Twenty years ago, changes to New Zealand’s construction and building inspection codes, the introduction of new materials, a shift in the style and design of homes, and, ironically, pressure from environmentalists, all combined to sow the seeds of a massive “leaky homes” problem.
Two decades after that perfect storm, the debris is now washing up on the shores of a recession-hit housing market, leaving thousands of people trapped in homes that are rotting around them, but which they cannot afford to repair and have no hope of selling.
Russell Cooney, past president of the New Zealand Institute of Building Surveyors, says there are many people suffering from mental and physical health issues, and some reported suicides. “It’s a really terrible situation.”
Leaky buildings have also been an issue in North America. Isolated pockets have caused problems in North Carolina and Seattle, while a major scandal erupted over leaky condos built in Vancouver between 1983 and 1998. There, a soul-searching Commission of Inquiry considered submissions from more than 400 homeowners before drafting 82 recommendations for overhauling British Columbia’s building industry.
The causes of New Zealand’s troubles have been endlessly debated, with blame batted between shoddy builders, negligent building inspectors, short-sighted architects and designers, greedy developers, and the use of cheap, untested materials. Political scientist Peter J. May has blamed a “leaky regulatory regime,” too.
New Zealand’s 1991 Building Act diluted controls and standards within the construction industry just after the axing of apprenticeship schemes sparked a shortage of skilled labor, and just before a building boom.
Meanwhile, designers were flirting with more Mediterranean-style homes with flat roofs and no eaves to deflect water away from the buildings. Those touches suit dry climates, but left New Zealand homes vulnerable, especially in subtropical Auckland.
By far the country’s largest city, with close to one-third of the nation’s 4.3 million people, Auckland averages 50 inches of rain annually besides experiencing high winds and coastal storms.
The law change also meant that kiln-dried framing timber need no longer be treated against insects and fungal infection. Treated timber lasts 50 years or more; untreated and exposed to moisture, it can deteriorate within two or three years.
Major building suppliers, eyeing savings of time and money, drove this initiative and gained unexpected support from “greenies” who liked the idea of ridding homes of chemicals. (Ironically, at its height, the leaky homes problems soured many people on green products such as local timber.)
At the same time, builders began covering homes with large plastered sheets of synthetic, monolithic cladding that industry experts now realize is much less waterproof and durable than traditional materials like wooden boards or bricks.
The net effect of all these changes, says journalist and author Yvonne van Dongen, was that homes began leaking and the new designs and materials meant that once water got in, it could not easily drain away or dry up; instead, it “quite quickly” began to rot the untreated timber.
Last year, she published How to Survive a Leaky Home: Risks, Remedies and Repairs, a book based on her own leaking home, which needed repairs and design changes costing NZ$700,000 (roughly US$540,000).
Building reforms in 2005 re-introduced treated timber and addressed other flaws in the earlier legislation. Guiding that was a key practical lesson from the Vancouver debacle, the “four Ds”: Deflection, Drainage, Drying, and Durability.
Nonetheless, leaky homes remain an albatross around the neck of the New Zealand property market, chilling sales of homes and apartments where any hint of doubtful weatherproofing scares off potential buyers.
“Some people have suffered a 50 percent or more loss of value,” says Cooney. “The monolithic clad houses in Auckland have seen a 25 percent devaluation – even if they’re not leaking. It’s called stigma.”
Nobody knows for certain how many homes are affected. In 2009, the government commissioned a report by international consultants PricewaterhouseCoopers that placed the number at between 22,000 and 89,000.
The report pegged repair costs as high as NZ$23 billion, making this, in the words of Building and Construction Minister Maurice Williamson, “equivalent to a natural disaster of huge proportions.”
The government favors a consensus estimate of around 42,000 homes, though many people familiar with the crisis think that’s far too conservative, especially since more cases are coming to light all the time.
Airline pilot John Gray, whose experience with a leaky home led him to start the nonprofit Home Owners and Buyers Association to help educate others, believes numbers are “well up towards 80,000, perhaps in excess of that.”
“I have a sense that every house built from untreated timber is going to be at risk because the assumption is that every house will leak at some time in its life,” he said. “Untreated timber is really the canary in the coal mine.”
Gray also points to a “very significant number” of leaky commercial and public buildings, including shops, offices, hospitals, and more than 150 schools.
Leaky buildings have become politically radioactive, defying the tentative efforts of successive governments to find a solution; the latest hopes rest on a NZ$1 billion financial assistance package passed by New Zealand’s Parliament in July.
Under this plan, government and local councils will each pay 25 percent of repair costs with homeowners responsible for the rest. In exchange, owners give up their right to sue local authorities and the national government but may pursue other negligent parties.
Still, Cooney notes concern that “only a small percentage of people will go through this financial assistance package because … they can’t adequately fund the remaining 50 percent.”
The rescue package also comes too late for many homeowners who have missed a 10-year deadline governing all building defect claims. The clock starts ticking when a home is finished, but because weatherproof issues often don’t show up for several years, critics say the time limit is grossly unfair.
“Twenty houses a day are falling off the 10-year cliff,” says Gray. “Most people don’t know they’re sitting in a ticking time bomb. That’s an incredibly sad position to be in because there’s no way out for them unless they fund it themselves.”