Competition in Consenting

This week's column over in the Stuff papers wonders about getting some competition into building consenting. A snippet:

Getting building consenting authorities out from under joint and several liability would help. And especially where the government is keen on encouraging the use of quality, lower-cost materials certified overseas.

But so too could easing the local monopoly on building consent and code of compliance issuance.

Government has already recognised that building consents and sign-offs are part of the problem. Kāinga Ora, the government’s housing provider, has its own arms-length consenting authority: Consentium. It provides consents for Kāinga Ora developments along with building inspections and code of compliance certificates.

Consentium then provides a small bit of contestability in the market for building inspection certificates. Kāinga Ora developments can ignore idiosyncratic local interpretations of the Building Act and build to a common national standard. It can also decide to try out new and innovative materials to help bring costs down while improving quality.

But only buildings that will be owned and retained by Kāinga Ora can apply for consenting through Consentium. If a private developer is building two adjacent identical houses, one for Kāinga Ora and the other for private sale, Consentium would only provide consenting services for the Kāinga Ora home. One potential reason: Kāinga Ora is not likely to sue Consentium if they discover a problem down the track.

It’s a bit of a shame.

Consentium is hardly perfect. It was reported earlier this month that it took almost two years for Consentium to decide that an above-ground stormwater storage tank didn’t impose a fire risk. But council consenting systems can be even more broken.

If building consenting authorities had to compete for business, outcomes could be different. If private developers had the option to seek consent from Consentium, both Consentium and councils could have reason to improve performance – so long as the liability issue were sorted out.

I recently returned from Vancouver where the Squamish Nation has autonomy over its Sen̓áḵw apartment tower development near Vancouver’s downtown. A New Zealand equivalent could allow iwi to establish themselves as building consenting authority on iwi-held land. In places where councils were underperforming, iwi might take up consenting for their own construction projects. That too would provide greater competitive discipline on building consenting.