Leaky buildings cost Auckland ratepayers $600m

File photo / Martin Sykes.

Auckland's leaky building disaster has cost ratepayers $600 million in claims and is partly why the council is taking longer to sign off on some new developments, a senior official says.

Penny Pirrit, Auckland Council's regulatory services director, revealed the $600m figure in responding to criticism from a building sector chief that the council was too slow in processing consents.

"Auckland Council agrees that the current process for consenting buildings can be complex and risk-averse," Pirrit said.

"This is because the Building Act places liability on the council for any defects in buildings. The leaky building situation is a great example of this and Auckland Council's ratepayers have already paid out $600m in claims. This means our processes are risk-averse, as we need to ensure the ratepayers doesn't experience a similar situation in the future," Pirrit said.

PwC has estimated New Zealand's leaky building crisis - that has affected tens of thousands of houses, units and apartments - could cost more than $20 billion.

Penny Pirrit of Auckland Council. Photo/Sarah Ivey

Pirrit admitted there were delays in council processes.

"Currently due to new systems, resourcing issues and these risk-averse processes, some applicants are experiencing longer periods to get their Code Compliance Certificate.

"We are working hard to resolve this issue and are also raising with central government a need to rethink the Building Act and regulations in order to rebalance the liability issue to one where all parties in the construction of a building take responsibility," she said.

Nigel Richards, general manager of McConnell Property which works in commercial property and land development, last week raised doubts about the practicality of the KiwiBuild scheme.

He blamed the council, saying the new Government's KiwiBuild scheme would be challenged because even at the current construction rates, projects are slow to get council sign-off.

The programme hopes to build 50,000 new Auckland residences in a decade.

Pirrit backed Richards on his KiwiBuild comments.

"We agree the proposed KiwiBuild plan would be a challenge in terms of gearing up to address capacity and capability issues for both the construction industry and for councils.

"Auckland Council has already recognised that it needs to lift its game so we can respond the demand for more housing construction. We already have been looking at ways to improve the consenting process through mechanisms such as online consents and streamlining our processes.

"This is all in the context of Auckland having by far the greatest number of building consents in New Zealand.

Pirrit said that, on average, Auckland Council processes around 23,000 building consents every year and undertakes over 132,000 building inspections.