Gerry Brownlee and Nick Smith criticise Christchurch Council decision to increase building consent fees 89%; ask for reports

"increase consent costs for a NZ$100,000 to NZ$300,000 home build by 89% to NZ$3,310"

THATS SO CHEAP - we pay more than $3300 in auckland to permit a single deck!

My father in law built a deck recently (over 1.5m high), materials were around $1000, labour was free, but consent and the plans required for the consent were about $10,000!!  Can't they just send someone around after you build it and jump up and down a couple of times to check it's stable?

One of the interesting things is that as you're seeing such a huge replacement of housing stock in Christchurch, the rates levied against those properties are going to significantly increase," Brownlee said, referring to one case he had heard of where a house being demolished had seen its rates bill rise from NZ$3,500 a year to just over NZ$8,000 a year.

"So there is a huge cashflow benefit to the Christchurch City Council. 

I am having a dumb day, but I don't get this bit. Surely the RV of a house only indictaes what share of the total it pays - the total for the year being divided by the number of houses and then a cost given to each. If all houses went up 15%, the share per house we remain the same?

Maybe there would be a year end residual benefit, but not much and then the new financial year it sets the total again.

Having said this, CCC are reviewing the RV of all houses in CHCH this month anyway.

It all becomes self-reinforcing and self fulfilling

Christchurch increases 89%

Next year, Auckland says, heck, Christchurch raised by 89%, we will raise 80%

The year after, Christchurch says, heck, we are out of step again

It's hard to read but the only thing I can extract from the article is that the reason for the rise is to match other councils prices.

That is truely an irrevelant reasoning.

Unless of course you are a monopoly council with a philosophy that you should extract the most you can from where you can, justified or not.

They truely are getting into volume house consenting in Christchurch.   How about a fee of $10 per house. 

Many of these houses being built are just simpe mchouses off the plan, using basic standard details, so I can't see the justification for consent fees being so high. 

Indeed:  the value-add of consents and inspections is minimal on a typical residential build:  relatively low risk, standard materials.

Ask yourself - what value can yer average Inspector deliver, that a competent PM (who is already costed in) could not?

And, sure, there were cowboyz about, but the LBP process has closed That loophole - much too tightly it could be argued - we now have created yet another buncha monopolists....

After all, the Chch earthquake sequences have shown up an Interesting fact.

No-one was killed in a residence, because of dodgy structure.   (Yes, yes, URM and brick chimneys plus external agents like rockfall did kill some people, but they are well-known hazards regardless of structure.)

And many of those residences were put up well before consenting, fee-gouging, Elfin Safety or many of the overheads now evident.

So consents and inspections need to be seen for what they are - a self-perpetuating racket (racket is traditionally defined as the raising of a 'threat' - nice little house y'have here, pity if anything wuz ter happen to it - and the offer to mitigate or avoid it, by the transfer of mucho readies.)

After all, a factory-built house will be far better QC'ed, tighter, more weatherproof, and built to a Plan, a BOM and by well-controlled machines and the occasional staffer.    What possible value can a Clueless Council Minion, add in that situation?

I dont follwo this,

""One of the interesting things is that as you're seeing such a huge replacement of housing stock in Christchurch, the rates levied against those properties are going to significantly increase," "

why? if its an insurance job you more or less get the same house so relatively speaking there shouldnt be much change?

regards

It does seem crazy to use the charges in other localities to justify charges in Christchurch. Presumably they will be really busy issuing thousands of consents and can thus spread their  existing overhead over lots more consents and charge miles less.

More to the point, the information that they are charging a specialist consent officer out at $280 / hour is a shocker. What are these people? Neurosurgeons looking for a pay rise?

Not brain surgery..No....but maybe after banging yer head against a brick wall, that may be what is required for poor Christchurch people.

However, I would like confirmation of a few facts, before a huge rise in rates, if I was in Christchurch and under the thumb of that Council.

Not that they ever stopped paying their rates, I hear, even when no water, no sewerage, house falling down around their ears.....etc.....and banging their heads over arguing the toss, with Gerry and his cronies, Insurance Co-s and the like.

Council even had the temerity to try and follow my leader and get huge rises, out of a falling city.

Jeez you wouldn't read about it....poor journalism, poor Christchurch.

(Lucky we have Hugh to put us in the picture).

So, just where is the money being wasted?...this time??.

Surely the CCC was well insured, they were always well paid in the past, our second city.

(Must have been the amount the bleeders were paid, but over spent)

It is not like Awkland, stuck with the bill for damage control for its over paid elite.

Or is it.?

Where is the Hugh and cry.??

Pray tell.

Is it that the overheads have got too big for their britches.

Or shall we skirt that point.

Re: "I am concerned that local government costs are part of the broader issue of housing affordability. The Productivity Commission identified that increased council charges was one of the factors affecting affordability, so it's concerning to see such a large increase being proposed in Christchurch," Smith said.

National won their first election partly on the back of promises of affordable housing. A year ago their Finance Minister said the problem was inelastic supply.

So what are they doing about it other than blaming CCC for increasing one charge to $3,310? This charge did not increase developed sections costs in Halswell ChCH from $70,000 ten years ago to $240,000 now as Mike Greer recently pointed out. Exploding land prices is the problem. National could easily fix this by introducing some 'right to build' legislation and reforming the local taxation and provision of new transport infrastructure along the lines of Alain Bertaud's proposed reforms (See Hugh Pavletich's last housing affordability forword)

National are doing too little too late and trying to blame others for something they promised to solve.

After the shortest retirement ever this story is too delicious to let go by without comment.

Yes Brownlee has managed to spend two years working closely with CCC without learning anything about what they do or how. Nick Smith (former Rangiora District councillor) must have cringed when this one got reported.

Craig, Brendon, dh, steven, you are all correct there is no direct link between the assessed value of a property and the rates it pays. The valuation introduces a small amount of progression into the system so that some property owners pay more than others. Note that some councils operate land-value rating rather than capital value so it doesn’t matter what you build on your section it’s not taken into account.

Now to building consent charges. This is a story of stupidity, arrogance, fear, laziness and stupidity but, above all, the public sector credo: “putting self before others”.

In 1991 parliament unanimously passes the Building Act which strips local government of all their power to set building standards and hands it over to its own creature, the Building Industry Authority. Fast forward ten years and we discover that buildings constructed using government sanctioned materials and fastening methods leak like sieves, are rotting into the ground and poisoning their inhabitants on the way. The government has two choices: man up and fix the damage or blame someone else. Hence the Building Act 2004, the subtext of which is “it’s the councils’ fault but this will fix it”.

The Act has some interesting provisions. The number of mandatory field inspections more than doubles. The building work must comply with the consented plans in every detail with no variation. The application must comply with the Act and the Code in every detail before it can be consented. Every certifier must run a quality assurance system that provides the evidence of their fitness to be certified as certifiers. Not only do consent fees sky rocket but applications now spend more time in the post going back and forth for corrections than it takes to construct the actual building.

There was also an unintended consequence: all private certifiers went out of business immediately and councils came very close to having to operate without liability insurance. The government should have seen this giant red flag waving in their face but somehow they missed it. Given that there are some ways of bypassing the worst of the Act’s provisions (or so bob says) councils won’t use them because they don’t want any negative outcomes that reflect on them. They will take no risks so that they can guarantee maintaining their certification and insurance.

Still doesn’t mean the fees councils charge are fair and reasonable given the legal environment. When it comes to staffing, councils are like crude oil tankers: fantastic at going in a straight line forever but don’t ask them to turn hard a’ starboard. They can end up overstaffed then they have to put up rates or charges instead of letting someone go, and then they have to make work and so on it goes. As we have noted elsewhere councils are incentivized to sneak charges up to ease the pressure on rates. They can’t make a profit in building control and siphon it over to Roading but they can cross-subsidise the bits of their own function that should be rates-funded. In building control that means enforcement. The inspectors who follow up on complaints and issue stop-work notices cannot be funded out of building consent charges. If any council funds their building control function entirely from consent fees then they are breaking the law. And,sometimes it’s just laziness. They are supposed to charge reasonable and actual costs but sometimes it’s just easier to work out how much money you need, set your charges and if they aren’t too far out of line with other councils then that will do. There is no incentive at all to look for cheaper ways of doing things.

But ultimately any Minister of Building and Construction (uh that’s Maurice Williamson) who wants building consent charges to drop holds most of the power in their own hands right now: unwind the lunacy of the Building Act 2004.

Kumbel - Good to see that the retirement was short, well said, and hopefully will hear more in the future.

Cheers

This maybe a song for Christchurch, then expand Nation wide..

http://www.youtube.com/watch?v=WSIUf2hD6Io

Never mind a new flag, we need a new National Anthem.

This one just might just do the trick. At least it might raise the spirit.

We need a new political party, this one seems right on the button.

So hit it and have a think.

I think that TLA's in general have passed Peak Absurdity in terms of value delivered for fees/rates/taxes charged.

I'm inclined to think that the way forward (especially thinking about FHB's and Awkland Apartments) is factory builds. 

This approach needs only localised foundations (geotech, private sector assessment well out of the limited scope of Councils):  because what's then planted on top - house, modular units, what-have-you -  need have precisiely zero Council input:

• Nationally type-certified as to design, materials, etc
• QC'ed at source:  this could easily be an ISO style deal
• Serial-numbered, plans, BOM, machines, staff utilised can all be stated/certified at source
• Guaranteed - in exactly the same way that cars, boats, ag machinery and construction gear is - and all these without Council minions poring over the details

So the rise of 'real' factory builds will, slowly but surely, starve the beast...

Maybe....