Govt's pre-fab state house plan

Property

Housing Minister Nick Smith announces plan to spend NZ$377 mln on 3000 extra bedrooms and 500 new state houses mainly in Auckland

14th May 13, 11:51am by David Hargreaves

<a href="http://www.shutterstock.com/">Image sourced from Shutterstock.com</a>

The Government's announced plans to pump NZ$377 million into new state houses and extending existing Housing NZ homes mainly in Auckland.

The project will involve use of pre-fabricated structures on existing Housing New Zealand properties.

Under two initiatives unveiled by Housing Minister Nick Smith today, it is planned to add 3000 bedrooms to 2000 properties over the next two years, while over the same period 500 two-bedroom state houses will be built. All the new houses will be on large Housing New Zealand properties in Auckland, while three-quarters of the new bedrooms are planned for Auckland properties.

The projects are part of the Auckland Housing Accord announced by the Government and Auckland Council last week. The 500 new homes will be part of the targeted 39,000 new homes for Auckland over the next three years.

Housing NZ currently owns around 16,000 houses in the Auckland area.

Smith said the first initiative is called Project 324&5 and is designed to convert three bedroom houses into four and five bedroom homes. He said that Housing NZ had designed and trialled modular units that were suitable to most locations and could be be attached to existing structures.

"Project 324&5 recognises that Housing New Zealand, and particularly Auckland, have an oversupply of three bedroom homes and a real shortage of larger ones," he said.

"Adding an extra one or two bedrooms to these properties will better meet tenants’ needs in relation to size, location and amenity. It will also result in less overcrowding and better health and education outcomes."

The properties targeted for modification would be houses that are up to 40 years old and on medium to large sections able to accommodate extensions and still have enough land to provide a decent outdoor area for tenants and their families.

Along with adding an extra bedroom the houses would also be modernised and upgraded, including work on landscaping and fencing.

"I’m confident the modifications can be done quickly, efficiently and with minimal disruption to tenants," Smith said

Smith said the building of the 500 new homes would be called the Simply Smart Homes initiative.

"There is strong demand from Housing New Zealand tenants for more two bedroom homes in Auckland. This is a result of a shortage of supply and increasing demand for two bedroom properties, particularly for single people with caregivers, couples with children, and solo parents.

"The Simply Smart Homes infill project will see pre-fabricated modular homes, to minimise disruption to existing tenants, assembled on the sections of large Housing New Zealand properties in Waitakere, North Shore and Manukau."

Project 324&5 is expected to cost up to $260 million and Simply Smart Homes initiative $117 million from Housing New Zealand’s Asset Management Strategy. The work will be completed by the 2015/16 year.

"These new initiatives are part of the Government’s Accord with the Auckland Council to increase the supply and affordability of housing," Smith said.

"The issue of better utilisation of existing Housing New Zealand properties came up early in joint discussions. Mayor Len Brown and I both recognise that more housing is needed inside Auckland’s current urban boundaries as well as outside to accommodate population growth. The 500 new infill houses will contribute towards the target 39,000 houses over three years announced in the Auckland Housing Accord.

"These projects are also consistent with Housing New Zealand’s direction of reconfiguring its housing to be of the right size and in the right location to match tenants’ needs. It also meets the Government’s focus on ensuring state housing is targeted to people with the highest housing needs."

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49 Comments

by Boatman | 14th May 13, 1:04pm 1368493481

I have no problem with this , but I find it difficult to understand how some people qualify for these houses .

I am not convinced that all these folk are real hardship cases

by Chris_J | 14th May 13, 1:08pm 1368493680

So an average of $130,000 for a 324&5 renovation and an average of $238,000 for a two bed prefab!

Hugh P will be thrilled with those building costs!! This is typical of government department spending. A one bedroom extension can be done for as little as $20,000 including fees. If you're spending $130,000 for extra bedroom you may as well leave the existing house as is and put that money towards building new ones. All the old dungers should be sold to fund building whole new houses, not just this kind of money wasting. As for those 2 bed prefabs, maybe they should get a quote from Keith Hay or Sunshine homes? Sunshine Homes offer two bedroom prefabs ex yard for as little as $55k.

by Gareth Vaughan | 14th May 13, 1:30pm 1368495017

"A one bedroom extension can be done for as little as $20,000 including fees." Really? Sounds way too low to me. Have you done any at the price in the last two years. If so where & how big?

by Boatman | 14th May 13, 1:53pm 1368496410

Gareth , he is not too far off the mark . Current building cost guidlines on the Ministry of Business Innovation website is around $1,600 per sqaure metre, which includes drafting costs ,costs of services and connection fees , application fees and a host of other rortiuos council levies

Bear in mind , that the services are already connected to the property , and earthworks should be minimal , draftmens' fees should be minimal , and the zoning is in place , so NO Treaty issues or Resource Mangment applications . Therefore the cost/m2 should be lower than the government guideline

A decent size single bedroom is about 5X4 m2 = 20m2

$1,600 X 20m2 = $ 32,000

Say $50,000 at the very most , but not $130,000 thats outrageous

Clearly one hand of the Government is not in sync with the other .

by waymad | 14th May 13, 3:45pm 1368503152

Done me up a pergola, rough-order costs as follows:

concrete slab 23 sq m, good 100mm all over, completely reinforced including all rebar, bar chairs and pillar brackets $600
sandstone topping for all a this (pure luxury, yes) $1900
Macrocarpa pillars 150x150 and beams/purlins mixture of 200 and 150x50 $1700
Fixings (316 ss bolts, 410 ss screws, dacromet purlin screws) $250
Crystal Glaze polycarbonate roofing $1800
Mortar, digger dry hire, tipping costs, diesel for the neighbour's truck etc $500
Cheap Chinese tile cutter/wet diamond blade (new job, new tool) $80

So 19.85 sq m under cover for say - um - around $7 grand. Say $350 per square

No walls. Shade cloth suffices (said it was a Pergola, not a Bedroom).

Labour around 100 hours over two months.

Shows what raw materials cost (direct from suppliers and TradeMe), and no little luxury in 'ere......

by Hevi Groswaite | 15th May 13, 7:54am 1368561292

Way to go , Waymad. DIY is the way to go.

Over the last couple of years i've built a new deck, a new fence, a Schist path down to the beach, 2 retainer walls made of rock - no concrete, all for under 20 grand, not counting my time or my kids time into it. One estimate for the retainer wall and the fence was $30k. Think I will build a gazebo next... Great idea! DIY that is. It's fun, healthy, and it cost a fraction of what builders want these days for shody workmanship.

I kept the walls, the fence, and the decks within specification for no permit required, thereby bypassing council regulations and engineering inspections. I am considering building a house myself, and will look into it after I sell this house. All good!

HGW

by powerdownkiwi | 14th May 13, 2:19pm 1368497959

Gareth - say we're talking 3 metres x 2.5 - so with founds, less than 2 cu/m of concrete. Say average height 2.7m. Skin area therefore under 24 sq/m walls, say 12 sq/m roof. You can get outer walls/roof for circa $100 sq/m, painted both sides, insulated/finished.

Say a grand for the pad materials, $3.600 for the walls. Two days on-site, one for the pad, one for erection; two people for the latter. Say 3 days/2 people/50/hr: say $2,500. Throw in one interior door, 1-2 exterior windows (bedroom remember, so high sill). I'm looking at $8-10,000, ex fees.

That's one-off, for multiples theres scale everywhere, and fees should be national/generic re structure, so only site differences. $20,000 is more than reasonable.

More to the point, this is self- gratifying population-growth of the bottom-end. The rest of us have stopped reproducing willy-nilly :) maybe we should teach them to too.

by Happy123 | 14th May 13, 2:34pm 1368498880

Exactly, if your dirt poor and your council house is overflowing with your off-spring, stop, just stop.

by KH | 14th May 13, 2:42pm 1368499359

Agreed happy. If you are dirt poor you might not have much control over your circumstances, but you can decide not to have large numbers of children.

by Boatman | 14th May 13, 2:42pm 1368499342

@PDK Oh so true ... I enjoyed your comment about reproducing at the lower socio-economic levels , and its worth some introspection on this issue .

We consciously limited our family to 3 kids because we knew what our financial limitations were in terms of how many we could feed , clothe ,and educate, and the size of house we could buy.

By the age of 30, I was limited to affording a 120m2 three bed house , so the boys had to share , and it was 10 years before we could either add a room or afford a bigger house . My wife and I are now in our 50's , and it seems incongruous that I should be paying tax to feed, clothe and house people who are breeding rampantly, and now need more bedrooms, and will get them as a handout .

And , that my kids who have been fed , clothed and educated properly will find well paid work, because of what we have forgone, only for them to have to pay tax to...... feed , clothe and house the next generation of rampant breeders

by powerdownkiwi | 14th May 13, 3:15pm 1368501359

We had the discussion 27 years ago, two, one or none. Planet-wise, none is the correct answer at present. One gets lonely, we chose two - cheeky but out upper limit.

Never regretted it. Spent a year (they were 10 and 12) in a boat with total volume of less than 20 cubic metres (two hulls 7 metres long,1 metre at the widest, 1.4 at the highest. Best year we ever had.

120 sq/m is fine - we're too big at 135, for two plus wwooffers (the worker kind). Building again, I'd do 80-100, and a bigger shed.......

by Hevi Groswaite | 15th May 13, 8:03am 1368561827

Brilliant PDK. We did the same, only we were kidless! We spent a few years crussing Baja California, Northerm mexico and Central America. Tried beating into the Humbolt current south of Galapagos but gave it up, too much hard work and cold waters. Been wanting to do it again... Maybe when the kids are older and have gone in their own path. Love sailing, love the lifestyle... Hard yacka sometimes though...

HGW

by steven | 15th May 13, 9:23am 1368566606

Agree....but I think we will see a social pressure type change return. The old maiden aunts who never married and had children because they couldnt provide for them v todays welfare state where WFF bails you out has to stop.

regards

by bob | 14th May 13, 5:21pm 1368508879

Presumably no plumbing/bathrooms or kitchens involved so $20K for a bedroom is plenty (unless it's a government job - then it will need to cost about 2X).

by Chris_J | 14th May 13, 8:00pm 1368518422

Come on Gareth, 10m2 @ $1200/m2 is $12k.

Materials only at retail for a 3.6m x 3.6m extension (13m2), w/b, timber piles, iron roof lean to is about $5500.

Eqc reckon they can build new tc3 foundations, 3 masonry chimneys rebuild a 15m2 lean to completely gut and reline plaster and lathe linings, renewing all the skirtings architraves bathroom fixings and reinstating kitchen and bathroom, plus rewiring and plumbing, replacing broken kauri floors and doors where bricks came through all for $150,000 for 115 m2 villa with 3m stud! That is unrealistic! $20,000 for a basic room is very achievable.

We've had a builder working almost constantly for the last year on some small projects. $130k is a major reno budget not a single room...

by Stephen L | 14th May 13, 4:47pm 1368506843

Chris,

Always good to see someone do the numbers.

You have to infer that either they have inflated the costs considerably; they have over specified the improvements; they are not capable of managing much, or in fact they plan to gut and redo most of these houses, including kitchens, bathrooms etc. I suspect most of the extra costs is in fact the latter.

I confess to not really being familiar with the states of the houses, or even the nature of their tenants; but have some sympathy for Kate's views below, in then wanting any redone houses well managed in terms of tenant treatment of them.

Am generally on board with the idea of not letting ghettos develop in Auckland, either for their residents, or the rest of us, so while your maths implies good questions should still be asked, in principle some improvements and enlarging of these houses is okay with me.

by steven | 15th May 13, 9:20am 1368566400

If you read the piece it does say the house gets re-furbed as well. However $130k still looks way to high, especially as we seem to be talking shipping a ready made unit to site and installing it.

I dont know how you would do a builder extension for $20k DIY maybe, yes. NB The council fees alone are $1k ish, so that leaves $19k for actual work.

regards

by Gareth Vaughan | 15th May 13, 4:59pm 1368593940

Good feedback on the costs folks. To add to it one of the team here got the following quick quote done by a mate who is a builder;

The cost of a double bedroom 4x4 m2 when building an entire house from scratch would be about 20k.

BUT if you were adding on to the end or side of an existing dwelling it would cost significantly more. Allowing for 3 exterior walls ( weatherboard cladding ) & to join the spouting onto the existing to eliminate the need for new storm water connections & down pipes it would be as follows:- plans & consent 5000 site fencing / scaffolding / signage 1500 Sub floor & flooring materials 2138 Frames & Truss 2300 Window Joinery 850 Exterior weather / soffit materials etc... 2026 Roof & spouting 3500 plaster & paint inc exterior paint 3200 Interior materials Gib / door / skirting etc... 738 Carpet / underlay 800 Basic electrical 1200 Labour inc demo & site management 11880 ------------- Sub total 35132.00 Margin on cost 10% 3513.20 ------------------ Sub total 38645.20 gst 5796.78 -------------- Total $44441.98 There is a lot more work involved in something like this than most people realize, it would take up to about the equivalent of 3 weeks for 2 people in man hours if you include all the organisation / preparation & off site work + client meetings etc.... However there are a lot of stupid builders out there that will spend half the time it takes to build a small job like this doing the organisation work for free just to get a job, they don't realize all they are doing is effectively reducing their hourly rate below the break even point & that's why lots of small building companies go broke. There is just as many things to organize & forms to fill out in this type of work as there are when building an entire new house. I have probably missed a few things out as well given this was done on the run, it should probably be 5 - 10k higher.

by powerdownkiwi | 15th May 13, 5:15pm 1368594947

gareth -

"There is a lot more work involved in something like this than most people realize".

Sorry mate, but who did you ask? Someone who does the conventional, and charges for it. Seriously, almost no builders think outside the conventional.

I built 135 sq/m for 50,000 a few years ago (05) and could probably still pull it off for 80. Read what I wrote up-thread. SIP is finished both sides, put up in a jiffy. He's talking old-school construction.

and remember he's a one-off. This should be production-line / generic plan.

by Chris_J | 15th May 13, 10:57pm 1368615478

Complete nonsense Gareth!

About $3000/m2 for a room with no plumbing is nonsense!

$3500 plus GST and margin for roof materials is dreamland! You could get copper cladding for that price! 20m2 plus spouting and some flashings, about $600 will cover it including GST - just over one eighth of your estimate!

Use Rawlinsons and get some facts or talk to some one who isn't into ripping people off!

question: if you can build a room that size as part of a house for $20,000 as you concede, then why does it cost more than that for materials in your estimate?

I will give you some accurate figures when I'm on the computer tomorrow!

BTW why not have some efficiency and build a 3.6x3.6 extension so you don't waste material.

I wish you worked for EQC or NZI!!!

by Craig Simpson | 16th May 13, 9:41am 1368654087

PDK / Chris J

This is not dreamland my friend but reality for quality workmanship and product

The person who gave us the numbers is not "Bob the Builder" and is not based in Auckland

by powerdownkiwi | 16th May 13, 10:02am 1368655327

CS - with respect, you miss the point. Current construction is a compounding of profit-takers, more complex that it ever was. I'm sure that was an hones appraisal, from a builder in the conventional regime, requiring his own slice of the profit. No offence to him, or anyone.

But - some of us think outside the trapezoid.

The panel I built with is both proprietary, has noting to do with 'bad' workmanship, and is the way housing will go. Maybe not steel/styrene/steel like mine, but SIP is the way it will go (following boat-building, but about 30 years behind.....)

Me, my partner and two teenagers, put up the walls of a 135 sq/m house, in an easy day. Then (I was having fun with a macro post-and-beam portal structure for the snow-loading) the roof wen on in 4 hours; the biggest bit (6m long, 9.6 across) took 1.5 hours. Painted both sides, it's the soffit already, insulated, finished.

It eliminates a lot of profit-taking, time, which in turn eliminates permit costs (no pre-lining, for instance).

Walls and roof were $16,100 delivered, our colours, chopped to length, every last flashing inc.

by Craig Simpson | 16th May 13, 10:36am 1368657360

PDK

Agree re compounding of profit takers. I know there is plenty of margin and fat in construction and building materials and it will remain like this for as long as we have this housing bubble.

by Chris_J | 16th May 13, 12:18pm 1368663539

Gareth and Craig, I’ve quickly gone through (about 45 mins work) and calculated a detailed costing of a 14m2 modest extension based on no complications. That works out at around $22,000 incl all labour.

A very basic 10m2 room might knock $4,000 off. DIYers could save about $1400 if they painted it themselves. Other savings would be using cheaper wall cladding material or second hand windows.

For efficiency assume a room with internal dimensions 3.6X3.6m, 3 new external walls, adjoining an existing dwelling.

We could make savings by using cheaper claddings such as corrugated iron wall claddings and second hand windows, but instead will base this basic extension on a timber suspended floor, weatherboard cladding (basic no fancy details), low pitch iron roof, a single opening window and one internal door to existing dwelling plus a cupboard with a single opening door.

For a project this size it would be most efficient to construct the roof and wall framing on site from a pack lot of timber. Also the roof would be constructed as a framed roof not trusses to save on cost.

BUILDER”S MATERIALS

Piles:

12 x 125mm sq piles length depending on ground conditions

(assuming NZS3604 good ground) $150

Concrete:

0.4m3 = $150

Framing:

100x50 H3.2 PG

Bearers:

3 double 100x50x3.9m=23.4m

Floor Joists and nogs 600c:

12x3.9m=46.8m

Wall: Top and bottom plates and dwangs:

3x(3.6x2+3.9)=33.3m

Studs 600c:

23x2.4=55.2m

Ceiling Joists and dwangs (at 600c to avoid need for ceiling battens or double top plate):

12x3.9m=46.8m

Rafters:

5x4.2m=21m

Framing wardrobe:

14m

Extra 100x50 for miscellaneous:

40m

Total 100x50 plus 5% waste:

260m@$5/m=$1300

Other framing timber:

Lintel:

150x50x1.5m@$9/m=$14

Ceiling Runner:

150x50 x3.9m@$9/m=$36

Ridgeboard R/S:

150*25*3.9m@$5/m=$20

Baseboards (ext) R/S:

100x25x66m@$2.5/m=$165

Pynefloor:

3600x1200 x3 sheets = $300

Gibboard:

Standard 13mm:

3600x1200x3 = $105

Standard 10mm:

3600x1200x7 = $210

Batts:

Subfloor:

12m2 = $120

Ceiling

12m2 = $180

Walls

24m2 = $280

Internal hollow core doors:

X2 = $220

Door hardware

X2 = $50

Skirting/architrave 60mm mdf:

40m = $80

Fixings, braces, straps and miscellaneous

$300

Aluminium double glazed window in H3 pine frame:

$700

Weatherboards 135x19 H3.2 pre primed (I prefer 3.2 to 3.1 for all timber):

250m = $1500

Facings H3.2 dressed:

ex100x25x5m = $40

ex75x25x10m = $70

Scribers H3.2 dressed:

50x10x22m = $70

Fascia 190x20mm H3 preprimed (note no soffit intended on this basic extn)

11m = $140

Flashing tape:

Allow 3m plus 2 corner fixings part roll = $15

Building wrap:

12 lineal metres part roll $40

Roof underlay:

20 lineal metres part roll $25

Roofing iron:

18m2 = $360

Ridge:

4m = $80

End caps and flashing as required:

8m = $120

Window flashings top and bottom:

3m = $50

Spouting and downpipe PVC:

$150

Rubbish (minimal trailer only skip not required)

$100

Connection to existing dwelling – assume no changes in existing dwelling, most materials allowed for above, allow PC sum $400 for any special requirements.

Siteworks not required assuming level site with easy access.

Site safety not required (assuming property is either vacant or owner occupied)

Scaffold not required as under 3m in height

TOTAL Builder’s materials

$7,170 including GST (considering my generous allowances and with discounts this price could easily vary downwards by $1000 or more).

Allow 3 weeks labour at $45+GST/hr. (Which is more than sufficient time for this very basic room) $6,075.

Total builder costs

$13,245

Add 5% P&G and 10% margin:

TOTAL BUILDER CHARGES $15,200

SUBCONTRACTORS all incl GST:

Carpet layer:

3.6 lineal metres = $522

(Basic $60/m polyprop “Wembley” NZ made or similar – my favourite for flats, but we’ll allow $85/m, plus $20/m foam underlay and $40/m laying = $145/m total)

Electrician

1 light on existing circuit plus 2 double plugs on new circuit.

Allow $750

Gibstop stop only:

50m2 @$7.5/m2=$375

Professional painter – can be reduced to paint only for a DIYer:

Interior: 56m2@$17/m2

Exterior 27m2@35/m2 (pre-primed)

Total = $1900 would be about $500 for paint and supplies only for a DIYer.

Assume no drainlayer required as can connect to existing traps.

Total subcontractors: $3550

OTHER

Designer:

$1000

Consent (assuming no resource consent issues, fee simple title, no ground issues, no engineering reports required):

$2000

Total other $3000.

GRAND TOTAL: $21,750

If you did the painting yourself the total would be $20,350.

If you used a second hand window and used some salvaged weatherboards, the price would drop to about $19,000.

The builder for a very simple project like this would probably walk away with about $7,500 excl GST for two and a half weeks work if he factors in discounts to retail and generous allowances above and runs a tight ship in terms of business management.

I am making the assumption that a single builder would do this job rather than a large firm or team.

Pricing the job at $25,000 would see the builder net $10,000 for his two and a half weeks of effort.

For the owner, managing a contract this size themselves would be more effective if they know what they are doing. Employing the builder labour only and sourcing the material themselves.

Of course this is all hypothetical and would be dependent on the extension being simple to attach to the house and there being few issues. A high quality extension in a replica style (high stud height matching roof and details etc) could easily cost $40k-50k for the same size, however we are only talking about a basic complying extension for a rental property in South Auckland or similar, not a million dollar home in Ponsonby, Grey Lynn or Epsom!

by Chris_J | 16th May 13, 5:19pm 1368681572

Gareth and Craig, the tenor of your comments seem slightly umbrageous, so I double checked Rawlinsons doing a quick elemental costing.

The result was $20,417 if we go for hardiplank and leanto roof as opposed to slightly better quality in my calc.

The number of builder hours was 89 or about 11 days (so the 3 weeks I allowed is sufficient).

I allowed $2000 for consent. That is generous for this scale of project (especially as we can probably get away with 3 inspections. ($1500 should suffice depending on which council!).

I also allowed $1000 for plans. I'd say $500 should suffice given the scale assuming no changes to the existing other than the small leanto.

So potential to come in under $20k

Of course as it's a small job it won't suit an HSV driving hotshot, but smaller guys will take a job on like that, and I reckon $25k would give them a fair profit.

If people in Auckland are seriously prepared to pay $45k for an absolute bog standard small leanto extension, I am clearly in the wrong business investing in property and developing houses! I should be in Auckland making $25k a time project managing cheap tack on extensions!! (PM just 2 a week to give $1m a year income!!).

PS I'll send Gareth the spreadsheet with the Rawlinsons Handbook elemental calc.

by Chris_J | 16th May 13, 6:33pm 1368686037

Just correcting the annual income mentioned above: should be over $2.5m for 2 a week!!

by Kate | 14th May 13, 2:27pm 1368498448

I wonder what number in a household unit is considered overcrowding in a three bed home?

I wonder if it wouldn't be better to spend the money on in-built furniture. A set of bunks and a day-bed (both with drawers under); a built in desk and built-in dresser (say in the existing wardrobe) in two of the three bedrooms - and for the adult bedroom perhaps a built in cot, that can convert to a seat (with stroage box under) if there is no infant in the family. Build in a table and bench/booth type dining - again put storage under the seats and make the table top fold down for greater floor space during non-meal times.

Convert laundry area to a second toilet and shower if there isn't already one and provide space in kitchen for a front load washing machine.

Problem solved for the family of eight or nine.

by Boatman | 14th May 13, 2:54pm 1368500058

Ah Kate , Its a fine idea for 99% of good average Kiwi's who would appreciate and care for such things , but have you seen what some of these folk do to these properties ?

The word " vandalism " appears more than once in the site , and th HNZ website also openly points the huge problems it has with vandalism and how costly an issue vandalism of state houses is .

Imagine what some of them would do to all that nice new furniture

by Andrewj | 14th May 13, 3:12pm 1368501178

http://www.youtube.com/watch?feature=player_embedded&v=a780LGWG7to#!

by Kate | 14th May 13, 3:27pm 1368502075

Vandalism increased significantly when the Nats reduced frontline tenancy managers;

Labour Housing spokesman Phil Twyford believed the increase was due to a failure of the government's "Smart, faster, fairer" policy which came into effect about the same time damage costs started to rise.

"That is a staggering increase," Mr Twyford said. "I think that shows that the policy, which saw [the government] close down HNZ offices all over the country and confine tenancy officers to their office behind an 0800 number, has utterly failed."

The policy was supposed to ensure tenancy officers had greater contact with their tenants. But Mr Twyford said that had not happened - if it had, officers would have been able to stop the damage early, and reduce the costs of repair.

"Basically it was a short-sighted, cost-cutting measure that has cut HNZ staff off from their tenants. We have had lots of reports from HNZ staff who feel that this policy hasn't worked."

http://www.stuff.co.nz/waikato-times/news/8376380/Damage-to-state-houses-up-83pc

It was a stupid policy with not necessarily unexpected consequences. Management and oversight is key, no matter what the 'market'.

by waymad | 14th May 13, 3:28pm 1368502113

The French have solved this pertickler problem in their own - er - French way:

"...

a kind of hotel nearby, where there was no staff, and the door could be opened only by inserting a credit card into an automatic billing terminal. Reaching his room, he discovered that all the furniture was of concrete, including the bed and washbasin, and attached either to the floor or walls.

The following morning, the police came to collect him, and he asked them what kind of place this was. Why was everything made of concrete?

“But don’t you know where you are, monsieur?” they asked. “C’est la Zone, c’est la Zone.”

La Zone is a foreign country: they do things differently there."

Concrete is around $185 a cube, delivered.

Next issue?

by xingmowang | 14th May 13, 2:38pm 1368499110

Which suburbs are they going to be built? I am so nervous!

by Wolly | 14th May 13, 3:50pm 1368503455

324&5 sure smells like a policy set to boost the HNZ tenant birth rate...want a rebuilt state house with all the mod cons and the extra bedrooms too...get with the baby making and be quick about it.

The Nats are chasing Shearer's support base and using taxpayer dosh for the task....

What word from the govt for the 'doing it on their own Kiwi workers with kids'...the ones paying full rent or feeding a bank...now they face seeing neighbours having rebuilds while still paying peppercorn rents.

by Takere | 14th May 13, 5:24pm 1368509079

.... And the winning tender for these "Modules"? Fletchers. Supplied by a subsidiary in China! No jobs there then.

by Chris_J | 14th May 13, 10:09pm 1368526175

Is that a joke or for real?

by Takere | 15th May 13, 9:46am 1368567964

Just found the company that has the contract for the prefabrication, flat packs of the extra rooms ....... not Fletchers! The Stanley Group. NZ owned & based in Auckland & Waikato. Thank F...k for that. 225 new jobs!

by ruru | 16th May 13, 11:47am 1368661653

Let's hope the employees do better than with EQR/Fletchers: builder's rates are said by EQR to be $65 an hour. The builder gets $25 an hour (often on contract, self-employed and supplying own tools). Where does the other $40 go?

by Takere | 16th May 13, 1:23pm 1368667416

Fletchers were awarded in two tranches $9bn for the management/rebuild for ChCh and it was uncontested. The Japanese government built 60,000 temporary homes within 18 months of there disaster the Tsunami. Fletchers built 120 flat pack homes imported from China & employed 86 trainees and clip the tickets of those builders you meantioned in the work they did/do & the accreditation fee's the builders had to pay Fletchers just to work?? In the meanwhile they get to the head of the queque tendering for all the big jobs in the rebuild too!A multi-national company subsidised by the NZ public and haven't delivered.Cancel the contract!

by notaneconomist | 16th May 13, 1:59pm 1368669581

Takere - the RBNZ is the majority shareholder in Fletcher so receives a dividend from Fletchers. Visit the companies office website and search shareholders. The largest shareholder is listed under another name which if you do a further search you will find the RBNZ.

The RBNZ also pays the Government a dividend - see link below.

http://www.rbnz.govt.nz/about/whatwedo/ar_2012.pdf

by Gareth Vaughan | 16th May 13, 2:01pm 1368669709

This issue has come up here before. Once again the RBNZ is NOT the majority shareholder in Fletcher Building.

by notaneconomist | 16th May 13, 6:57pm 1368687449

Gareth

Fletcher Construction Company limited (952004) 1000 shares held by Fletcher Building Holdings New Zealand limited.

Fletcher Building Holdings Ltd (3891376)

Allocation 1 = 2773108538 Shares

Allocation 2 = 693277134 Shares Fletcher Building Industries Ltd

Fletcher Building Industries Ltd (1248554) total number of shares 346000000 and is 100% owned by Fletcher Building Ltd.

Fletcher Building Ltd (1104175)

Allocation 1 343832805 Shares (50.11%) owned by New Zealand Central Securities Depository Ltd, 2 The Terrace Wellington.

New Zealand Central Securities Depository Ltd (644859) has 1 shareholder of 100 shares - Reserve Bank Of New Zealand

by notaneconomist | 16th May 13, 7:07pm 1368688061

Gareth - I have copies of appropriate certificates that I emailed from the Companies office website.

by iconoclast | 16th May 13, 7:18pm 1368688685

notaneconomist

This subject has been dealt with a few times now - a good explanation here - in the comments section

http://www.interest.co.nz/news/58055/90-seconds-9-am-bnz-chinese-factory-output-down-again-chinese-export-orders-worst-8-month

by Chris_J | 16th May 13, 7:51pm 1368690698

Check http://www.fletcherbuilding.com/investor/reports

Check page 94

"New Zealand Central Securities Depository Limited provides a custodial depository service that allows electronic trading of its securities to its members and does not have a beneficial interest in those shares"

As a matter of interest the biggest Government ownership comes in the form of ACC at 4.27% and NZ Super Fund at 3.04%

by notaneconomist | 17th May 13, 10:08am 1368742129

ChrisJ - thank you for your time and post.

NZCSD limited is according to the RBNZ's website a custodian trustee which has a Company structure. Its role is different to NZ Clear.

http://www.rbnz.govt.nz/payment/nzclear/4949974.pdf

If NZCSD is to a corporate trustee - (it operates under a Company structure and is therefore bound by Company legislation) - 1st question; who are the beneficiaries? 2, How are the dividends or other income/disbursements passed along?

I could form a Company e.g. Christchurch Central Security Depository Ltd which could act as a corporate trustee for another entity which receives the beneficial interest in the shares or other investments.

It is very clear that NZCSD is a company. It is clear that it has a custodian role as a corporate trustee. The depository service has a grey area. As you state in your post "allows electronic trading of its securities to its members"

by Matt in Auck | 14th May 13, 8:35pm 1368520541

some fairly average interpretations of this programme above!

the 324&5 programme equates to 86K per bedroom on average, but what most seem to be missing is THAT THE COST ALSO INCLUDES UPGRADE OF EXISTING HOMES AND LANDSCAPING AND SITE WORKS

And the cost for the prefab homes likely includes at least 50K for Council charges, site works etc.

Having said that, it still seems more expensive than it should be.

But again good to see the Nats finally following through on the kind of policy I have been advocating the last 3-4 years (more state houre building, freeing up planning controls). Now all they have to do is restrict foreign property investment.

by Chris_J | 14th May 13, 10:07pm 1368526030

I can see perfectly where the money is going, just why should the state overcapitalise these houses for tenants who would be happy with them as they are. We don't have to provide brand new quality homes only to rent them at $100pw to beneficiaries. They would simply be better just keeping them clean and tidy and use the money for new builds or very basic extensions.

DCs and council fees for minor units might be $40k but I could get a high quality 3bd house built for the remaining $180k!

by waymad | 16th May 13, 10:59am 1368658755

Interesting, innit, to see GV's quoted cost from a conventional builder further up in the thread.

Call fer a bitta Analysis. After all, it's a 20 squares Bedroom, FFS, not plumbed, coupla electrical sockets, coupla lights, a roof and coupla windows.

Roundin' 'er all up to $45 K and adopting a jaundiced attitude, I slices the cost This way - all $ figgers are GST inc to simplify things:

Completely useless Nanny State imposts (scaffolding, fencing, signage) 1725 or 3.8%
Exorbitant Council rorty fees $5750 or 12.7%
Materials Duopoly oncost - all materials are say 20% overpriced, trousered by the usual suspects on a materials cost of $13,285 which excludes carpet and painting: $2657 or 5.9%
Raw materials cost excluding superprofits is $10628 or 23.9%
Labour inc painting (which will have materials in it) of $17,342 or 39%
Floor cover plus electrical $2300 or 5.2%
The overall 10% allowance is $4040 or 9.1%

So if we strip out Council, nanny, superprofit and the 10% allowance we have ourselves a saving of $14172 or 31.9%

And a bulk buy should be able to get That down by another 10-15%. which on a residual real cost of say $30K rounded, GST inc, would get us our bedroom for between $25729 and $27242 or $1287 and $1362 per square.

Which Hugh P will point to and larf at, as the US can do this stuff for $6-700 per sqaure , but p'raps that's the penalty of living on a penurious South Sea Island - call it an Externality...

Now if ya built this entire unit in a QC'ed Factory, choppered 'er in onto a site-built found, and did a bit a coupling up and weathertighteratering, p'raps we could get the unit cost down even further, and cut out all the hooha.

Ya certainly wouldn't need them Signs. Just coupla Hard Hats.

In deference to the Elfin Safety crew, p'raps better line them Hats with tinfoil too - ya cannae be sure aboot Cosmic Rays on this sorta job.,

by Boatman | 20th May 13, 6:22pm 1369030953

Funny that , the Government is spending $130,000 to add one small single bedroom to each State house BUT , the Labour party is offerring each of us a whole brand spanking new 3 BEDROOMED house in Auckland all up for just over double this, at $300,000.

Two of my kids need houses as first time buyers

I am voting for Labour on this issue alone.