and use the cheapest builders they can find. Go to Placemakers Trade they have areas and shelves specifically for Kianga Ora products. Check it for yourself. Its mostly dross.
Completely the opposite Vino. I know of two instances (and that’s from 2 mates dealing with them so hardly a wide sample!) where KO have had their architects specify ridiculously high end materials (one a special concrete finish 8 times the price) one a special Abode wood cladding- that were completely over the top -even the choice of architect practise was insane. Why should they specify these things out of the tax payers purse when the majority of us would not be able to choose that for ourselves due to cost implications. Crazy
I wonder if they’re reviewing residential housing land covenants? I purchased a house because of a 60 year old land covenant that guarantees beautiful uninterrupted views of the ocean for everyone. The neighbours in front also have fantastic views, but aren't allowed to build two storied houses.
https://www.stats.govt.nz/information-releases/building-consents-issued… you'll have to download the files and generate a chart but the info is there.
Oh my god - where have these people been for the last 7+ years while everything was getting out of hand. Seems to me like Labour and RBNZ have all been asleep at the wheel while things got out of control and only now that things are so out of whack they decide to put measures in place which are too little too late.
They have failed the average kiwi, who I thought Labour was supposed to support more than anyone. Time for a change.
Anyone see this in the link? WTF does this mean do Maori (including myself) have a separate building regulatory system? Sounds a little racist.
Better serve Māori through the building regulatory system - AGREE
The Government agrees with the issues identified and recommendations. We also agree that Māori needs can be better served by delivering on Treaty of Waitangi obligations and addressing challenges faced by Māori within the sector. The Construction Sector Accord Transformation Plan 2022-2025 will deliver a number of initiatives aimed at building a stronger Māori economy. These initiatives have been informed by engagements with Māori: Kōtuiā te hono (Māori Advisory Group), Māori end-to-end supply chains, Māori SME capability development, Māori procurement panels and the Kaiako Construction Mentorship Programme.
I believe some Māori have been complaining that they can't build on the land they were given in treaty settlements because it's too expensive to build to code, and that code doesn't take into account their unique cultural practices. Thus the settlement had no effect.
Gotcha.
There is an interesting dynamic going on here where according to Maori tradition (in some areas), no women should be on the construction site until it is completed and blessed. At the same time they are trying to get more Maori into construction - wonder if that little gem will show up anywhere in the unique cultural practices.
though re-reading your comment... actually I don't see anything there that mentions the regulator, and in fact sounds more like it's aimed at address the concerns raised with the Commerce Commsion in the catchily titled "Residential building supplies market study He Kohinga Kōrero – Engagement with Māori on Residential Building Supplies Market Study"
https://comcom.govt.nz/__data/assets/pdf_file/0030/289362/He-Kohinga-Ko…
On most Maori land the banks will not lend due to multiple ownerships on the title, and thus no enforceable security. Govt. could and should help with funding that allows houses to be developed.
Then the question is who provides insurance, health and safety, etc. for these properties if they are not built to a recognized code and in maybe areas prone to future climate events etc.
There is some real broken window fallacy economics going on here which is ironic in the context of who the characters are in the broken window analogy.
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