Nick Collins: Govt investment essential to build far healthier future

The building industry is in a strong position to protect and create jobs in these tough economic times - with Government support.

Prudent Government investment in New Zealand's residential infrastructure, in partnership with local government and industry has much to offer. It will maintain employment and critical mass in the building industry.

The Government has earmarked infrastructural development as a key tool for maintaining economic momentum, but the recent Job Summit highlighted the need to think more broadly.

Infrastructure, while typically considered in 'macro' terms - roads, bridges and telecommunications - is inextricably linked to our nation's homes. Homes are, in effect, the end point for infrastructure, so promoting investment in New Zealand's existing housing stock is a natural complement to direct funding in 'macro' infrastructure.

National's focus on upgrading state housing is an excellent leadership position which can be built on by encouragement and incentives for other home-owning New Zealanders to do the same.

The need is certainly there. New Zealand houses are, by international standards, cold, damp, unhealthy and inefficient.

On average, our homes are 6C below World Health Organisation recommended minimum temperatures in winter. About 45 per cent are mouldy and 300,000 have an unflued gas heater. Unflued gas heaters are unhealthy and, as such, are banned in Australia, Britain and the US.

Our nation's health reflects our living conditions - we have the second highest rate of asthma in the world and an excess winter mortality rate of 1600 people - a trend not seen in other OECD countries.

More than 30 per cent of New Zealand's electricity is consumed in our homes. If New Zealand is to achieve its Kyoto targets, we need to improve the energy efficiency of our existing housing stock.

The economic significance of our homes is enormous - they are worth approximately half a trillion dollars and carry about $170 billion of mortgage debt to banks.

What's more, the residential sector is a large source of employment - the house building and renovation industry is worth in excess of $12 billion annually and directly employs about 5 per cent of the workforce.

There is significant economic and social benefit in redirecting this resource to improving the current housing stock in recessionary times.

The numbers are compelling. A standard 1940-1960 home renovated for improved performance would require an estimated 277 hours of labour split between a variety of sub trades.

The data indicates that for every 1000 houses retrofitted a total of 151 full-time equivalent jobs would be required solely for delivery of on-site retrofitting services. A total of 392 full-time equivalent jobs would be required to provide the products and services involved in the renovation activity.

And, of our 1.6 million homes, at least one million of them could use some help.

An initiative of this scale would also mitigate the risk of losing skilled tradespeople to offshore markets.

The building industry is cyclical by nature and it is vital New Zealand retains this expertise so the industry is ready to hit the ground running when the economy recovers.

Importantly, the mechanisms to deliver the services exist and, with the economic downturn, there will be increasing slack in the system, which the initiatives can help to take up.

As a result there is little upfront capital cost in initiating a significant existing residential infrastructural renovation initiative.

But the value of investing in New Zealand's residential infrastructure extends well beyond employment.

By delivering a more sustainably built environment our homes will be healthier, resulting in more productive New Zealanders.

Our homes will also be more resource efficient, reducing the need for future infrastructural development, in particular electricity, gas and water.

To strengthen our economy and deliver New Zealanders the jobs, quality of life and financial security they expect, we must invest in infrastructure on both macro and micro scales.

To progress this initiative Government collaboration with industry is essential. The Government needs to:

* Take a leadership role in renovating all houses owned by Housing New Zealand.

* Set realistic goals and action plans to reduce energy demand from reticulated services, and stimulate uptake of renewables in the residential sector.

* Work with industry to renovate both privately owned and rental housing across all socioeconomic groups.

* Work with local government to address the condition of regional housing stocks and facilitate broader renovation projects.

* Work with local government to reduce compliance costs, and encourage greater use of industry organisations and warranties for certification of retrofitted buildings.

* Encourage more collaboration between the Department of Building and Housing and the building and construction sector.

* Provide a package of incentives, from low-income grants to interest-free loans, to cover renovation costs across all our housing irrespective of socioeconomic group.

We have what it takes to set all this in motion.

Let's stop talking and get on with it.

Nick Collins is general manager of Beacon Pathway, a research consortium looking at making New Zealand homes more sustainable.