Housing and construction industry bodies in Western Australia are calling for decisive policy changes to address an unexpected blockage in the building approvals process.
The problem came to light last week when the Australian Bureau of Statistics reported a near halving of building approvals in WA in April.
The fall has been attributed to passage of the state government’s Building Act at the start of April and delays and inconsistency in getting approvals through local councils.
However, finding agreement on the best way forward has not been easy.
Master Builders Association WA director Michael McLean has identified the most significant issues arising from the new Act as delays in obtaining planning consent from adjacent property owners and an inconsistency between processes for local government approvals.
“Local councils are being more cautious to ensure that they’re not held liable for overlooking their responsibilities … and, as a result, some will approve plans that others won’t,” Mr McLean said.
For a development to proceed in residential areas, the plans must now receive consent from neighbouring properties.
Under the old system prospective developers were not required to secure design approval before receiving building approval.
However, under the Building Act, developers must obtain design approval before they can apply for building approval.
Developers now have to wait for neighbour consent before their applications can progress, a process which takes up to 28 days.
Housing Industry Association WA executive director John Dastlik blames “overly complex legislation” as the primary reason for the drop in approvals.
Just 950 building approvals were passed in WA in April, down from 1575 and 1781 in February and March respectively.
Mr Dastlik said growth in sales data made it clear the new legislation was behind the sharp fall.
“Sales figures have been increasing; the only change was the Building Act, which has slowed down building approvals going both in and out of local government,” he said.
“I have heard some instances of approvals taking six to eight weeks to pass through local government.
“Because the legislation is so complex, builders are being forced to interpret it themselves, which means no two people are interpreting it the same.”
The Building Act was designed to make the approvals system more efficient, helped by a shift to private certification of building design.
A private certifier can issue a Certificate of Design Compliance that is then passed on to the relevant local government, which supposedly has just 10 business days to review the application.
Alternatively, if the local government carries out the inspection the waiting period is meant to be 25 days.
Code Group director Gary Cox, who works as a building certifier, said differences in interpretation between councils had always been a major issue for the industry.
Mr Cox said the new system should be more efficient, because the compliance process could be undertaken throughout the design and construction phases rather than after lodgement with a local council but he was concerned the system was not working as it should.
“The Building Act makes it quite clear that once a certified application has been received, the local council has an administrative role only,” Mr Cox said.
“The project should not be peer reviewed for compliance by the council, however, this appears to be happening.”
Leading homebuilder Dale Alcock foreshadowed problems with the new system when he addressed an Australian Property Institute state conference last month.
“The notion of private certification in this state, which we have waited for over 20 years for, is an abysmal failure … in May our group approvals totalled 75 and they should be 150 to 200,” Mr Alcock said.
“What we get is a system in which the local government is still the licensing authority and we have achieved absolutely nothing in the process.
“What has effectively happened is that the process of applying for a licence in this state cannot be done by a private certifier and they cannot provide us with an efficient system.”
The passage of the Building Act was welcomed by most groups but many expressed reservations about lack of preparation for the new regime.
The state government’s Building Commission endeavoured to inform all stakeholders about the changes but there are competing claims about how well that was done.
WA Local Government Association president Troy Pickard, for instance, told WA Business News earlier this year “there has been a great deal of frustration, however, at the lack of timeliness in information coming out of the Building Commission and the late release of the final regulations and forms required for the introduction of the reforms may lead to some delays”.
Commerce Minister Simon O’Brien said the government was committed to ensuring the building approvals process was effective and efficient.
“The issues raised by the industry are of concern and we are working closely with them to understand where any improvements could be made or misunderstanding clarified,” Mr O’Brien said.
WA opposition leader Mark McGowan said the Act had caused a crisis of confidence in the building industry.
“There is now mass confusion in the industry and local councils throughout WA,” Mr McGowan said.
He said Labor’s Plan to Streamline the Planning and Housing Approval System released in March provided a blueprint for reform of the approvals process.
Under the plan, if a building licence application was not dealt with by council after two weeks, it would be deemed approved.
“If adopted, these changes would fix the situation that the Barnett government has created,” Mr McGowan said.
Mr O’Brien said Labor’s policy was “ill-conceived and potentially dangerous”.