Category: Building & Construction

New housing in Australia must meet minimum energy performance requirements. We wondered how many buildings exceeded the minimum standard. What our analysis found is that four in five new houses are being built to the minimum standard and a negligible proportion to an optimal performance standard. Via The Conversation.

Before these standards were introduced the average performance of housing was found to be around 1.5 stars. The current minimum across most of Australia is six stars under the Nationwide House Energy Rating Scheme (NatHERS).

This six-star minimum falls short of what is optimal in terms of environmental, economic and social outcomes. It’s also below the minimum set by many other countries.

There have been calls for these minimum standards to be raised. However, many policymakers and building industry stakeholders believe the market will lift performance beyond minimum standards and so there is no need to raise these.

What did the data show?

We wanted to understand what was happening in the market to see if consumers or regulation were driving the energy performance of new housing. To do this we explored the NatHERS data set of building approvals for new Class 1 housing (detached and row houses) in Australia from May 2016 (when all data sets were integrated by CSIRO and Sustainability Victoria) to December 2018.

Our analysis focuses on new housing in Victoria, South Australia, Western Australia, Tasmania and the ACT, all of which apply the minimum six-star NatHERS requirement. The other states have local variations to the standard, while New South Wales uses the BASIX index to determine the environmental impact of housing.

The chart below shows the performance for 187,320 house ratings. Almost 82% just met the minimum standard (6.0-6.4 star). Another 16% performed just above the minimum standard (6.5-6.9 star).

Only 1.5% were designed to perform at the economically optimal 7.5 stars and beyond. By this we mean a balance between the extra upfront building costs and the savings and benefits from lifetime building performance.

The average rating is 6.2 stars across the states. This has not changed since 2016.

The data analysis shows that, while most housing is built to the minimum standard, the cooler temperate regions (Tasmania, ACT) have more houses above 7.0 stars compared with the warm temperate states.

The ACT increased average performance each year from 6.5 stars in 2016 to 6.9 stars in 2018. This was not seen in any other state or territory.

The ACT is the only region with mandatory disclosure of the energy rating on sale or lease of property. The market can thus value the relative energy efficiency of buildings. Providing this otherwise invisible information may have empowered consumers to demand slightly better performance.

We are paying for accepting a lower standard

The evidence suggests consumers are not acting rationally or making decisions to maximise their financial well-being. Rather, they just accept the minimum performance the building sector delivers.

Higher energy efficiency or even environmental sustainability in housing provides not only significant benefits to the individual but also to society. And these improvements can be delivered for little additional cost.

The fact that these improvements aren’t being made suggests there are significant barriers to the market operating efficiently. This is despite increasing awareness among consumers and in the housing industry about the rising cost of energy.

Eight years after the introduction of the six-star NatHERS minimum requirement for new housing in Australia, the results show the market is delivering four out of five houses that just meet this requirement. With only 1.5% designed to 7.5 stars or beyond, regulation rather than the economically optimal energy rating is clearly driving the energy performance of Australian homes.

Increasing the minimum performance standard is the most effective way to improve the energy outcomes.

The next opportunity for increasing the minimum energy requirement will be 2022. Australian housing standards were already about 2.0 NatHERS stars behind comparable developed countries in 2008. If mandatory energy ratings aren’t increased, Australia will fall further behind international best practice.

If we continue to create a legacy of homes with relatively poor energy performance, making the transition to a low-energy and low-carbon economy is likely to get progressively more challenging and expensive. Recent research has calculated that a delay in increasing minimum performance requirements from 2019 to 2022 will result in an estimated A$1.1 billion (to 2050) in avoidable household energy bills. That’s an extra 3 million tonnes of greenhouse gas emissions.

Our research confirms the policy proposition that minimum house energy regulations based on the Nationwide House Energy Rating Scheme are a powerful instrument for delivering better environmental and energy outcomes. While introducing minimum standards has significantly lifted the bottom end of the market, those standards should be reviewed regularly to ensure optimal economic and environmental outcomes.

Authors: Trivess Moore, Lecturer, RMIT University; Michael Ambrose, Research Team Leader, CSIRO; Stephen Berry, Research fellow, University of South Australia

From The Conversation. Hundreds of residents in a Sydney apartment complex, the 122-unit Mascot Towers, were evacuated last Sunday when cracks began to appear due to a serious structural failure. And it isn’t clear when the residents can return.

This crisis echoes the structural failure at Opal Tower and its evacuation on Christmas Eve last year. We have seen a series of serious building failures and fires in recent years. And state and federal governments have had more than year to act on recommendations for better construction regulations, but instead they’re shifting blame.

Although each building failure was different, the end result is the same: misery for the residents and a looming financial disaster for the owners.

New South Wales Premier Gladys Berejiklian said:

We’re getting to the bottom of what happened. The NSW government will hold everybody to account, that’s our role.

But the government’s role is to regulate sufficiently to prevent building failures in the first place, not to hold people to account after the event.

Building regulations since the Great Fire of London

Prevention of construction failures has been the bedrock of building regulations ever since the Great Fire of London in 1666. In the aftermath, the English government realised there was not much use in raking through the ashes and trying to hold people to account, and that an ounce of prevention was worth a pound of cure. This led to the parliament passing regulations to prevent the spread of fire between buildings.

Governments all around the developed world took the lesson of the Great Fire to heart. Their common goal has been to proactively ensure buildings are constructed properly and are safe as a result.

This has been a pretty successful effort and most significant building failures since 1666 have contributed to a more comprehensive and effective regulatory regime.

Serious building failures appear to be more frequent

Prior to the Opal Tower emergency, there had been only one significant evacuation of a multi-unit residential building in NSW due to structural failure. That was a result of the 2009 gas explosion at Eastgate Towers in Bondi Junction.

However, depending on which research you read, either 72% or 97% of strata apartments suffer from serious defects when they’re finished.

There have also been a series of other problems with recent buildings. These include lead in water caused by imported brass plumbing components, non-complying imported electrical cables and failures in the installation of fire doors, fire walls and fire door frames.

Why has this happened?

The states progressively introduced the Building Code of Australia (now the National Construction Code) during the 1990s as part of an agreed plan between the states and the federal government to make building regulations less prescriptive.

The aim was to reduce the cost of construction by favouring “innovation” over conservative “deemed to satisfy” regulations. Innovation, in these terms, meant finding ways to make buildings cheaper to build.

This move coincided with the globalisation of the building materials supply industry and a boom in the construction of tall apartment buildings in Australia.

Some of the innovation has been innocuous, or even beneficial, such as the introduction of a variety of lightweight interior wall systems, but some have resulted in substantial remediation bills – combustible cladding being the prime example. Inspection and responsibility for the plethora of imported components is virtually non-existent.

The downstream cost of failure has landed squarely in the laps of the building owners, many of them owners of tall apartments.

It’s difficult to estimate the total bill for remedial works to tall apartment buildings built over the last 25 years, but it may well exceed the Productivity Commission estimates of savings resulting from the introduction of the National Construction Code.

Blame shifting and ineffective regulations

The federal minister responsible for building regulations, Karen Andrews, says the states are to blame.

And some states, including NSW, have resorted to tough talk about crackdowns on “dodgy” certifiers and “dodgy” builders. In reality, the problem is dodgy government regulation, by both federal and state governments.

The federal and state governments already have an initial plan for fixing these problems. The Shergold-Weir report was delivered to the Building Ministers’ Forum in February 2018.

As the report said:

After having examined the matters put to us, we have concluded that the nature and extent [of building defects] are significant and concerning. The problems have led to diminishing public confidence that the building and construction industry can deliver compliant, safe buildings which will perform to the expected standards over the long term.

Since then, state and federal governments have done almost nothing to implement the recommendations of the report, despite the 2018 Christmas Eve failure at Opal and the fire at Neo200 in Melbourne the following February.

The report itself states:

The recommendations have been designed to form a holistic and structured framework to improve the compliance and enforcement systems of the [National Construction Code] across the country. They form a coherent package. They would best be implemented in their entirety.

In NSW, the published response to Shergold-Weir is a patchwork focusing on holding people to account after a building construction event. This is the reverse of the proactive approach developed following the Great Fire of London.

The NSW government is set to appoint a building commissioner to oversee qualifications and to review building documentation.

But this will likely not achieve much, unless the government commits to upskilling workers throughout the industry and backs up desktop audits by increasing direct inspections on site. Neither of these things appears to be part of its plan.

All governments must take an active role in fixing the defective regulatory regime they have created. If they can’t get on with this process in a timely way, we will need yet another royal commission to sort it out.

The least Premier Berejiklian can do is to treat the Mascot Towers and Opal events in the same way the government treats natural disasters and provide housing assistance to residents who have been displaced through no fault of their own.

Author: Geoff Hanmer, Adjunct Lecturer in Architecture, UNSW