John Gray, President of HOBANZ - The Home Owners and Buyers Association of NZ, responds to a recent Bernard Hickey column which suggested the Government should not spend billions bailing out leaky home owners.
Recent opinion pieces in the Herald have once again highlighted the Leaky Homes crisis but this time there seems to be a move to blame those caught up in the problem.
The size of the problem has now jumped from an estimated $11 billion to $23 billion following an admission that officials arbitrarily halved the estimated figure, and may yet grow higher.
As the full scale of the issue facing the country becomes apparent there is a move to blame the victims. Bernard Hickey's columns misrepresented the issue and many of the comments on the website demonstrated both ignorance of the subject and a meanness of spirit.
There are homeowners in the leafy suburbs of Herne Bay, St Heliers and Takapuna who are leaky home owners, but also in Queenstown, and Wellington, Tauranga, , Christchurch, Nelson, Whangarei, Timaru, and, indeed, throughout the country.
However, home owners saddled with a Leaky Home are often low- or middle-income earners who unknowingly bought one of these blights on our housing landscape because it was all they could afford.
Many who bought a leaky home after 2002 did so without knowing the home was leaky. Many leaking homes are not monolithic cladding type Mediterranean homes. Many monolithic cladding homes do not leak. Many buyers had house inspections that missed the leaks. In fact, there are numerous examples of building inspectors whose reports are so incompetent they border on criminally negligent.
Those who have a leaky home have seen capital gains wiped out with one condemning report so how does one pay for repairs when the amount owed on a home often exceeds the newly diminished value and the banks won't lend additional funds to cover the cost of repairs?
Or should these leaky home owners extend themselves into more debt - often double or more than what they had originally borrowed and often beyond what they can afford - to fix problems caused by a failure of the system and of people they should have been able to trust?
While Mr Hickey would have us believe that Leaky Homes are all owned by rapacious Baby Boomers looking to build cheap, sell high and rip off the younger generation. Given many of these homes were at the lower-cost end of the market, they were often bought by younger people buying first homes. Is Mr Hickey really suggesting that we saddle these young people, often families, with huge debts, unhealthy living conditions and no prospect of escape?
The 1991 Building Act allowed a combination of unsuitable products, poor design, and poor workmanship to combine with insufficient oversight to produce homes that have failed.
Responsibility for this serious national issue arising is due to council and building certifier incompetence, shoddy workmanship, poor design, unscrupulous manufacturers, suppliers and developers, and, yes, sometimes homeowners seeking cheaper options.
However, the Government, too, should shoulder responsibility for an ideologically driven piece of legislation that allowed this combination of factors to come together, through failure to put sufficient checks, including oversight systems and education, licensing for builders, consumer protection and skill development for the trade as recommended by the Building Industry Commission, into the system to prevent failures, let alone of the magnitude facing the country.
Through the decisions made by Government - both central and local - in the implementation and oversight of the 1991 Building Act, we all bear collective responsibility. Simply put, our political leaders let us all down and there is a democratic imperative that we should all pay.
Housing is the most fundamental element of our infrastructure and yet the government seems to be backing off from helping to fix these 90,000 homes - 6 per cent of the total number of homes in the country.
Mr Williamson's suggestion of central government contributing 10 per cent of the cost is, simply put, pathetic and cynical. More than that will be reclaimed through GST, especially if it is raised to 15 per cent, and other taxes.
HOBANZ have long been proposing the following:
1. Low-cost loans with more appropriate levels of means testing and an option for loans to be suspensory
2. Establishment of a well-articulated remedial standard
3. The insurance industry changes its policies and provides insurance cover to builders doing remedial work
4. The banks need to take an active role in finding solutions because they'll soon find that owners' problems will soon become their own
5. Councils accept their role and responsibility in the crisis , work more closely with owners and stop fighting citizens through the courts
6. Establishment of a not-for-profit materials supply chain to minimise costs to victims and the country
7. A collaborative approach between the building industry and regulatory bodies in order to drive costs out of the remedial process as opposed to the band-aid solution becoming more prevalent.
8. A strong drive for education to the consumer (and trade) sectors on the building process - something that has been markedly lacking from government departments
New Zealand is, indeed, facing a crisis and one that arrives at the worst possible time. However, blaming those unfortunate souls caught up in it is not constructive.
Rather than blame those caught up in the problem and walk away from these thousands of people - families, New Zealanders - some in desperate need - we should be channelling our efforts in to finding solutions that will be good for all New Zealanders and for the country.
John Gray, President, HOBANZ
The Home Owners and Buyers Association of NZ is a not-for profit advocacy group for home owners and people buying homes in New Zealand. The Association aims to provide guidance and support to home owners and buyers in by providing the right guidance and support in order to make wise decisions in dealing with any matter that may arise concerning their home.
